Document:

Document

Exhibit 10.2
Amended and Restated Participation Agreement

Name:     Laura A. Francis
Section 1.    ELIGIBILITY.  
You have been designated as eligible to participate in the SI-BONE, Inc. Severance Benefit Plan (the “Plan”), a copy of which is attached to this Participation Agreement (the “Participation Agreement”).  Capitalized terms not explicitly defined in this Participation Agreement but defined in the Plan shall have the same definitions as in the Plan.  You will receive the benefits set forth below if you meet all the eligibility requirements set forth in the Plan, including, without limitation, timely executing a Release for benefit of the Company and allowing such Release to become effective in accordance with its terms. Notwithstanding the schedule for provision of benefits set forth below, the schedule and timing of payment of any benefits under this Participant Agreement is subject to any delay in payment that may be required under Section 5 of the Plan. 

Section 2.    CHANGE IN CONTROL SEVERANCE BENEFITS.

        If you are terminated in a Covered Termination that occurs during the Change in Control Period, you will receive the severance benefits set forth in this Section 2. All severance benefits described herein are subject to standard deductions and withholdings.

(a)    Base Salary.  You shall receive a cash payment in an amount equal to 18 months (the “Severance Period”) of payment of your Base Salary.  The Base Salary payment will be paid to you in a lump sum cash payment no later than the second regular payroll date following the later of (i) the effective date of the Release or (ii) the Closing, but in any event not later than March 15 of the year following the year in which your Separation from Service occurs. 

(b)    Bonus Payment. You will be entitled to one and one-half (1.5) times the annual target cash bonus established for you, if any, pursuant to the annual performance bonus or annual variable compensation plan established by the Board of Directors or Committee (or any authorized committee or designee thereof) for the year in which your Covered Termination occurs.  If at the time of the Covered Termination you are eligible for the annual target cash bonus for the year in which the Covered Termination occurs, but the target percentage (or target dollar amount, if specified as such in the applicable bonus plan) for such bonus has not yet been established for such year, the target percentage shall be the target percentage established for you for the preceding year (but adjusted, if necessary for your position for the year in which the Covered Termination occurs).  For the avoidance of doubt, the amount of the annual target bonus to which you are entitled under this Section 2(b) will be calculated (1) assuming all articulated performance goals for such bonus (including, but not limited to, corporate and individual performance, if applicable), for the year of the Covered Termination were achieved at target levels; (2) as if you had provided services for the entire year for which 

the bonus relates; and (3) ignoring any reduction in your Base Salary that would give rise to your right to resignation for Good Reason (such bonus to which you are entitled under this Section 2(b), the “Annual Target Bonus Severance Payment”).  The Annual Target Bonus Severance Payment shall be paid in a lump sum cash payment no later than the second regular payroll date following the later of (i) the effective date of the Release or (ii) the Closing, but in any event not later than March 15 of the year following the year in which your Separation from Service occurs.  
(c)    Payment of Continued Group Health Plan Benefits If you timely elect continued group health plan coverage under the Consolidated Omnibus Budget Reconciliation Act of 1985 (“COBRA”) following your Covered Termination date, the Company shall pay directly to the carrier the full amount of your COBRA premiums on behalf of you for your continued coverage under the Company’s group health plans, including coverage for your eligible dependents, until the earliest of (i) the end of the Severance Period following the date of your Covered Termination, (ii) the expiration of your eligibility for the continuation coverage under COBRA, or (iii) the date when you become eligible for substantially equivalent health insurance coverage in connection with new employment (such period from your termination date through the earliest of (i) through (iii), the “COBRA Payment Period”).  Upon the conclusion of such period of insurance premium payments made by the Company, you will be responsible for the entire payment of premiums (or payment for the cost of coverage) required under COBRA for the duration of your eligible COBRA coverage period, if any.  For purposes of this Section, (1) references to COBRA shall be deemed to refer also to analogous provisions of state law and (2) any applicable insurance premiums that are paid by the Company shall not include any amounts payable by you under an Internal Revenue Code Section 125 health care reimbursement plan, which amounts, if any, are your sole responsibility.  You agree to promptly notify the Company as soon as you become eligible for health insurance coverage in connection with new employment or self-employment.
Notwithstanding the foregoing, if at any time the Company determines, in its sole discretion, that it cannot provide the COBRA premium benefits without potentially incurring financial costs or penalties under applicable law (including, without limitation, Section 2716 of the Public Health Service Act), then in lieu of paying COBRA premiums directly to the carrier on your behalf, the Company will instead pay you on the last day of each remaining month of the COBRA Payment Period a fully taxable cash payment equal to the value of your monthly COBRA premium for the first month of COBRA coverage, subject to applicable tax withholding (such amount, the “Special Severance Payment”), such Special Severance Payment to be made without regard to your election of COBRA coverage or payment of COBRA premiums and without regard to your continued eligibility for COBRA coverage during the COBRA Payment Period.  Such Special Severance Payment shall end upon expiration of the COBRA Payment Period.
(d)    Equity Acceleration.  The vesting and exercisability of each outstanding unvested stock option and other stock award, as applicable, that you hold covering Company common stock (each, an “Equity Award”) shall be accelerated in full and any reacquisition or repurchase rights held by the Company in respect of common stock issued pursuant to any Equity Award granted to you shall lapse in full.  For purposes of determining the 
2.

number of shares that will vest pursuant to the foregoing provision with respect to any performance based vesting Equity Award for which the performance period has not ended and that has multiple vesting levels depending upon the level of performance, vesting acceleration with respect to any ongoing performance period(s) shall occur with respect to the number of shares subject to the award as if the applicable performance criteria had been attained at a 100% level or, if greater, based on actual performance as of the termination of your Continuous Service to the Company. Notwithstanding anything to the contrary set forth herein, your Equity Awards shall remain subject to the terms of the Equity Plan (or other applicable Company plan) and award documents under which such Equity Award was granted, including any provision for earlier termination of such Equity Awards.  
(e)    Extension of Post-Termination Exercise Period.  All outstanding Equity Awards which carry a right to exercise that you hold as of the date of your Covered Termination will expire on the earlier of (A) the original term of such outstanding Equity Awards as set forth in the applicable award agreement or the equity incentive plan, subject to earlier termination in the event of a Change in Control as set forth in the terms of the applicable equity incentive plan and definitive agreement for such Change in Control transaction, and (B) the date which occurs on the second anniversary of termination of your Continuous Service to the Company.
Section 3.    NON-CHANGE IN CONTROL SEVERANCE BENEFITS.  If your employment is terminated by the Company without Cause that occurs at a time that is not during the Change in Control Period, you will receive:
(a)    the base salary cash payment described in Section 2(a) above, but the     Severance Period for purposes of calculating such benefits shall be twelve (12) months; and
(b)    the COBRA benefits described in Section 2(c) above, but the Severance Period for purposes of calculating such benefits shall be twelve (12) months.
You shall not be eligible to receive any other benefits under the Plan except as described in Section 3(a) and Section 3(b) above.  
For the avoidance of doubt, in no event shall you be entitled to benefits under both Section 2 and this Section 3.  If you are eligible for severance benefits under both Section 2 and this Section 3, you shall receive the benefits set forth in Section 2 and such benefits shall be reduced by any benefits previously provided to you under Section 3.
Section 4.    ACKNOWLEDGEMENTS.  
As a condition to participation in the Plan, you hereby acknowledge each of the following:

(a)    The benefits that may be provided to you under this Participation Agreement are subject to certain reductions and termination under Section 2 and Section 3 of the Plan.
3.

(b)    Your eligibility for and receipt of any severance benefits to which you may become entitled as described in Section 2 or Section 3 above is expressly contingent upon your execution of and compliance with the terms and conditions of the Plan, the Release and the Confidentiality Agreement.  Severance benefits under this Participation Agreement shall immediately cease in the event of your violation of the provisions of Confidentiality Agreement or any other written agreement with the Company.
(c)    As further described in Section 2(c) of the Plan, this Participation Agreement and the Plan supersede and replace any change in control or severance benefits previously provided to you and by executing below you expressly agree to such treatment.  In particular, you previously entered into that certain Participation Agreement (the “Original Participation Agreement”) under the SI-BONE, Inc. Severance Benefit Plan, both dated July 20, 2020.  Section 9(b) of the Severance Benefit Plan permits amendments to such plan provided that such amendment with the written consent of such employee.  In connection with your appointment as Chief Executive Officer of SI-BONE, Inc. the Company is hereby offering you the amended severance benefits set forth herein.  This Amended and Restated Participation Agreement, and the severance benefits set forth herein, shall supersede and replace in their entirety the Original Participation Agreement and the severance benefits set forth therein.
    To accept the terms of this Participation Agreement and continue to participate in the Plan under the amended terms set forth herein, please sign and date this Agreement in the space provided below and return it to Timothy E. Davis no later than April 20, 2021.

SI-BONE, Inc.

By: /s/ Timothy E. Davis 
       Timothy E. Davis,
       Lead Independent Director and
       Compensation Committee Chairman    

Eligible Employee

/s/ Laura A. Francis        
Laura A. Francis    

Date: April 20, 2021    
 
4.sols_ex101

  Exhibit 10.1

 

 

 

 

 

 

Sollensys Corp

 

 

2021 Equity Incentive Plan

 

 

Dated as of April 14, 2021

 

 

 

 

 

 

 

Table of Contents

 

	
Article
I. Purposes and
Definitions

	
 1

	
    Section
1.01 Purposes of this
Plan; Structure.

	
 1

	
    Section
1.02 Definitions.

	
 1

	
    Section
1.03 Additional
Interpretations.

	
 5

	
Article
II. Stock Subject to this
Plan; Administration.

	
 6

	
    Section
2.01 Stock Subject to
this Plan.

	
 6

	
    Section
2.02 Administration of
this Plan.

	
 6

	
    Section
2.03 Eligibility.

	
 8

	
    Section
2.04 Indemnification.

	
 8

	
Article
III. Awards.

	
 8

	
    Section
3.01 Stock
Options.

	
 8

	
    Section
3.02 Stock Appreciation
Rights.

	
 11

	
    Section
3.03 Restricted
Stock.

