Document:

Exhibit 10.14

 

DATASEA INC.

2018 EQUITY INCENTIVE PLAN

1.          Purpose.
The purpose of the Datasea Inc. 2018 Equity Incentive Plan is to provide a means through which the Company and its Affiliates may
attract and retain key personnel and to provide a means whereby directors, officers, managers, employees, consultants and advisors
(and prospective directors, officers, managers, employees, consultants and advisors) of the Company and its Affiliates can acquire
and maintain an equity interest in the Company, or be paid incentive compensation, which may (but need not) be measured by reference
to the value of Common Shares, thereby strengthening their commitment to the welfare of the Company and its Affiliates and aligning
their interests with those of the Company’s stockholders.

 

2.          Definitions.
The following definitions shall be applicable throughout this Plan:

 

(a)          “Affiliate”
means (i) any person or entity that directly or indirectly controls, is controlled by or is under common control with the
Company and/or (ii) to the extent provided by the Committee, any person or entity in which the Company has a significant interest
as determined by the Committee in its discretion. The term “control” (including, with correlative meaning, the terms
“controlled by” and “under common control with”), as applied to any person or entity, means the possession,
directly or indirectly, of the power to direct or cause the direction of the management and policies of such person or entity,
whether through the ownership of voting or other securities, by contract or otherwise.

 

(b)          “Award”
means, individually or collectively, any Incentive Stock Option, Nonqualified Stock Option, Stock Appreciation Right, Restricted
Stock, Restricted Stock Unit, Stock Bonus Award and Performance Compensation Award granted under this Plan. An “Award
agreement” means an agreement (including, without limitation, any employment or consulting agreement, as the case may
be) memorializing an Award. An Award agreement may be in paper or electronic medium (including email or the posting on a web site
maintained by the Company or a third party under contract with the Company).

 

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

 

(d)          “Business
Combination” has the meaning given such term in the definition of “Change in Control.”

 

(e)          “Business
Day” means any day other than a Saturday, a Sunday or a day on which banking institutions in New York City are authorized
or obligated by federal law or executive order to be closed.

 

(f)          “Cause”
means, in the case of a particular Award, unless the applicable Award agreement states otherwise: (i) the Company or an Affiliate
having “cause” to terminate a Participant’s employment or service, as defined in any employment or consulting
agreement or similar document or policy between the Participant and the Company or an Affiliate in effect at the time of such termination
or (ii) in the absence of any such employment or consulting agreement, document or policy (or the absence of any definition
of “Cause” contained therein): (A) a continuing material breach or material default (including, without limitation,
any material dereliction of duty) by Participant of any agreement between the Participant and the Company, except for any such
breach or default which is caused by the physical disability of the Participant (as determined by a neutral physician), or a continuing
failure by the Participant to follow the direction of a duly authorized representative of the Company; (B) gross negligence, willful
misfeasance or breach of fiduciary duty by the Participant; (C) the commission by the Participant of an act of fraud, embezzlement
or any felony or other crime of dishonesty in connection with the Participant’s duties; or (D) conviction of the Participant
of a felony or any other crime that would materially and adversely affect: (i) the business reputation of the Company or (ii) the
performance of the Participant’s duties to the Company. Any determination of whether Cause exists shall be made by the Committee
in its sole discretion.

 

     

     

    

 

(g)          “Change
in Control” shall, in the case of a particular Award, unless the applicable Award agreement states otherwise or contains
a different definition of “Change in Control,” be deemed to occur upon: 

 

(i)          An
acquisition (whether directly from the Company or otherwise) of any voting securities of the Company (the “Voting Securities”)
by any “Person” (as the term person is used for purposes of Section 13(d) or 14(d) of the Securities and Exchange Act
of 1934, as amended (the “Exchange Act”)), immediately after which such Person has “Beneficial
Ownership” (within the meaning of Rule 13d-3 promulgated under the Exchange Act) of more than fifty percent (50%) of the
combined voting power of the Company’s then outstanding Voting Securities.

 

(ii)         The
individuals who constitute the members of the Board cease, by reason of a financing, merger, combination, acquisition, takeover
or other non-ordinary course transaction affecting the Company, to constitute at least fifty-one percent (51%) of the members of
the Board; or

 

(iii)        The
consummation of any of the following events:

 

(A)         A
merger, consolidation or reorganization involving the Company, where either or both of the events described in clauses (i) or (ii)
above would be the result;

 

(B)         A
liquidation or dissolution of or appointment of a receiver, rehabilitator, conservator or similar person for, or the filing by
a third party of an involuntary bankruptcy against, the Company; provided, however, that to the extent necessary to comply with
Section 409A of the Code, the occurrence of an event described in this subsection (B) shall not permit the settlement of Restricted
Stock Units granted under this Plan; or

 

(C)         An
agreement for the sale or other disposition of all or substantially all of the assets of the Company to any Person (other than
a transfer to a subsidiary of the Company).

 

(h)          “Closing
Price” means (i) during such time as the Common Shares are registered under Section 12 of the Exchange Act, the closing
price of the Common Shares as reported by an established stock exchange or automated quotation system on the day for which such
value is to be determined, or, if no sale of the Common Shares shall have been made on any such stock exchange or automated quotation
system that day, on the next preceding day on which there was a sale of such Common Shares, or (ii) during any such time as the
Common Shares are not listed upon an established stock exchange or automated quotation system, the average “bid” and
“ask” prices of the Common Shares in the over-the-counter market on the day for which such value is to be determined,
as reported by the OTC Markets Group, Inc. (www.otcmarkets.com) or any successor or alternative recognized over-the-counter market
or another inter-dealer quotation system, or (C) during any such time as the Common Shares cannot be valued pursuant to (i) or
(ii) above, the fair market value shall be as determined by the Committee considering all relevant information including, by example
and not by limitation, the most recent price at which Common Shares were issued to third party investors.

 

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(i)          “Code”
means the Internal Revenue Code of 1986, as amended, and any successor thereto. References in this Plan to any section of the Code
shall be deemed to include any regulations or other interpretative guidance under such section, and any amendments or successor
provisions to such section, regulations or guidance.

 

(j)          “Committee”
means a committee of at least two people as the Board may appoint to administer this Plan or, if no such committee has been appointed
by the Board, the Board. Unless altered by an action of the Board, the Committee shall be the Compensation Committee of the Board.

 

(k)          “Common
Shares” means the common stock, par value $.001 per share, of the Company (and any stock or other securities into
which such common shares may be converted or into which they may be exchanged).

 

(l)          “Company”
means Datasea Inc., a Nevada corporation, together with its successors and assigns. 

 

(m)          “Date
of Grant” means the date on which the granting of an Award is authorized, or such other date as may be specified
in such authorization.

 

(n)          “Disability”
means (unless the applicable Award, employment or consulting agreement between the Participant and the Company states otherwise)
a “permanent and total” disability incurred by a Participant while in the employ of the Company or an Affiliate. For
this purpose, a permanent and total disability shall mean that the Participant is unable to engage in any substantial gainful activity
by reason of any medically determinable physical or mental impairment that can be expected to result in death or can be expected
to last for a continuous period of not less than twelve (12) months.

 

(o)          “Effective
Date” means the date this Plan is approved and adopted by the Board and the stockholders of the Company holding a
majority of the outstanding Common Shares.

 

(p)          “Eligible
Director” means a person who is (i) a “non-employee director” within the meaning of Rule 16b-3 under
the Exchange Act, and (ii) an “outside director” within the meaning of Section 162(m) of the Code.

 

(q)          “Eligible
Person” means any (i) individual employed by the Company or an Affiliate; provided, however,
that no such employee covered by a collective bargaining agreement shall be an Eligible Person unless and to the extent that such
eligibility is set forth in such collective bargaining agreement or in an agreement or instrument relating thereto; (ii) director
of the Company or an Affiliate; (iii) consultant or advisor to the Company or an Affiliate, provided that if the Securities
Act applies such persons must be eligible to be offered securities registrable on Form S-8 under the Securities Act; or (iv) prospective
employees, directors, officers, consultants or advisors who have accepted offers of employment or consultancy from the Company
or its Affiliates (and would satisfy the provisions of clauses (i) through (iii) above once he or she begins employment with or
begins providing services to the Company or its Affiliates).

 

(r)          “Exchange
Act” has the meaning given such term in the definition of “Change in Control,” and any reference in this
Plan to any section of (or rule promulgated under) the Exchange Act shall be deemed to include any rules, regulations or other
interpretative guidance under such section or rule, and any amendments or successor provisions to such section, rules, regulations
or guidance.

 

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(s)          “Exercise
Price” has the meaning given such term in Section 7(b) of this Plan.

 

(t)          “Fair
Market Value”, unless otherwise provided by the Committee in accordance with all applicable laws, rules regulations
and standards, means, on a given date, (i) if the Common Shares (A) are listed on a national securities exchange or automated quotation
system or (B) are not listed on a national securities exchange, but is quoted by the OTC Markets Group, Inc. (www.otcmarkets.com)
or any successor or alternative recognized over-the-counter market or another inter-dealer quotation system, on a last sale basis,
the average selling price of the Common Shares reported on such national securities exchange or other inter-dealer quotation system,
determined as the arithmetic mean of such selling prices over the thirty (30) Business Day period preceding the Date of Grant,
weighted based on the volume of trading of such Common Shares on each trading day during such period; or (ii) if the Common Shares
are not listed on a national securities exchange or quoted in an inter-dealer quotation system on a last sale basis, the amount
determined by the Committee in good faith to be the fair market value of the Common Shares. 

 

(u)          “Immediate
Family Members” shall have the meaning set forth in Section 15(b) of this Plan.

 

(v)         “Incentive
Stock Option” means an Option that is designated by the Committee as an incentive stock option as described in Section 422
of the Code and otherwise meets the requirements set forth in this Plan.

 

(w)          “Indemnifiable
Person” shall have the meaning set forth in Section 4(e) of this Plan.

 

(x)          “IPO”
shall have the meaning set forth in Section 5(b) of this Plan.

 

(y)          “Negative
Discretion” shall mean the discretion authorized by this Plan to be applied by the Committee to eliminate or reduce
the size of a Performance Compensation Award consistent with Section 162(m) of the Code.

 

(z)          “Nonqualified
Stock Option” means an Option that is not designated by the Committee as an Incentive Stock Option.

 

(aa)         “Option”
means an Award granted under Section 7 of this Plan.

 

(bb)         “Option
Period” has the meaning given such term in Section 7(c) of this Plan.

 

(cc)         “Participant”
means an Eligible Person who has been selected by the Committee to participate in this Plan and to receive an Award pursuant to
Section 6 of this Plan.

 

(dd)         “Performance
Compensation Award” shall mean any Award designated by the Committee as a Performance Compensation Award pursuant
to Section 11 of this Plan.

 

(ee)         “Performance
Criteria” shall mean the criterion or criteria that the Committee shall select for purposes of establishing the Performance
Goal(s) for a Performance Period with respect to any Performance Compensation Award under this Plan.

 

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(ff)         “Performance
Formula” shall mean, for a Performance Period, the one or more objective formulae applied against the relevant Performance
Goal to determine, with regard to the Performance Compensation Award of a particular Participant, whether all, some portion but
less than all, or none of the Performance Compensation Award has been earned for the Performance Period.

