Document:

EX-10.3

 Exhibit 10.3 

LIVE OAK BANCSHARES, INC. 

2014 EMPLOYEE STOCK PURCHASE PLAN 

Live Oak Bancshares, Inc. (the “Company”) hereby adopts this 2014 EMPLOYEE STOCK PURCHASE PLAN (the “Plan”) as further described
herein. 
 ARTICLE I 

PURPOSE AND SCOPE OF PLAN 
  

	1.1	Purpose. 

 The purpose of the Plan is to encourage employees of Live Oak Bancshares, Inc. (the
“Company”) and companies which are, or during the term of the Plan become, subsidiaries of the Company or subsidiaries of its subsidiaries (the “Subsidiaries” and each a “Subsidiary”) to acquire equity interests in the
Company and to encourage their continued employment by giving them options to purchase shares of the Company’s capital stock and, thereby, the opportunity to share the benefit of increases in the value of the Company’s capital stock. 

 

	1.2	Stock to be Issued under Plan; Aggregate Limitation. 

 Pursuant to and in accordance with the
terms of the Plan, options (“Options”) may be granted from time to time to purchase shares of the Company’s voting common stock, no par value per share (“Common Stock”). The Options are intended to constitute options issued
pursuant to an “employee stock purchase plan” within the meaning of Section 423 of the Internal Revenue Code of 1986, as amended (the “Code”). 

The aggregate number of shares of Common Stock which may be sold upon the exercise of Options granted under the Plan is 280,000 shares, which maximum is
subject to adjustment as provided in Paragraph 6.1 hereof. Shares of Common Stock sold by the Company upon the exercise of Options granted hereunder, at the sole discretion of the Company, may be issued from the Company’s authorized but
unissued shares, or be issued and outstanding shares purchased by the Company on the open market or in private transactions. Upon the expiration or termination of an Option granted pursuant to the Plan, any shares of Common Stock which have not been
issued and purchased pursuant to the exercise of that Option shall again become available for the grant of new Options under the Plan. 
  

	1.3	Effective Date; Termination Date. 

 The Plan shall be subject to approval by a vote of the holders
of a majority of the shares of the Company’s Common Stock present or represented, in person or by proxy, and entitled to vote at a meeting of the Company’s shareholders held in accordance with North Carolina law. Subject to such approval,
the Plan shall become effective as of October 8, 2014 (the “Effective Date”), which is the date of adoption of the Plan by the Company’s Board of Directors) and, 

 
unless sooner terminated as provided herein, shall terminate at 5:00 P.M. on October 5, 2024 (the “Termination Date”), the tenth anniversary of the Effective Date. Following the
Termination Date, no further Options may be granted under the Plan, but such termination shall not effect any Option granted prior to the Termination Date. 

ARTICLE II 
 PLAN
ADMINISTRATION 
  

	2.1	General. 

 The Plan shall be administered by a committee (the “Committee”) of, and
appointed by, the Board of Directors of the Company, and which shall be composed of not less than three members of the Board of Directors. Members of the Committee shall serve at the pleasure of the Board, and the Board of Directors, from time to
time and at its discretion, may remove members from (with or without cause) or add members to the Committee or fill any vacancies on the Committee, however created. 
  

	2.2	Duties. 

 In its administration of the Plan, the Committee shall have the following authority,
powers and duties: 
  

	(a)	to determine the persons who are eligible to receive Options under the Plan; 

  

	(b)	to construe and interpret the terms and provisions of the Plan and any Options granted pursuant to the Plan; 

  

	(c)	to make, adopt, amend, rescind, and interpret such rules and regulations not inconsistent with the Plan or law as it from time to time deems reasonable and necessary for the interpretation and administration of
the Plan; 

  

	(d)	to prescribe the form or forms of the instruments evidencing any Options granted under the Plan and of any other instruments required under the Plan and to change such forms from time to time; 

 

	(e)	subject to the provisions of Articles III and IV below, to make any and all determinations in connection with each grant of Options pursuant to the Plan (including without limitation the timing of each grant of
Options and the Offering Factor, Fair Market Value, Applicable Percentage, Option Price and Option Term) and otherwise in the administration of the Plan; 

  

	(f)	to take all other actions provided for herein or deemed by it, in its discretion, to be necessary or advisable to administer the Plan in a proper and effective manner. 

  
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	2.3	Meetings and Voting. 

 The Committee shall select one of its members as Chairman and shall hold
meetings at such times and places as it shall deem necessary or desirable. A majority of the members of the Committee shall constitute a quorum for all matters with respect to administration of the Plan, and acts of a majority of the members of the
Committee present at meetings at which a quorum is present, or acts reduced to and approved in writing by all of the members of the Committee without a meeting, shall be valid acts of the Committee. 

 

	2.4	Effect of Committee Action. 

 All actions, decisions and determinations of the Committee in
connection with the administration of the Plan, and in connection with the interpretation and construction of, or questions or other matters concerning, the Plan or any Options granted, shall (i) be made consistent and in accordance with
the terms of the Plan and shall be designed to cause the Plan to continue to comply with Section 423 of the Code, and (ii) shall be final, conclusive and binding on all persons, including the Company, its shareholders, Eligible
Employees and any other person claiming any interest in any Option; provided, however, that any action, decision, interpretation or determination, other than those respecting the actual grant of Options, shall be subject to review by the Board of
Directors, either on its own initiative, at the request of the Committee or on application of any aggrieved party. In such a case, the determination of the Board of Directors on such review shall be final and binding on all affected parties. 

 

	2.5	Indemnification. 

 To the extent permitted by applicable law, and in addition to such other rights
of indemnification members of the Committee may have as Directors of the Company, the members of the Committee shall be indemnified by the Company against the 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 thereof, to which they or any of them may be a party by reason of any action taken or omitted in good faith under or in connection with administration of
the Plan or any Option 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 any such Committee member is liable for gross negligence or misconduct in the performance of his or her duties;
provided, however, that within sixty (60) days after institution of any such action, suit or proceeding, such Committee member(s) shall in writing offer the Company the opportunity, at its own expense, to handle and defend same. 

  
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 ARTICLE III 

ELIGIBILITY 
  

	3.1	Eligible Employees. 

 Except as provided in this Article, each employee of the Company and/or any
Subsidiary who is actively employed by the Company and/or any Subsidiary or is on paid or authorized but unpaid leave of absence on a date immediately preceding a date of Grant (an “Eligible Employee”) shall be eligible to receive an
Option under the Plan in connection with that grant of Options. The Committee may approve separate offerings for employees of the Parent and employees of a Subsidiary, which offerings may be restricted to employees of the Parent or Subsidiary for
whom the offering is made. Further, the Committee in establishing the terms of the Grant for an offering may exclude one or more of the following categories of Eligible Employees from the offering: 

 

	 	(i)	any individual who has a period of employment with the Company and/or a Subsidiary of less than 2 years (or some shorter period of employment as may be established by the Committee), 

 

	 	(ii)	any individual whose customary employment with the Company and/or a Subsidiary is less than 20 hours (or at the discretion of the Committee fewer than 20 hours) per week, 

 

	 	(iii)	any individual whose customary employment is less than 5 months (or at the discretion of the Committee fewer than 5 months) with the Company and/or a Subsidiary in any calendar year, 

 

	 	(iv)	any individual who is a “highly compensated employee” as defined in Section 414(q) of the Code of the Company or a Subsidiary, or 

 

	 	(v)	any individual who is a “highly compensated employee as defined in Section 414(q) of the Code of the Company or a Subsidiary and whose compensation is an amount established by the Committee for a
particular offering that is greater than the amount of compensation set forth in Section 414(q)(1)(B). 

 For purposes of subparagraph
(v) of this Paragraph 3.1, “compensation” shall have the meaning set forth in Code Section 414(q). For purposes of determining an employee’s eligibility to receive an Option, the Committee may, at its sole discretion, give
credit for the employee’s past service with any financial institution or other entity that shall have been acquired by the Company or any Subsidiary; provided, however, that all employees of the Company and/or any Subsidiary who were employees
of any such acquired entity shall be treated alike for purposes of past service credit under the Plan. Any exclusion from an offering of a category of Eligible Employee will be applied in an identical manner to all Eligible Employees in the excluded
category of every corporation (that is, the Company or a Subsidiary) that participates in the offering. 

  
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	3.2	Exclusion of Certain Shareholders. 

 Notwithstanding Paragraph 3.1 above, an Option shall not be
granted in an offering to an Eligible Employee who, immediately after the date the Option would otherwise be granted, would own stock possessing five percent (5%) or more of the total combined voting power or value of all classes of stock of
the Company or its parent or subsidiary corporation (as the terms “parent corporation” and “subsidiary corporation” are defined in Sections 424(e) and (f) of the Code). For purposes of determining stock ownership under this
paragraph, the rules of Section 424(d) of the Code shall apply, and shares of the Company’s stock which an Eligible Employee may purchase under outstanding options of any type shall be treated as shares owned by such employee. 

ARTICLE IV 
 GRANT OF
OPTIONS 
  

	4.1	Authorization to Grant Options. 

 Pursuant to the Plan, from time to time prior to the Termination
Date the Company may make an offering granting Options to Eligible Employees to purchase shares of Common Stock. Each such offering and the grant of Options must be specifically approved by the Committee and, in connection with each such offering,
Options will be granted in accordance with the terms of the Plan to all persons who are Eligible Employees, other than Eligible Employees who may be excluded under the provisions of Section 3.1 or 3.2, as of the Date of Grant of such Options.
However, notwithstanding anything contained herein to the contrary, in no event may the Committee approve a grant of Options under the Plan while any Option previously granted hereunder shall remain outstanding. 

 

	4.2	Number of Shares. 

 At the time an offering for a grant of Options hereunder is approved by
the Committee, the Committee also shall specify a dollar amount of annual compensation for the offering (the “Offering Factor”) on the basis of which the number of shares of Common Stock to be covered by the Option granted to each Eligible
Employee will be determined. Each such Option will entitle the Eligible Employee to whom it is granted to purchase a number of whole shares of Common Stock equal to the lesser of (i) such employee’s annual rate of compensation as of the
day prior to the Date of Grant of that Option (as determined by the payroll records of the corporation that employs such employee) divided by the Offering Factor set by the Committee for that grant of Options, or (ii) a fixed maximum quantity,
at the Committee’s discretion. The Offering Factor may be different for each offering of Options under the Plan; however, in connection with each separate offering of Options the Offering Factor shall be the same for all Eligible Employees.

The term “compensation” as used herein is defined as an Eligible Employee’s annualized regular, fixed base salary or wages based on the
Eligible Employee’s salary or wage rate (and number of hours per week) in effect at the time of grant. Compensation does not include any bonus, overtime payment, payment of deferred compensation or equity compensation, commission, contribution
by an employer corporation to an employee benefit plan or other similar payment or contribution. 

  
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	4.3	Option Price. 

 The option or purchase price of each share of Common Stock covered by Options
included in each offering of Options under the Plan (the “Option Price”) shall be a percentage (the “Applicable Percentage”) of the fair market value of one share of the Common Stock (the “Fair Market Value”). For the
purpose of determining Fair Market Value, the fair market value of the Common Stock shall be determined as of the date of Grant, except that the Committee may establish in an offering that the Fair Market Value shall be determined as of the date of
exercise if the fair market value of the Common Stock on the date of exercise is less than the fair market value of the Common Stock on the date of Grant. The Applicable Percentage for the Grants under each offering shall be determined by the
Committee, but (i) in no event may be less than 85% nor more than 100% of the Fair Market Value, and (ii) may be different for each offering of Options, but in connection with each separate offering of Options shall be the
same for all Eligible Employees. 
 The Fair Market Value of a share of the Company’s outstanding Common Stock on any particular date shall be,
(i) if the Common Stock is not then listed on the Nasdaq Stock Market, the fair market value of a share of the Common Stock as determined by the Committee in its sole discretion in such manner as it shall deem to be reasonable and
appropriate, or, (ii) if the Common Stock is listed on the Nasdaq Stock Market, the average of the bid and asked prices for a share of the Common Stock as quoted by Nasdaq on such date. 