	
 11

	    Section
3.04 Restricted Stock
Units.	
 12

	    Section
3.05 Performance Units
and Performance Shares.	
 13

	    Section 3.06 Cash-Based
Awards and Other Stock-Based Awards.	
 14

	    Section
3.07 Form of Award
Agreements.	
 15

	Article IV.Additional
Provisions Applicable to this Plan and Awards	
 15

	    Section
4.01 Outside Director
Limitations.	
 15

	    Section
4.02 Compliance With
Code Section 409A.	
 15

	    Section 4.03 Leaves of
Absence/Transfer Between Locations.	
 16

	    Section
4.04 Limited
Transferability of Awards.	
 16

	    Section
4.05 Adjustments;
Dissolution, Merger, Etc.	
 16

	    Section
4.06 Tax
Withholding.	
 18

	    Section
4.07 Compliance with
Securities Laws.	
 18

	    Section
4.08 Tax
Withholding.	
 18

	    Section
4.09 No Effect on
Employment or Service.	
 19

	    Section
4.10 Repurchase
Rights.	
 19

	    Section
4.11 Fractional
Shares.	
 19

	    Section
4.12 Forfeiture
Events.	
 19

	    Section
4.13 Date of
Grant.	
 19

	    Section
4.14 Term of
Plan.	
 20

	    Section
4.15 Amendment and
Termination of this Plan.	
 20

	    Section
4.16 Conditions Upon
Issuance of Shares.	
 20

	    Section
4.17 Inability to Obtain
Authority.	
 20

	    Section
4.18 Shareholder
Approval.	
 20

	    Section
4.19 Retirement and
Welfare Plans.	
 21

	    Section
4.20 Beneficiary
Designation.	
 21

	    Section
4.21 Severability.	
 21

	    Section
4.22 No Constraint on
Corporate Action.	
 21

	    Section
4.23 Unfunded
Obligation.	
 21

	    Section
4.24 Choice of
Law.	
 21

 

 

	

Exhibits

	
 

	
Exhibit
A

	
Form of Award
Agreement for Options

	
  

	
  

	
Exhibit
B

	
Form of Award
Agreement for Stock Appreciation Rights

	
  

	
 

	
Exhibit
C

	
Form of Award
Agreement for Restricted Stock

	
  

	
 

	
Exhibit
D

	
Form of Award
Agreement for Restricted Stock Units

 

 

 

Sollensys Corp 2021 Equity Incentive Plan

 

Article
I.     Purposes and
Definitions

  

 

Section 1.01      

Purposes of this Plan;
Structure.

  

(a) 

The purposes of
this Plan are (i) to attract and retain the best available
personnel for positions of substantial responsibility, (ii) to
provide additional incentive to Employees, Directors and
Consultants, and (ii) to promote the success of the Company’s
business.

 

(b)

This Plan permits
the grant of Incentive Stock Options, Nonstatutory Stock Options,
Stock Appreciation Rights, Restricted Stock, Restricted Stock
Units, Performance Awards, Cash-Based Awards and Other Stock-Based
Awards.

 

Section
1.02 Definitions.

 

 As used
herein, the following definitions will apply:

 

(a)

“Administrator”
means the Board or any of its Committees as will be administering
this Plan, in accordance with Section
2.02.

 

(b)

“Affiliate”
means, with respect to any Person, any other Person directly or
indirectly Controlling, Controlled by, or under common Control with
such Person.

 

(c)

“Applicable
Laws” means the legal and regulatory requirements relating to
the administration of equity-based awards, including but not
limited to the related issuance of shares of Common Stock,
including but not limited to under U.S. federal and state corporate
laws, U.S. federal and state securities laws, the Code, any stock
exchange or quotation system on which the Common Stock is listed or
quoted and the applicable laws of any non-U.S. country or
jurisdiction where Awards are, or will be, granted under this
Plan.

 

(d)

“Award”
means, individually or collectively, a grant under this Plan of
Options, Stock Appreciation Rights, Restricted Stock, Restricted
Stock Units, Performance Units or Performance Shares, or Cash-Based
Award or Other Stock-Based Award granted under this
Plan.

 

(e)

“Award
Agreement” means the written or electronic agreement setting
forth the terms and provisions applicable to each Award granted
under this Plan, which Award Agreement shall be is subject to the
terms and conditions of this Plan.

 

(f)

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

 

(g)

“Cash-Based
Award” means an Award denominated in cash and granted
pursuant to Section 3.06.

 

 

1

 

 

(h)

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

 

(i)

“Change
in Control” means the occurrence of any of the following
events, subject to the provisions of Section 1.03:

 

(i)

Change in Ownership of the
Company. A change in the
ownership of the Company which occurs on the date that any one
person, or more than one person acting as a group
(“Person”), acquires ownership of the stock of the
Company that, together with the stock held by such Person,
constitutes more than fifty percent (50%) of the total voting power of the stock of the
Company; provided, however, that for purposes of this
Section
1.02(i)(i), the acquisition
of additional stock by any one Person, who is considered to own
more than fifty percent (50%) of the total voting power of the stock of the
Company will not be considered a Change in Control. Further, if the
shareholders of the Company immediately before such change in
ownership continue to retain immediately after the change in
ownership, in substantially the same proportions as their ownership
of shares of the Company’s voting stock immediately prior to
the change in ownership, direct or indirect beneficial ownership of
fifty percent (50%) or more of the total voting power of the stock
of the Company or of the ultimate parent entity of the Company,
such event shall not be considered a Change in Control under
this Section 1.02(i)(i). For this purpose, indirect beneficial ownership
shall include, without limitation, an interest resulting from
ownership of the voting securities of one or more corporations or
other business entities which own the Company, as the case may be,
either directly or through one or more subsidiary corporations or
other business entities.

 

(ii)

Change in Effective Control of the
Company. A change in the effective control of the Company
which occurs on the date that a majority of members of the Board is
replaced during any twelve (12) month period by Directors whose
appointment or election is not endorsed by a majority of the
members of the Board prior to the date of the appointment or
election. For purposes of this Section
1.02(i)(ii), if any Person is considered to be in effective
control of the Company, the acquisition of additional control of
the Company by the same Person will not be considered a Change in
Control.

 

(iii)

Change in Ownership of a Substantial
Portion of the Company’s Assets. A change in the ownership of a substantial portion
of the Company’s assets which occurs on the date that any
Person acquires (or has acquired during the twelve (12) month
period ending on the date of the most recent acquisition by such
person or persons) assets from the Company that have a total
gross fair market value equal to or more than fifty percent
(50%) of the total gross fair
market value of all of the assets of the Company immediately prior
to such acquisition or acquisitions; provided, however, that for
purposes of this Section 1.02(i)(iii), the following will not constitute a change in
the ownership of a substantial portion of the Company’s
assets: (A) a transfer to an entity that is controlled by the
Company’s shareholders immediately after the transfer, or
(B) a transfer of assets by the Company to: (1) a
shareholder of the Company (immediately before the asset
transfer) in exchange for or with respect to the
Company’s stock, (2) an entity, fifty percent
(50%) or more of the total value
or voting power of which is owned, directly or indirectly, by the
Company, (3) a Person, that owns, directly or
indirectly, fifty percent (50%) or more of the total value or voting power of all
the outstanding stock of the Company, or (4) an entity, at
least fifty percent (50%) of the total value or voting power of which is
owned, directly or indirectly, by a Person described in clause
(B)(3) of this Section 1.02(i)(iii). For purposes of this Section
1.02(i)(iii), gross fair
market value means the value of the assets of the Company, or the
value of the assets being disposed of, determined without regard to
any liabilities associated with such assets.

 

(j)

“Code”
means the Internal Revenue Code of 1986, as amended, and reference
to a specific section of the Code or regulation thereunder shall
include such section or regulation, any valid regulation
promulgated under such section, and any comparable provision of any
future legislation or regulation amending, supplementing or
superseding such section or regulation.

 

 

2

 

 

(k)

“Committee”
means a committee of Directors or of other individuals satisfying
Applicable Laws appointed by the Board, or by a duly authorized
committee of the Board, in accordance with Section 2.02.

 

(l)

“Common
Stock” means the common stock, par value $0.001 per share, of
the Company.

 

(m)

“Company”
means Sollensys Corp, a Nevada corporation, or any successor
thereto.

 

(n)

“Consultant”
means any natural person, including an advisor, engaged by the
Company or a Parent or Subsidiary to render bona fide services to
such entity, provided the services (i) are not in connection
with the offer or sale of securities in a capital-raising
transaction, and (ii) do not directly promote or maintain a
market for the Company’s securities, in each case, within the
meaning of Form S-8 promulgated under the Securities Act, and
provided further, that a Consultant will include only those persons
to whom the issuance of Shares may be registered under Form S-8
promulgated under the Securities Act.

 

(o)

“Control”
of a Person means the possession, directly or indirectly, of the
power to direct or cause the direction of the management and
policies of such Person, whether through the ownership of voting
securities, by contract, or otherwise.” Controlled”,
“Controlling” and “under common Control
with” have correlative meanings. Without limiting the
foregoing a Person (the “Controlled Person”) shall be
deemed Controlled by (a) any other Person (the “10%
Owner”) (i) owning beneficially, as meant in Rule 13d-3 under
the Exchange Act, securities entitling such Person to cast 10% or
more of the votes for election of directors or equivalent governing
authority of the Controlled Person or (ii) entitled to be allocated
or receive 10% or more of the profits, losses, or distributions of
the Controlled Person; (b) an officer, director, general partner,
partner (other than a limited partner), manager, or member (other
than a member having no management authority that is not a 10%
Owner ) of the Controlled Person; or (c) a spouse, parent, lineal
descendant, sibling, aunt, uncle, niece, nephew, mother-in-law,
father-in-law, sister-in-law, or brother-in-law of an Affiliate of
the Controlled Person or a trust for the benefit of an Affiliate of
the Controlled Person or of which an Affiliate of the Controlled
Person is a trustee.

 

(p)

“Director”
means a member of the Board.

 

(q)

“Disability”
means total and permanent disability as defined in Code
Section 22(e)(3), provided that in the case of Awards other
than Incentive Stock Options, the Administrator in its discretion
may determine whether a permanent and total disability exists in
accordance with uniform and non-discriminatory standards adopted by
the Administrator from time to time.

 

(r)

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

 

(s)

“Employee”
means any person, including Officers and Directors, employed by the
Company or any Parent or Subsidiary of the Company, provided that
neither service as a Director nor payment of a director’s fee
by the Company will be sufficient to constitute
“employment” by the Company or any Parent or Subsidiary
of the Company.

 

(t)

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

 

(u)

“Exchange
Program” means a program under which (i) outstanding Awards
are surrendered or cancelled in exchange for awards of the same
type (which may have higher or lower exercise prices and different
terms), awards of a different type, and/or cash, (ii) Participants
would have the opportunity to transfer any outstanding Awards to a
financial institution or other person or entity selected by the
Administrator, and/or (iii) the exercise price of an outstanding
Award is reduced or increased. The Administrator will determine the
terms and conditions of any Exchange Program in its sole
discretion.