 

(gg)         “Performance
Goals” shall mean, for a Performance Period, the one or more goals established by the Committee for the Performance
Period based upon the Performance Criteria.

 

(hh)         “Performance
Period” shall mean the one or more periods of time, as the Committee may select, over which the attainment of one
or more Performance Goals will be measured for the purpose of determining a Participant’s right to, and the payment of, a
Performance Compensation Award. 

 

(ii)         “Permitted
Transferee” shall have the meaning set forth in Section 15(b) of this Plan.

 

(jj)         “Person”
has the meaning given such term in the definition of “Change in Control.”

 

(kk)         “Plan”
means this Datasea Inc. 2018 Equity Incentive Plan, as amended from time to time.

 

(ll)         “Retirement”
means the fulfillment of each of the following conditions: (i) the Participant is in good standing with the Company as determined
by the Committee; (ii) the voluntary termination by a Participant of such Participant’s employment or service to the Company
and (B) that at the time of such voluntary termination, the sum of: (1) the Participant’s age (calculated to the nearest
month, with any resulting fraction of a year being calculated as the number of months in the year divided by 12) and (2) the Participant’s
years of employment or service with the Company (calculated to the nearest month, with any resulting fraction of a year being calculated
as the number of months in the year divided by 12) equals at least 62 (provided that, in any case, the foregoing shall only be
applicable if, at the time of Retirement, the Participant shall be at least 55 years of age and shall have been employed by or
served with the Company for no less than 5 years).

 

(mm)         “Restricted
Period” means the period of time determined by the Committee during which an Award is subject to restrictions or,
as applicable, the period of time within which performance is measured for purposes of determining whether an Award has been earned.

 

(nn)         “Restricted
Stock Unit” means an unfunded and unsecured promise to deliver Common Shares, cash, other securities or other property,
subject to certain restrictions (including, without limitation, a requirement that the Participant remain continuously employed
or provide continuous services for a specified period of time), granted under Section 9 of this Plan.

 

(oo)         “Restricted
Stock” means Common Shares, subject to certain specified restrictions (including, without limitation, a requirement
that the Participant remain continuously employed or provide continuous services for a specified period of time), granted under
Section 9 of this Plan.

 

(pp)         “SAR
Period” has the meaning given such term in Section 8(c) of this Plan.

 

(qq)         “Securities
Act” means the Securities Act of 1933, as amended, and any successor thereto. Reference in this Plan to any section
of the Securities Act shall be deemed to include any rules, regulations or other official interpretative guidance under such section,
and any amendments or successor provisions to such section, rules, regulations or guidance.

 

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(rr)         “Stock
Appreciation Right” or “SAR” means an Award granted under Section 8 of this Plan which
meets all of the requirements of Section 1.409A-1(b)(5)(i)(B) of the Treasury Regulations.

 

(ss)         “Stock
Bonus Award” shall mean an Award granted under Section 10 of this Plan.

 

(tt)         “Strike
Price” means, except as otherwise provided by the Committee in the case of Substitute Awards, (i) in the case
of a SAR granted in tandem with an Option, the Exercise Price of the related Option, or (ii) in the case of a SAR granted
independent of an Option, the Fair Market Value on the Date of Grant.

 

(uu)         “Subsidiary”
means, with respect to any specified Person (i) any corporation, association or other business entity of which more than 50% of
the total voting power of shares of Outstanding Company Voting Securities (without regard to the occurrence of any contingency
and after giving effect to any voting agreement or stockholders’ agreement that effectively transfers voting power) is at
the time owned or controlled, directly or indirectly, by that Person or one or more of the other Subsidiaries of that Person (or
a combination thereof); and (ii) any partnership or limited liability company (or any comparable foreign entity) (a) the sole
general partner or managing member (or functional equivalent thereof) or the managing general partner of which is such Person or
Subsidiary of such Person or (b) the only general partners or managing members (or functional equivalents thereof) of which
are that Person or one or more Subsidiaries of that Person (or any combination thereof).

 

(vv)         “Substitute
Award” has the meaning given such term in Section 5(e).

 

(ww)         “Treasury
Regulations” means any regulations, whether proposed, temporary or final, promulgated by the U.S. Department of Treasury
under the Code, and any successor provisions.

 

3.           Effective
Date; Duration. The Plan shall be effective as of the Effective Date, but no Award shall be exercised or paid (or, in
the case of a stock Award, shall be granted unless contingent on stockholder approval) unless and until this Plan has been approved
by the stockholders of the Company, which approval shall be within twelve (12) months after the date this Plan is adopted by the
Board. The expiration date of this Plan, on and after which date no Awards may be granted hereunder, shall be the tenth anniversary
of the Effective Date; provided, however, that such expiration shall not affect Awards then outstanding, and the terms
and conditions of this Plan shall continue to apply to such Awards.

 

4.           Administration.

 

(a)          The
Committee shall administer this Plan. To the extent required to comply with the provisions of Rule 16b-3 promulgated under the
Exchange Act (if the Board is not acting as the Committee under this Plan) or necessary to obtain the exception for performance-based
compensation under Section 162(m) of the Code, as applicable, it is intended that each member of the Committee shall, at the
time he takes any action with respect to an Award under this Plan, be an Eligible Director. However, the fact that a Committee
member shall fail to qualify as an Eligible Director shall not invalidate any Award granted by the Committee that is otherwise
validly granted under this Plan. The acts of a majority of the members present at any meeting at which a quorum is present or acts
approved in writing by a majority of the Committee shall be deemed the acts of the Committee. Whether a quorum is present shall
be determined based on the Committee’s charter as approved by the Board. 

 

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(b)          Subject
to the provisions of this Plan and applicable law, the Committee shall have the sole and plenary authority, in addition to other
express powers and authorizations conferred on the Committee by this Plan and its charter, to: (i) designate Participants;
(ii) determine the type or types of Awards to be granted to a Participant; (iii) determine the number of Common Shares
to be covered by, or with respect to which payments, rights, or other matters are to be calculated in connection with, Awards;
(iv) determine the terms and conditions of any Award; (v) determine whether, to what extent, and under what circumstances
Awards may be settled or exercised in cash, Common Shares, other securities, other Awards or other property, or canceled, forfeited,
or suspended and the method or methods by which Awards may be settled, exercised, canceled, forfeited, or suspended; (vi) determine
whether, to what extent, and under what circumstances the delivery of cash, Common Shares, other securities, other Awards or other
property and other amounts payable with respect to an Award; (vii) interpret, administer, reconcile any inconsistency in,
settle any controversy regarding, correct any defect in and/or complete any omission in this Plan and any instrument or agreement
relating to, or Award granted under, this Plan; (viii) establish, amend, suspend, or waive any rules and regulations and appoint
such agents as the Committee shall deem appropriate for the proper administration of this Plan; (ix) accelerate the vesting
or exercisability of, payment for or lapse of restrictions on, Awards; and (x) make any other determination and take any other
action that the Committee deems necessary or desirable for the administration of this Plan.

 

(c)          The
Committee may delegate to one or more officers of the Company or any Affiliate the authority to act on behalf of the Committee
with respect to any matter, right, obligation, or election that is the responsibility of or that is allocated to the Committee
herein, and that may be so delegated as a matter of law, except for grants of Awards to persons (i) subject to Section 16
of the Exchange Act or (ii) who are, or who are reasonably expected to be, “covered employees” for purposes of
Section 162(m) of the Code.

 

(d)          Unless
otherwise expressly provided in this Plan, all designations, determinations, interpretations, and other decisions under or with
respect to this Plan or any Award or any documents evidencing Awards granted pursuant to this Plan shall be within the sole discretion
of the Committee, may be made at any time and shall be final, conclusive and binding upon all persons or entities, including, without
limitation, the Company, any Affiliate, any Participant, any holder or beneficiary of any Award, and any stockholder of the Company.

 

(e)          No
member of the Board, the Committee, delegate of the Committee or any employee, advisor or agent of the Company or the Board or
the Committee (each such person, an “Indemnifiable Person”) shall be liable for any action taken or omitted
to be taken or any determination made in good faith with respect to this Plan or any Award hereunder. Each Indemnifiable Person
shall be indemnified and held harmless by the Company against and from (and the Company shall pay or reimburse on demand for) any
loss, cost, liability, or expense (including attorneys’ fees) that may be imposed upon or incurred by such Indemnifiable
Person in connection with or resulting from any action, suit or proceeding to which such Indemnifiable Person may be a party or
in which such Indemnifiable Person may be involved by reason of any action taken or omitted to be taken under this Plan or any
Award agreement and against and from any and all amounts paid by such Indemnifiable Person with the Company’s approval, in
settlement thereof, or paid by such Indemnifiable Person in satisfaction of any judgment in any such action, suit or proceeding
against such Indemnifiable Person, provided, that the Company shall have the right, at its own expense, to assume and defend
any such action, suit or proceeding and once the Company gives notice of its intent to assume the defense, the Company shall have
sole control over such defense with counsel of the Company’s choice. The foregoing right of indemnification shall not be
available to an Indemnifiable Person to the extent that a final judgment or other final adjudication (in either case not subject
to further appeal) binding upon such Indemnifiable Person determines that the acts or omissions of such Indemnifiable Person giving
rise to the indemnification claim resulted from such Indemnifiable Person’s bad faith, fraud or willful criminal act or omission
or that such right of indemnification is otherwise prohibited by law or by the Company’s Certificate of Incorporation or
Bylaws. The foregoing right of indemnification shall not be exclusive of any other rights of indemnification to which such Indemnifiable
Persons may be entitled under the Company’s Certificate of Incorporation or Bylaws, as a matter of law, or otherwise, or
any other power that the Company may have to indemnify such Indemnifiable Persons or hold them harmless.

 

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(f)          Notwithstanding
anything to the contrary contained in this Plan, the Board may, in its sole discretion, at any time and from time to time, grant
Awards and administer this Plan with respect to such Awards. In any such case, the Board shall have all the authority granted to
the Committee under this Plan.

 

5.           Grant
of Awards; Shares Subject to this Plan; Limitations.

 

(a)          The
Committee may, from time to time, grant Options, Stock Appreciation Rights, Restricted Stock, Restricted Stock Units, Stock Bonus
Awards and/or Performance Compensation Awards to one or more Eligible Persons.

 

(b)          Subject
to Sections 3, 11 and 12 of this Plan, the Committee is authorized to deliver under this Plan an aggregate of an amount equal to
4,000,000 Common Shares following the final closing of the Offering. Each Common Share subject to an Option or a Stock Appreciation
Right will reduce the number of Common Shares available for issuance by one share, and each Common Share underlying an Award of
Restricted Stock, Restricted Stock Units, Stock Bonus Awards and Performance Compensation Awards will reduce the number of Common
Shares available for issuance by 1.15 shares. 

 

(c)          Common
Shares underlying Awards under this Plan that are forfeited, cancelled, expire unexercised, or are settled in cash shall be available
again for Awards under this Plan at the same ratio at which they were previously granted. Notwithstanding the foregoing, the following
Common Shares shall not be available again for Awards under the Plan: (i) shares tendered or held back upon the exercise of an
Option or settlement of an Award to cover the Exercise Price of an Award; (ii) shares that are used or withheld to satisfy tax
obligations of the Participant; and (iii) shares subject to a Stock Appreciation Right that are not issued in connection with the
stock settlement of the SAR upon exercise thereof. 