 

	4.4	Option Notices. 

 Each Option granted pursuant to the Plan shall be evidenced by a written notice
(an “Option Notice”) delivered to the Eligible Employee to whom such Option is granted and which shall specify (i) the Date of Grant of the Option, (ii) the number of shares covered by the Option, and
(iii) the Option Price of the covered shares. Each Option Notice shall be in such form as the Committee shall determine and shall incorporate by reference the terms and provisions of the Plan. No Eligible Employee shall have any rights
hereunder to purchase any shares of Common Stock until an Option has been granted to him and such Option is evidenced by an Option Notice delivered to him, all as provided herein. 

 

	4.5	Limitation on Purchases. 

 Notwithstanding the foregoing provisions of the Plan or the terms of
any Option granted hereunder, no Eligible Employee may purchase shares of the Company’s stock in any calendar year under all employee stock purchase plans (including this Plan) of his or her employer corporation and its related corporations
that have a fair market value (determined at the time the Option is granted) in an amount greater than an amount calculated as follows: 
  

	 	(i)	Determine the number of calendar years that the Option has been granted at the calendar year of determination, 

  

	 	(ii)	Multiply (i) by $25,000, and 

  

	 	(iii)	Subtract from the product of (i) and (ii) the fair market value of the shares of Company stock purchased under the Option before the potential purchase for which the limitation is calculated.

  
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 This limitation applies only to options granted under “employee stock purchase plans” as defined by
Section 423 of the Code and does not limit the amount of the Company’s stock which an Eligible Employee may purchase under any other stock or bonus plan then in effect. 

ARTICLE V 
 TERMS AND
CONDITION OF OPTIONS; PURCHASE OF SHARES 
  

	5.1	Term of Options; Expiration or Termination. 

 Except as otherwise provided below, the term of each
Option (the “Option Term”) for an offering shall extend for a period commencing on the Date of Grant and ending on the date established by the Committee for the offering, which ending date shall be no later than the 15th day of the twenty-fourth calendar month (including the month in which the Option is granted) following the Date of Grant of such Option (the “Expiration Date”). Notwithstanding anything
contained herein or in any Option Agreement to the contrary, to the extent that an Option shall not previously have been exercised in the manner required by the Plan, it shall expire and terminate at 5:00 P.M. on its Expiration Date. 

In addition to the termination provisions set forth above, Options granted pursuant to the Plan shall terminate or may be terminated as provided in Paragraphs
5.6 and 6.1 below. Upon the expiration or termination of all or any portion of an Option, such Option or portion thereof shall, without any further act by the Company, expire and no longer be exercisable or confer any rights to any person to
purchase shares of Common Stock under the Plan. 
  

	5.2	Election by Eligible Employee. 

 Each Option granted to an Eligible Employee shall entitle the
Eligible Employee to purchase up to the total number of shares of Common Stock specified in the Option Notice relating to that Option, and to purchase all or any portion of such shares at the times and in the manner specified below. 

For each offering the Committee shall establish the period during which an Eligible Employee may elect to purchase shares pursuant to his or her or her
Option. The election period shall not extend beyond the Expiration Date. In order to make such election, the Eligible Employee must give written notice (an “Election Notice”) to the Company as to the number of shares he or she wishes to
purchase (the “Elected Shares”). Such notices must be made on a form supplied by the Company for that purpose and must be accompanied by full payment of the Option Price of all Elected Shares or, if the Eligible Employee intends that
payment for any of the Elected Shares be made from funds held for him under the payroll deduction plan described in Paragraph 5.4 below, such notice must indicate that payment of the Option Price for those shares will be made by transfer of funds
under that plan. Purchases of Elected Shares shall be made on the Company’s last business day of each such month (the “Purchase Dates”). An Eligible Employee’s Election Notice as to any number of Elected Shares shall be
irrevocable as to that number of shares and may not be altered or changed by such Eligible Employee following receipt of such notice by the Company. 

  
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 The failure of an Eligible Employee to deliver an Election Notice to the Company in a timely manner to purchase
all shares covered by an Option before the Expiration Date of that Option will be conclusively deemed to be an election by the Eligible Employee not to purchase, and a forfeiture of his or her rights to purchase, any and all such remaining shares
covered by that Option; and, on the Expiration Date that Option shall immediately terminate and be of no further force or effect. 
 At its sole discretion
and upon written notice to Eligible Employees, the Committee may (i) provide for Election Periods during other months during the Option Term of Options granted under the Plan, or, (ii) at the time any Options are granted,
place other restrictions or limitations on the exercise of those Options. 
 Shares of Common Stock issued upon the exercise of Options granted under the
Plan will be subject to the Company’s Amended and Restated Shareholders Agreement and Eligible Employees will be required to execute the Company’s Amended and Restated Shareholders Agreement as a condition of the valid exercise of any
Option granted hereunder. 
  

	5.3	Payment of Option Price. 

 Payment of the aggregate Option Price of Elected Shares must be
delivered to the Company (in the form of certified or other collected U.S. funds) with the Election Notice pertaining to those Elected Shares required by Paragraph 5.2 above, or, in the case of any Eligible Employee participating in the payroll
deduction plan, such payment must be transferred to the Company as described in Paragraph 5.4 below. If during any Election Period an Eligible Employee elects to purchase a number of shares greater than the number which could be purchased with funds
credited to him under the payroll deduction plan, then payment of the aggregate Option Price of such excess Elected Shares must accompany the employee’s Election Notice with respect to those shares. 

If payment of the Option Price of any Elected Shares is not made as required herein, then the Eligible Employee’s Election Notice will not be effective
as to those shares and he or she will not be allowed to purchase those shares on the Purchase Date for that Election Period, but those shares may be reelected during a later Election Period (subject to final forfeiture as described in Paragraph 5.1
above) 
  

	5.4	Payroll Deduction Plan. 

 At its discretion the Committee may establish for an offering a payroll
deduction agreement that would be available to all Eligible Employees covered by the offering under which, at the Eligible Employee’s written instruction, a specified amount will be deducted from each payment of his or her salary or wages
received on or before the Expiration Date of the Eligible Employee’s Option (or, in the case of an Eligible Employee whose salary or wages are paid other than monthly, from the second payment of wages each month), and will be applied in the
manner described below 

  
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toward the purchase of Elected Shares pursuant to his or her Option. Such instruction may be given only on a form of written authorization supplied by the Company for that purpose, and shall
specify a dollar amount to be withheld from each salary or wage payment. The amount of such deduction shall not exceed the aggregate Option Price of all shares covered by the Eligible Employee’s Option which have not yet been purchased, divided
by the number of the Eligible Employee’s salary or wage payments (or, in the case of an Eligible Employee whose salary or wages are paid other than monthly, the number of wage payments from which deductions will be made as described above)
remaining prior to the Expiration Date of the Option. Once a payroll deduction authorization is given by an Eligible Employee, he or she may change the amount of the deduction, or terminate the deduction authorization, only upon prior written notice
to the Company. Any such change in amount or termination shall be effective only on the last day of the month next following receipt of the Eligible Employee’s written notice thereof, or as soon as practicable thereafter. Once an Eligible
Employee has terminated a payroll deduction authorization, he or she may not give a new authorization or participate further in the payroll deduction plan until the Committee authorizes a new offering in which a payroll deduction agreement will be
available. 
 All amounts deducted from the salaries or wages of all Eligible Employees pursuant to their payroll deduction authorizations shall be
delivered to the Company’s subsidiary bank, Live Oak Banking Company (the “Bank”) which will hold such funds as custodian for each Eligible Employee in an interest-bearing deposit account. 

Upon receipt by the Company of an Election Notice from an Eligible Employee with respect to the purchase of Elected Shares for which payment will be made with
funds held by the Bank, the Company will so notify the Bank and the Bank will transfer to the Company from funds credited to the Eligible Employee on the Bank’s books and records the aggregate Option Price of those Elected Shares (but not more
than the aggregate amount then credited to that Eligible Employee). 
 An Eligible Employee who has terminated a payroll deduction authorization as provided
above, or whose Option has expired or been terminated, may request in writing that funds then credited to him on the Bank’s books and records be paid to him, and, following receipt of such a request by the Bank, all such funds which previously
have not been transferred to the Company for the purchase of stock promptly will be paid to the Eligible Employee. Following the expiration or termination of an Eligible Employee’s Option, any remaining funds credited to him on the Bank’s
books and records which previously have not been transferred to the Company for the purchase of stock shall be paid to the Eligible Employee. 
  

	5.5	Assignment. 

 Options granted to an Eligible Employee hereunder shall not be assignable or
transferable except by will or by the laws of descent and distribution, and, during the lifetime of the Eligible Employee, may be exercised only by him. More particularly, but without limiting the generality of the foregoing, an Option may not be
sold, assigned, transferred (except as noted herein), pledged or hypothecated in any way and shall not be subject to execution, attachment or similar process. Shares of Common Stock issued upon the exercise of Options granted under the Plan will be
subject to the Company’s Amended and Restated Shareholders Agreement and Eligible Employees or their assignees will be required to execute the Company’s Amended and Restated Shareholders Agreement as a condition of the valid exercise of
any Option granted hereunder. 

  
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	5.6	Termination of Options; Effect. 

 (a) Termination of Employment: In the event an Eligible
Employee’s employment with the Company or any Subsidiary shall terminate or be terminated during an Option Term for any reason other than his or her or her death, “Disability” (as defined below) or “Retirement” (as defined
below), then the Eligible Employee’s Option shall terminate at the times specified below as to any unpurchased shares, including any Elected Shares to be purchased pursuant to an Option on a Purchase Date occurring after the date of his or her
termination of employment. 
 Authorized leaves of absence and transfers of employment by an Eligible Employee between the Company and a Subsidiary, or
between two Subsidiaries, without a break in service, shall not constitute terminations of employment for purposes of the Plan. The Committee shall determine whether any other absence for military or government service or for any other reasons shall
constitute a termination of employment for purposes of the Plan, and the Committee’s determination shall be final. 
 (i) If,
prior to the Expiration Date of his or her or her Option, an Eligible Employee voluntarily terminates his or her or her employment with the Company or any of its Subsidiaries (other than as a result of “Retirement” as defined below), then,
to the extent it shall not previously have been exercised in the manner required by the Plan, any Option previously granted to the Eligible Employee which remains outstanding and in effect immediately shall terminate and be of no further force or
effect on the effective date of such termination of employment. 
 (ii) If, prior to the Expiration Date of his or her or her Option,
an Eligible Employee’s employment with the Company or any of its Subsidiaries is terminated as a result of “Retirement” (as defined below) with the consent of the Company, the Eligible Employee shall have the right to exercise his or
her rights pursuant to his or her Option within ninety (90) days following the date of such Retirement, but not later than the Expiration Date of the Option, in accordance with the terms of the Plan. 

The termination of an Eligible Employee’s employment with the Company or any of its Subsidiaries which is treated as a “retirement” under the
terms of a qualified retirement plan of the Company, or the termination of an Optionee’s employment at such earlier time or under such other circumstances as the Committee shall agree in writing to treat as “Retirement” for purposes
of the Plan, shall be deemed to be a “Retirement” with the consent of the Company. The Committee shall determine whether any termination of employment is to be considered Retirement with the consent of the Company, and the Committee’s
determination shall be final. 
 (iii) If, prior to the Expiration Date of his or her or her Option, an Eligible Employee’s
employment is terminated by the Company or any of its Subsidiaries other than for Cause (as defined below), then, to the extent it shall not previously have been exercised in the manner required by the Plan, any Option previously granted to the
Eligible Employee which remains outstanding and in effect shall terminate and be of no further force or effect on the effective date of such termination of employment. 