 

 

3

 

 

(v)

“Fair Market
Value” means, as of any date, the value of Common Stock
determined as follows:

 

(i)

If the Common Stock
is listed on any established stock exchange or a national market
system (other than an over-the counter market, which will not be
considered an established stock exchange of national market system
for the purposes of this definition), including without
limitation the New York Stock
Exchange, the Nasdaq Global Select Market, the Nasdaq Global Market
or the Nasdaq Capital Market of The Nasdaq Stock Market, its Fair
Market Value will be the closing sales price for such stock (or, if
no closing sales price was reported on that date, as applicable, on
the last trading date such closing sales price was reported) as
quoted on such exchange or system on the day of determination, as
reported in The Wall Street Journal or such other source as the
Administrator deems reliable;

 

(ii)

If the Common Stock
is regularly quoted by a recognized securities dealer but selling
prices are not reported, the Fair Market Value of a Share will be
the mean between the high bid and low asked prices for the Common
Stock on the day of determination (or, if no bids and asks were
reported on that date, as applicable, on the last trading date such
bids and asks were reported), as reported in The Wall Street
Journal or such other source as the Administrator deems
reliable;

 

(iii)

In the absence of
an established market for the Common Stock, the Fair Market Value
will be determined in good faith by the Administrator.

 

(w)

“Fiscal
Year” means the fiscal year of the Company.

 

(x)

“Incentive
Stock Option” means an Option that by its terms qualifies and
is otherwise intended to qualify as an incentive stock option
within the meaning of Code Section 422 and the regulations
promulgated thereunder.

 

(y)

“Nonstatutory
Stock Option” means an Option that by its terms does not
qualify or is not intended to qualify as an Incentive Stock
Option.

 

(z)

“Officer”
means a person who is an officer of the Company within the meaning
of Section 16 of the Exchange Act and the rules and regulations
promulgated thereunder.

 

(aa)

“Option”
means a stock option granted pursuant to this Plan.

 

(bb)

“Outside
Director” means a Director who is not an
Employee.

 

(cc)

“Other
Stock-Based Award” means an Award denominated in Shares and
granted pursuant to Section
3.06.

 

(dd)

“Parent”
means a “parent corporation,” whether now or hereafter
existing, as defined in Code Section 424(e).

 

(ee)

“Participant”
means the holder of an outstanding Award.

 

(ff)

“Performance
Award” means an Award of Performance Shares or Performance
Units.

 

(gg)

“Performance
Award Formula” means, for any Performance Award, a formula or
table established by the Administrator pursuant to Section 3.05 which provides the basis for
computing the value of a Performance Award at one or more levels of
attainment of the applicable Performance Goal(s) measured as of the
end of the applicable Performance Period.

 

 

4

 

 

(hh)

“Performance
Share” means an Award denominated in Shares which may be
earned in whole or in part upon attainment of performance goals or
other vesting criteria as the Administrator may determine pursuant
to Section 3.05.

 

(ii)

 “Performance
Unit” means an Award which may be earned in whole or in part
upon attainment of performance goals or other vesting criteria as
the Administrator may determine and which may be settled for cash,
Shares or other securities or a combination of the foregoing
pursuant to Section 3.05.

 

(jj)

“Period of
Restriction” means the period during which the transfer of
Shares of Restricted Stock are subject to restrictions and
therefore, the Shares are subject to a substantial risk of
forfeiture. Such restrictions may be based on the passage of time,
the achievement of target levels of performance, or the occurrence
of other events as determined by the Administrator.

 

(kk)

“Person”
means an individual, corporation, partnership (including a general
partnership, limited partnership or limited liability partnership),
limited liability company, association, trust or other entity or
organization, including a government, domestic or foreign, or
political subdivision thereof, or an agency or instrumentality
thereof.

 

(ll)

“Plan”
means this 2021 Equity Incentive Plan.

 

(mm)

“Restricted
Stock” means Shares issued pursuant to an Award of Restricted
Stock under Section 3.03, or issued
pursuant to the early exercise of an Option.

 

(nn)

“Restricted
Stock Unit” means a bookkeeping entry representing an amount
equal to the Fair Market Value of one Share, granted pursuant to
Section 3.04. Each Restricted Stock
Unit represents an unfunded and unsecured obligation of the
Company.

 

(oo)

“Rule
16b-3” means Rule 16b-3 of the Exchange Act or any successor
to Rule 16b-3, as in effect when discretion is being exercised with
respect to this Plan.

 

(pp)

“Section 16(b)”
means Section 16(b) of the Exchange Act.

 

(qq)

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

 

(rr)

“Service
Provider” means an Employee, Director or
Consultant.

 

(ss)

“Share”
means a share of the Common Stock, as adjusted in accordance with
Section 4.05.

 

(tt)

“Stock
Appreciation Right” means an Award, granted alone or in
connection with an Option, that pursuant to Section 3.02 is designated as a Stock
Appreciation Right.

 

(uu)

“Subsidiary”
means a “subsidiary corporation,” whether now or
hereafter existing, as defined in Code
Section 424(f).

 

Section
1.03 Additional
Interpretations.

 

 

 For purposes
of Section 1.02(i), persons will be
considered to be acting as a group if they are owners of a
corporation that enters into a merger, consolidation, purchase or
acquisition of stock, or similar business transaction with the
Company. Notwithstanding the foregoing, a transaction will not be
deemed a Change in Control unless the transaction qualifies as a
change in control event within the meaning of Code Section 409A, as
it has been and may be amended from time to time, and any proposed
or final Treasury Regulations and Internal Revenue Service guidance
that has been promulgated or may be promulgated thereunder from
time to time. Further and for the avoidance of doubt, a transaction
will not constitute a Change in Control if: (i) its sole purpose is
to change the jurisdiction of the Company’s incorporation, or
(ii) its sole purpose is to create a holding company that will be
owned in substantially the same proportions by the persons who held
the Company’s securities immediately before such
transaction.

 

 

5

 

 

Article
II.     Stock Subject to this
Plan; Administration.

 

Section 2.01       

Stock Subject to this Plan.

 

(a) 

Subject to the
provisions of Section 2.01(a) and
Section 4.05, the maximum aggregate
number of Shares that may be subject to Awards and sold under this
Plan is 1,000,000 Shares. The Shares may be authorized but
unissued, or reacquired Common Stock.

 

(b)

Subject to
adjustment as provided in Section 4.05,
the maximum aggregate number of shares of Shares that may be issued
under this Plan as set forth in Section
2.01(a) shall be cumulatively increased on January 1, 2022 and
on each subsequent January 1 through and including January 1, 2023,
by a number of shares (the “Annual Increase”) equal to
the smaller of (a) three percent (3%) of the number of shares of
Common Stock issued and outstanding on the immediately preceding
December 31, or (b) an amount determined by the Board.

 

(c)

If an Award expires or becomes un-exercisable
without having been exercised in full, is surrendered pursuant to
an Exchange Program, or, with respect to Restricted Stock,
Restricted Stock Units, Performance Units or Performance Shares, is
forfeited to or repurchased by the Company due to the failure to
vest, the unpurchased Shares (or for Awards other than Options or
Stock Appreciation Rights the forfeited or repurchased Shares)
which were subject thereto will become available for future grant
or sale under this Plan (unless this Plan has terminated). With
respect to Stock Appreciation Rights, only Shares actually issued
pursuant to a Stock Appreciation Right will cease to be available
under this Plan; all remaining Shares under Stock Appreciation
Rights will remain available for future grant or sale under this
Plan (unless this Plan has terminated). Shares that have actually
been issued under this Plan under any Award will not be returned to
this Plan and will not become available for future distribution
under this Plan; provided, however, that if Shares issued pursuant
to Awards of Restricted Stock, Restricted Stock Units, Performance
Shares or Performance Units are repurchased by the Company or are
forfeited to the Company due to the failure to vest, such Shares
will become available for future grant under this Plan. Shares used
to pay the exercise price of an Award or to satisfy the tax
withholdings related to an Award will become available for future
grant or sale under this Plan. To the extent an Award under this
Plan is paid out in cash rather than Shares, such cash payment will
not result in reducing the number of Shares available for issuance
under this Plan. Notwithstanding the foregoing and, subject to
adjustment as provided in Section
4.05, the maximum number of
Shares that may be issued upon the exercise of Incentive Stock
Options will equal the aggregate Share number stated in
Section
2.01(a), plus, to the
extent allowable under Code Section 422 and the Treasury
Regulations promulgated thereunder, any Shares that become
available for issuance under this Plan pursuant to Section
2.01(c) and Section
2.01(d).

 

(d)

The Company, during the term of this Plan, will at
all times reserve and keep available such number of Shares as will
be sufficient to satisfy the requirements of this
Plan.

 

Section
2.02 Administration of this
Plan.

 

(a) 

Procedure.

 

(i)

Multiple Administrative Bodies.
Different Committees with respect to different groups of Service
Providers may administer this Plan.

 

(ii)

Rule 16b-3. To the extent desirable to
qualify transactions hereunder as exempt under Rule 16b-3, the
transactions contemplated hereunder will be structured to satisfy
the requirements for exemption under Rule 16b-3.

 

(iii)

Other Administration. Other than as
provided above, this Plan will be administered by (A) the
Board or (B) a Committee, which Committee will be constituted
to satisfy Applicable Laws.