 

(d)          Common
Shares delivered by the Company in settlement of Awards may be authorized and unissued shares, shares held in the treasury of the
Company, shares purchased on the open market or by private purchase, or a combination of the foregoing.

 

(e)          Subject
to compliance with Section 1.409A-3(f) of the Treasury Regulations, Awards may, in the sole discretion of the Committee, be granted
under this Plan in assumption of, or in substitution for, outstanding awards previously granted by an entity acquired by the Company
or with which the Company combines (“Substitute Awards”). The number of Common Shares underlying any
Substitute Awards shall be counted against the aggregate number of Common Shares available for Awards under this Plan.

 

(f)          Notwithstanding
any provision in the Plan to the contrary (but subject to adjustment as provided in Section 12), the Committee shall not grant
to any one Eligible Person in any one calendar year Awards (i) for more than 1,500,000 Common Shares in the aggregate or (ii) payable
in cash in an amount, when added to any cash fees paid by the Company as compensation to such Eligible Person, exceeding $2,500,000
in the aggregate.

 

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(g)          Notwithstanding
any provision in the Plan to the contrary (but subject to adjustment as provided in Section 12), the aggregate value of all
compensation paid or granted, as applicable, to any individual for service as a non-employee director (as defined in Rule 16b-3(b)(3)
of the Exchange Act) with respect to any calendar year, including Awards granted and any cash fees paid by the Company as compensation
to such non-employee director, shall not exceed $300,000 in total value. For purposes of this Section 5(g), the value of the
Awards shall be based on the grant date fair value of such Awards for financial reporting purposes.

 

6.           Eligibility.
Participation shall be limited to Eligible Persons who have entered into an Award agreement or who have received written notification
from the Committee, or from a person designated by the Committee, that they have been selected to participate in this Plan.

 

7.           Options.

 

(a)          Generally.
Each Option granted under this Plan shall be evidenced by an Award agreement (whether in paper or electronic medium (including
email or the posting on a web site maintained by the Company or a third party under contract with the Company)). Each Option so
granted shall be subject to the conditions set forth in this Section 7, and to such other conditions not inconsistent with
this Plan as may be reflected in the applicable Award agreement. All Options granted under this Plan shall be Nonqualified Stock
Options unless the applicable Award agreement expressly states that the Option is intended to be an Incentive Stock Option. Notwithstanding
any designation of an Option, to the extent that the aggregate Fair Market Value of Common Shares with respect to which Options
designated as Incentive Stock Options are exercisable for the first time by any Participant during any calendar year (under all
plans of the Company or any Subsidiary) exceeds $100,000, such excess Options shall be treated as Nonqualified Stock Options. Incentive
Stock Options shall be granted only to Eligible Persons who are employees of the Company and its Affiliates, and no Incentive Stock
Option shall be granted to any Eligible Person who is ineligible to receive an Incentive Stock Option under the Code. No Option
shall be treated as an Incentive Stock Option unless this Plan has been approved by the stockholders of the Company in a manner
intended to comply with the stockholder approval requirements of Section 422(b)(1) of the Code, provided that any Option intended
to be an Incentive Stock Option shall not fail to be effective solely on account of a failure to obtain such approval, but rather
such Option shall be treated as a Nonqualified Stock Option unless and until such approval is obtained. In the case of an Incentive
Stock Option, the terms and conditions of such grant shall be subject to and comply with such rules as may be prescribed by Section 422
of the Code. If for any reason an Option intended to be an Incentive Stock Option (or any portion thereof) shall not qualify as
an Incentive Stock Option, then, to the extent of such nonqualification, such Option or portion thereof shall be regarded as a
Nonqualified Stock Option appropriately granted under this Plan.

 

(b)          Exercise
Price. The exercise price (“Exercise Price”) per Common Share for each Option shall not be less
than 100% of the Fair Market Value of such share determined as of the Date of Grant; provided, however, that in the case
of an Incentive Stock Option granted to an employee who, at the time of the grant of such Option, owns shares representing more
than 10% of the voting power of all classes of shares of the Company or any Affiliate, the Exercise Price per share shall not be
less than 110% of the Fair Market Value per share on the Date of Grant; and, provided further, that notwithstanding any
provision herein to the contrary, the Exercise Price shall not be less than the par value per Common Share.

 

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(c)          Vesting
and Expiration. Options shall vest and become exercisable in such manner and on such date or dates determined by the Committee
and as set forth in the applicable Award agreement, and shall expire after such period, not to exceed ten (10) years from the
Date of Grant, as may be determined by the Committee (the “Option Period”); provided, however,
that the Option Period shall not exceed five (5) years from the Date of Grant in the case of an Incentive Stock Option granted
to a Participant who on the Date of Grant owns shares representing more than 10% of the voting power of all classes of shares
of the Company or any Affiliate; and, provided, further, that notwithstanding any vesting dates set by the Committee, the
Committee may, in its sole discretion, accelerate the exercisability of any Option, which acceleration shall not affect the terms
and conditions of such Option other than with respect to exercisability. Unless otherwise provided by the Committee in an Award
agreement: 

 

(i)          an
Option shall vest in three (3) equal annual installments beginning on the first (1st) anniversary of the Date of Grant
and become exercisable with respect to 100% of the Common Shares subject to such Option on the third (3rd) anniversary
of the Date of Grant; 

 

(ii)         the
unvested portion of an Option shall expire upon termination of employment or service of the Participant granted the Option, and
the vested portion of such Option shall remain exercisable for:

 

(A)         one
year following termination of employment or service by reason of such Participant’s death or Disability (with the determination
of Disability to be made by the Committee on a case by case basis), but not later than the expiration of the Option Period;

 

(B)         for
directors, officers and employees of the Company only, for the remainder of the Option Period following termination of employment
or service by reason of such Participant’s Retirement (it being understood that any Incentive Stock Option held by the Participant
shall be treated as a Nonqualified Stock Option if exercise is not undertaken within 90 days of the date of Retirement); 

 

(C)         90
calendar days following termination of employment or service for any reason other than such Participant’s death, Disability
or Retirement, and other than such Participant’s termination of employment or service for Cause, but not later than the expiration
of the Option Period; and 

 

(iii)        both
the unvested and the vested portion of an Option shall immediately expire upon the termination of the Participant’s employment
or service by the Company for Cause.

 

(d)          Method
of Exercise and Form of Payment. No Common Shares shall be delivered pursuant to any exercise of an Option until payment
in full of the Exercise Price therefor is received by the Company and the Participant has paid to the Company an amount equal
to any federal, state, local and non-U.S. income and employment taxes required to be withheld. Options that have become exercisable
may be exercised by delivery of written or electronic notice of exercise to the Company in accordance with the terms of the Award
agreement accompanied by payment of the Exercise Price. The Exercise Price shall be payable (i) in cash, check (subject to
collection), cash equivalent and/or vested Common Shares valued at the Closing Price at the time the Option is exercised (including,
pursuant to procedures approved by the Committee, by means of attestation of ownership of a sufficient number of Common Shares
in lieu of actual delivery of such shares to the Company); provided, however, that such Common Shares are not subject to
any pledge or other security interest and; (ii) by such other method as the Committee may permit in accordance with applicable
law, in its sole discretion, including without limitation: (A) in other property having a fair market value (as determined
by the Committee in its discretion) on the date of exercise equal to the Exercise Price or (B) if there is a public market
for the Common Shares at such time, by means of a broker-assisted “cashless exercise” pursuant to which the Company
is delivered a copy of irrevocable instructions to a stockbroker to sell the Common Shares otherwise deliverable upon the exercise
of the Option and to deliver promptly to the Company an amount equal to the Exercise Price or (C) by a “net exercise”
method whereby the Company withholds from the delivery of the Common Shares for which the Option was exercised that number of
Common Shares having a Closing Price equal to the aggregate Exercise Price for the Common Shares for which the Option was exercised.
Any fractional Common Shares shall be settled in cash.

 

    	 	10	 

     

    

 

(e)          Notification
Upon Disqualifying Disposition of an Incentive Stock Option. Each Participant awarded an Incentive Stock Option under this
Plan shall notify the Company in writing immediately after the date he makes a disqualifying disposition of any Common Shares acquired
pursuant to the exercise of such Incentive Stock Option. A “disqualifying disposition” is any disposition (including,
without limitation, any sale) of such Common Shares before the later of (A) two years after the Date of Grant of the Incentive
Stock Option or (B) one year after the date of exercise of the Incentive Stock Option. The Company may, if determined by the
Committee and in accordance with procedures established by the Committee, retain possession of any Common Shares acquired pursuant
to the exercise of an Incentive Stock Option as agent for the applicable Participant until the end of the period described in the
preceding sentence.

 

(f)          Compliance
With Laws, etc. Notwithstanding the foregoing, in no event shall a Participant be permitted to exercise an Option in a
manner that the Committee determines would violate the Sarbanes-Oxley Act of 2002, if applicable, or any other applicable law or
the applicable rules and regulations of the Securities and Exchange Commission or the applicable rules and regulations of any securities
exchange or inter-dealer quotation system on which the securities of the Company are listed or traded.

 

8.           Stock
Appreciation Rights.

 

(a)          Generally.
Each SAR granted under this Plan shall be evidenced by an Award agreement (whether in paper or electronic medium (including email
or the posting on a web site maintained by the Company or a third party under contract with the Company)). Each SAR so granted
shall be subject to the conditions set forth in this Section 8, and to such other conditions not inconsistent with this Plan
as may be reflected in the applicable Award agreement. Any Option granted under this Plan may include tandem SARs. The Committee
also may award SARs to Eligible Persons independent of any Option.

 

(b)          Exercise
Price. The Exercise Price per Common Share for each SAR shall not be less than 100% of the Fair Market Value of
such share determined as of the Date of Grant. 

 

(c)          Vesting
and Expiration. A SAR granted in connection with an Option shall become exercisable and shall expire according to the same
vesting schedule and expiration provisions as the corresponding Option. A SAR granted independent of an Option shall vest and become
exercisable and shall expire in such manner and on such date or dates determined by the Committee and shall expire after such period,
not to exceed ten years, as may be determined by the Committee (the “SAR Period”); provided, however,
that notwithstanding any vesting dates set by the Committee, the Committee may, in its sole discretion, accelerate the exercisability
of any SAR, which acceleration shall not affect the terms and conditions of such SAR other than with respect to exercisability.
Unless otherwise provided by the Committee in an Award agreement: 

 

(i)          a
SAR shall vest in three (3) equal annual installments beginning on the first (1st) anniversary of the Date of Grant
and become exercisable with respect to 100% of the Common Shares subject to such SAR on the third anniversary of the Date of Grant;

 

    	 	11	 

     

    

 

(ii)         the
unvested portion of a SAR shall expire upon termination of employment or service of the Participant granted the SAR, and the vested
portion of such SAR shall remain exercisable for:

 

(A)         one
year following termination of employment or service by reason of such Participant’s death or Disability (with the determination
of Disability to be made by the Committee on a case by case basis), but not later than the expiration of the SAR Period;

 

(B)         for
directors, officers and employees of the Company only, for the remainder of the SAR Period following termination of employment
or service by reason of such Participant’s Retirement; 

 

(C)         90
calendar days following termination of employment or service for any reason other than such Participant’s death, Disability
or Retirement, and other than such Participant’s termination of employment or service for Cause, but not later than the expiration
of the SAR Period; and

 

(iii)        both
the unvested and the vested portion of a SAR shall expire immediately upon the termination of the Participant’s employment
or service by the Company for Cause. 