  
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 (iv) If, prior to the Expiration Date of his or her or her Option, an Eligible
Employee’s employment is terminated by the Company or any of its Subsidiaries for Cause, then, to the extent it shall not previously have been exercised in the manner required by the Plan, any Option previously granted to the Eligible Employee
which remains outstanding and in effect immediately shall terminate and be of no further force or effect on the earlier of the effective date of such termination of employment or the date of a determination by the Company or any of its Subsidiaries
to terminate the Eligible Employee’s employment for Cause. 
 Within thirty (30) days after receipt by the Company of a written request therefor
from an Eligible Employee whose employment has been terminated (voluntarily or by the Company or its Subsidiary), the Company shall pay to the Eligible Employee any funds paid prior to the date of such termination for the purchase of shares on a
Purchase Date occurring after the date of termination and for which such Elected Shares have not been issued. 
 For purposes of this Paragraph 5.6(a), the
Company or its Subsidiary shall have “Cause” to terminate an Eligible Employee’s employment upon: 
 (i) a
determination by the Company or its Subsidiary, in good faith, that the Eligible Employee (A) has failed in any material respect to perform or discharge his or her duties or responsibilities of employment, or (B) is engaging
or has engaged in willful misconduct or conduct which is detrimental to the business prospects of the Company or its Subsidiary or which has had or likely will have a material adverse effect on the Company’s or its Subsidiary’s business or
reputation; 
 (ii) the violation by the Eligible Employee of any applicable federal or state law, or any applicable rule,
regulation, order or statement of policy promulgated by any governmental agency or authority having jurisdiction over the Company or its Subsidiaries (a “Regulatory Authority”), including but not limited to the Federal Deposit Insurance
Corporation, the North Carolina Commissioner of Banks, the North Carolina State Banking Commission, the Federal Reserve Board or any other regulator, which results from the Eligible Employee’s gross negligence, willful misconduct or intentional
disregard of such law, rule, regulation, order or policy statement and results in any substantial damage, monetary or otherwise, to Company or any of its Subsidiaries or to its reputation; 

(iii) the commission in the course of the Eligible Employee’s employment of an act of fraud, embezzlement, theft or proven
personal dishonesty, or the Eligible Employee’s being charged with any felony or other crime involving moral turpitude (whether or not such act or charge involves the Company or its assets or results in criminal indictment, charges, prosecution
or conviction) 
 (iv) the conviction of the Eligible Employee of any felony or any criminal offense involving dishonesty or breach
of trust, or the occurrence of any event described in Section 19 of the Federal Deposit Insurance Act or any other event or circumstance which disqualifies the 

  
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Eligible Employee from serving as an employee or executive officer of, or a party affiliated with, the Company or any of its Subsidiaries; or, in the event the Eligible Employee becomes
unacceptable to, or is removed, suspended or prohibited from participating in the conduct of the Company’s or any of its Subsidiaries’ affairs (or if proceedings for that purpose are commenced), by any Regulatory Authority; 

(v) the exclusion of the Eligible Employee by the carrier or underwriter from coverage under the Company’s then current
“blanket bond” or other fidelity bond or insurance policy covering its or its Subsidiaries’ directors, officers or employees, or the occurrence of any event which the Company or any of its Subsidiaries believes, in good faith, will
result in the Eligible Employee being excluded from such coverage, or having coverage limited as to the Eligible Employee as compared to other covered officers or employees, pursuant to the terms and conditions of such “blanket bond” or
other fidelity bond or insurance policy; or, 
 (vi) the Eligible Employee’s excessive use of any addictive drug or use of any
controlled substance, as defined at 21 U.S.C. § 802 and listed on Schedules I through V of 21 U.S.C. § 812, as revised from time to time, and as defined by other federal laws and regulations, his or her use of legal drugs that have not
been obtained legally or are not being taken as prescribed by a licensed physician, or his or her use of alcohol in a manner that adversely affects the performance of his or her or her employment duties, prevents him or her from performing his or
her or her employment duties safely or creates a risk to the safety of others at the workplace. 
 For purposes of this Plan, the determination of whether
any termination of an Optionee’s employee was for Cause shall be within the sole discretion of the Committee. 
 (b) Disability of Eligible
Employee: If, prior to the Expiration Date of his or her or her Option, an Eligible Employee becomes “Disabled” (as defined below) and his or her or her employment with the Company or any of its Subsidiaries is terminated as a result,
then, to the extent it shall not previously have been exercised in the manner required by the Plan, any Option previously granted to the Eligible Employee which remains outstanding and in effect shall terminate and be of no further force or effect
on the date ninety (90) days following the effective date of such termination of employment. For purposes of this Paragraph 5.6(b), an Eligible Employee shall be considered “Disabled” at such time as he or she or she is determined to
be permanently disabled such as would qualify the Eligible Employee for benefits under the Company’s long term disability insurance plan which is applicable to the Eligible Employee. 

(c) Death of Eligible Employee: If an Eligible Employee shall die while employed by the Company or a Subsidiary during an Option Term, his or her
designated beneficiary (determined either by will or other writing delivered to the Committee in advance), or if no designated beneficiary, the personal representative of his or her estate, shall have the right to exercise such Eligible
Employee’s rights pursuant to his or her Option following the date of his or her death, but not later than the Expiration Date of the Option, in accordance with the terms of the Plan. 

  
 12 

 ARTICLE VI 

GENERAL PROVISIONS 
  

	6.1	Allotment of Options. 

  

	(a)	Changes in Capitalization; Stock Splits and Dividends. In the event of (i) any dividend payable by the Company in shares of Common Stock, or (ii) any recapitalization, reclassification,
split, consolidation or combination of, or other change in or offering of rights to the holders of, Common Stock, or (iii) an exchange of the outstanding shares of Common Stock for a different number or class of shares of stock or other
securities of the Company in connection with a merger, consolidation or other reorganization of or involving the Company (provided the Company shall be the surviving or resulting corporation in any such merger or consolidation) then the Committee
may, in such a manner as it shall determine in its sole discretion, appropriately adjust the number and class or kind of shares or of the securities which shall be subject to outstanding Options and/or the Option Price per share which must be paid
thereafter upon exercise of any Option. However, in no event shall any such adjustment change the aggregate Option Price for all shares that could be purchased pursuant to any Option. 

Subject to review by the Board of Directors of the Company, any such adjustments made by the Committee shall be consistent with changes in the
Company’s outstanding Common Stock resulting from the above events and, when made, shall be final, conclusive and binding upon all persons, including, without limitation, the Company, its shareholders and each Eligible Employee or other person
having any interest in any Option so adjusted. Any fractional shares resulting from any such adjustment shall be eliminated. However, notwithstanding anything contained herein to the contrary, Options granted pursuant to the Plan shall not be
adjusted in a manner that causes the Options to fail to continue to qualify as options issued pursuant to an “employee stock purchase plan” within the meaning of Section 423 of the Code. 

 

	(b)	Dissolution; Merger or Consolidation; Sale of Assets. In the event of a dissolution or liquidation of the Company, the sale of substantially all the assets of the Company, or a merger or consolidation of the
Company with or into any other corporation or entity (or any other such reorganization or similar transaction) in which the Company is not the surviving or resulting corporation (and if a provision is not made in such transaction for the continuance
of this Plan or the assumption of Options by any successor to the Company or for the substitution for Options of new options covering shares of any successor corporation or a parent or subsidiary thereof) then, in such event, all rights of Eligible
Employees pursuant to all outstanding Options shall terminate and be of no further effect to the extent such Options are not exercised during an Election Period preceding the effective date of such dissolution, liquidation, sale, merger,
consolidation or other reorganization (or at such other time and pursuant to such rules and regulations as the Committee shall determine and promulgate to the Eligible Employees). 

 

	(c)	Miscellaneous. The grant of an Option pursuant to the Plan shall not affect in any way the right or power of the Company to (i) make adjustments, recapitalizations, reclassifications, reorganizations
or any other changes in its capital or business structure or its business, (ii) to merge or consolidate, or to dissolve, liquidate, sell or transfer all or any part of its business or assets, or (iii) to issue bonds,
debentures, preferred or other preference stock ahead of or affecting the Common Stock or the rights thereof. 

  
 13 

	6.2	Rights as a Shareholder. 

 No Eligible Employee shall have any rights as a shareholder of the
Company with respect to any Common Stock subject to an Option until such Option has been validly exercised in the manner described herein, and until full payment of the Option Price has been made for such shares hereunder and a stock certificate
therefor has actually been issued to and registered in such Eligible Employee’s name on the Company’s stock records. Except for adjustments as provided in Paragraph 6.1 above, no adjustment will be made for dividends (ordinary or
extraordinary, whether in cash, securities or other property) distributions or other rights as to which the record date for determining shareholders entitled to receive the same is prior to the date of the issuance of such certificate. 

 

	6.3	No Right to Employment. 

 Nothing in the Plan or in any Option Notice is intended or shall be
deemed or interpreted to constitute an employment agreement or to confer upon an Optionee any right of employment with the Company or a Subsidiary, including without limitation any right to continue in the employ of the Company or a Subsidiary, or
to interfere with or otherwise restrict in any way the right of the Company or a Subsidiary to discharge or terminate the employment of an Eligible Employee at any time for any reason whatsoever, with or without cause. 

 

	6.4	Legal Restrictions. 

 If in the opinion of legal counsel for the Company the issuance or sale of
any shares of Common Stock pursuant to the exercise of an Option would not be lawful without registration under the Securities Act of 1933 (the “Act”) or without some other action being taken or for any other reason, or would require the
Company to obtain approval from any governmental authority or regulatory body having jurisdiction deemed by such counsel to be necessary to such issuance or sale, then the Company shall not be obligated to issue or sell any Common Stock pursuant to
the exercise of any Option to its Eligible Employee or any other authorized person unless a registration statement that complies with the provisions of the Act in respect of such shares is in effect at the time thereof, or all other required or
appropriate action has been taken under and pursuant to the terms and provisions of the Act or other applicable law, or the Company receives evidence satisfactory to such counsel that the issuance and sale of such shares, in the absence of an
effective registration statement or other required or appropriate action, would not constitute a violation of the Act or other applicable law, or unless any such required approval shall have been obtained. The Company is in no event obligated to
register any such shares, to comply with any exemption from registration requirements or to take any other action which may be required in order to permit, or to remedy or remove any prohibition or limitation on, the issuance or sale of such shares
to any Eligible Employee or other authorized person. 

  
 14 

 The Committee, as a condition of the grant of an Option and/or the exercise thereof, may require that the
Eligible Employee execute one or more undertakings in such form as the Committee shall prescribe to the effect that such shares are being acquired for investment purposes only and not with a view to the distribution or resale thereof. 

Notwithstanding anything contained herein to the contrary, it is understood and agreed that neither the Company nor any of its Subsidiaries (or any of their
successors in interest) shall be required to take any action under this Plan or any Option granted hereunder if: 
  

	(a)	the Company is declared by any Regulatory Authority to be insolvent, in default or operating in an unsafe or unsound manner; or, 

 

	(b)	in the opinion of counsel to the Company, such payment or action: 

  

	 	(i)	would be prohibited by or would violate any provision of state or federal law applicable to the Company or any of its Subsidiaries, including without limitation the Federal Deposit Insurance Act as now in effect
or hereafter amended; 

  

	 	(ii)	would be prohibited by or would violate any applicable rules, regulations, orders or statements of policy, whether now existing or hereafter promulgated, of any Regulatory Authority; or, 

 

	 	(iii)	otherwise would be prohibited by any Regulatory Authority. 

  

	6.5	No Obligation to Purchase Shares. 

 The granting of an Option pursuant to the Plan shall impose no
obligation on the Eligible Employee to purchase any shares covered by such Option. 
  