 

 

6

 

 

(b)

Powers of the Administrator. Subject to
the provisions of this Plan, and in the case of a Committee,
subject to the specific duties delegated by the Board to such
Committee, the Administrator will have the authority, in its
discretion:

 

(i)

to determine the
Fair Market Value;

 

(ii)

to select the
Service Providers to whom Awards may be granted
hereunder;

 

(iii)

to determine the
number of Shares to be covered by each Award granted
hereunder;

 

(iv)

to approve forms of
Award Agreements for use under this Plan;

 

(v)

to determine the
terms and conditions, not inconsistent with the terms of this Plan,
of any Award granted hereunder, with such terms and conditions
including, but not being limited to, the exercise price, the time
or times when Awards may be exercised (which may be based on
performance criteria), any vesting acceleration or waiver of
forfeiture restrictions, and any restriction or limitation
regarding any Award or the Shares relating thereto, based in each
case on such factors as the Administrator will
determine;

 

(vi)

to determine
whether an Award will be settled in Shares, cash, other property or
in any combination thereof;

 

(vii)

to institute and
determine the terms and conditions of an Exchange
Program;

 

(viii)

to construe and
interpret the terms of this Plan and Awards granted pursuant to
this Plan;

 

(ix)

to prescribe, amend
and rescind rules and regulations relating to this Plan, including
rules and regulations relating to sub-plans established for the
purpose of satisfying applicable non-U.S. laws or for qualifying
for favorable tax treatment under applicable non-U.S.
laws;

 

(x)

to modify or amend
each Award (subject to Section
4.15(c)), including but not limited to the discretionary
authority to extend the post-termination exercisability period of
Awards; provided, however, that in no case will an Option or Stock
Appreciation Right be extended beyond its original maximum
term;

 

(xi)

to allow
Participants to satisfy tax withholding obligations in a manner
prescribed in Section
4.06(b);

 

(xii)

to authorize any
person to execute on behalf of the Company any instrument required
to effect the grant of an Award previously granted by the
Administrator;

 

(xiii)

to allow a
Participant to defer the receipt of the payment of cash or the
delivery of Shares that otherwise would be due to such Participant
under an Award;

 

(xiv)

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

 

 

7

 

 

(xv)

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

 

(xvi)

to make all other
determinations deemed necessary or advisable for administering this
Plan.

 

(c)

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

 

(d)

Effect of
Administrator’s Decision. The
Administrator’s decisions, determinations and interpretations
will be final and binding on all Participants and any other holders
of Awards and will be given the maximum deference permitted by
Applicable Laws

 

Section
2.03 Eligibility.

 

 Nonstatutory
Stock Options, Stock Appreciation Rights, Restricted Stock,
Restricted Stock Units, Performance Shares and Performance Units
may be granted to Service Providers. Incentive Stock Options may be
granted only to Employees.

 

 

Section
2.04 Indemnification.

 

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

 

Article
III.      Awards.

 

Section 3.01     
Stock Options.

 

(a) 

Grant of Options. Subject to the terms
and provisions of this Plan, the Administrator, at any time and
from time to time, may grant Options in such amounts as the
Administrator, in its sole discretion, will determine.

 

(b)

Option Agreement. Each Award of an
Option will be evidenced by an Award Agreement that will specify
the exercise price, the term of the Option, the number of Shares
subject to the Option, the exercise restrictions, if any,
applicable to the Option, and such other terms and conditions as
the Administrator, in its sole discretion, will
determine.

 

 

8

 

 

(c)

Limitations. Each Option will be
designated in the Award Agreement as either an Incentive Stock
Option or a Nonstatutory Stock Option. Notwithstanding such
designation, however, to the extent that the aggregate Fair Market
Value of the Shares with respect to which Incentive Stock Options
are exercisable for the first time by the Participant during any
calendar year (under all plans of the Company and any Parent or
Subsidiary) exceeds one hundred thousand dollars ($100,000), such
Options will be treated as Nonstatutory Stock Options. For purposes
of this Section 3.01(c), Incentive
Stock Options will be taken into account in the order in which they
were granted, the Fair Market Value of the Shares will be
determined as of the time the Option with respect to such Shares is
granted, and the calculation will be performed in accordance with
Code Section 422 and Treasury Regulations promulgated
thereunder.

 

(d)

Nonemployee Director Award Limit.
Notwithstanding any other provision of this Plan to the contrary,
the aggregate grant date fair value (computed as of the date of
grant in accordance with generally accepted accounting principles
in the United States) of all Awards granted to any Director who is
not an Employee, during any fiscal year of the Company, taken
together with any cash compensation paid to such Director during
such fiscal year, shall not exceed $300,000.

 

(e)

Term of Option. The term of each Option
will be stated in the Award Agreement. In the case of an Incentive
Stock Option, the term will be no more than ten (10) years from the
date of grant thereof. In the case of an Incentive Stock Option
granted to a Participant who, at the time the Incentive Stock
Option is granted, owns stock representing more than ten percent
(10%) of the total combined voting power of all classes of stock of
the Company or any Parent or Subsidiary, the term of the Incentive
Stock Option will be five (5) years from the date of grant or such
shorter term as may be provided in the Award
Agreement.

 

(f)

Option Exercise Price and
Consideration.

 

(i)

Exercise Price. The per Share
exercise price for the Shares to be issued pursuant to the exercise
of an Option will be determined by the Administrator, subject to
the following:

 

(1)

In the case of an
Incentive Stock Option: 

 

(A)

granted to an
Employee who, at the time the Incentive Stock Option is granted,
owns stock representing more than ten percent (10%) of the voting
power of all classes of stock of the Company or any Parent or
Subsidiary, the per Share exercise price will be no less than one
hundred ten percent (110%) of the Fair Market Value per Share (or
the fair market value per Share as determined in accordance with
Treas. Reg. 1.409A-1(b)(5)(iv)(A)) on the date of
grant;

 

(B)

granted to any
Employee other than an Employee described in paragraph (1) immediately above, the per Share exercise
price will be no less than one hundred percent (100%) of the Fair
Market Value per Share on the date of grant;

 

(2)

In the case of a
Nonstatutory Stock Option, the per Share exercise price will be no
less than one hundred percent (100%) of the Fair Market Value
per Share on the date of grant (or the fair market value per Share
as determined in accordance with Treas. Reg.
1.409A-1(b)(5)(iv)(A)).

 

(3)

Notwithstanding the
foregoing provisions of this Section
3.01(f), Options may be granted with a per Share exercise price
of less than one hundred percent (100%) of the Fair Market Value
per Share on the date of grant pursuant to a transaction described
in, and in a manner consistent with, Code
Section 424(a).

 

 

9

 

 

(ii)

Waiting Period and Exercise
Dates. At the time an Option is granted, the Administrator
will fix the period within which the Option may be exercised and
will determine any conditions that must be satisfied before the
Option may be exercised.

 

(iii)

Form of Consideration. The
Administrator will determine the acceptable form of consideration
for exercising an Option, including the method of payment. In the
case of an Incentive Stock Option, the Administrator will determine
the acceptable form of consideration at the time of grant. Such
consideration may consist entirely of: (1) cash; (2) check; (3)
promissory note; to the extent permitted by Applicable Laws; (4)
other Shares, provided that such Shares have a Fair Market Value on
the date of surrender equal to the aggregate exercise price of the
Shares as to which such Option will be exercised and provided
further that accepting such Shares will not result in any adverse
accounting consequences to the Company, as the Administrator
determines in its sole discretion; (5) consideration received by
the Company under a broker assisted (or other) cashless exercise
program (whether through a broker or otherwise) implemented by the
Company in connection with this Plan; (6) by net exercise; (7) such
other consideration and method of payment for the issuance of
Shares to the extent permitted by Applicable Laws; or (8) any
combination of the foregoing methods of payment. In making its
determination as to the type of consideration to accept, the
Administrator will consider if acceptance of such consideration may
be reasonably expected to benefit the Company.

 

(g)

Exercise of Option.

 

(i)

Procedure for Exercise; Rights as a
Shareholder. Any Option granted hereunder will be
exercisable according to the terms of this Plan and at such times
and under such conditions as determined by the Administrator and
set forth in the Award Agreement. An Option may not be exercised
for a fraction of a Share. An Option will be deemed exercised when
the Company receives: (i) notice of exercise (in such form as
the Administrator may specify from time to time) from the person
entitled to exercise the Option, and (ii) full payment for the
Shares with respect to which the Option is exercised (together with
applicable tax withholding). Full payment may consist of any
consideration and method of payment authorized by the Administrator
and permitted by the Award Agreement and this Plan. Shares issued
upon exercise of an Option will be issued in the name of the
Participant or, if requested by the Participant, in the name of the
Participant and his or her spouse. Until the Shares are issued (as
evidenced by the appropriate entry on the books of the Company or
of a duly authorized transfer agent of the Company), no right to
vote or receive dividends or any other rights as a shareholder will
exist with respect to the Shares subject to an Option,
notwithstanding the exercise of the Option. The Company will issue
(or cause to be issued) such Shares promptly after the Option is
exercised. No adjustment will be made for a dividend or other right
for which the record date is prior to the date the Shares are
issued, except as provided in Section
4.05. Exercising an Option in any manner will decrease the
number of Shares thereafter available, both for purposes of this
Plan and for sale under the Option, by the number of Shares as to
which the Option is exercised.

 

(ii)

Termination of Relationship as a
Service Provider. If a Participant ceases to be a Service
Provider, other than upon the Participant’s termination as
the result of the Participant’s death or Disability, the
Participant may exercise his or her Option within such period of
time as is specified in the Award Agreement to the extent that the
Option is vested on the date of termination (but in no event later
than the expiration of the term of such Option as set forth in the
Award Agreement). In the absence of a specified time in the Award
Agreement, the Option will remain exercisable for three
(3) months following the Participant’s termination.
Unless otherwise provided by the Administrator, if on the date of
termination the Participant is not vested as to his or her entire
Option, the Shares covered by the unvested portion of the Option
will revert to this Plan. If after termination the Participant does
not exercise his or her Option within the time specified by the
Administrator, the Option will terminate, and the Shares covered by
such Option will revert to this Plan.

 

(iii)

Disability of Participant. If a
Participant ceases to be a Service Provider as a result of the
Participant’s Disability, the Participant may exercise his or
her Option within such period of time as is specified in the Award
Agreement to the extent the Option is vested on the date of
termination (but in no event later than the expiration of the term
of such Option as set forth in the Award Agreement). In the absence
of a specified time in the Award Agreement, the Option will remain
exercisable for twelve (12) months following the
Participant’s termination. Unless otherwise provided by the
Administrator, if on the date of termination the Participant is not
vested as to his or her entire Option, the Shares covered by the
unvested portion of the Option will revert to this Plan. If after
termination the Participant does not exercise his or her Option
within the time specified herein, the Option will terminate, and
the Shares covered by such Option will revert to this
Plan.

 

(iv)

Death of Participant. If a
Participant dies while a Service Provider, the Option may be
exercised following the Participant’s death within such
period of time as is specified in the Award Agreement to the extent
that the Option is vested on the date of death (but in no event may
the option be exercised later than the expiration of the term of
such Option as set forth in the Award Agreement), by the
Participant’s designated beneficiary, provided such
beneficiary has been designated prior to Participant’s death
in a form acceptable to the Administrator. If no such beneficiary
has been designated by the Participant, then such Option may be
exercised by the personal representative of the Participant’s
estate or by the person(s) to whom the Option is transferred
pursuant to the Participant’s will or in accordance with the
laws of descent and distribution. In the absence of a specified
time in the Award Agreement, the Option will remain exercisable for
twelve (12) months following Participant’s death. Unless
otherwise provided by the Administrator, if at the time of death
Participant is not vested as to his or her entire Option, the
Shares covered by the unvested portion of the Option will
immediately revert to this Plan. If the Option is not so exercised
within the time specified herein, the Option will terminate, and
the Shares covered by such Option will revert to this
Plan.