 

(d)          Method
of Exercise. SARs that have become exercisable may be exercised by delivery of written or electronic notice of exercise
to the Company in accordance with the terms of the Award, specifying the number of SARs to be exercised and the date on which such
SARs were awarded. Notwithstanding the foregoing, if on the last day of the Option Period (or in the case of a SAR independent
of an option, the SAR Period), the Closing Price exceeds the Strike Price, the Participant has not exercised the SAR or the corresponding
Option (if applicable), and neither the SAR nor the corresponding Option (if applicable) has expired, such SAR shall be deemed
to have been exercised by the Participant on such last day and the Company shall make the appropriate payment therefor.

 

(e)          Payment.
Upon the exercise of a SAR, the Company shall pay to the Participant an amount equal to the number of shares subject to the SAR
that are being exercised multiplied by the excess, if any, of the Closing Price of one Common Share on the exercise date over the
Strike Price, less an amount equal to any federal, state, local and non-U.S. income and employment taxes required to be withheld.
The Company shall pay such amount in cash, in Common Shares valued at fair market value, or any combination thereof, as determined
by the Committee. Any fractional Common Share shall be settled in cash.

 

9.           Restricted
Stock and Restricted Stock Units.

 

(a)          Generally.
Each grant of Restricted Stock and Restricted Stock Units shall be evidenced by an Award agreement (whether in paper or electronic
medium (including email or the posting on a web site maintained by the Company or a third party under contract with the Company)).
Each such grant shall be subject to the conditions set forth in this Section 9, and to such other conditions not inconsistent
with this Plan as may be reflected in the applicable Award agreement.

 

(b)          Restricted
Accounts; Escrow or Similar Arrangement. Upon the grant of Restricted Stock, a book entry in a restricted account shall
be established in the Participant’s name at the Company’s transfer agent and, if the Committee determines that the
Restricted Stock shall be held by the Company or in escrow rather than held in such restricted account pending the release of the
applicable restrictions, the Committee may require the Participant to additionally execute and deliver to the Company (i) an
escrow agreement satisfactory to the Committee, if applicable, and (ii) the appropriate share power (endorsed in blank) with
respect to the Restricted Stock covered by such agreement. If a Participant shall fail to execute an agreement evidencing an Award
of Restricted Stock and, if applicable, an escrow agreement and blank share power within the amount of time specified by the Committee,
the Award shall be null and void ab initio. Subject to the restrictions set forth in this Section 9 and the applicable
Award agreement, the Participant generally shall have the rights and privileges of a stockholder as to such Restricted Stock, including
without limitation the right to vote such Restricted Stock and the right to receive dividends, if applicable. To the extent shares
of Restricted Stock are forfeited, any share certificates issued to the Participant evidencing such shares shall be returned to
the Company, and all rights of the Participant to such shares and as a stockholder with respect thereto shall terminate without
further obligation on the part of the Company.

 

    	 	12	 

     

    

 

(c)          Vesting;
Acceleration of Lapse of Restrictions. Unless otherwise provided by the Committee in an Award agreement: (i) the Restricted
Period shall lapse in three (3) equal annual installments beginning on the first (1st) anniversary of the Date of Grant
and shall lapse with respect to 100% of the Restricted Stock and Restricted Stock Units on the third (3rd) anniversary
of the Date of Grant; and (ii) the unvested portion of Restricted Stock and Restricted Stock Units shall terminate and be
forfeited upon termination of employment or service of the Participant granted the applicable Award. 

 

(d)          Delivery
of Restricted Stock and Settlement of Restricted Stock Units. (i) Upon the expiration of the Restricted Period with
respect to any shares of Restricted Stock, the restrictions set forth in the applicable Award agreement shall be of no further
force or effect with respect to such shares, except as set forth in the applicable Award agreement. If an escrow arrangement is
used, upon such expiration, the Company shall deliver to the Participant, or his beneficiary, without charge, the share certificate
evidencing the shares of Restricted Stock that have not then been forfeited and with respect to which the Restricted Period has
expired (rounded down to the nearest full share). Dividends, if any, that may have been withheld by the Committee and attributable
to any particular share of Restricted Stock shall be distributed to the Participant in cash or, at the sole discretion of the Committee,
in Common Shares having a Closing Price equal to the amount of such dividends, upon the release of restrictions on such share and,
if such share is forfeited, the Participant shall have no right to such dividends (except as otherwise set forth by the Committee
in the applicable Award agreement).

 

(ii)         Unless
otherwise provided by the Committee in an Award agreement, upon the expiration of the Restricted Period with respect to any outstanding
Restricted Stock Units, the Company shall deliver to the Participant, or his beneficiary, without charge, one Common Share for
each such outstanding Restricted Stock Unit; provided, however, that the Committee may, in its sole discretion and subject
to the requirements of Section 409A of the Code, elect to (i) pay cash or part cash and part Common Share in lieu of delivering
only Common Shares in respect of such Restricted Stock Units or (ii) defer the delivery of Common Shares (or cash or part
Common Shares and part cash, as the case may be) beyond the expiration of the Restricted Period if such delivery would result
in a violation of applicable law until such time as is no longer the case. If a cash payment is made in lieu of delivering Common
Shares, the amount of such payment shall be equal to the Closing Price of the Common Shares as of the date on which the Restricted
Period lapsed with respect to such Restricted Stock Units, less an amount equal to any federal, state, local and non-U.S. income
and employment taxes required to be withheld. 

 

10.          Stock
Bonus Awards. The Committee may issue unrestricted Common Shares, or other Awards denominated in Common Shares, under this
Plan to Eligible Persons, either alone or in tandem with other awards, in such amounts as the Committee shall from time to time
in its sole discretion determine. Each Stock Bonus Award granted under this Plan shall be evidenced by an Award agreement. Each
Stock Bonus Award so granted shall be subject to such conditions not inconsistent with this Plan as may be reflected in the applicable
Award agreement.

 

    	 	13	 

     

    

 

11.          Performance
Compensation Awards.

 

(a)          Generally.
The Committee shall have the authority, at the time of grant of any Award described in Sections 7 through 10 of this Plan,
to designate such Award as a Performance Compensation Award intended to qualify as “performance-based compensation”
under Section 162(m) of the Code. The Committee shall have the authority to make an award of a cash bonus to any Participant
and designate such Award as a Performance Compensation Award intended to qualify as “performance-based compensation”
under Section 162(m) of the Code.

 

(b)          Discretion
of Committee with Respect to Performance Compensation Awards. With regard to a particular Performance Period, the Committee
shall have sole discretion to select the length of such Performance Period, the type(s) of Performance Compensation Awards to be
issued, the Performance Criteria that will be used to establish the Performance Goal(s), the kind(s) and/or level(s) of the Performance
Goals(s) that is (are) to apply and the Performance Formula. Within the first 90 calendar days of a Performance Period (or, if
longer or shorter, within the maximum period allowed under Section 162(m) of the Code, if applicable), the Committee shall,
with regard to the Performance Compensation Awards to be issued for such Performance Period, exercise its discretion with respect
to each of the matters enumerated in the immediately preceding sentence and record the same in writing.

 

(c)          Performance
Criteria. The Performance Criteria that will be used to establish the Performance Goal(s) shall be based on the attainment
of specific levels of performance of the Company and/or one or more Affiliates, divisions or operational units, or any combination
of the foregoing, as determined by the Committee, which criteria will be based on one or
more of the following business criteria: (i) revenue; (ii) sales; (iii) profit (net profit, gross profit, operating
profit, economic profit, profit margins or other corporate profit measures); (iv) earnings (EBIT, EBITDA, earnings per share,
or other corporate earnings measures); (v) net income (before or after taxes, operating income or other income measures);
(vi) cash (cash flow, cash generation or other cash measures); (vii) stock price or performance; (viii) total stockholder
return (stock price appreciation plus reinvested dividends divided by beginning share price); (ix) economic value added; (x) return
measures (including, but not limited to, return on assets, capital, equity, investments or sales, and cash flow return on assets,
capital, equity, or sales); (xi) market share; (xii) improvements in capital structure; (xiii) expenses (expense
management, expense ratio, expense efficiency ratios or other expense measures); (xiv) business expansion or consolidation
(acquisitions and divestitures); (xv) internal rate of return or increase in net present value; (xvi) working capital
targets relating to inventory and/or accounts receivable; (xvii) inventory management; (xviii) service or product delivery
or quality; (xix) customer satisfaction; (xx) employee retention; (xxi) safety standards; (xxii) productivity
measures; (xxiii) cost reduction measures; and/or (xxiv) strategic plan development and implementation. Any one
or more of the Performance Criteria adopted by the Committee may be used on an absolute or relative basis to measure the performance
of the Company and/or one or more Affiliates as a whole or any business unit(s) of the Company and/or one or more Affiliates or
any combination thereof, as the Committee may deem appropriate, or any of the above Performance Criteria may be compared to the
performance of a selected group of comparison companies, or a published or special index that the Committee, in its sole discretion,
deems appropriate, or as compared to various stock market indices. The Committee also has the authority to provide for accelerated
vesting of any Award based on the achievement of Performance Goals pursuant to the Performance Criteria specified in this paragraph.
To the extent required under Section 162(m) of the Code, the Committee shall, within the first 90 calendar days of a Performance
Period (or, if longer or shorter, within the maximum period allowed under Section 162(m) of the Code), define in an objective
fashion the manner of calculating the Performance Criteria it selects to use for such Performance Period and thereafter promptly
communicate such Performance Criteria to the Participant.

 

    	 	14	 

     

    

 

(d)          Modification
of Performance Goal(s). In the event that applicable tax and/or securities laws change to permit Committee discretion to
alter the governing Performance Criteria without obtaining stockholder approval of such alterations, the Committee shall have sole
discretion to make such alterations without obtaining stockholder approval. The Committee is authorized at any time during the
first 90 calendar days of a Performance Period (or, if longer or shorter, within the maximum period allowed under Section 162(m)
of the Code, if applicable), or at any time thereafter to the extent the exercise of such authority at such time would not cause
the Performance Compensation Awards granted to any Participant for such Performance Period to fail to qualify as “performance-based
compensation” under Section 162(m) of the Code, in its sole discretion, to adjust or modify the calculation of a Performance
Goal for such Performance Period, based on and in order to appropriately reflect the following events: (i) asset write-downs;
(ii) litigation or claim judgments or settlements; (iii) the effect of changes in tax laws, accounting principles, or
other laws or regulatory rules affecting reported results; (iv) any reorganization and restructuring programs; (v) extraordinary
nonrecurring items as described in Accounting Principles Board Opinion No. 30 (or any successor pronouncement thereto) and/or
in management’s discussion and analysis of financial condition and results of operations appearing in the Company’s
annual report to stockholders for the applicable year; (vi) acquisitions or divestitures; (vii) any other specific unusual
or nonrecurring events, or objectively determinable category thereof; (viii) foreign exchange gains and losses; and (ix) a
change in the Company’s fiscal year.