	6.6	Payment of Taxes. 

 Each Eligible Employee shall be responsible for all federal, state, local or
other taxes of any nature as shall be imposed pursuant to any law or governmental regulation or ruling on any Option or the exercise thereof or on any income which an Eligible Employee is deemed to recognize in connection with an Option. If the
Committee shall determine to its reasonable satisfaction that the Corporation or any Subsidiary is required to pay or withhold the whole or any part of any estate, inheritance, income, or other tax with respect to or in connection with any Option,
the exercise thereof or the Eligible Employee’s resale of any Elected Shares, then the Company or such Subsidiary shall have the full power and authority to withhold and pay such tax out of any Elected Shares purchased by the Eligible Employee
or from the Eligible Employee’s salary or any other funds otherwise payable to the Eligible Employee, or, prior to and as a condition of exercising such Option, the Company may require that the Eligible Employee pay to it in cash the amount of
any such tax which the Company, in good faith, deems itself required to withhold. 

  
 15 

	6.7	Choice of Law. 

 The validity, interpretation and administration of the Plan and of any rules,
regulations, determinations or decisions made thereunder, and the rights of any and all persons having or claiming to have any interest therein or thereunder, shall be determined exclusively in accordance with the laws of the State of North
Carolina. Without limiting the generality of the foregoing, the period within which any action in connection with the Plan must be commenced shall be governed by the laws of the State of North Carolina, without regard to the place where the act or
omission complained of took place, the residence of any party to such action, or the place where the action may be brought or maintained. 
  

	6.8	Amendment of Plan. 

 The Board of Directors, upon recommendation of the Committee, may, from time
to time, amend, modify, suspend or discontinue the Plan at any time without notice, provided that no Eligible Employee’s existing rights are adversely affected thereby; and, provided further that, except with the approval of shareholders of the
Company and no more frequently than once each six months, or otherwise as provided in Paragraph 6.1 hereof or to comport with changes in the Code, no such amendment of the Plan shall: (a) increase the aggregate number of shares which may
be sold upon the exercise of Options granted under the Plan; (b) change the formula by which the Option Price is determined; (c) change the formula by which the number of shares which any Optionee may purchase is determined;
or, (d) change the provisions of the Plan with respect to the determination of Eligible Employees and the timing of grants of Options. In the event the Board shall terminate or discontinue the Plan, such action shall not operate to
deprive any Eligible Employee of any rights theretofore acquired by him or her under the Plan, and any Options outstanding as of the date of any such termination shall remain in full force and effect according to their terms as though the Plan had
not been terminated. 
  

	6.9	Application of Funds. 

 The proceeds received by the Company from the sale of Common Stock
pursuant to Options granted under the Plan will be used for general corporate purposes. 
  

	6.10	Notices. 

 Except as otherwise provided herein, any notice which the Company or an Eligible
Employee may be required or permitted to give to the other shall be in writing and shall be deemed duly given when delivered personally or deposited in the United States mail, first class postage prepaid, and properly addressed. Notice, if to the
Company, shall be sent to the Secretary of the Company at the following address: 
 Live Oak Bancshares, Inc. 

1741 Tiburon Drive 
 Wilmington,
North Carolina 28403 
 Phone: (877) 890-5867 

  
 16 

 Any notice sent by mail by the Company to an Optionee shall be sent to the most current address of the Optionee
as reflected on the records of the Company or its Subsidiaries as of the time said notice is required. In the case of a deceased Optionee, any notice shall be given to the Optionee’s personal representative if such representative has delivered
to the Company evidence satisfactory to the Company of such representative’s status as such and has informed the Company of the address of such representative by notice pursuant to this Paragraph 6.10. 

 

	6.11	Conformity With Applicable Laws and Regulations. 

 With respect to persons who are subject to
Section 16 of the Securities Exchange Act of 1934, the Plan and each Option granted and other transaction under it are intended to satisfy applicable conditions of Rule 16b-3 of the Securities and Exchange Commission (as such Rule may be
modified, amended or superseded from time to time). To the extent any provision of the Plan or any Option, or any action by the Committee or the Board of Directors, shall fail to so comply, then, to the extent permitted by law and deemed advisable
by the Committee, such provision or action shall be deemed null and void. 
  

	6.12	Successors and Assigns. 

 Subject to Paragraph 5.5 above, this Plan shall bind and inure to the
benefit of the Company, any Optionee, and their respective successors, assigns, personal or legal representatives and heirs. 
  

	6.13	Severability. 

 It is intended that each provision of this Plan shall be viewed as separate and
divisible, and in the event that any provision hereof shall be held to be invalid or unenforceable, the remaining provisions shall continue to be in full force and effect. 
  

	6.14	Titles. 

 Titles of Articles and Paragraphs are provided herein for convenience only, do not
modify or affect the meaning of any provision herein, and shall not serve as a basis for interpretation or construction of this Plan. 
  

	6.15	Gender and Number. 

 As used herein, the masculine gender shall include the feminine and neuter,
the singular number the plural, and vice versa, whenever such meanings are appropriate. 

  
 17 

 IN WITNESS WHEREOF, the Company has caused this Plan to be executed in its corporate name
by its President, attested by its Secretary and its corporate seal to be hereto affixed, all by authority duly given by the Board, as of this the 16th day of May, 2006. 

 

			
	LIVE OAK BANCSHARES, INC.
		
	By:		 /s/ James S. Mahan III

			Chairman and Chief Executive Officer

  

	
	ATTEST:
	
	 /s/ Lynn M. Burney

	Secretary

  
 18 

 CERTIFICATE OF SECRETARY 

The undersigned Secretary of Live Oak Bancshares, Inc. (the “Company”) hereby certifies that the foregoing 2014 EMPLOYEE STOCK
PURCHASE PLAN was duly adopted by the Company’s Board of Directors on October 8, 2014, and was approved by the Company’s shareholders at the annual meeting of shareholders held on March 20, 2015, by a vote of a majority of the shares
of the Company’s common stock present or represented, in person and by proxy, at such meeting. 
 This the 20th day of March, 2015. 
  

	
	 /s/ Lynn M. Burney

	Secretary

  
 19EX-10.4

 Exhibit 10.4 

LIVE OAK BANCSHARES, INC. 

2015 OMNIBUS STOCK INCENTIVE PLAN 

MARCH 20, 2015 
 1.
Purposes of the Plan. The purposes of this Plan are to attract and retain the best available personnel; to provide additional incentives to Employees, Directors and Consultants to contribute to the successful performance of the Company and
any Subsidiary of the Company; to promote the growth of the market value of the Company’s Common Stock; to align the interests of Grantees with those of the Company’s shareholders; and to promote the success of the Company’s business.

 2. Definitions. The following definitions shall apply as used herein and in all individual Award Agreements except as a term may
be otherwise defined in an individual Award Agreement. In the event a term is separately defined in an individual Award Agreement, such definition shall supersede the definition contained in this Section 2. 

(a) “Administrator” means the Board or any Committee. 

(b) “Applicable Laws” means the legal requirements relating to the Plan and the Awards under applicable provisions of
federal and state securities laws, the corporate laws of North Carolina, and, to the extent other than North Carolina, the corporate law of the state of the Company’s incorporation, the Code, the rules of any applicable stock exchange or
national market system, and the rules of any non-U.S. jurisdiction applicable to Awards granted to residents therein. 
 (c)
“Assumed” means that pursuant to a Corporate Transaction either (i) the Award is expressly affirmed by the Company or (ii) the contractual obligations represented by the Award are expressly assumed (and not simply
by operation of law) by the successor entity or its Parent in connection with the Corporate Transaction with appropriate adjustments to the number and type of securities of the successor entity or its Parent subject to the Award and the exercise or
purchase price thereof which at least preserves the compensation element of the Award existing at the time of the Corporate Transaction as determined in accordance with the instruments evidencing the agreement to assume the Award. 

(d) “Award” means the grant of an Option, SAR, Dividend Equivalent Right, Restricted Stock, Restricted Stock Unit, or
other right or benefit under the Plan. 
 (e) “Award Agreement” means the written agreement evidencing the grant of
an Award executed by the Company and the Grantee, including any amendments thereto. 
 (f) “Board” means the Board
of Directors of the Company. 
 (g) “Cause” means, with respect to the termination by the Company or a Related
Entity of the Grantee’s Continuous Service, that such termination is for “Cause” as such 

  
 1 

 
term (or word of like import) is expressly defined in a then-effective written agreement between the Grantee and the Company or such Related Entity, or in the absence of such then-effective
written agreement and definition, is based on, in the determination of the Administrator: (i) the Grantee’s performance of any act, or failure to perform any act, in bad faith and to the detriment of the Company or a Related Entity;
(ii) the Grantee’s dishonesty, intentional misconduct or material breach of any agreement with the Company or a Related Entity; (iii) the removal of the Grantee from office or permanent prohibition of the Grantee from participating in
the affairs of the Company or any Related Entity by an order issued under section 8(e)(4) or (g)(1) of the Federal Deposit Insurance Act, 12 U.S.C. 1818(e)(4) or (g)(1); (iv) the occurrence of any event that results in the Grantee being
excluded from coverage, or having coverage limited for the Grantee, under the Company’s blanket bond or other fidelity or insurance policy covering its directors, officers, or employees; or (v) the Grantee’s commission of a crime
involving dishonesty, breach of trust, or physical or emotional harm to any person; provided, however, that with regard to any agreement that defines “Cause” on the occurrence of or in connection with a Corporate Transaction, such
definition of “Cause” shall not apply until a Corporate Transaction actually occurs. 
 (h) “Code” means
the Internal Revenue Code of 1986, as amended, or any successor statute. 
 (i) “Committee” means any committee
composed of members of the Board appointed by the Board to administer the Plan. 
 (j) “Common Stock” means the
Company’s voting common stock, no par value per share. 
 (k) “Company” means Live Oak Bancshares, Inc., a
North Carolina corporation, or any successor entity that adopts the Plan in connection with a Corporate Transaction. 
 (l)
“Consultant” means any person (other than an Employee or a Director, solely with respect to rendering services in such person’s capacity as a Director) who is engaged by the Company or any Related Entity to render
consulting or advisory services to the Company or such Related Entity. 
 (m) “Continuous Service” means that the
provision of services to the Company or a Related Entity in any capacity of Employee, Director or Consultant is not interrupted or terminated. In jurisdictions requiring notice in advance of an effective termination as an Employee, Director or
Consultant, Continuous Service shall be deemed terminated upon the actual cessation of providing services to the Company or a Related Entity notwithstanding any required notice period that must be fulfilled before a termination as an Employee,
Director or Consultant can be effective under Applicable Laws. A Grantee’s Continuous Service shall be deemed to have terminated either upon an actual termination of Continuous Service or upon the entity for which the Grantee provides services
ceasing to be a Related Entity. Continuous Service shall not be considered interrupted in the case of (i) any approved leave of absence, (ii) transfers among the Company, any Related Entity, or any successor in any capacity of Employee,
Director or Consultant, or (iii) any change in status as long as the individual remains 

  
 2 

 
in the service of the Company or a Related Entity in any capacity of Employee, Director or Consultant (except as otherwise provided in the Award Agreement). An approved leave of absence for
purposes of this Plan shall include sick leave, military leave, or any other authorized personal leave, so long as the Company or Related Entity has a reasonable expectation that the individual will return to provide services for the Company or
Related Entity, and provided further that the leave does not exceed six (6) months, unless the individual has a statutory or contractual right to re-employment following a longer leave. For purposes of each Incentive Stock Option granted under
the Plan, if such leave exceeds three (3) months, and reemployment upon expiration of such leave is not guaranteed by statute or contract, then the Incentive Stock Option shall be treated as a Non-Qualified Stock Option beginning on the day
three (3) months and one (1) day following the expiration of such three (3) month period. 
 (n) “Corporate
Transaction” means any of the following transactions, provided, however, that the Administrator shall determine under parts (iv) and (v) whether multiple transactions are related, and its determination shall be final, binding
and conclusive: 
 (i) a merger or consolidation in which the Company is not the surviving entity, except for a transaction the principal
purpose of which is to change the state in which the Company is incorporated; 
 (ii) the sale, transfer or other disposition of all or
substantially all of the assets of the Company; 
 (iii) the complete liquidation or dissolution of the Company; 

(iv) any reverse merger or series of related transactions culminating in a reverse merger (including, but not limited to, a tender offer
followed by a reverse merger) in which the Company is the surviving entity but (A) the Shares outstanding immediately prior to such merger are converted or exchanged by virtue of the merger into other property, whether in the form of
securities, cash or otherwise, or (B) in which securities possessing more than fifty percent (50%) of the total combined voting power of the Company’s outstanding securities are transferred to a person or persons different from those
who held such securities immediately prior to such merger or the initial transaction culminating in such merger; or 
 (v) acquisition in a
single or series of related transactions by any person or related group of persons (other than the Company or by a Company-sponsored employee benefit plan) of beneficial ownership (within the meaning of Rule 13d-3 of the Exchange Act) of securities
possessing more than fifty percent (50%) of the total combined voting power of the Company’s outstanding securities. 
 (o)
“Covered Employee” means an Employee who is a “covered employee” under Section 162(m)(3) of the Code. 