 

10

 

 

Section
3.02 Stock Appreciation
Rights.

 

(a) 

Grant of Stock Appreciation Rights.
Subject to the terms and conditions of this Plan, a Stock
Appreciation Right may be granted to Service Providers at any time
and from time to time as will be determined by the Administrator,
in its sole discretion.

 

(b)

Number of Shares. The Administrator
will have complete discretion to determine the number of Shares
subject to any Award of Stock Appreciation Rights.

 

(c)

Exercise Price and Other Terms. The per
Share exercise price for the Shares that will determine the amount
of the payment to be received upon exercise of a Stock Appreciation
Right as set forth in Section 3.02(f)
will be determined by the Administrator and will be no less than
one hundred percent (100%) of the Fair Market Value per Share on
the date of grant. Otherwise, the Administrator, subject to the
provisions of this Plan, will have complete discretion to determine
the terms and conditions of Stock Appreciation Rights granted under
this Plan. Stock Appreciation Rights which 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, specifying the
number of Stock Appreciation Rights to be exercised and the date on which such
Stock Appreciation Rights were awarded
and vested.

 

(d)

Stock Appreciation Right Agreement.
Each Stock Appreciation Right grant will be evidenced by an Award
Agreement that will specify the exercise price, the term of the
Stock Appreciation Right, the conditions of exercise, and such
other terms and conditions as the Administrator, in its sole
discretion, will determine.

 

(e)

Expiration of Stock Appreciation
Rights. A Stock Appreciation Right granted under this Plan
will expire upon the date determined by the Administrator, in its
sole discretion, and set forth in the Award Agreement.
Notwithstanding the foregoing, the rules of Section 3.01(e) relating to the maximum term
and Section 3.01(g) relating to
exercise also will apply to Stock Appreciation Rights.

 

(f)

Payment of Stock Appreciation Right
Amount. Upon exercise of a Stock Appreciation Right, a
Participant will be entitled to receive payment from the Company in
an amount determined by multiplying (i) the difference between the
Fair Market Value of a Share on the date of exercise over the
exercise price; and (ii) the number of Shares with respect to which
the Stock Appreciation Right is exercised. At the discretion of the
Administrator, the payment upon Stock Appreciation Right exercise
may be in cash, in Shares of equivalent value, or in some
combination thereof.

 

(g)

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

 

Section
3.03 Restricted Stock.

 

(a) 

Grant of Restricted Stock. Subject to
the terms and provisions of this Plan, the Administrator, at any
time and from time to time, may grant Shares of Restricted Stock to
Service Providers in such amounts as the Administrator, in its sole
discretion, will determine.

 

(b)

Restricted Stock Agreement. Each Award
of Restricted Stock will be evidenced by an Award Agreement that
will specify the Period of Restriction, the number of Shares
granted, and such other terms and conditions as the Administrator,
in its sole discretion, will determine. Unless the Administrator
determines otherwise, the Company as escrow agent will hold Shares
of Restricted Stock until the restrictions on such Shares have
lapsed.

 

(c)

Transferability. Except as provided in
this Section 3.03 or as the
Administrator determines, Shares of Restricted Stock may not be
sold, transferred, pledged, assigned, or otherwise alienated or
hypothecated until the end of the applicable Period of
Restriction.

 

(d)

Other Restrictions. The Administrator,
in its sole discretion, may impose such other restrictions on
Shares of Restricted Stock as it may deem advisable or
appropriate.

 

 

11

 

 

(e)

Removal of Restrictions. Except as
otherwise provided in this Section
3.03, Shares of Restricted Stock covered by each Restricted
Stock grant made under this Plan will be released from escrow as
soon as practicable after the last day of the Period of Restriction
or at such other time as the Administrator may determine. The
Administrator, in its discretion, may accelerate the time at which
any restrictions will lapse or be removed.

 

(f)

Voting Rights. During the Period of
Restriction, Service Providers holding Shares of Restricted Stock
granted hereunder may exercise full voting rights with respect to
those Shares, unless the Administrator determines
otherwise.

 

(g)

Dividends and Other Distributions.
During the Period of Restriction, Service Providers holding Shares
of Restricted Stock will be entitled to receive all dividends and
other distributions paid with respect to such Shares, unless the
Administrator provides otherwise. If any such dividends or
distributions are paid in Shares, the Shares will be subject to the
same restrictions on transferability and forfeitability as the
Shares of Restricted Stock with respect to which they were
paid.

 

(h)

Return of Restricted Stock to Company.
On the date set forth in the Award Agreement, the Restricted Stock
for which restrictions have not lapsed will revert to the Company
and again will become available for grant under this
Plan.

 

Section 
3.04 Restricted Stock
Units.

 

(a) 

Grant. Restricted Stock Units may be granted at any
time and from time to time as determined by the Administrator.
After the Administrator determines that it will grant Restricted
Stock Units under this Plan, it will advise the Participant in an
Award Agreement of the terms, conditions, and restrictions related
to the grant, including the number of Restricted Stock
Units.

 

(b)

Vesting Criteria and Other
Terms. The Administrator will
set vesting criteria in its discretion, which, depending on the
extent to which the criteria are met, will determine the number of
Restricted Stock Units that will be paid out to the Participant.
The Administrator may set vesting criteria based upon the
achievement of Company-wide, divisional, business unit, or
individual goals (including, but not limited to, continued
employment or service), applicable federal or state securities
laws, or any other basis determined by the Administrator in its
discretion.

 

(c)

Earning Restricted Stock
Units. Upon meeting the
applicable vesting criteria, the Participant will be entitled to
receive a payout as determined by the Administrator or as set forth
in the applicable Award Agreement. Notwithstanding the foregoing,
at any time after the grant of Restricted Stock Units, the
Administrator, in its sole discretion, may reduce or waive any
vesting criteria that must be met to receive a
payout.

 

(d)

Form and Timing of
Payment. Payment of earned
Restricted Stock Units will be made as soon as practicable after
the date(s) determined by the Administrator and set forth in the
Award Agreement. The Administrator, in its sole discretion, may
settle earned Restricted Stock Units in cash, Shares, or a
combination of both.

 

(e)

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

 

(f)

Cancellation.
On the date set forth in the Award Agreement, all unearned
Restricted Stock Units will be forfeited to the
Company.

 

 

12

 

 

Section
3.05 Performance Units and Performance
Shares.

 

(a) 

Issuance. Performance Awards may be
granted to Service Providers at any time and from time to time, as
will be determined by the Administrator, in its sole discretion.
The Administrator will have complete discretion in determining the
number of Performance Units and Performance Shares granted to each
Participant.

 

(b)

Value of Performance Units/Shares. Each
Performance Unit will have an initial value that is established by
the Administrator on or before the date of grant. Each Performance
Share will have an initial value equal to the Fair Market Value of
a Share on the date of grant.

 

(c)

Performance Objectives and Other Terms.
The Administrator will set performance objectives or other vesting
provisions (including, without limitation, continued status as a
Service Provider) in its discretion which, depending on the
extent to which they are met, will determine the number or value of
Performance Units/Shares that will be paid out to the Service
Providers. The time period during which the performance objectives
or other vesting provisions must be met will be called the
“Performance Period.” Each Performance Awards will be
evidenced by an Award Agreement that will specify the Performance
Period, and such other terms and conditions as the Administrator,
in its sole discretion, will determine.

 

(d)

Performance Targets and Goals. The
Administrator may set performance objectives based upon the
achievement of Company-wide, divisional, business unit or
individual goals (including, but not limited to, continued
employment or service), applicable federal or state securities
laws, or any other basis determined by the Administrator in its
discretion (“Performance Goals”). Performance Goals
shall be established by the Administrator on the basis of targets
to be attained (“Performance Targets”) with respect to
one or more measures of business or financial performance (each, a
“Performance Measure”), subject to the
following:

 

(i)

Performance
Measures.
Performance Measures shall be calculated in accordance with the
Company’s financial statements, or, if such measures are not
reported in the Company’s financial statements, they shall be
calculated in accordance with generally accepted accounting
principles, a method used generally in the Company’s
industry, or in accordance with a methodology established by the
Administrator prior to the grant of the Performance Award. As
specified by the Administrator, Performance Measures may be
calculated with respect to the Company and its Subsidiaries
consolidated therewith for financial reporting purposes, one or
more Subsidiaries or such division or other business unit of any of
them selected by the Administrator. Unless otherwise determined by
the Administrator prior to the grant of the Performance Award, the
Performance Measures applicable to the Performance Award shall be
calculated prior to the accrual of expense for any Performance
Award for the same Performance Period and excluding the effect
(whether positive or negative) on the Performance Measures of any
change in accounting standards or any unusual or infrequently
occurring event or transaction, as determined by the Administrator,
occurring after the establishment of the Performance Goals
applicable to the Performance Award. Each such adjustment, if any,
shall be made solely for the purpose of providing a consistent
basis from period to period for the calculation of Performance
Measures in order to prevent the dilution or enlargement of the
Participant’s rights with respect to a Performance Award.
Performance Measures may be based upon one or more of the
following, as determined by the Administrator: (1) revenue; (2)
sales; (3) expenses; (4) operating income; (5) gross margin; (6)
operating margin; (7) earnings before any one or more of:
stock-based compensation expense, interest, taxes, depreciation and
amortization; (8) pre-tax profit; (9) net operating income; (10)
net income; (11) economic value added; (12) free cash flow; (13)
operating cash flow; (14) balance of cash, cash equivalents and
marketable securities; (15) stock price; (16) earnings per share;
(17) return on shareholder equity; (18) return on capital; (19)
return on assets; (20) return on investment; (21) total shareholder
return; (22) employee satisfaction; (23) employee retention; (24)
market share; (25) customer satisfaction; (26) product development;
(27) research and development expenses; (28) completion of an
identified special project; and (29) completion of a joint venture
or other corporate transaction.