 

(e)          Payment
of Performance Compensation Awards. 

 

(i)          Condition
to Receipt of Payment. Unless otherwise provided in the applicable Award agreement, a Participant must be employed by the
Company on the last day of a Performance Period to be eligible for payment in respect of a Performance Compensation Award for such
Performance Period.

 

(ii)         Limitation.
A Participant shall be eligible to receive payment in respect of a Performance Compensation Award only to the extent that: (A) the
Performance Goals for such period are achieved; and (B) all or some of the portion of such Participant’s Performance
Compensation Award has been earned for the Performance Period based on the application of the Performance Formula to such achieved
Performance Goals.

 

(iii)        Certification.
Following the completion of a Performance Period, the Committee shall review and certify in writing whether, and to what extent,
the Performance Goals for the Performance Period have been achieved and, if so, calculate and certify in writing that amount of
the Performance Compensation Awards earned for the period based upon the Performance Formula. The Committee shall then determine
the amount of each Participant’s Performance Compensation Award actually payable for the Performance Period and, in so doing,
may apply Negative Discretion.

 

(iv)        Use
of Negative Discretion. In determining the actual amount of an individual Participant’s Performance Compensation
Award for a Performance Period, the Committee may reduce or eliminate the amount of the Performance Compensation Award earned under
the Performance Formula in the Performance Period through the use of Negative Discretion if, in its sole judgment, such reduction
or elimination is appropriate. The Committee shall not have the discretion, except as is otherwise provided in this Plan, to (A) grant
or provide payment in respect of Performance Compensation Awards for a Performance Period if the Performance Goals for such Performance
Period have not been attained; or (B) increase a Performance Compensation Award above the applicable limitations set forth
in Section 5 of this Plan.

 

(f)          Timing
of Award Payments. Performance Compensation Awards granted for a Performance Period shall be paid to Participants as soon
as administratively practicable following completion of the certifications required by this Section 11, but in no event later
than two-and-one-half months following the end of the fiscal year during which the Performance Period is completed in order to
comply with the short-term deferral rules under Section 1.409A-1(b)(4) of the Treasury Regulations. Notwithstanding the foregoing,
payment of a Performance Compensation Award may be delayed, as permitted by Section 1.409A-2(b)(7)(i) of the Treasury Regulations,
to the extent that the Company reasonably anticipates that if such payment were made as scheduled, the Company’s tax deduction
with respect to such payment would not be permitted due to the application of Section 162(m) of the Code.

 

    	 	15	 

     

    

 

12.         Changes
in Capital Structure and Similar Events. In the event of (a) any dividend or other distribution (whether in the form
of cash, Common Shares, other securities or other property), recapitalization, stock split, reverse stock split, reorganization,
merger, amalgamation, consolidation, split-up, split-off, combination, repurchase or exchange of Common Shares or other securities
of the Company, issuance of warrants or other rights to acquire Common Shares or other securities of the Company, or other similar
corporate transaction or event (including, without limitation, a Change in Control) that affects the Common Shares, or (b) unusual
or nonrecurring events (including, without limitation, a Change in Control) affecting the Company, any Affiliate, or the financial
statements of the Company or any Affiliate, or changes in applicable rules, rulings, regulations or other requirements of any governmental
body or securities exchange or inter-dealer quotation system, accounting principles or law, such that in either case an adjustment
is determined by the Committee in its sole discretion to be necessary or appropriate, then the Committee shall make any such adjustments
that are equitable, including without limitation any or all of the following:

 

(i)          adjusting
any or all of (A) the number of Common Shares or other securities of the Company (or number and kind of other securities or
other property) that may be delivered in respect of Awards or with respect to which Awards may be granted under this Plan (including,
without limitation, adjusting any or all of the limitations under Section 5 of this Plan) and (B) the terms of any outstanding
Award, including, without limitation, (1) the number of Common Shares or other securities of the Company (or number and kind
of other securities or other property) subject to outstanding Awards or to which outstanding Awards relate, (2) the Exercise
Price or Strike Price with respect to any Award or (3) any applicable performance measures (including, without limitation,
Performance Criteria and Performance Goals);

 

(ii)         providing
for a substitution or assumption of Awards, accelerating the exercisability of, lapse of restrictions on, or termination of, Awards
or providing for a period of time for exercise prior to the occurrence of such event; and

 

(iii)        subject
to the requirements of Section 409A of the Code, canceling any one or more outstanding Awards and causing to be paid to the holders
thereof, in cash, Common Shares, other securities or other property, or any combination thereof, the value of such Awards, if any,
as determined by the Committee (which if applicable may be based upon the price per Common Share received or to be received by
other stockholders of the Company in such event), including without limitation, in the case of an outstanding Option or SAR, a
cash payment in an amount equal to the excess, if any, of the fair market value (as of a date specified by the Committee) of the
Common Shares subject to such Option or SAR over the aggregate Exercise Price or Strike Price of such Option or SAR, respectively
(it being understood that, in such event, any Option or SAR having a per share Exercise Price or Strike Price equal to, or in excess
of, the fair market value of a Common Share subject thereto may be canceled and terminated without any payment or consideration
therefor); 

 

provided, however, that in the
case of any “equity restructuring” (within the meaning of the Financial Accounting Standards Board Statement of Financial
Accounting Standards No. 123 (revised 2004) or ASC Topic 718, or any successor thereto), the Committee shall make an equitable
or proportionate adjustment to outstanding Awards to reflect such equity restructuring. Any adjustment in Incentive Stock Options
under this Section 12 (other than any cancellation of Incentive Stock Options) shall be made only to the extent not constituting
a “modification” within the meaning of Section 424(h)(3) of the Code, and any adjustments under this Section 12
shall be made in a manner that does not adversely affect the exemption provided pursuant to Rule 16b-3 under the Exchange Act.
The Company shall give each Participant notice of an adjustment hereunder and, upon notice, such adjustment shall be conclusive
and binding for all purposes.

 

    	 	16	 

     

    

 

13.         Effect
of Change in Control. Except to the extent otherwise provided in an Award agreement, in the event of a Change in Control,
notwithstanding any provision of this Plan to the contrary, with respect to all or any portion of a particular outstanding Award
or Awards:

 

(a)          all
of the then outstanding Options and SARs shall immediately vest and become immediately exercisable as of a time prior to the Change
in Control;

 

(b)          the
Restricted Period shall expire as of a time prior to the Change in Control (including without limitation a waiver of any applicable
Performance Goals);

 

(c)          Performance
Periods in effect on the date the Change in Control occurs shall end on such date, and the Committee shall (i) determine the extent
to which Performance Goals with respect to each such Performance Period have been met based upon such audited or unaudited financial
information or other information then available as it deems relevant and (ii) cause the Participant to receive partial or full
payment of Awards for each such Performance Period based upon the Committee’s determination of the degree of attainment of
the Performance Goals, or assuming that the applicable “target” levels of performance have been attained or on such
other basis determined by the Committee.

 

To the
extent practicable, any actions taken by the Committee under the immediately preceding clauses (a) through (c) shall occur in a
manner and at a time which allows affected Participants the ability to participate in the Change in Control transactions with respect
to the Common Shares subject to their Awards.

 

14.         Amendments
and Termination.

 

(a)        Amendment
and Termination of this Plan. The Board may amend, alter, suspend, discontinue, or terminate this Plan or any portion
thereof at any time; provided, that (i) no amendment to the definition of Eligible Employee in Section 2, Section 5(i),
Section 11(c) or Section 14(b) (to the extent required by the proviso in such Section 14(b)) shall be made without stockholder
approval and (ii) no such amendment, alteration, suspension, discontinuation or termination shall be made without stockholder
approval if such approval is necessary to comply with any tax or regulatory requirement applicable to this Plan (including, without
limitation, as necessary to comply with any rules or requirements of any securities exchange or inter-dealer quotation system
on which the Common Shares may be listed or quoted or to prevent the Company from being denied a tax deduction under Section 162(m)
of the Code); and, provided, further, that any such amendment, alteration, suspension, discontinuance or termination that
would materially and adversely affect the rights of any Participant or any holder or beneficiary of any Award theretofore granted
shall not to that extent be effective without the prior written consent of the affected Participant, holder or beneficiary.

 

(b)          Amendment
of Award Agreements. The Committee may, to the extent consistent with the terms of any applicable Award agreement, waive
any conditions or rights under, amend any terms of, or alter, suspend, discontinue, cancel or terminate, any Award theretofore
granted or the associated Award agreement, prospectively or retroactively; provided, however that any such waiver,
amendment, alteration, suspension, discontinuance, cancellation or termination that would materially and adversely affect the
rights of any Participant with respect to any Award theretofore granted shall not to that extent be effective without the consent
of the affected Participant; and, provided, further, that without stockholder approval, except as otherwise permitted under
Section 12 of this Plan, (i) no amendment or modification may reduce the Exercise Price of any Option or the Strike
Price of any SAR, (ii) the Committee may not cancel any outstanding Option or SAR and replace it with a new Option or SAR,
another Award or cash or take any action that would have the effect of treating such Award as a new Award for tax or accounting
purposes and (iii) the Committee may not take any other action that is considered a “repricing” for purposes
of the stockholder approval rules of the applicable securities exchange or inter-dealer quotation system on which the Common Shares
are listed or quoted.

 

    	 	17	 

     

    

 

15.         General.

 

(a)        Award
Agreements. Each Award under this Plan shall be evidenced by an Award agreement, which shall be delivered to the Participant
and shall specify the terms and conditions of the Award and any rules applicable thereto, including without limitation, the effect
on such Award of the death, Disability or termination of employment or service of a Participant, or of such other events as may
be determined by the Committee. The Company’s failure to specify any term of any Award in any particular Award agreement
shall not invalidate such term, provided such terms was duly adopted by the Board or the Committee.

 

(b)          Nontransferability;
Trading Restrictions. 

 

(i)          Each
Award shall be exercisable only by a Participant during the Participant’s lifetime, or, if permissible under applicable law,
by the Participant’s legal guardian or representative. No Award may be assigned, alienated, pledged, attached, sold or otherwise
transferred or encumbered by a Participant other than by will or by the laws of descent and distribution and any such purported
assignment, alienation, pledge, attachment, sale, transfer or encumbrance shall be void and unenforceable against the Company or
an Affiliate; provided that the designation of a beneficiary shall not constitute an assignment, alienation, pledge, attachment,
sale, transfer or encumbrance.

 

(ii)         Notwithstanding
the foregoing, the Committee may, in its sole discretion, permit Awards (other than Incentive Stock Options) to be transferred
by a Participant, with or without consideration, subject to such rules as the Committee may adopt consistent with any applicable
Award agreement to preserve the purposes of this Plan, to: (A) any person who is a “family member” of the Participant,
as such term is used in the instructions to Form S-8 under the Securities Act (collectively, the “Immediate Family
Members”); (B) a trust solely for the benefit of the Participant and his or her Immediate Family Members; or
(C) a partnership or limited liability company whose only partners or stockholders are the Participant and his or her Immediate
Family Members; or (D) any other transferee as may be approved either (I) by the Board or the Committee in its sole discretion,
or (II) as provided in the applicable Award agreement (each transferee described in clauses (A), (B) (C) and (D) above is hereinafter
referred to as a “Permitted Transferee”); provided, that the Participant gives the Committee advance
written notice describing the terms and conditions of the proposed transfer and the Committee notifies the Participant in writing
that such a transfer would comply with the requirements of this Plan.