(p) “Data” has the meaning set forth in Section 23 of this Plan. 

(q) “Director” means a member of the Board or the board of directors of any Related Entity. 

  
 3 

 (r) “Disability” means a “disability” (or word of like import)
as defined under the long-term disability policy of the Company or the Related Entity to which the Grantee provides services regardless of whether the Grantee is covered by such policy. If the Company or the Related Entity to which the Grantee
provides service does not have a long-term disability plan in place, “Disability” means that a Grantee is unable to carry out the responsibilities and functions of the position held by the Grantee by reason of any medically determinable
physical or mental impairment for a period of not less than ninety (90) consecutive days. A Grantee will not be considered to have incurred a Disability unless he or she furnishes proof of such impairment sufficient to satisfy the Administrator
in its discretion. 
 (s) “Disqualifying Disposition” means any disposition (including any sale) of Common Stock
received upon exercise of an Incentive Stock Option before either (i) two years after the date the Employee was granted the Incentive Stock Option, or (ii) one year after the date the Employee acquired Common Stock by exercising the
Incentive Stock Option. If the Employee has died before such stock is sold, these holding period requirements do not apply and no Disqualifying Disposition can occur thereafter. 

(t) “Dividend Equivalent Right” means a right entitling the Grantee to compensation measured by dividends paid with
respect to Common Stock. 
 (u) “Employee” means any person, including an Officer or Director, who is in the employ
of the Company or any Related Entity, subject to the control and direction of the Company or any Related Entity as to both the work to be performed and the manner and method of performance. The payment of a director’s fee by the Company or a
Related Entity shall not be sufficient to make such person an “Employee” of the Company or a Related Entity. 
 (v)
“Exchange Act” means the Securities Exchange Act of 1934, as amended. 
 (w) “Fair Market
Value” means, as of any date, the value of the Common Stock determined as follows. 
 (i) If the Common Stock is listed on one
or more established stock exchanges or national market systems, including without limitation The NASDAQ Global Select Market, The NASDAQ Global Market, or The NASDAQ Capital Market of The NASDAQ Stock Market LLC, its Fair Market Value shall be the
closing sales price for such stock (or the closing bid, if no sales were reported) as quoted on the principal exchange or system on which the Common Stock is listed (as determined by the Administrator) on the date of determination (or, if no closing
sales price or closing bid was reported on that date, as applicable, on the last trading date such closing sales price or closing bid was reported), as reported in The Wall Street Journal or such other source as the Administrator deems reliable;

 (ii) If the Common Stock is regularly quoted on an automated quotation system (including the OTC Bulletin Board) or by a recognized
securities dealer, its Fair Market Value shall be the closing sales price for such stock as quoted on such system or by such securities dealer on the date of determination, but if selling prices are not reported, the Fair Market Value of a Share
shall be the mean between the high bid and low asked prices for the Common Stock on the date of determination (or, if no such prices were reported on that date, on the last date such prices were reported), as reported in The Wall Street Journal or
such other source as the Administrator deems reliable; or 

  
 4 

 (iii) In the absence of an established market for the Common Stock of the type described in
(i) and (ii), above, the Fair Market Value thereof shall be determined by the Administrator in good faith by application of a reasonable valuation method consistently applied and taking into consideration all available information material to
the value of the Company in a manner in compliance with Section 409A of the Code, or in the case of an Incentive Stock Option, in a manner in compliance with Section 422 of the Code. 

(x) “Grantee” means an Employee, Director or Consultant who receives an Award under the Plan. 

(y) “Incentive Stock Option” means an Option intended to qualify as an incentive stock option within the meaning of
Section 422 of the Code. 
 (z) “Non-Qualified Stock Option” means an Option not intended to qualify as an
Incentive Stock Option. 
 (aa) “Officer” means a person who is an officer of the Company or a Related Entity within
the meaning of Section 16 of the Exchange Act and the rules and regulations promulgated thereunder. 
 (bb)
“Option” means an option to purchase Shares pursuant to an Award Agreement granted under the Plan. 
 (cc)
“Parent” means a “parent corporation,” whether now or hereafter existing, as defined in Section 424(e) of the Code. 

(dd) “Performance-Based Compensation” means compensation qualifying as “performance-based compensation”
under Section 162(m) of the Code. 
 (ee) “Performance Period” means the time period during which specified
performance criteria and/or continued status as an Employee, Director, or Consultant must be met as determined by the Administrator in its sole discretion. 

(ff) “Plan” means this Live Oak Bancshares 2015 Omnibus Stock Incentive Plan. 

(gg) “Post-Termination Exercise Period” means the period specified in the Award Agreement of not less than thirty
(30) days commencing on the date of termination (other than termination by the Company or any Related Entity for Cause) of the Grantee’s Continuous Service, or such longer period as may be applicable upon death or Disability. 

(hh) “Related Entity” means any Parent or Subsidiary of the Company. 

(ii) “Restricted Stock” means Shares issued under the Plan to the Grantee for such consideration, if any, and subject
to such restrictions on transfer, rights of first refusal, repurchase provisions, forfeiture provisions, and other terms and conditions as established by the Administrator. 

  
 5 

 (jj) “Restricted Stock Units” means an Award which may be earned in whole
or in part upon the passage of time or the attainment of performance criteria established by the Administrator and which may be settled for cash, Shares or other securities or a combination of cash, Shares or other securities as established by the
Administrator. 
 (kk) “Rule 16b-3” means Rule 16b-3 promulgated under the Exchange Act or any successor
thereto. 
 (ll) “SAR” means a stock appreciation right entitling the Grantee to Shares or cash compensation, as
established by the Administrator, measured by appreciation in the value of Common Stock. 
 (mm) “Share” means a
share of the Common Stock. 
 (nn) “Subsidiary” means a “subsidiary corporation,” whether now or hereafter
existing, as defined in Section 424(f) of the Code. 
 (oo) “Tax Obligations” means all income tax, social
insurance, payroll tax, fringe benefits tax, or other tax-related liabilities related to a Grantee’s participation in the Plan and the receipt of any benefits hereunder, as determined under the Applicable Laws. 

3. Stock Subject to the Plan. 

(a) Subject to adjustment as described in Section 13 below, the maximum aggregate number of Shares which may be issued pursuant to all
Awards (including Incentive Stock Options) is Four Million Three Hundred Thousand (4,300,000) Shares. The Shares may be authorized, but unissued, or reacquired Common Stock. 

(b) Any Shares covered by an Award (or portion of an Award) which is forfeited, canceled or expires (whether voluntarily or involuntarily)
shall be deemed not to have been issued for purposes of determining the maximum aggregate number of Shares which may be issued under the Plan, except that the maximum aggregate number of Shares which may be issued pursuant to the exercise of
Incentive Stock Options shall not exceed the number specified in Section 3(a). Shares that actually have been issued under the Plan pursuant to an Award shall not be returned to the Plan and shall not become available for future issuance under
the Plan, except that if unvested Shares are forfeited or repurchased by the Company, such Shares shall become available for future grant under the Plan. In the event any Option or other Award granted under the Plan is exercised through the
tendering of Shares (either actually or through attestation), or in the event tax withholding obligations are satisfied by tendering or withholding Shares, any Shares so tendered or withheld shall not again be available for awards under the Plan. To
the extent that cash in lieu of Shares is delivered upon the exercise of an SAR pursuant to Section 6(m), the Company shall be deemed, for purposes of applying the limitation on the number of shares, to have issued the greater of the number of
Shares which it was entitled to issue upon such exercise or on the exercise of any related Option. Shares reacquired by the Company on the open market or otherwise using cash proceeds from the exercise of Options shall not be available for awards
under the Plan. 

  
 6 

 4. Administration of the Plan. 

(a) Plan Administrator. 

(i) Administration with Respect to Directors and Officers. With respect to grants of Awards to Directors or Employees who are also
Officers or Directors of the Company, the Plan shall be administered by (A) the Board or (B) a Committee designated by the Board, which Committee shall be constituted in such a manner as to satisfy the Applicable Laws and to permit such
grants and related transactions under the Plan to be exempt from Section 16(b) of the Exchange Act in accordance with Rule 16b-3. Once appointed, such Committee shall continue to serve in its
designated capacity until otherwise directed by the Board. 
 (ii) Administration With Respect to Consultants and Other Employees.
With respect to grants of Awards to Employees or Consultants who are neither Directors nor Officers of the Company, the Plan shall be administered by (A) the Board or (B) a Committee designated by the Board, which Committee shall be
constituted in such a manner as to satisfy the Applicable Laws. Once appointed, such Committee shall continue to serve in its designated capacity until otherwise directed by the Board. 

(iii) Administration With Respect to Covered Employees. Notwithstanding the foregoing, grants of Awards to any Covered Employee
intended to qualify as Performance-Based Compensation shall be made only by a Committee (or subcommittee of a Committee) which is comprised solely of two or more Directors eligible to serve on a committee making Awards qualifying as
Performance-Based Compensation. In the case of such Awards granted to Covered Employees, references to the “Administrator” or to a “Committee” shall be deemed to be references to such Committee or subcommittee. 