 

(ii)

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

 

(e)

Earning of Performance Units/Shares.
After the applicable Performance Period has ended, the holder of
Performance Units/Shares will be entitled to receive a payout of
the number of Performance Units/Shares earned by the Participant
over the Performance Period, to be determined as a function of the
extent to which the corresponding performance objectives or other
vesting provisions have been achieved. After the grant of a
Performance Unit/Share, the Administrator, in its sole discretion,
may reduce or waive any performance objectives or other vesting
provisions for such Performance Unit/Share.

 

(f)

Form and Timing of Payment of Performance
Units/Shares. Payment of earned Performance Units or
Performance Shares will be made as soon as practicable after the
expiration of the applicable Performance Period. The Administrator,
in its sole discretion, may pay earned Performance Units/Shares in
the form of cash, in Shares (which have an aggregate Fair Market
Value equal to the value of the earned Performance Units/Shares at
the close of the applicable Performance Period) or in a
combination thereof.

 

(g)

Cancellation of Performance
Units/Shares. On the date set forth in the Award Agreement,
all unearned or unvested Performance Units or Performance Shares
will be forfeited to the Company, and again will be available for
grant under this Plan.

 

 

13

 

 

(h)

Qualified Performance-Based Awards.
Restricted Stock and Restricted Stock Units granted to officers and
Employees of the Company or any Parent or Subsidiary of the Company
(within the meaning of Code Section 424) may be granted with the
intent that the award satisfy the “Performance-Based
Exception” (any such award intended to satisfy the
Performance-Based Exception, a “Qualified Performance-Based
Award”). The grant, vesting, or payment of a Qualified
Performance-Based Awards may depend on the degree of achievement of
one or more performance goals relative to a pre-established
targeted level or levels using one or more performance targets as
determined by the Administrator (on an absolute or relative
(including, without limitation, relative to the performance of one
or more other companies or upon comparisons of any of the
indicators of performance relative to one or more other companies)
basis, any of which may also be expressed as a growth or decline
measure relative to an amount or performance for a prior date or
period) for the Company on a consolidated basis or for one or more
of the Company’s Subsidiaries, segments, divisions, or
business or operational units, or any combination of the foregoing.
The performance period applicable to any Performance Units or
Performance Shares may not be less than three (3) months nor more
than ten (10) years. To satisfy the Performance-Based Exception,
the performance measure(s) applicable to the Qualified
Performance-Based Award and specific performance formula, goal or
goals (“targets”), including must be established and
approved by the Administrator during the first ninety (90) days of
the applicable Performance Period (and, in the case of Performance
Periods of less than one year, in no event after 25% or more of the
Performance Period has elapsed) and while performance relating to
such target(s) remains substantially uncertain within the meaning
of Section 162(m) of the Code.

 

(i)

Voting Rights; Dividend Equivalent Rights and
Distributions. Participants shall have no voting rights with
respect to Shares represented by Performance Share Awards until the
date of the issuance of such Shares, if any (as evidenced by the
appropriate entry on the books of the Company or of a duly
authorized transfer agent of the Company). However, the
Administrator, in its discretion, may provide in the Award
Agreement evidencing any Performance Share Award that the
Participant shall be entitled to Dividend Equivalent Rights with
respect to the payment of cash dividends on Stock during the period
beginning on the date the Award is granted and ending, with respect
to each share subject to the Award, on the earlier of the date on
which the Performance Shares are settled or the date on which they
are forfeited. Such Dividend Equivalent Rights, if any, shall be
credited to the Participant either in cash or in the form of
additional whole Performance Shares as of the date of payment of
such cash dividends on Stock, as determined by the Administrator.
The number of additional Performance Shares (rounded to the nearest
whole number), if any, to be so credited shall be determined by
dividing (a) the amount of cash dividends paid on the dividend
payment date with respect to the number of Shares represented by
the Performance Shares previously credited to the Participant by
(b) the Fair Market Value per Share on such date. Dividend
Equivalent Rights, if any, shall be accumulated and paid to the
extent that the related Performance Shares become nonforfeitable.
Settlement of Dividend Equivalent Rights may be made in cash,
Shares, or a combination thereof as determined by the
Administrator, and may be paid on the same basis as settlement of
the related Performance Share as provided in Section 3.05(e). Dividend Equivalent Rights
shall not be paid with respect to Performance Units. In the event
of a dividend or distribution paid in Shares or other property or
any other adjustment made upon a change in the capital structure of
the Company as described in Section
4.05, appropriate adjustments shall be made in the
Participant’s Performance Share Award so that it represents
the right to receive upon settlement any and all new, substituted
or additional securities or other property (other than regular,
periodic cash dividends) to which the Participant would be entitled
by reason of the Shares issuable upon settlement of the Performance
Share Award, and all such new, substituted or additional securities
or other property shall be immediately subject to the same
Performance Goals as are applicable to the Award.

 

Section
3.06 Cash-Based Awards and Other
Stock-Based Awards.

 

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

 

(a)

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

 

(b)

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

 

(c)

Value of Cash-Based and Other Stock-Based
Awards. Each Cash-Based Award shall specify a monetary
payment amount or payment range as determined by the Administrator.
Each Other Stock-Based Award shall be expressed in terms of Shares
or units based on such Shares, as determined by the Administrator.
The Administrator may require the satisfaction of such Service
requirements, conditions, restrictions or performance criteria,
including, without limitation, Performance Goals as described in
Section 3.05, as shall be established
by the Administrator and set forth in the Award Agreement
evidencing such Award. If the Administrator exercises its
discretion to establish performance criteria, the final value of
Cash-Based Awards or Other Stock-Based Awards that will be paid to
the Participant will depend on the extent to which the performance
criteria are met. The establishment of performance criteria with
respect to the grant or vesting of any Cash-Based Award or Other
Stock-Based Award intended to result in Performance-Based
Compensation shall follow procedures substantially equivalent to
those applicable to Performance Awards set forth in Section 3.05.

 

 

14

 

 

(d)

Payment or Settlement of Cash-Based Awards and
Other Stock-Based Awards. Payment or settlement, if any,
with respect to a Cash-Based Award or an Other Stock-Based Award
shall be made in accordance with the terms of the Award, in cash,
Shares or other securities or any combination thereof as the
Administrator determines. The determination and certification of
the final value with respect to any Cash-Based Award or Other
Stock-Based Award intended to result in Performance-Based
Compensation shall comply with the requirements applicable to
Performance Awards set forth in Section 3.05. To the extent
applicable, payment or settlement with respect to each Cash-Based
Award and Other Stock-Based Award shall be made in compliance with
the requirements of Section 409A.

 

(e)

Voting Rights; Dividend Equivalent Rights and
Distributions. Participants shall have no voting rights with
respect to Shares represented by Other Stock-Based Awards until the
date of the issuance of such Shares (as evidenced by the
appropriate entry on the books of the Company or of a duly
authorized transfer agent of the Company), if any, in settlement of
such Award. However, the Administrator, in its discretion, may
provide in the Award Agreement evidencing any Other Stock-Based
Award that the Participant shall be entitled to Dividend Equivalent
Rights with respect to the payment of cash dividends on Stock
during the period beginning on the date such Award is granted and
ending, with respect to each share subject to the Award, on the
earlier of the date the Award is settled or the date on which it is
terminated. Such Dividend Equivalent Rights, if any, shall be paid
in accordance with the provisions set forth in Section 3.04(e). Dividend Equivalent Rights
shall not be granted with respect to Cash-Based Awards. In the
event of a dividend or distribution paid in Shares or other
property or any other adjustment made upon a change in the capital
structure of the Company as described in Section 4.05, appropriate adjustments shall be
made in the Participant’s Other Stock-Based Award so that it
represents the right to receive upon settlement any and all new,
substituted or additional securities or other property (other than
regular, periodic cash dividends) to which the Participant would be
entitled by reason of the Shares issuable upon settlement of such
Award, and all such new, substituted or additional securities or
other property shall be immediately subject to the same vesting
conditions and performance criteria, if any, as are applicable to
the Award.

 

(f)

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

 

Section
3.07 Form of Award
Agreements.

 

 A
form of Award Agreement for a grant of Options is attached hereto
as Exhibit A, a form of Award Agreement for a grant of Stock
Appreciation Rights is attached hereto as Exhibit B, a form of
Award Agreement for a grant of Restricted Stock is attached hereto
as Exhibit C; and a form of Award Agreement for a grant of
Restricted Stock Units is attached hereto as Exhibit D, provided
that the Administrator shall have the discretion to modify such
forms and to replace such forms with any other agreement as
determined by the Administrator. In the event of a conflict between
the terms of any Award Agreement and the provisions in the body of
this Plan, the terms of the Award Agreement shall
control.

 

Article
IV.     Additional Provisions Applicable to
this Plan and Awards

 

Section
4.01         

Outside Director Limitations.

 

 No Outside
Director may be granted, in any Fiscal Year, Awards with a grant
date fair value (determined in accordance with U.S. generally
accepted accounting principles) of more than $750,000, increased to
$1,500,000 in connection with his or her initial service. Any
Awards granted to an individual while he or she was an Employee, or
while he or she was a Consultant but not an Outside Director, will
not count for purposes of the limitations under this Section 4.01.

 

Section
4.02 Compliance With Code
Section 409A.

 

 Awards will
be designed and operated in such a manner that they are either
exempt from the application of, or comply with, the requirements of
Code Section 409A such that the grant, payment, settlement or
deferral will not be subject to the additional tax or interest
applicable under Code Section 409A, except as otherwise
determined in the sole discretion of the Administrator. This Plan
and each Award Agreement under this Plan is intended to meet
the requirements of Code Section 409A and will be
construed and interpreted in accordance with such intent, except as
otherwise determined in the sole discretion of the Administrator.
To the extent that an Award or payment, or the settlement or
deferral thereof, is subject to Code Section 409A the Award
will be granted, paid, settled or deferred in a manner that will
meet the requirements of Code Section 409A, such that the
grant, payment, settlement or deferral will not be subject to the
additional tax or interest applicable under Code Section 409A.
In no event will the Company have any obligation under the terms of
this Plan to reimburse a Participant for any taxes or other costs
that may be imposed on Participant as a result of Section
409A.

 

 

15

 

 

Section
4.03 Leaves of Absence/Transfer Between
Locations.

 

 Unless the
Administrator provides otherwise, vesting of Awards granted
hereunder will be suspended during any unpaid leave of absence. A
Participant will not cease to be an Employee in the case of
(i) any leave of absence approved by the Company or
(ii) transfers between locations of the Company or between the
Company, its Parent, or any Subsidiary. For purposes of Incentive
Stock Options, no such leave may exceed three (3) months, unless
reemployment upon expiration of such leave is guaranteed by statute
or contract. If reemployment upon expiration of a leave of absence
approved by the Company is not so guaranteed, then six (6) months
following the first (1st) day of such leave,
any Incentive Stock Option held by the Participant will cease to be
treated as an Incentive Stock Option and will be treated for tax
purposes as a Nonstatutory Stock Option.