 

(iii)        The
terms of any Award transferred in accordance with the immediately preceding sentence shall apply to the Permitted Transferee and
any reference in this Plan, or in any applicable Award agreement, to a Participant shall be deemed to refer to the Permitted Transferee,
except that (A) Permitted Transferees shall not be entitled to transfer any Award, other than by will or the laws of descent
and distribution; (B) Permitted Transferees shall not be entitled to exercise any transferred Option unless there shall be
in effect a registration statement on an appropriate form covering the Common Shares to be acquired pursuant to the exercise of
such Option if the Committee determines, consistent with any applicable Award agreement, that such a registration statement is
necessary or appropriate; (C) the Committee or the Company shall not be required to provide any notice to a Permitted Transferee,
whether or not such notice is or would otherwise have been required to be given to the Participant under this Plan or otherwise;
and (D) the consequences of the termination of the Participant’s employment by, or services to, the Company or an Affiliate
under the terms of this Plan and the applicable Award agreement shall continue to be applied with respect to the Participant, including,
without limitation, that an Option shall be exercisable by the Permitted Transferee only to the extent, and for the periods, specified
in this Plan and the applicable Award agreement.

 

    	 	18	 

     

    

 

(iv)        The
Committee shall have the right, either on an Award-by-Award basis or as a matter of policy for all Awards or one or more classes
of Awards, to condition the delivery of vested Common Shares received in connection with such Award on the Participant’s
agreement to such restrictions as the Committee may determine. 

 

(c)          Tax
Withholding. 

 

(i)          A
Participant shall be required to pay to the Company or any Affiliate, or the Company or any Affiliate shall have the right and
is hereby authorized to withhold, from any cash, Common Shares, other securities or other property deliverable under any Award
or from any compensation or other amounts owing to a Participant, the amount (in cash, Common Shares, other securities or other
property) of any required withholding taxes in respect of an Award, its exercise, or any payment or transfer under an Award or
under this Plan and to take such other action as may be necessary in the opinion of the Committee or the Company to satisfy all
obligations for the payment of such withholding and taxes.

 

(ii)         Without
limiting the generality of clause (i) above, the Committee may, in its sole discretion, permit a Participant to satisfy, in whole
or in part, the foregoing withholding liability by (A) the delivery of Common Shares (which are not subject to any pledge
or other security interest) owned by the Participant having a fair market value equal to such withholding liability or (B) having
the Company withhold from the number of Common Shares otherwise issuable or deliverable pursuant to the exercise or settlement
of the Award a number of shares with a fair market value equal to such withholding liability (but no more than the minimum required
statutory withholding liability).

 

(d)          No
Claim to Awards; No Rights to Continued Employment; Waiver. No employee of the Company or an Affiliate, or other person,
shall have any claim or right to be granted an Award under this Plan or, having been selected for the grant of an Award, to be
selected for a grant of any other Award. There is no obligation for uniformity of treatment of Participants or holders or beneficiaries
of Awards. The terms and conditions of Awards and the Committee’s determinations and interpretations with respect thereto
need not be the same with respect to each Participant and may be made selectively among Participants, whether or not such Participants
are similarly situated. Neither this Plan nor any action taken hereunder shall be construed as giving any Participant any right
to be retained in the employ or service of the Company or an Affiliate, nor shall it be construed as giving any Participant any
rights to continued service on the Board. The Company or any of its Affiliates may at any time dismiss a Participant from employment
or discontinue any consulting relationship, free from any liability or any claim under this Plan, unless otherwise expressly provided
in this Plan or any Award agreement. By accepting an Award under this Plan, a Participant shall thereby be deemed to have waived
any claim to continued exercise or vesting of an Award or to damages or severance entitlement related to non-continuation of the
Award beyond the period provided under this Plan or any Award agreement, notwithstanding any provision to the contrary in any written
employment contract or other agreement between the Company and its Affiliates and the Participant, whether any such agreement is
executed before, on or after the Date of Grant.

 

    	 	19	 

     

    

 

(e)          International
Participants. With respect to Participants who reside or work outside of the United States of America and who are not (and
who are not expected to be) “covered employees” within the meaning of Section 162(m) of the Code, the Committee
may in its sole discretion amend the terms of this Plan or outstanding Awards (or establish a sub-plan) with respect to such Participants
in order to conform such terms with the requirements of local law or to obtain more favorable tax or other treatment for a Participant,
the Company or its Affiliates.

 

(f)          Designation
and Change of Beneficiary. Each Participant may file with the Committee a written designation of one or more persons as
the beneficiary(ies) who shall be entitled to receive the amounts payable with respect to an Award, if any, due under this Plan
upon his or her death. A Participant may, from time to time, revoke or change his or her beneficiary designation without the consent
of any prior beneficiary by filing a new designation with the Committee. The last such designation filed with the Committee shall
be controlling; provided, however, that no designation, or change or revocation thereof, shall be effective unless received
by the Committee prior to the Participant’s death, and in no event shall it be effective as of a date prior to such receipt.
If no beneficiary designation is filed by a Participant, the beneficiary shall be deemed to be his or her spouse or, if the Participant
is unmarried at the time of death, his or her estate. Upon the occurrence of a Participant’s divorce (as evidenced by a
final order or decree of divorce), any spousal designation previously given by such Participant shall automatically terminate.

 

(g)          Termination
of Employment/Service. Unless determined otherwise by the Committee at any point following such event: (i) neither
a temporary absence from employment or service due to illness, vacation or leave of absence nor a transfer from employment or service
with the Company to employment or service with an Affiliate (or vice-versa) shall be considered a termination of employment or
service with the Company or an Affiliate; and (ii) if a Participant’s employment with the Company and its Affiliates
terminates, but such Participant continues to provide services to the Company and its Affiliates in a non-employee capacity (or
vice-versa), such change in status shall not be considered a termination of employment with the Company or an Affiliate.

 

(h)          No
Rights as a Stockholder. Except as otherwise specifically provided in this Plan or any Award agreement, no person shall
be entitled to the privileges of ownership in respect of Common Shares that are subject to Awards hereunder until such shares have
been issued or delivered to that person.

 

(i)          Government
and Other Regulations. 

 

(i)          The
obligation of the Company to settle Awards in Common Shares or other consideration shall be subject to all applicable laws, rules,
and regulations, and to such approvals by governmental agencies as may be required. Notwithstanding any terms or conditions of
any Award to the contrary, the Company shall be under no obligation to offer to sell or to sell, and shall be prohibited from offering
to sell or selling, any Common Shares pursuant to an Award unless such shares have been properly registered for sale pursuant to
the Securities Act with the Securities and Exchange Commission or unless the Company has received an opinion of counsel, satisfactory
to the Company, that such shares may be offered or sold without such registration pursuant to an available exemption therefrom
and the terms and conditions of such exemption have been fully complied with. The Company shall be under no obligation to register
for sale under the Securities Act any of the Common Shares to be offered or sold under this Plan. The Committee shall have the
authority to provide that all certificates for Common Shares or other securities of the Company or any Affiliate delivered under
this Plan shall be subject to such stop transfer orders and other restrictions as the Committee may deem advisable under this Plan,
the applicable Award agreement, the federal securities laws, or the rules, regulations and other requirements of the Securities
and Exchange Commission, any securities exchange or inter-dealer quotation system upon which such shares or other securities are
then listed or quoted and any other applicable federal, state, local or non-U.S. laws, and, without limiting the generality of
Section 9 of this Plan, the Committee may cause a legend or legends to be put on any such certificates to make appropriate
reference to such restrictions. Notwithstanding any provision in this Plan to the contrary, the Committee reserves the right to
add any additional terms or provisions to any Award granted under this Plan that it in its sole discretion deems necessary or advisable
in order that such Award complies with the legal requirements of any governmental entity to whose jurisdiction the Award is subject.

 

    	 	20	 

     

    

 

(ii)         The
Committee may cancel an Award or any portion thereof if it determines, in its sole discretion, that legal or contractual restrictions
and/or blockage and/or other market considerations would make the Company’s acquisition of Common Shares from the public
markets, the Company’s issuance of Common Shares to the Participant, the Participant’s acquisition of Common Shares
from the Company and/or the Participant’s sale of Common Shares to the public markets, illegal, impracticable or inadvisable.
If the Committee determines to cancel all or any portion of an Award in accordance with the foregoing, unless doing so would violate
Section 409A of the Code, the Company shall pay to the Participant an amount equal to the excess of (A) the aggregate fair
market value of the Common Shares subject to such Award or portion thereof canceled (determined as of the applicable exercise date,
or the date that the shares would have been vested or delivered, as applicable), over (B) the aggregate Exercise Price or
Strike Price (in the case of an Option or SAR, respectively) or any amount payable as a condition of delivery of Common Shares
(in the case of any other Award). Such amount shall be delivered to the Participant as soon as practicable following the cancellation
of such Award or portion thereof. The Committee shall have the discretion to consider and take action to mitigate the tax consequence
to the Participant in cancelling an Award in accordance with this clause.

 

(j)          Payments
to Persons Other Than Participants. If the Committee shall find that any person to whom any amount is payable under this
Plan is unable to care for his affairs because of illness or accident, or is a minor, or has died, then any payment due to such
person or his estate (unless a prior claim therefor has been made by a duly appointed legal representative) may, if the Committee
so directs the Company, be paid to his spouse, child, relative, an institution maintaining or having custody of such person, or
any other person deemed by the Committee to be a proper recipient on behalf of such person otherwise entitled to payment. Any such
payment shall be a complete discharge of the liability of the Committee and the Company therefor.

 

(k)          Nonexclusivity
of this Plan. Neither the adoption of this Plan by the Board nor the submission of this Plan to the stockholders of the
Company for approval shall be construed as creating any limitations on the power of the Board to adopt such other incentive arrangements
as it may deem desirable, including, without limitation, the granting of stock options or other equity-based awards otherwise than
under this Plan, and such arrangements may be either applicable generally or only in specific cases.

 

(l)          No
Trust or Fund Created. Neither this Plan nor any Award shall create or be construed to create a trust or separate fund
of any kind or a fiduciary relationship between the Company or any Affiliate, on the one hand, and a Participant or other person
or entity, on the other hand. No provision of this Plan or any Award shall require the Company, for the purpose of satisfying any
obligations under this Plan, to purchase assets or place any assets in a trust or other entity to which contributions are made
or otherwise to segregate any assets, nor shall the Company maintain separate bank accounts, books, records or other evidence of
the existence of a segregated or separately maintained or administered fund for such purposes. Participants shall have no rights
under this Plan other than as general unsecured creditors of the Company, except that insofar as they may have become entitled
to payment of additional compensation by performance of services, they shall have the same rights as other employees under general
law.

 

    	 	21	 

     

    

 

(m)          Reliance
on Reports. Each member of the Committee and each member of the Board shall be fully justified in acting or failing to
act, as the case may be, and shall not be liable for having so acted or failed to act in good faith, in reliance upon any report
made by the independent public accountant of the Company and its Affiliates and/or any other information furnished in connection
with this Plan by any agent of the Company or the Committee or the Board, other than himself.