(b) Multiple Administrative Bodies. The Plan may be administered by different bodies with respect to Directors, Officers, Consultants,
and Employees who are neither Directors nor Officers. 
 (c) Powers of the Administrator. Subject to Applicable Laws and the
provisions of the Plan (including any other powers given to the Administrator hereunder), and except as otherwise provided by the Board, the Administrator shall have the authority, in its discretion: 

(i) to select the Employees, Directors and Consultants to whom Awards may be granted from time to time hereunder; 

(ii) to determine whether and to what extent Awards are granted hereunder; 

(iii) to determine the number of Shares or the amount of other consideration to be covered by each Award granted hereunder; 

  
 7 

 (iv) to approve forms of Award Agreements for use under the Plan; 

(v) to determine the type, terms and conditions of any Award granted hereunder; 

(vi) to establish additional terms, conditions, rules or procedures to accommodate the rules or laws of applicable non-U.S. jurisdictions and
to afford Grantees favorable treatment under such rules or laws; provided, however, that no Award shall be granted under any such additional terms, conditions, rules or procedures with terms or conditions which are inconsistent with the provisions
of the Plan; 
 (vii) to amend the terms of any outstanding Award granted under the Plan, provided that any amendment that would adversely
affect the Grantee’s rights under an outstanding Award shall not be made without the Grantee’s written consent; provided, however, that an amendment or modification that may cause an Incentive Stock Option to become a Non-Qualified Stock
Option shall not be treated as adversely affecting the rights of the Grantee; 
 (viii) to construe and interpret the terms of the Plan and
Awards, including without limitation, any notice of award or Award Agreement, granted pursuant to the Plan; 
 (ix) to institute an option
exchange program; and 
 (x) to take such other action, not inconsistent with the terms of the Plan, as the Administrator deems
appropriate. 
 The express grant in the Plan of any specific power to the Administrator shall not be construed as limiting any power or authority of the
Administrator; provided that the Administrator may not exercise any right or power reserved to the Board. Any decision made, or action taken, by the Administrator or in connection with the administration of this Plan shall be final, conclusive and
binding on all persons having an interest in the Plan. 
 (d) Indemnification. In addition to such other rights of indemnification as
they may have as members of the Board or as Officers or Employees of the Company or a Related Entity, members of the Board and any Officers or Employees of the Company or a Related Entity to whom authority to act for the Board, the Administrator or
the Company is delegated shall be defended and indemnified by the Company to the extent permitted by law on an after-tax basis against all reasonable expenses, including attorneys’ fees, actually and necessarily incurred in connection with the
defense of any claim, investigation, 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 Award
granted hereunder, and against all amounts paid by them in settlement thereof (provided such settlement is approved by the Company) or paid by them in satisfaction of a judgment in any such claim, investigation, action, suit or proceeding, except in
relation to such liabilities, costs, and expenses as may arise out of, or result from, the bad faith, gross negligence, willful misconduct, or criminal acts of such persons; provided, however, that within thirty (30) days after the institution
of such claim, investigation, action, suit or proceeding, such person shall offer to the Company, in writing, the opportunity at the Company’s expense to defend the same. 

  
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 5. Eligibility. Awards other than Incentive Stock Options may be granted to Employees,
Directors, and Consultants of the Company and any Related Entity. Incentive Stock Options may be granted only to Employees of the Company or a Related Entity. An Employee, Director, or Consultant who has been granted an Award may, if otherwise
eligible, be granted additional Awards. Awards may be granted to such Employees, Directors, or Consultants who are residing in non-U.S. jurisdictions as the Administrator may determine from time to time. 

6. Terms and Conditions of Awards. 

(a) Types of Awards. The Administrator is authorized under the Plan to award any type of arrangement to an Employee, Director or
Consultant that is not inconsistent with the provisions of the Plan and that by its terms involves or might involve the issuance of (i) Shares, (ii) cash or (iii) an Option, an SAR, or similar right with a fixed or variable price
related to the Fair Market Value of the Shares and with an exercise or conversion privilege related to the passage of time, the occurrence of one or more events, or the satisfaction of performance criteria or other conditions. Such awards include,
without limitation, Options, SARs, sales or bonuses of Restricted Stock, Restricted Stock Units, and Dividend Equivalent Rights. An Award may consist of one such security or benefit, or two (2) or more of them in any combination or alternative.

 (b) Designation of Award. Each Award shall be evidenced by an Award Agreement in form and substance satisfactory to the
Administrator in its discretion. The type of each Award shall be designated in the Award Agreement. In the case of an Option, the Option shall be designated as either an Incentive Stock Option or a Non-Qualified Stock Option. However,
notwithstanding such designation, an Option will qualify as an Incentive Stock Option under the Code only to the extent the $100,000 dollar limitation of Section 422(d) of the Code is not exceeded. The $100,000 limitation of Section 422(d)
of the Code is calculated based on the aggregate Fair Market Value of the Shares subject to Options designated as Incentive Stock Options which become exercisable for the first time by a Grantee during any calendar year (under all plans of the
Company or any Related Entity). For purposes of this calculation, Incentive Stock Options shall be taken into account in the order in which they were granted, and the Fair Market Value of the Shares shall be determined as of the grant date of the
relevant Option. Any Option granted which fails to satisfy the requirements of the Applicable Laws for treatment as an Incentive Stock Option shall become a Non-Qualified Stock Option. 

(c) Conditions of Award. Subject to the terms of the Plan, the Administrator shall determine the provisions, terms, and conditions of
each Award including, but not limited to, the Award vesting schedule, repurchase provisions, rights of first refusal, forfeiture provisions, form of payment (cash, Shares, or other consideration) upon settlement of the Award, payment contingencies,
and satisfaction of any performance criteria that may be established by the Administrator. 
 (d) Performance-Based Awards. If the
Administrator, in its discretion, determines to grant one or more Awards intended to quality as Performance-Based Compensation, then the following provisions will apply. 

  
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 (i) The granting and/or vesting of Awards under the Plan may, in the discretion of the
Administrator, be made subject to the achievement of certain performance criteria as the Administrator may determine. The performance criteria established by the Administrator may be based on any one of, or combination of, the following criteria:
increase in share price, earnings per share, total shareholder return, return on equity, return on assets, return on investment, net operating income, cash flow, revenue, economic value added, personal management objectives, or other measure of
performance selected by the Administrator. 
 (ii) With respect to Awards intended to qualify as Performance-Based Compensation, before the
90th day of the applicable Performance Period (or, if the Performance Period is less than one year, no later than the number of days which is equal to 25% of such Performance Period), the Administrator will determine the duration of the Performance
Period, the performance criteria on which performance will be measured, and the amount and terms of payment/vesting upon achievement of the such criteria. 

(iii) Following the completion of each Performance Period, the Administrator will certify in writing whether the applicable performance
criteria have been achieved for such Performance Period. A Grantee will be eligible to receive payment pursuant to an Award intended to qualify as Performance-Based Compensation for a Performance Period only if the performance criteria for such
Performance Period are achieved. In determining the amounts earned by a Grantee pursuant to an Award intended to qualified as Performance-Based Compensation, the Administrator will have the right to (A) reduce or eliminate (but not to increase)
the amount payable at a given level of performance to take into account additional factors that the Administrator may deem relevant to the assessment of individual or corporate performance for the Performance Period, (B) determine what actual
Award, if any, will be paid in the event of a Corporate Transaction or in the event of a termination of employment following a Corporate Transaction prior to the end of the Performance Period, and (C) determine what actual Award, if any, will
be paid in the event of a termination of employment other than as the result of a Grantee’s death or Disability prior to a Corporate Transaction and prior to the end of the Performance Period to the extent an actual Award would have otherwise
been achieved had the Grantee remained employed through the end of the Performance Period. 
 (iv) To the extent that the Administrator
determines as of the date of grant of an Award that (A) the Award is intended to qualify as Performance-Based Compensation, and (B) the Award is not exempt from the application of Section 162(m) of the Code, such Award shall not be
effective until any shareholder approval required under Section 162(m) of the Code has been obtained. 
 (e) Acquisitions and Other
Transactions. The Administrator may issue Awards under the Plan in settlement, assumption or substitution for, outstanding awards or obligations to grant future awards in connection with the Company or a Related Entity acquiring another entity,
an interest in another entity or an additional interest in a Related Entity whether by merger, stock purchase, asset purchase or other form of transaction. 

(f) Deferral of Award Payment. The Administrator may establish one or more programs under the Plan to permit selected Grantees the
opportunity to elect to defer receipt of consideration upon exercise of an Award, satisfaction of performance criteria, or other 

  
 10 

 
event that absent the election would entitle the Grantee to payment or receipt of Shares or other consideration under an Award. The Administrator may establish the election procedures, the timing
of such elections, the mechanisms for payments of, and accrual of interest or other earnings, if any, on amounts, Shares or other consideration so deferred, and such other terms, conditions, rules and procedures that the Administrator deems
advisable for the administration of any such deferral program. 
 (g) Separate Programs. The Administrator may establish one or more
separate programs under the Plan for the purpose of issuing particular forms of Awards to one or more classes of Grantees on such terms and conditions as determined by the Administrator from time to time. 

(h) Individual Option and SAR Limit. The maximum number of Shares with respect to which Options and SARs may be granted to any Grantee
in any calendar year shall be Fifty Thousand (50,000) Shares. The foregoing limitation shall be adjusted proportionately in connection with any change in the Company’s capitalization pursuant to Section 13 below. To the extent
required by Section 162(m) of the Code or the regulations thereunder, in applying the foregoing limitations with respect to a Grantee, if any Option or SAR is canceled, the canceled Option or SAR shall continue to count against the maximum
number of Shares with respect to which Options and SARs may be granted to the Grantee. For this purpose, the repricing of an Option (or in the case of an SAR, the base amount on which the stock appreciation is calculated is reduced to reflect a
reduction in the Fair Market Value of the Common Stock) shall be treated as the cancellation of the existing Option or SAR and the grant of a new Option or SAR. 

(i) Early Exercise. An Award Agreement may, but need not, include a provision whereby the Grantee may elect at any time while an
Employee, Director or Consultant to exercise any part or all of the Award prior to full vesting of the Award. Any unvested Shares received pursuant to such exercise may be subject to a repurchase right in favor of the Company or a Related Entity or
to any other restriction the Administrator determines to be appropriate. 
 (j) Term of Award. The term of each Award shall be the
term stated in the Award Agreement, provided, however, that the term shall be no more than ten (10) years from the date of grant thereof. However, in the case of an Incentive Stock Option granted to a Grantee who, at the time the Option is
granted, owns stock representing more than ten percent (10%) of the voting power of all classes of stock of the Company or any Related Entity, the term of the Incentive Stock Option shall be five (5) years from the date of grant
thereof or such shorter term as may be provided in the Award Agreement. Notwithstanding the foregoing, the specified term of any Award shall not include any period for which the Grantee has elected to defer the receipt of the Shares or cash issuable
pursuant to the Award. 
 (k) Transferability of Awards. Unless the Administrator provides otherwise, in its sole discretion, no
award may be sold, pledged, assigned, hypothecated, transferred, or disposed of in any manner other than by will or by the laws of descent or distribution and may be exercised, during the lifetime of the Grantee, only by the Grantee. Notwithstanding
the foregoing, the Grantee may designate one or more beneficiaries of the Grantee’s Award in the event of the Grantee’s death on a beneficiary designation form provided by the Administrator. 

  
 11 

 (l) Time of Granting Awards. The date of grant of an Award shall for all purposes be the
date on which the Administrator makes the determination to grant such Award, or such other later date as is determined by the Administrator. 

(m) Stock Appreciation Rights. An SAR may be granted (i) with respect to any Option granted under this Plan, either concurrently
with the grant of such Option or at such later time as determined by the Administrator (as to all or any portion of the Shares subject to the Option), or (ii) alone, without reference to any related Option. Each SAR granted by the Administrator
under this Plan shall be subject to the following terms and conditions. Each SAR granted to any participant shall relate to such number of Shares as shall be determined by the Administrator, subject to adjustment as provided in Section 13. In
the case of an SAR granted with respect to an Option, the number of Shares to which the SAR pertains shall be reduced in the same proportion that the holder of the Option exercises the related Option. The exercise price of an SAR will be determined
by the Administrator, in its discretion, at the date of grant but may not be less than 100% of the Fair Market Value of the Shares subject thereto on the date of grant. Subject to the right of the Administrator to deliver cash in lieu of Shares
(which, as it pertains to Officers and Directors of the Company, shall comply with all requirements of the Exchange Act), the number of Shares which shall be issuable upon the exercise of an SAR shall be determined by dividing: 

(i) the number of Shares as to which the SAR is exercised multiplied by the amount of the appreciation in such Shares (for this purpose, the
“appreciation” shall be the amount by which the Fair Market Value of the Shares subject to the SAR on the exercise date exceeds (1) in the case of an SAR related to an Option, the exercise price of the Shares under the Option or
(2) in the case of an SAR granted alone, without reference to a related Option, an amount which shall be determined by the Administrator at the time of grant, subject to adjustment under Section 13); by 

(ii) the Fair Market Value of a Share on the exercise date. 