 

Section
4.04 Limited Transferability of
Awards.

 

 Unless
determined otherwise by the Administrator, Awards may not be sold,
pledged, assigned, hypothecated, or otherwise transferred in any
manner other than by will or by the laws of descent and
distribution, and may be exercised, during the lifetime of the
Participant, only by the Participant. If the Administrator makes an
Award transferable, such Award will contain such additional terms
and conditions as the Administrator deems appropriate.

 

Section
4.05 Adjustments; Dissolution, Merger,
Etc.

 

(a) 

Adjustments. In the event that any dividend or other
distribution (whether in the form of cash, Shares, other
securities, or other property), recapitalization, stock split,
reverse stock split, reorganization, merger, consolidation,
split-up, spin-off, combination, repurchase, or exchange of Shares
or other securities of the Company, or other change in the
corporate structure of the Company affecting the Shares occurs, the
Administrator, in order to prevent diminution or enlargement of the
benefits or potential benefits intended to be made available under
this Plan, will adjust the number and class of shares of stock that
may be delivered under this Plan and/or the number, class, and
price of shares of stock covered by each outstanding Award, and the
numerical Share limits of Section
2.01.

 

(b)

Dissolution or Liquidation. In the
event of the proposed dissolution or liquidation of the Company,
the Administrator will notify each Participant as soon as
practicable prior to the effective date of such proposed
transaction. To the extent it has not been previously exercised, an
Award will terminate immediately prior to the consummation of such
proposed action.

 

(c)

Change in Control.

 

(i)

In the event of a merger of the Company with or
into another corporation or other entity or a Change in Control,
each outstanding Award will be treated as the Administrator
determines (subject to the provisions of the following paragraph) without a
Participant’s consent, including, without limitation, that
(i) Awards will be assumed, or substantially equivalent awards
will be substituted, by the acquiring or succeeding corporation (or
an Affiliate thereof) with appropriate adjustments as to the number
and kind of shares and prices; (ii) upon written notice to a
Participant, that the Participant’s Awards will terminate
upon or immediately prior to the consummation of such merger or
Change in Control; (iii) outstanding Awards will vest and
become exercisable, realizable, or payable, or restrictions
applicable to an Award will lapse, in whole or in part prior to or
upon consummation of such merger or Change in Control, and, to the
extent the Administrator determines, terminate upon or immediately
prior to the effectiveness of such merger or Change in Control;
(iv) (A) the termination of an Award in exchange for an amount of
cash and/or property, if any, equal to the amount that would have
been attained upon the exercise of such Award or realization of the
Participant’s rights as of the date of the occurrence of the
transaction (and, for the avoidance of doubt, if as of the date of
the occurrence of the transaction the Administrator determines in
good faith that no amount would have been attained upon the
exercise of such Award or realization of the Participant’s
rights, then such Award may be terminated by the Company without
payment), or (B) the replacement of such Award with other
rights or property selected by the Administrator in its sole
discretion; or (v) any combination of the foregoing. In taking any
of the actions permitted under this Section
4.05(c), the Administrator
will not be obligated to treat all Awards, all Awards held by a
Participant, or all Awards of the same type,
similarly.

 

 

16

 

 

(ii)

In
the event that the successor corporation does not assume or
substitute for the Award (or portion thereof), the Participant will
fully vest in and have the right to exercise all of his or her
outstanding Options and Stock Appreciation Rights, including Shares
as to which such Awards would not otherwise be vested or
exercisable, all restrictions on Restricted Stock and Restricted
Stock Units will lapse, and, with respect to Awards with
performance-based vesting, all performance goals or other vesting
criteria will be deemed achieved at one hundred percent (100%) of
target levels and all other terms and conditions met, in all cases,
unless specifically provided otherwise under the applicable Award
Agreement or other written agreement between the Participant and
the Company or any of its Subsidiaries or Parents, as applicable.
In addition, if an Option or Stock Appreciation Right is not
assumed or substituted in the event of a merger or Change in
Control, the Administrator will notify the Participant in writing
or electronically that the Option or Stock Appreciation Right will
be exercisable for a period of time determined by the Administrator
in its sole discretion, and the Option or Stock Appreciation Right
will terminate upon the expiration of such period.

 

(iii)

For the purposes of this Section
4.05(c) and Section
4.05(d), an Award will be
considered assumed if, following the merger or Change in Control,
the Award confers the right to purchase or receive, for each Share
subject to the Award immediately prior to the merger or Change in
Control, the consideration (whether stock, cash, or other
securities or property) received in the merger or Change in Control by holders of Common
Stock for each Share held on the effective date of the transaction
(and if holders were offered a choice of consideration, the type of
consideration chosen by the holders of a majority of the
outstanding Shares); provided, however, that if such consideration
received in the merger or Change in Control is not solely common
stock of the successor corporation or its Parent, the Administrator
may, with the consent of the successor corporation, provide for the
consideration to be received upon the exercise of an Option or
Stock Appreciation Right or upon the payout of a Restricted Stock
Unit, Performance Unit, or Performance Share, for each Share
subject to such Award, to be solely common stock of the successor
corporation or its Parent equal in fair market value to the per
share consideration received by holders of Common Stock in the
merger or Change in Control.

 

(iv)

Notwithstanding
anything in this Section 4.05(c) to the
contrary, an Award that vests, is earned or paid-out upon the
satisfaction of one or more performance goals will not be
considered assumed if the Company or its successor modifies any of
such performance goals without the Participant’s
consent, in all cases, unless
specifically provided otherwise under the applicable Award
Agreement or other written agreement between the Participant and
the Company or any of its Subsidiaries or Parents, as
applicable; provided, however, a modification to such
performance goals only to reflect the successor corporation’s
post-Change in Control corporate structure will not be deemed to
invalidate an otherwise valid Award assumption.

 

(v)

Notwithstanding
anything in this Section 4.05(c) to the
contrary, and unless otherwise provided in an Award Agreement, if
an Award that vests, is earned or paid-out under an Award Agreement
is subject to Code Section 409A and if the change in control
definition contained in the Award Agreement does not comply with
the definition of “change of control” for purposes of a
distribution under Code Section 409A, then any payment of an amount
that is otherwise accelerated under this Section 4.05(c) will be delayed until the
earliest time that such payment would be permissible under Code
Section 409A without triggering any penalties applicable under Code
Section 409A.

 

(vi)

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

 

(d)

Outside Director Awards. In the event of a Change in Control, with respect
to Awards granted to an Outside Director, the Outside Directors
will fully vest in and have the right to exercise Options and/or
Stock Appreciation Rights as to all of the Shares underlying such
Award, including those Shares which would not otherwise be vested
or exercisable, all restrictions on Restricted Stock and Restricted
Stock Units will lapse, and, with respect to Awards with
performance-based vesting, all performance goals or other vesting
criteria will be deemed achieved at one hundred percent (100%) of
target levels and all other terms and conditions met, unless
specifically provided otherwise under the applicable Award
Agreement or other written agreement between the Participant and
the Company or any of its Subsidiaries or Parents, as
applicable.

 

 

17

 

 

Section
4.06 Tax
Withholding.

 

(a) 

Withholding Requirements. Prior to the
delivery of any Shares or cash pursuant to an Award (or exercise
thereof) or such earlier time as any tax withholding obligation is
due, the Company will have the power and the right to deduct or
withhold, or require a Participant to remit to the Company, an
amount sufficient to satisfy federal, state, local, non-U.S. or
other taxes (including the Participant’s FICA obligation)
required to be withheld with respect to such Award (or exercise
thereof).

 

(b)

Withholding Arrangements. The
Administrator, in its sole discretion and pursuant to such
procedures as it may specify from time to time, may permit a
Participant to satisfy such tax withholding obligation, in whole or
in part by such methods as the Administrator shall determine,
including, without limitation, (i) paying cash, (ii) electing
to have the Company withhold otherwise deliverable cash or Shares
having a fair market value equal to the minimum statutory amount
required to be withheld or such greater amount as the Administrator
may determine if such amount would not have adverse accounting
consequences, as the Administrator determines in its sole
discretion, (iii) delivering to the Company already-owned Shares
having a fair market value equal to the minimum statutory amount
required to be withheld or such greater amount as the Administrator
may determine, in each case, provided the delivery of such Shares
will not result in any adverse accounting consequences, as the
Administrator determines in its sole discretion, (iv) selling a sufficient number of Shares
otherwise deliverable to the Participant through such means as the
Administrator may determine in its sole discretion (whether through
a broker or otherwise) equal to the amount required to be withheld,
or (v) any combination of the foregoing methods of payment. The
amount of the withholding requirement will be deemed to include any
amount which the Administrator agrees may be withheld at the time
the election is made, not to exceed the amount determined by using
the maximum federal, state or local marginal income tax rates
applicable to the Participant with respect to the Award on the date
that the amount of tax to be withheld is to be determined or
such greater amount as the Administrator may determine if such
amount would not have adverse accounting consequences, as the
Administrator determines in its sole discretion. The fair market value of the Shares to be
withheld or delivered will be determined as of the date that the
taxes are required to be withheld.

 

Section
4.07 Compliance with Securities
Laws.

 

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

 

Section
4.08 Tax Withholding.

 

(a) 

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

 

(b)

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

 

 

18

 

 

Section
4.09 No Effect on Employment or
Service.

 

 Neither this
Plan nor any Award will confer upon a Participant any right with
respect to continuing the Participant’s relationship as a
Service Provider with the Company or its Subsidiaries or Parents,
as applicable, nor will they interfere in any way with the
Participant’s right or the right of the Company and its
Subsidiaries or Parents, as applicable to terminate such
relationship at any time, with or without cause, to the extent
permitted by Applicable Laws.

 

Section
4.10 Repurchase Rights

 

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

 

Section
4.11 Fractional Shares.

 

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

 

Section
4.12 Forfeiture Events.