 

(n)          Relationship
to Other Benefits. No payment under this Plan shall be taken into account in determining any benefits under any pension,
retirement, profit sharing, group insurance or other benefit plan of the Company except as otherwise specifically provided in such
other plan.

 

(o)          Governing
Law. The Plan shall be governed by and construed in accordance with the internal laws of the State of Nevada, without giving
effect to the conflicts of law provisions.

 

(p)          Severability.
If any provision of this Plan or any Award or Award agreement is or becomes or is deemed to be invalid, illegal, or unenforceable
in any jurisdiction or as to any person or entity or Award, or would disqualify this Plan or any Award under any law deemed applicable
by the Committee, such provision shall be construed or deemed amended to conform to the applicable laws in the manner that most
closely reflects the original intent of the Award or the Plan, or if it cannot be construed or deemed amended without, in the determination
of the Committee, materially altering the intent of this Plan or the Award, such provision shall be construed or deemed stricken
as to such jurisdiction, person or entity or Award and the remainder of this Plan and any such Award shall remain in full force
and effect.

 

(q)          Obligations
Binding on Successors. The obligations of the Company under this Plan shall be binding upon any successor corporation or
organization resulting from the merger, amalgamation, consolidation or other reorganization of the Company, or upon any successor
corporation or organization succeeding to substantially all of the assets and business of the Company.

 

(r)          Code
Section 162(m) Approval. If so determined by the Committee, the provisions of this Plan regarding Performance Compensation
Awards shall be disclosed and reapproved by stockholders no later than the first stockholder meeting that occurs in the fifth year
following the year in which stockholders previously approved such provisions, in each case in order for certain Awards granted
after such time to be exempt from the deduction limitations of Section 162(m) of the Code. Nothing in this clause, however, shall
affect the validity of Awards granted after such time if such stockholder approval has not been obtained. 

 

(s)          Expenses;
Gender; Titles and Headings. The expenses of administering this Plan shall be borne by the Company and its Affiliates.
Masculine pronouns and other words of masculine gender shall refer to both men and women. The titles and headings of the sections
in this Plan are for convenience of reference only, and in the event of any conflict, the text of this Plan, rather than such titles
or headings shall control.

 

(t)          Other
Agreements. Notwithstanding the above, the Committee may require, as a condition to the grant of and/or the receipt of
Common Shares under an Award, that the Participant execute lock-up, stockholder or other agreements, as it may determine in its
sole and absolute discretion. 

 

    	 	22	 

     

    

 

(u)          Section
409A. The Plan and all Awards granted hereunder are intended to comply with, or otherwise be exempt from, the requirements
of Section 409A of the Code. The Plan and all Awards granted under this Plan shall be administered, interpreted, and construed
in a manner consistent with Section 409A of the Code to the extent necessary to avoid the imposition of additional taxes under
Section 409A(a)(1)(B) of the Code. Notwithstanding anything in this Plan to the contrary, in no event shall the Committee exercise
its discretion to accelerate the payment or settlement of an Award where such payment or settlement constitutes deferred compensation
within the meaning of Section 409A of the Code unless, and solely to the extent that, such accelerated payment or settlement is
permissible under Section 1.409A-3(j)(4) of the Treasury Regulations. If a Participant is a “specified employee” (within
the meaning of Section 1.409A-1(i) of the Treasury Regulations) at any time during the twelve (12)-month period ending on the date
of his termination of employment, and any Award hereunder subject to the requirements of Section 409A of the Code is to be satisfied
on account of the Participant’s termination of employment, satisfaction of such Award shall be suspended until the date that
is six (6) months after the date of such termination of employment.

 

(v)         Payments.
Participants shall be required to pay, to the extent required by applicable law, any amounts required to receive Common Shares
under any Award made under this Plan. 

 

*    *    *

 

As adopted by the Board on August 22,
2018.

 

As approved by the holders of a majority
of the outstanding Common Shares on August 22, 2018.

 

    	 	23gec-ex1041_151.htm

Exhibit 10.41

 

March 21, 2018

 

 

Mr. Adam M. Kleinman

11 Applecrest Road

Weston, MA 02493

 

Dear Mr. Kleinman:

 

This offer letter (this “Offer Letter”) sets forth the terms of your employment as of the date hereof (the “Effective Date”) as President and Chief Operating Officer of Great Elm Capital Group, Inc. (“GECG”) and as Managing Director, Chief Operating Officer and General Counsel of Great Elm Capital Management, Inc. (“GECM” and, together with GECG, the “Company”).  Upon your acceptance of this Offer Letter, this Offer Letter amends and restates as of the Effective Date our agreement with respect to your employment with GECM dated September 18, 2017 (the “Amended Agreement”), which Amended Agreement amended and restated as of the effective date thereof our agreement with respect to your employment with GECM dated November 3, 2016.

 

	
1.
	
Title.  You will serve as President and Chief Operating Officer of GECG reporting directly to GECG’s Chief Executive Officer and you will serve as a Managing Director, Chief Operating Officer and General Counsel of GECM reporting directly to GECM’s Chief Investment Officer and you will be a member of GECM’s management committee and investment committee.

 

	
2.
	
Employment Location.  You are expected to work at the Company’s corporate headquarters in the greater Boston area.

 

	
3.
	
Base Salary. Your annual base salary rate will be $250,000.00, less applicable withholdings and deductions, commencing on September 1, 2017, and paid in accordance with the Company’s payroll practices in effect from time to time.

 

	
4.
	
Bonus. You will be eligible to participate in the Great Elm Capital Management Performance Bonus Plan (the “Plan”) beginning on October 1, 2017.  Your targeted bonus level under the Plan will be $194,902 for the twelve months beginning October 1, 2017 and ending September 30, 2018 and the cap for such period shall be 150%, subject to, and in accordance with, the terms of the Plan.  Additionally, the Company has the right, but not any obligation, to award you additional bonuses in its sole discretion. For any period after September 30, 2018, there is no guarantee that you will be awarded any bonus in any period or be eligible for a bonus under that Plan or any other bonus or incentive plan for any period.

 

	
5.
	
Equity Incentives.

 

	
5.1
	
Stock Options. 

 

	
(a)
	
The compensation committee (the “Compensation Committee”) of the board of directors of GECG has awarded you options to purchase 213,000 shares of GECG common stock at an exercise price equal to the closing price of the shares on the Effective Date.  These options vest twenty percent on the first anniversary of the Effective Date and monthly thereafter such that they will be fully vested five years from the Effective Date.

 

	
(b)
	
The Compensation Committee also has awarded you options to purchase 194,175 shares of GECG common stock at an exercise price equal to the closing price of the shares on the Effective Date.  These options vest fifty percent on the six-month anniversary of the Effective Date and monthly thereafter such that they are fully vested on the first anniversary of the Effective Date.

 

The terms of the options described in Sections 5.1(a) and 5.1(b) are set forth in separate notices of grant and award agreements that, along with the GECG 2016 Long-Term Incentive Plan, govern such options (the “Option Award”).  You will be eligible for periodic additional option grants in the sole discretion of the Compensation Committee and there is no assurance that any such award will be made at any future time.

 

 

 

	
5.2
	
Performance Shares.  All performance shares you hold as of the Effective Date will be amended concurrent with the delivery of this Offer Letter pursuant to the Amended and Restated Notice of Performance Stock Award delivered to you concurrent herewith to provide that all vesting/repurchase criteria thereunder will be deemed satisfied if (a) GECM, directly or indirectly, sells, assigns, distributes, participates, delegates or encumbers its economic interest (other than to GECC GP Corp or GECG) under the Investment Management Agreement, dated as of September 27, 2016, by and between GECM and Great Elm Capital Corp. (as such agreement may be amended from time to time, the “IMA”) or (b) GECG or any of its affiliates receives any compensation in connection with the transfer, sale, assignment, distribution, participation, delegation, encumbrance, termination, modification or amendment of the IMA.

 

	
6.
	
Employee Health and Welfare Benefits. You will be offered benefits, including participation in the Company’s health, dental and 401(k) plans, consistent with those offered to similarly-situated employees.

 

	
7.
	
Business Expenses.  The Company will reimburse your reasonable out of pocket expenses incurred in connection with your service, subject to the Company’s policies as in effect from time to time, and applicable IRS guidelines.

 

	
8.
	
At Will Employment. Your employment with the Company is “at will” and may be terminated at any time by the Company or by you for any reason or no reason.

 

	
9.
	
Non-Solicitation.

 

	
9.1
	
During the term of your employment and for a period of one year thereafter (no matter why your employment concluded), you will not, directly or indirectly, on your own account or on behalf of or in conjunction with any other person or organization induce or attempt to induce any employee of the Company or its affiliates to leave the employment of the Company or its affiliates (whether or not such would be a breach of contract by such employee).

 

	
9.2
	
During the term of your employment and for a period of one year thereafter (no matter why your employment concluded), you will not, directly or indirectly, on your own account or on behalf of or in conjunction with any other person or organization solicit (a) any investor in GECM or in any managed/advised investment vehicle of GECM or (b) any borrower or other investee in which GECM or any managed/advised investment vehicle of GECM holds an investment or (c) any entity in which GECG holds or, to your knowledge, is seeking to acquire, a controlling interest, provided that you either (x) had business-related contact with such investor, borrower or other investee or entity during your employment with the Company or (b) learned non-public information about such investor, borrower or other investee or entity in the course of your employment with the Company.  Nothing in this Section 9.2 shall prohibit you from directly or indirectly soliciting any such investor, borrower or other investee or entity if prior to such solicitation (i) such investor has not been a fee-paying investor in GECM or in any managed or advised investment vehicle of GECM for one year prior to such solicitation, (ii) GECM and any investment vehicle managed by GECM are no longer invested in such borrower or other investee or (iii) GECG no longer holds or, to your knowledge, is seeking to acquire, a controlling interest in such entity.

 

	
9.3
	
The restrictions contained in this Section 9 are necessary for the protection of the trade secrets, confidential information and goodwill of the Company and are considered by you to be reasonable for such purpose.  You stipulate that irrevocable harm will result from breach of your obligations under this Section 9. Therefore, in the event of any such breach or threatened breach, you agree that the Company, in addition to such other remedies which may be available, shall have the right to obtain an injunction from a court restraining such a breach or threatened breach and the right to specific performance of the provisions of this Section 9 and you hereby waive the adequacy of a remedy at law as a defense to such relief.

 

	
9.4
	
You stipulate that the remedies at law are inadequate to compensate the Company for breach of your obligations under this Section 9 and the CIAA (as defined below) and that enforcement of the provisions of each of this Section 9 and the CIAA is in the public interest of the market for talent in the investment management industry and of investors in the investment vehicles managed/advised by the Company.

 

2

 

	
9.5
	
If you materially violate any provision of this Section 9 after the end of your employment, you agree that you shall continue to be bound by the restrictions in this Section 9 until a period of one year has expired without any material violation of this Section 9.

 

	
10.
	
Severance.

 

	
10.1
	
If the Company terminates your employment without Cause or you terminate your employment for Good Reason:

 

	
(a)
	
You will (i) abide by your obligations under the CIAA and (ii) comply with your obligations under Section 9.