In lieu of issuing Shares upon the exercise of an SAR, the Administrator may elect to pay the holder of the SAR cash equal to the Fair Market Value on the
exercise date of any or all of the Shares which would otherwise be issuable. No fractional Shares shall be issued upon the exercise of an SAR; instead, the holder of the SAR shall be entitled to receive a cash adjustment equal to the same fraction
of the Fair Market Value of a Share on the exercise date or to purchase the portion necessary to make a whole share at its Fair Market Value on the date of exercise. The exercise of an SAR related to an Option shall be permitted only to the extent
that the Option is exercisable under Section 11 on the date of surrender. Any Incentive Stock Option surrendered pursuant to the provisions of this Section 6(m) shall be deemed to have been converted into a Non-Qualified Stock Option
immediately prior to such surrender. 
 (n) Compliance with Section 409A of the Code. Notwithstanding anything to the contrary
set forth herein, any Award that is not exempt from the requirements of Section 409A of the Code shall contain such provisions so that such Award will comply with the requirements of Section 409A of the Code. Such restrictions, if any,
shall be determined by the Administrator and contained in the Award Agreement evidencing such Award. 

  
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 7. Award Exercise or Purchase Price, Consideration and Taxes. 

(a) Exercise or Purchase Price. The exercise or purchase price, if any, for an Award shall be as follows. 

(i) In the case of an Incentive Stock Option: 

(1) granted to an Employee who, at the time of the grant of such Incentive Stock Option owns stock representing more than ten percent
(10%) of the voting power of all classes of stock of the Company or any Related Entity, the per Share exercise price shall be not less than one hundred ten percent (110%) of the Fair Market Value per Share on the date of grant; or 

(2) granted to any Employee other than an Employee described in the preceding paragraph, the per Share exercise price shall be not less than
one hundred percent (100%) of the Fair Market Value per Share on the date of grant. 
 (ii) In the case of a Non-Qualified Stock
Option, the per Share exercise price shall be not less than one-hundred percent (100%) of the Fair Market Value per Share on the date of grant. 

(iii) In the case of Awards intended to qualify as Performance-Based Compensation, the exercise or purchase price, if any, shall be not less
than one hundred percent (100%) of the Fair Market Value per Share on the date of grant. 
 (iv) In the case of other Awards, such
price as is determined by the Administrator. 
 (v) Notwithstanding the foregoing provisions of this Section 7(a), in the case of an
Award issued pursuant to Section 6(e), above, the exercise or purchase price for the Award shall be determined in accordance with the provisions of the relevant instrument evidencing the agreement to issue such Award. 

(b) Consideration. Subject to Applicable Laws, the consideration to be paid for the Shares to be issued upon exercise or purchase of an
Award, including the method of payment, shall be determined by the Administrator. In addition to any other types of consideration the Administrator may determine, the Administrator is authorized to accept as consideration for Shares issued under the
Plan the following: 
 (i) cash; 

(ii) check; 
 (iii) delivery
of Grantee’s promissory note with such recourse, interest, security, and redemption provisions as the Administrator determines as appropriate (but only to the extent that the acceptance or terms of the promissory note would not violate an
Applicable Law); provided, however, that interest shall compound at least annually and shall be charged at the minimum rate of interest necessary to avoid (A) the imputation of interest income to the Company and compensation income to the
Grantee under any applicable provisions of the Code, and (B) the classification of the Award as a liability for financial accounting purposes; 

  
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 (iv) surrender of Shares or delivery of a properly executed form of attestation of ownership of
Shares as the Administrator may require which have a Fair Market Value on the date of surrender or attestation equal to the aggregate exercise price of the Shares as to which said Award shall be exercised; 

(v) with respect to Options, payment through a broker-dealer sale and remittance procedure pursuant to which the Grantee (A) shall
provide written instructions to a Company designated brokerage firm to effect the immediate sale of some or all of the purchased Shares and remit to the Company sufficient funds to cover the aggregate exercise price payable for the purchased Shares
and (B) shall provide written directives to the Company to deliver the certificates (or other evidence satisfactory to the Company to the extent that the Shares are uncertificated) for the purchased Shares directly to such brokerage firm in
order to complete the sale transaction; 
 (vi) with respect to Options, payment through a “net exercise” such that, without the
payment of any funds, the Grantee may exercise the Option and receive the net number of Shares equal to (i) the number of Shares as to which the Option is being exercised, multiplied by (ii) a fraction, the numerator of which is the Fair
Market Value per Share (on such date as is determined by the Administrator) less the Exercise Price per Share, and the denominator of which is such Fair Market Value per Share; 

(vii) past or future services actually or to be rendered to the Company or a Related Entity; or 

(viii) any combination of the foregoing methods of payment. 

The Administrator may at any time or from time to time, by adoption of or by amendment to the standard forms of Award Agreement described in
Section 4(c)(iv), or by other means, grant Awards which do not permit all of the foregoing forms of consideration to be used in payment for the Shares or which otherwise restrict one or more forms of consideration. 

8. Notice to Company of Disqualifying Disposition. Each Employee who receives an Incentive Stock Option must agree to notify the
Company in writing immediately after the Employee makes a Disqualifying Disposition of any Common Stock acquired pursuant to the exercise of an Incentive Stock Option. 

9. Tax Withholding. 
 (a)
Prior to the delivery of any Shares or cash pursuant to an Award (or the exercise thereof), or at such other time as the Tax Obligations are due, the Company, in accordance with the Code and any Applicable Laws, shall have the power and the right to
deduct or withhold, or require a Grantee to remit to the Company, an amount sufficient to satisfy all Tax Obligations. The Administrator may, in its discretion, condition such delivery, payment, or other event pursuant to an Award on the payment by
the Grantee of any such Tax Obligations. 

  
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 (b) The Administrator, in its sole discretion and pursuant to such procedures as it may specify
from time to time, may designate the method or methods by which a Grantee may satisfy the Tax Obligations. As determined by the Administrator in its discretion from time to time, these methods may include one or more of the following: 

(i) paying cash; 
 (ii)
electing to have the Company withhold otherwise cash or Shares having a Fair Market Value equal to the amount required to be withheld; 

(iii) delivering to the Company already-owned Shares having a Fair Market Value equal to the minimum amount required to be withheld or
remitted, provided the delivery of such Shares will not result in any adverse accounting consequences as the Administrator determines in its sole discretion; 

(iv) selling a sufficient number of Shares otherwise deliverable to the Grantee through such means as the Administrator may determine in its
sole discretion (whether through a broker or otherwise) equal to the Tax Obligations required to be withheld; 
 (v) retaining from salary
or other amounts payable to the Grantee cash having a sufficient value to satisfy the Tax Obligations; or 
 any other means which the Administrator, in its
sole discretion, determines to both comply with Applicable Laws, and to be consistent with the purposes of the Plan. 
 The amount of Tax Obligations will
be deemed to include any amount that the Administrator agrees may be withheld at the time the election is made, not to exceed the amount determined by using the maximum federal, state, local and foreign marginal income tax rates applicable to the
Grantee or the Company, as applicable, with respect to the Award on the date that the amount of tax or social insurance liability to be withheld or remitted is to be determined. The Fair Market Value of the Shares to be withheld or delivered shall
be determined as of the date that the Tax Obligations are required to be withheld. 
 10. Rights As a Shareholder. 

(a) Restricted Stock. Except as otherwise provided in any Award Agreement, a Grantee will not have any rights of a shareholder with
respect any of the Shares granted to the Grantee under an Award of Restricted Stock (including the right to vote or receive dividends and other distributions paid or made with respect thereto) nor shall cash dividends or dividend equivalents accrue
or be paid in respect of any unvested Award of Restricted Stock, unless and until such Shares vest. 
 (b) Other Awards. In the case
of Awards other than Restricted Stock, except as otherwise provided in any Award Agreement, a Grantee will not have any rights of a shareholder, nor will dividends or dividend equivalents accrue or be paid, with respect any of the Shares granted
pursuant to such Award until the Award is exercised or settled and the Shares are delivered (as evidenced by the appropriate entry on the books of the Company or of a duly authorized transfer agent of the Company). 

  
 15 

 11. Exercise of Award. 

(a) Procedure for Exercise. 

(i) Any Award granted hereunder shall be exercisable at such times and under such conditions as determined by the Administrator under the
terms of the Plan and as specified in the Award Agreement. 
 (ii) An Award shall be deemed to be exercised when written notice of such
exercise has been given to the Company in accordance with the terms of the Award by the person entitled to exercise the Award and full payment for the Shares with respect to which the Award is exercised has been made, including, to the extent
selected, use of the broker-dealer sale and remittance procedure to pay the purchase price as provided in Section 7(b)(v). 
 (b)
Exercise of Award Following Termination of Continuous Service. In the event of termination of a Grantee’s Continuous Service for any reason other than Disability or death (but not in the event of a Grantee’s change of status from
Employee to Consultant or from Consultant to Employee), such Grantee may, but only during the Post-Termination Exercise Period (but in no event later than the expiration date of the term of such Award as set forth in the Award Agreement), exercise
the portion of the Grantee’s Award that was vested at the date of such termination or such other portion of the Grantee’s Award as may be determined by the Administrator. The Grantee’s Award Agreement may provide that upon the
termination of the Grantee’s Continuous Service for Cause, the Grantee’s right to exercise the Award shall terminate concurrently with the termination of Grantee’s Continuous Service. In the event of a Grantee’s change of status
from Employee to Consultant, an Employee’s Incentive Stock Option shall convert automatically to a Non-Qualified Stock Option on the day three (3) months and one day following such change of status. To the extent that the Grantee’s
Award was unvested at the date of termination, or if the Grantee does not exercise the vested portion of the Grantee’s Award within the Post-Termination Exercise Period, the Award shall terminate. 

(c) Disability of Grantee. In the event of termination of a Grantee’s Continuous Service as a result of his or her Disability,
such Grantee may, but only within twelve (12) months from the date of such termination (or such longer period as specified in the Award Agreement but in no event later than the expiration date of the term of such Award as set forth in the Award
Agreement), exercise the portion of the Grantee’s Award that was vested at the date of such termination; provided, however, that if such Disability is not a “disability” as such term is defined in Section 22(e)(3) of the Code, in
the case of an Incentive Stock Option such Incentive Stock Option shall automatically convert to a Non-Qualified Stock Option on the day three (3) months and one day following such termination. To the extent that the Grantee’s Award was
unvested at the date of termination, or if Grantee does not exercise the vested portion of the Grantee’s Award within the time specified herein, the Award shall terminate. 

(d) Death of Grantee. In the event of a termination of the Grantee’s Continuous Service as a result of his or her death, or in the
event of the death of the Grantee 

  
 16 

 
during the Post-Termination Exercise Period or during the twelve (12) month period following the Grantee’s termination of Continuous Service as a result of his or her Disability, the
Grantee’s estate or a person who acquired the right to exercise the Award by bequest or inheritance may exercise the portion of the Grantee’s Award that was vested as of the date of termination, within twelve (12) months from the date
of death (or such longer period as specified in the Award Agreement but in no event later than the expiration of the term of such Award as set forth in the Award Agreement). To the extent that, at the time of death, the Grantee’s Award was
unvested, or if the Grantee’s estate or a person who acquired the right to exercise the Award by bequest or inheritance does not exercise the vested portion of the Grantee’s Award within the time specified herein, the Award shall
terminate. 
 (e) Extension if Exercise Prevented by Law. Notwithstanding the foregoing, if the exercise of an Award within the
applicable time periods set forth in this Section 11 is prevented by the provisions of Section 12 below, the Award shall remain exercisable until one (1) month after the date the Grantee is notified by the Company that the Award is
exercisable, but in any event no later than the expiration of the term of such Award as set forth in the Award Agreement. 
 12.
Conditions Upon Issuance of Shares; Manner of Issuance of Shares. 
 (a) If at any time the Administrator determines that the
delivery of Shares pursuant to the exercise, vesting or any other provision of an Award is or may be unlawful under Applicable Laws, the vesting or right to exercise an Award or to otherwise receive Shares pursuant to the terms of an Award shall be
suspended until the Administrator determines that such delivery is lawful and shall be further subject to the approval of counsel for the Company with respect to such compliance. The Company shall have no obligation to effect any registration or
qualification of the Shares under any Applicable Law. 
 (b) As a condition to the exercise of an Award, the Company may require the person
exercising such Award to represent and warrant at the time of any such exercise that the Shares are being purchased only for investment and without any present intention to sell or distribute such Shares if, in the opinion of counsel for the
Company, such a representation is required by any Applicable Laws. 
 (c) Subject to the Applicable Laws and any governing rules or
regulations, the Company shall issue or cause to be issued the Shares acquired pursuant to an Award and shall deliver such Shares to or for the benefit of the Grantee by means of one or more of the following as determined by the Administrator:
(i) by delivering to the Grantee evidence of book entry Shares credited to the account of the Grantee, (ii) by depositing such Shares for the benefit of the Grantee with any broker with which the Grantee has an account relationship, or
(iii) by delivering such Shares to the Grantee in certificate form. 
 (d) No fractional Shares shall be issued pursuant to any Award
under the Plan; any Grantee who would otherwise be entitled to receive a fraction of a Share upon exercise or vesting of an Award will receive from the Company cash in lieu of such fractional Shares in an amount equal to the Fair Market Value of
such fractional Shares, as determined in the sole discretion of the Administrator. 

  
 17 

 13. Adjustments. Subject to any required action by the shareholders of the Company, the
number of Shares covered by each outstanding Award, and the number of Shares which have been authorized for issuance under the Plan but as to which no Awards have yet been granted or which have been returned to the Plan, the exercise or purchase
price of each such outstanding Award, as well as any other terms that the Administrator determines require adjustment shall be proportionately adjusted for (i) any increase or decrease in the number of issued and outstanding Shares resulting
from a stock split, reverse stock split, stock dividend, combination or reclassification of the Shares, or similar transaction affecting the Shares, (ii) any other increase or decrease in the number of issued and outstanding Shares effected
without receipt of consideration by the Company, or (iii) any other transaction with respect to the Company’s Common Stock including a corporate merger, consolidation, acquisition of property or stock, separation (including a spin-off or
other distribution of stock or property), reorganization, liquidation (whether partial or complete) or any similar transaction; provided, however that conversion of any convertible securities of the Company shall not be deemed to have been
“effected without receipt of consideration.” Such adjustment shall be made by the Administrator and its determination shall be final, binding and conclusive. Except as the Administrator determines, no issuance by the Company of shares of
stock of any class, or securities convertible into shares of stock of any class, shall affect, and no adjustment by reason hereof shall be made with respect to, the number or price of Shares subject to an Award. No adjustments shall be made for
dividends paid in cash or in property other than Common Stock of the Company, nor shall cash dividends or dividend equivalents accrue or be paid in respect of unexercised Options or unvested Awards hereunder. 

14. Corporate Transactions. 

(a) Termination of Award to Extent Not Assumed in Corporate Transaction. Effective upon the consummation of a Corporate Transaction,
all outstanding Awards under the Plan shall terminate. However, all such Awards shall not terminate to the extent they are Assumed in connection with the Corporate Transaction. 

(b) Acceleration of Award Upon Corporate Transaction. The Administrator shall have the authority, exercisable either in advance of any
actual or anticipated Corporate Transaction or at the time of an actual Corporate Transaction, and exercisable at the time of the grant of an Award under the Plan or any time while an Award remains outstanding, to provide for the full or partial
automatic vesting and exercisability of one or more outstanding unvested Awards under the Plan and the release from restrictions on transfer and repurchase or forfeiture rights of such Awards in connection with a Corporate Transaction on such terms
and conditions as the Administrator may specify. The Administrator also shall have the authority to condition any such Award vesting and exercisability or release from such limitations upon the subsequent termination of the Continuous Service of the
Grantee within a specified period following the effective date of the Corporate Transaction. The Administrator may provide that any Awards so vested or released from such limitations in connection with a Corporate Transaction shall remain fully
exercisable until the expiration or sooner termination of the Award. 
 (c) Effect of Acceleration on Incentive Stock Options. Any
Incentive Stock Option accelerated under this Section 14 in connection with a Corporate Transaction shall remain exercisable as an Incentive Stock Option under the Code only to the extent the $100,000 dollar limitation of Section 422(d) of
the Code is not exceeded. 

  
 18 

 15. Effective Date and Term of Plan. The Plan shall become effective at such time as it
has been (a) approved by the Company’s shareholders and (b) adopted by the Board. Shareholder approval shall be obtained in the degree and manner required under Applicable Laws. The Plan shall continue in effect for a term of ten
(10) years unless sooner terminated. Any Award exercised before shareholder approval is obtained will be rescinded if shareholder approval is not obtained within the time prescribed, and Shares issued on the exercise of any such Award shall not
be counted in determining whether shareholder approval is obtained. Subject to the preceding sentence and the Applicable Laws, Awards may be granted under the Plan upon its becoming effective. 

16. Amendment, Suspension or Termination of the Plan. 

(a) The Board may at any time amend, suspend or terminate the Plan in any respect, except that it may not, without the approval of the
shareholders obtained within twelve (12) months before or after the Board adopts a resolution authorizing any of the following actions, do any of the following: 

(i) increase the total number of shares that may be issued under the Plan (except by adjustment pursuant to Section 13); 

(ii) modify the provisions of Section 6 regarding eligibility for grants of Incentive Stock Options; 

(iii) modify the provisions of Section 7(a) regarding the exercise price at which shares may be offered pursuant to Options (except by
adjustment pursuant to Section 13); 
 (iv) extend the expiration date of the Plan; and 

(v) except as provided in Section 13 (including, without limitation, any stock dividend, stock split, extraordinary cash dividend,
recapitalization, reorganization, merger, consolidation, split-up, spin-off, combination, or exchange of shares), the Company may not amend an Award granted under the Plan to reduce its exercise price per share, cancel and regrant new Awards with
lower prices per share than the original prices per share of the cancelled Awards, or cancel any Awards in exchange for cash or the grant of replacement Awards with an exercise price that is less than the exercise price of the original Awards,
essentially having the effect of a repricing, without approval by the Company’s shareholders. 
 (b) No Award may be granted during any
suspension of the Plan or after termination of the Plan. 
 (c) No suspension or termination of the Plan (including termination of the Plan
under Section 14, above) shall adversely affect any rights under Awards already granted to a Grantee without his or her consent. 

  
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 17. Reservation of Shares. 

(a) The Company, during the term of the Plan, will at all times reserve and keep available such number of Shares as shall be sufficient to
satisfy the requirements of the Plan. 
 (b) The inability of the Company to obtain authority from any regulatory body having jurisdiction,
which authority is deemed by the Company’s counsel to be necessary to the lawful issuance and sale of any Shares hereunder, 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. 
 18. No Effect on Terms of Employment/Consulting Relationship. The Plan shall not
confer upon any Grantee any right with respect to the Grantee’s Continuous Service, nor shall it interfere in any way with his or her right or the right of the Company or a Related Entity to terminate the Grantee’s Continuous Service at
any time, with or without Cause, and with or without notice. The ability of the Company or any Related Entity to terminate the employment of a Grantee who is employed at will is in no way affected by its determination that the Grantee’s
Continuous Service has been terminated for Cause for the purposes of this Plan. 
 19. No Effect on Retirement and Other Benefit
Plans. Except as specifically provided in a retirement or other benefit plan of the Company or a Related Entity, Awards shall not be deemed compensation for purposes of computing benefits or contributions under any retirement plan of the Company
or a Related Entity, and shall not affect any benefits under any other benefit plan of any kind or any benefit plan subsequently instituted under which the availability or amount of benefits is related to level of compensation. The Plan is not a
“Retirement Plan” or “Welfare Plan” under the Employee Retirement Income Security Act of 1974, as amended. 
 20.
Information to Grantees. The Company shall provide to each Grantee, during the period for which such Grantee has one or more Awards outstanding, such information as required by Applicable Laws. 

21. Effect of Section 162(m) of the Code. To the extent that the Administrator determines as of the date of grant of an Award that
(a) the Award is intended to qualify as Performance-Based Compensation and (b) the Award is not exempt from the application of Section 162(m) of the Code, such Award shall not be effective until any shareholder approval required under
Section 162(m) of the Code has been obtained. 
 22. Electronic Delivery. The Administrator may, in its sole discretion, decide
to deliver any documents related to any Award granted under the Plan through an online or electronic system established and maintained by the Company or another third party designated by the Company or to request a Grantee’s consent to
participate in the Plan by electronic means. By accepting an Award, each Grantee consents to receive such documents by electronic delivery and agrees to participate in the Plan through an online or electronic system established and maintained by the
Company or another third party designated by the Company, and such consent shall remain in effect throughout Grantee’s Continuous Service with the Company and any Related Entity and thereafter until withdrawn in writing by Grantee. 

  
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 23. Data Privacy. The Administrator may, in its sole discretion, decide to collect, use
and transfer, in electronic or other form, personal data as described in this Plan or any Award for the exclusive purpose of implementing, administering and managing participation in the Plan. By accepting an Award, each Grantee acknowledges that
the Company holds certain personal information about Grantee, including, but not limited to, name, home address and telephone number, date of birth, social security number or other identification number, salary, nationality, job title, details of
all Awards awarded, cancelled, exercised, vested or unvested, for the purpose of implementing, administering and managing the Plan (the “Data”). Each Grantee further acknowledges that Data may be transferred to any third
parties assisting in the implementation, administration and management of the Plan and that these third parties may be located in jurisdictions that may have different data privacy laws and protections, and Grantee authorizes such third parties to
receive, possess, use, retain and transfer the Data, in electronic or other form, for the purposes of implementing, administering and managing the Plan, including any requisite transfer of such Data as may be required to a broker or other third
party with whom the recipient or the Company may elect to deposit any Shares acquired upon any Award. 
 24. Compliance with
Section 409A. To the extent that the Administrator determines that any Award granted hereunder is subject to Section 409A of the Code, the Award Agreement evidencing such Award shall incorporate the terms and conditions necessary to
avoid the consequences specified in Section 409A(a)(1) of the Code. To the extent applicable, the Plan and Award Agreements shall be interpreted in accordance with Section 409A of the Code and Department of Treasury regulations and other
interpretive guidance issued thereunder, including without limitation any such regulations or other guidance that may be issued or amended after the effective date of the Plan. Notwithstanding any provision of the Plan to the contrary, in the event
that following the effective date of the Plan the Administrator determines that any Award may be subject to Section 409A of the Code and related Department of Treasury guidance (including such Department of Treasury guidance as may be issued
after the effective date of the Plan), the Administrator may adopt such amendments to the Plan and the applicable Award Agreement or adopt other policies and procedures (including amendments, policies and procedures with retroactive effect), or take
any other actions, that the Administrator determines are necessary or appropriate to (1) exempt the Award from Section 409A of the Code and/or preserve the intended tax treatment of the benefits provided with respect to the Award, or
(2) comply with the requirements of Section 409A of the Code and related Department of Treasury guidance. 
 25. Unfunded
Obligation. Grantees shall have the status of general unsecured creditors of the Company. Any amounts payable to Grantees pursuant to the Plan shall be unfunded and unsecured obligations for all purposes, including, without limitation,
Title I of the Employee Retirement Income Security Act of 1974, as amended. Neither the Company nor any Related Entity 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 Grantee account shall not create or constitute a trust or fiduciary relationship between the Administrator, the Company or any Related Entity and a Grantee, or otherwise create any vested or beneficial interest in any
Grantee or the Grantee’s creditors in any assets of the Company or a Related Entity. The Grantees shall have no claim against the Company or any Related Entity for any changes in the value of any assets that may be invested or reinvested by the
Company with respect to the Plan. 

  
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 26. 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. 

  
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