 

	
(b)
	
If you execute a customary mutual release and do not exercise any revocation rights you may have, the Company will (i) execute a customary mutual release, (ii) after expiration of any rescission periods under applicable law, but in no event more than 70 days following your termination of employment, pay you a lump sum equal to (A) $650,000 if such termination occurs on or prior to the first anniversary of the Effective Date and (B) $550,000 if such termination occurs thereafter, (iii) reimburse you all premiums paid by you to continue health and dental insurance for you and your family for a period of one year post employment, provided that you timely elect COBRA coverage with respect to any such health and dental insurance;  and (iv)  (A) accelerate the vesting of the shares subject to the options referred to in Section 5.1(b) by crediting six months of service (if no vesting had occurred as of the date of termination), (B) if such termination occurs within two years following a Change of Control, accelerate all remaining vesting of the options referred to in Section 5.1(a) and (C) accelerate the vesting of shares subject to the options referred to in Section 5.1(a) by crediting twelve months of service (in addition to any vesting that had occurred as of the date of termination).

 

	
(c)
	
Notwithstanding the foregoing, if your employment terminates at any time for any reason, the Company will pay you (i) any bonus under Section 4 above for any fully completed plan period which had concluded prior to the date on which termination occurs and (ii) any bonus payments from prior periods that had been deferred in accordance with the terms of the Plan, in each case, as and when such payments are made to other employees of the Company in accordance with the terms of the Plan.

 

	
10.2
	
Best Net After Tax Adjustment

 

	
(a)
	
If amounts under Section 10.1 would be subject to any excise tax imposed by Sections 409A or 4999 of the Internal Revenue Code of 1986, as amended (the “Code”), (such excise tax together with any such interest and penalties, shall be referred to as the “Excise Tax”), then a calculation shall first be made under which such payments or benefits provided to you are reduced to the extent necessary so that no portion thereof shall be subject to the Excise Tax (the “4999 Limit”).  The Company shall then compare (1) your Net After-Tax Benefit (as defined below) assuming application of the 4999 Limit with (2) your Net After-Tax Benefit without application of the 4999 Limit. If (1) is greater than (2), you will receive amounts under Section 10.1 solely up to the 4999 Limit.  If (2) is greater than (1), then you will be entitled to receive all amounts as specified in Section 10.1 without adjustment, and shall be solely liable for any and all Excise Tax related thereto. “Net After-Tax Benefit” shall mean the sum of (i) all payments that you receive or are entitled to receive that are contingent on a change in the ownership or effective control of the Company or in the ownership of a substantial portion of the assets of the Company within the meaning of Section 280G(b)(2) of the Code, less (ii) the amount of federal, state, local, employment, and Excise Tax (if any) imposed with respect to such payments.

 

	
(b)
	
If amounts must be reduced pursuant to Section 10.2(a), you may select the order of reduction, but none of the selected amounts may be “nonqualified deferred compensation” subject to Section 409A of the Code.  If you fail to select an order in which amounts are to be reduced, or cannot select such an order without selecting payments that would be “nonqualified deferred compensation” subject to Section 409A of the Code, the Company shall (to the extent feasible) reduce accelerated equity incentive vesting first (to the extent the value of such accelerated vesting for 280G purposes is not determined pursuant to Treasury Regulation Section 1.280G-1 Q&A 24(c)), followed by cash payments and in the order in which such payments would be made (with payments made closest to the Change in Control being reduced first), followed by accelerated equity incentive vesting (to the extent the value of such accelerated vesting is determined pursuant to Treasury Regulation Section 1.280G-1 Q&A 24(c)), and followed last by the continued health and welfare benefits.

 

3

 

	
(c)
	
The calculations in this Section 10.2 shall be made by a certified public accounting firm, executive compensation consulting firm, or law firm designated by the Company in its sole and absolute discretion, and shall be determined using reasonable assumptions and approximations concerning applicable taxes and relying on reasonable, good faith interpretations concerning the application of Sections 280G and 4999 of the Code.  The costs of performing such calculations shall be borne exclusively by the Company.

 

	
10.3
	
For purposes of this Offer Letter, “Cause” shall mean: (a) your theft, dishonesty, misconduct, or falsification of any of the Company’s or its affiliates’ records; (b) any action by you outside of the scope of your employment agreement with the Company that has a material detrimental effect on the Company’s reputation or business as reasonably determined by the Company’s board of directors; (c) your substantial failure or inability to perform any reasonably assigned duties within the scope of your employment agreement with the Company that has not been cured within thirty business days of written notice from the Company to you, in each case, as determined by the Company’s board of directors in its sole discretion; (d) your material violation of any Company policy; (e) your conviction (including any plea of guilty or no contest) of any criminal act (other than traffic violations); or (f) your material breach of any written agreement with the Company or its affiliates which has not been cured within ten business days’ of written notice from the Company to you thereof.

 

	
10.4
	
For purposes of this Offer Letter, “Good Reason” shall mean your resignation from the Company within six months after the occurrence of any of the following events: (a) without your express prior written consent, the significant reduction of your duties, authority, responsibilities, job title, or reporting relationships relative to your duties, authority, responsibilities, job title, or reporting relationships as in effect immediately prior to such reduction, or the assignment to you of such reduced duties, authority, responsibilities, job title, or reporting relationships; (b) without your express prior written consent, a reduction by the Company of your base salary or bonus target as in effect immediately prior to such reduction or the Company’s failure to pay such amounts when due; (c) a material reduction by the Company in the kind or level of employee benefits, excluding salary and bonuses, to which you were entitled immediately prior to such reduction with the result that your overall benefits package is significantly reduced (unless such reduction is part of a program generally applicable to other similar level employees of the Company); (d) the relocation of your principal place of work to a facility or a location more than twenty five miles from your then present location, without your express prior written consent or (e) breach by the Company of its obligations hereunder or under any incentive or performance award (including under the related notices of grant and award agreements) granted to you by the Company or its affiliates, including, without limitation, the equity incentive awards (and related notices of grant and award agreements) referred to in Sections 5.1(a), 5.1(b) and 5.2 above; provided, however, that in each case, your resignation shall not constitute Good Reason under this provision unless (i) you provide the Company with written notice of the applicable event or circumstance within thirty days after you first have knowledge of it, which notice reasonably identifies the event or circumstance that you believe constitutes grounds for Good Reason, and (ii) the Company fails to correct the event or circumstance so identified within thirty days after receipt of such notice.

 

	
10.5
	
For purposes of this Offer Letter, “Change of Control” shall have the meaning given to such term in the GECG 2016 Long-Term Incentive Plan as in effect on the Effective Date.

 

	
11.
	
General Provisions.

 

	
11.1
	
You understand, acknowledge and agree that your obligations under this Offer Letter shall continue in accordance with the express terms of this Offer Letter regardless of any changes in your title, position, duties, salary or other compensation or other terms and conditions of employment, and that no change in any of the foregoing shall be considered to end your employment for purposes of this Offer Letter.

 

	
11.2
	
You confirm that the employee confidentiality and invention assignment agreement (the “CIAA”) you entered into with the Company is in full force and effect.

 

	
11.3
	
You confirm that you are a citizen of the U.S., a noncitizen national of the U.S., a lawful permanent resident, or an alien authorized to work in the U.S.

 

	
11.4
	
Amounts payable hereunder (net of taxes) shall be subject to the GECG’s claw back policies if its financial statements are restated (a “Restatement”) or as otherwise required by applicable law or listing requirement; 

4

 

		
provided that, except as mandated by applicable law or listing rule, in the event of a claw-back because of a Restatement, (a) the Company may only claw-back payments earned in the period to which the Restatement applies and (b) in no event may the Company claw back any payments earned in periods occurring more than three years prior to such Restatement.  Claw backs by the Company required under applicable law shall not constitute a breach of the Company’s obligations hereunder nor constitute Good Reason.

 

	
11.5
	
You are expected to devote substantially all of your business efforts to service of the Company under this Offer Letter.  Subject to the Company’s code of ethics as in effect from time to time, you may participate in charitable, religious or civic organizations that do not materially interfere with your work.

 

	
11.6
	
This Offer Letter and the matters covered hereby will be governed by and construed under the laws of the Commonwealth of Massachusetts.

 

	
11.7
	
Any dispute arising out of or relating to this Offer Letter or the breach thereof or otherwise arising out of your employment or the termination of that employment (including, without limitation, any claims of unlawful employment discrimination or any other claims based on any statute) shall, to the fullest extent permitted by law, be settled by arbitration before a single arbitrator in Boston pursuant to the JAMS Employment Arbitration Rules and Procedures as then in effect, subject to a direction to the arbitrator to apply such rules in a manner to minimize cost and maximize efficiency and speed of resolution to the maximum reasonable extent permitted under such rules and applicable law consistent with obtaining a fully enforceable resolution of such dispute.  The arbitrator must only choose between the position, in total, that you advance or the position, in total, that the Company advances as the closest to the correct resolution of all matters being arbitrated based on the law and the facts.  This paragraph shall be specifically enforceable. Notwithstanding the foregoing, this paragraph shall not preclude either party from pursuing a court action for the sole purpose of obtaining a temporary restraining order or a preliminary injunction in circumstances in which such relief is appropriate; provided that any other relief shall be pursued through an arbitration proceeding pursuant to this paragraph.

 

	
11.8
	
This Offer Letter, the award agreements evidencing your option grants, the CIAA, and the Stock Subscription Agreement, dated as of June 22, 2016, among GECC GP Corp., you and the other parties signatory thereto, as amended on the Effective Date, the documents governing your existing equity incentive awards, together with all of the Company’s policies and procedures relating to employees, as in effect from time to time, including its Code of Ethics, as in effect from time to time (collectively, “Employment Documents”), constitute our entire agreement with respect to your employment with the Company and no prior negotiations, drafts, arrangements or understandings with respect thereto shall be of any effect. The Amended Agreement shall be of no further effect for periods from and after the Effective Date.

 

	
11.9
	
The Company’s benefits, payroll, and other human resource management services may be provided through one or more of the Company’s affiliates or a professional employer organization. As a result of this arrangement, the affiliate or the professional employment organization will be considered your employer of record for these purposes; however, the Company’s Chief Investment Officer will be responsible for directing your work, reviewing your performance, setting your schedule and otherwise directing your work at the Company.

 

	
11.10
	
If any provision of this Offer Letter is held by an arbitrator or court of competent authority to be unenforceable, the parties intend that (a) the remaining provisions of this Agreement shall be enforced in accordance with their terms and (b) the court shall substitute a replacement provision that is enforceable that, as closely as possible, accomplishes the purposes intended by such original provision.

 

	
11.11
	
Any amendment or modification to this Offer Letter may only be made pursuant to a written agreement executed by each of the parties hereto. 

 

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If this Offer Letter correctly sets forth the terms of our agreement, please sign and return this Offer Letter whereupon it shall become our binding agreement.

 

Very truly yours,

 

_/s/Peter A. Reed         ____

 

Peter A. Reed

Chief Executive Officer

Great Elm Capital Group, Inc.

 

Accepted and agreed to as of the Effective Date:

 

 

_/s/Adam M. Kleinman____

Adam M. Kleinman

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