 

(a) 

All Awards under
this Plan will be subject to recoupment under any clawback policy
that the Company is required to adopt pursuant to the listing
standards of any national securities exchange or association on
which the Company’s securities are listed or as is otherwise
required by the Dodd-Frank Wall Street Reform and Consumer
Protection Act or other Applicable Laws. In addition, the
Administrator may impose such other clawback, recovery or
recoupment provisions in an Award Agreement as the Administrator
determines necessary or appropriate, including but not limited to a
reacquisition right regarding previously acquired Shares or other
cash or property. Unless this Section
4.12 is specifically mentioned and waived in an Award Agreement
or other document, no recovery of compensation under a clawback
policy or otherwise will be an event that triggers or contributes
to any right of a Participant to resign for “good
reason” or “constructive termination” (or similar
term) under any agreement with the Company or a Subsidiary or
Parent of the Company.

 

(b)

Notwithstanding any
other provision of this Plan or any Award Agreement to the
contrary, if the Participant’s service to the Company or any
of its Affiliates as a Service Provider is terminated for Cause,
then any Award which has no vested as of such time in accordance
with its terms shall automatically be forfeited and cancelled and
shall cease to vest, be exercisable or otherwise provide any
benefit to Participant.

 

(c)

The Administrator
may specify in an Award Agreement that the Participant’s
rights, payments, and benefits with respect to an Award will be
subject to reduction, cancellation, forfeiture, or recoupment upon
the occurrence additional of specified events, in addition to any
otherwise applicable vesting or performance conditions of an Award.
Such events may include, but will not be limited to, termination of
such Participant’s status as Service Provider for Cause or
any specified action or inaction by a Participant, whether before
or after such termination of service, that would constitute Cause
for termination of such Participant’s status as a Service
Provider.

 

Section
4.13 Date of Grant.

 

 The date of
grant of an Award will be, for all purposes, the date on which the
Administrator makes the determination granting such Award, or such
other later date as is determined by the Administrator. Notice of
the determination will be provided to each Participant within a
reasonable time after the date of such grant.

 

 

19

 

 

Section
4.14 Term of
Plan.

 

 This Plan
will become effective upon its adoption by the Board. It will
continue in effect for a term of ten (10) years from the date
adopted by the Board, unless terminated earlier under Section 4.15.

 

Section
4.15 Amendment and Termination of this
Plan.

 

(a) 

Amendment and Termination. The
Administrator may at any time amend, alter, suspend or terminate
this Plan.

 

(b)

Shareholder Approval. The Company will
obtain shareholder approval of any Plan amendment to the extent
necessary and desirable to comply with Applicable
Laws.

 

(c)

Effect of Amendment or Termination. No
amendment, alteration, suspension or termination of this Plan will
impair the rights of any Participant, unless mutually agreed
otherwise between the Participant and the Administrator, which
agreement must be in writing and signed by the Participant and the
Company. Termination of this Plan will not affect the
Administrator’s ability to exercise the powers granted to it
hereunder with respect to Awards granted under this Plan prior to
the date of such termination.

Section
4.16 Conditions Upon Issuance of
Shares.

 

(a) 

Legal Compliance. Shares will not be
issued pursuant to the exercise of an Award unless the exercise of
such Award and the issuance and delivery of such Shares will comply
with Applicable Laws and will be further subject to the approval of
counsel for the Company with respect to such
compliance.

 

(b)

Investment Representations. As a
condition to the exercise of an Award, the Company may require the
person exercising such Award to represent and warrant at the time
of any such exercise that the Shares are being purchased only for
investment and without any present intention to sell or distribute
such Shares if, in the opinion of counsel for the Company, such a
representation is required.

Section
4.17 Inability to Obtain
Authority.

 

 The inability
of the Company to obtain authority from any regulatory body having
jurisdiction or to complete or comply with the requirements of any
registration or other qualification of the Shares under any state,
federal or non-U.S. law or under the rules and regulations of the
Securities and Exchange Commission, the stock exchange on which
Shares of the same class are then listed, or any other governmental
or regulatory body, which authority, registration, qualification or
rule compliance is deemed by the Company’s counsel to be
necessary or advisable for the issuance and sale of any Shares
hereunder, will relieve the Company of any liability in respect of
the failure to issue or sell such Shares as to which such requisite
authority, registration, qualification or rule compliance will not
have been obtained.

 

Section
4.18 Shareholder
Approval.

 

 This Plan
will be presented for approval by the shareholders of the Company
within twelve (12) months after the date this Plan is adopted by
the Board. Such shareholder approval will be obtained in the manner
and to the degree required under Applicable Laws. No Option granted
under this Plan may be treated as an Incentive Stock Option if this
Plan is not approved by shareholders of the Company within twelve
(12) months after the date this Plan is adopted by the
Board.

 

 

20

 

 

Section
4.19 Retirement and Welfare
Plans.

 

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

 

Section
4.20 Beneficiary
Designation.

 

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

 

Section
4.21 Severability.

 

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

 

Section
4.22 No Constraint on Corporate
Action.

 

 Nothing in
this Plan shall be construed to: (a) limit, impair, or otherwise
affect the Company’s or any of its Affiliate’s right or
power to make adjustments, reclassifications, reorganizations, or
changes of its capital or business structure, or to merge or
consolidate, or dissolve, liquidate, sell, or transfer all or any
part of its business or assets; or (b) limit the right or power of
the Company any of its Affiliates to take any action which such
entity deems to be necessary or appropriate.

 

Section
4.23 Unfunded
Obligation.

 

 Participants
shall have the status of general unsecured creditors of the
Company. Any amounts payable to Participants pursuant to this Plan
shall be considered unfunded and unsecured obligations for all
purposes, including, without limitation, Title I of the Employee
Retirement Income Security Act of 1974. Neither the Company nor any
of its Affiliates shall be required to segregate any monies from
its general funds, or to create any trusts, or establish any
special accounts with respect to such obligations. The Company
shall retain at all times beneficial ownership of any investments,
including trust investments, which the Company may make to fulfill
its payment obligations hereunder. Any investments or the creation
or maintenance of any trust or any Participant account shall not
create or constitute a trust or fiduciary relationship between the
Administrator, the Company or any of its Affiliates and a
Participant, or otherwise create any vested or beneficial interest
in any Participant or the Participant’s creditors in any
assets of the Company or any of its Affiliates. The Participants
shall have no claim against the Company or any of its Affiliates
for any changes in the value of any assets which may be invested or
reinvested by the Company with respect to this Plan.

 

Section
4.24 Choice of Law.

 

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

 

 

***

 

 

21

 

 

Exhibit A

Form of Option Award Agreement

 

 

Sollensys Corp

Option Award Agreement

 

This
grant of an Award to purchase Shares (“Grant”) is made
as of [_______________] (the “Effective Date”) by
Sollensys Corp, a Nevada corporation (the “Company”)
under the Sollensys Corp 2021 Equity Incentive Plan (the
“Plan”), to [__________________] (the
“Participant”). Under applicable
provisions of the Internal Revenue Code of 1986, as amended, the
Option is treated as [an
incentive option][a non-qualified option].

 

 

By signing this cover sheet, you hereby accept the Option (as
defined below) and agree to all of the terms and conditions
described herein and in this Plan.

 

 

 

Participant
Name:                             
_____________________________

 

Signature:                                           ____________________________

 

 

 

Sollensys
Corp

 

By:           _________________________

 

Name:     
_________________________

 

Title:        
_________________________

 

 

This is not a stock certificate or a negotiable instrument. This
grant of Option is a

voluntary, revocable grant from the Company and Participant hereby
acknowledges that the Company has no obligation to make additional
grants in the future.

 

UPON RECEIPT OF YOUR SIGNED AGREEMENT, A BOOKKEEPING ENTRY WILL BE
ENTERED INTO THE COMPANY’S BOOKS AND RECORDS

TO EVIDENCE THE OPTIONS GRANTED TO YOU.

 

***

 

A-1

 

 

 

1.

Grant. As of
the Effective Date, the Company grants to the Participant an option
(the “Option”) to purchase on the terms and
conditions hereinafter set forth all or any part of an aggregate of
[________________] shares of
the Company’s Common
Stock, par value $0.001 per share, (the “Option Shares”), at the purchase price of
$[____________] per share (the “Option Price”). The Participant shall have the
cumulative right to exercise the Option, and the Option is only
exercisable, with respect to the following number of Option Shares
on or after the following dates:

 

	

Date

 

	

Number of Options Vested and Shares Which May be
Acquired

 

	
 

	
 

	
 

	
 

 

The
Administrator may, in its sole discretion, accelerate the date on
which the Participant may purchase Option Shares.

 

2.

Term. The
Option granted hereunder shall expire in all events at 5:00 p.m.,
Pacific time on [______________], unless sooner terminated as
provided in in this Section 2.

 

3.

Change in Accounting
Treatment. If the Administrator finds that a change in the
financial accounting treatment for options granted under this Plan
adversely affects the Company or, in the determination of the
Administrator, may adversely affect the Company in the foreseeable
future, the Administrator may, in its discretion, set an
accelerated termination date for the Option. In such event, the
Administrator may take whatever other action, including
acceleration of any exercise provisions, it deems
necessary.

 

4.

Blackout
Periods. The Administrator reserves the right to suspend or
limit the Participant’s
rights to exercise and sell Shares acquired through the exercise of
Options to comply with Applicable Requirements and any
Company’s insider trading
policy, any Applicable Law, or at any other times that it deems
appropriate.

 

5.

Transfers.
Except as otherwise provided herein or in any separate provisions
applicable to this Option, the Option is transferable by the
Participant only by will or pursuant to the laws of descent and
distribution in the event of the Participant’s death, in which event the Option
may be exercised by the heirs or legal representatives of the
Participant as set forth in this Plan. Any attempt at assignment,
transfer, pledge or disposition of the Option contrary to the
provisions hereof or the levy of any execution, attachment or
similar process upon the Option shall be null and void and without
effect. Any exercise of the Option by a Person other than the
Participant shall be accompanied by appropriate proofs of the right
of such person to exercise the Option.

 

6.

Adjustments on Changes
in Common Stock. In the event that, prior to the delivery by
the Company of all of the Option Shares in respect of which the
Option is granted, there shall be an increase or decrease in the
number of issued shares of Common Stock of the Company as a result
of a subdivision or consolidation of Shares or other capital
adjustment, or the payment of a stock dividend or other increase or
decrease in such Shares, effected without receipt of consideration
by the Company, the remaining number of Option Shares still subject
to the Option and the Option Price therefor shall be adjusted in a
manner determined by the Administrator so that the adjusted number
of Option Shares and the adjusted Option Price shall be the
substantial equivalent of the remaining number of Option Shares
still subject to the Option and the Option Price thereof prior to
such change. For purposes of this Section 7 no adjustment shall be
made as a result of the issuance of Common Stock upon the
conversion of other securities of the Company which are convertible
into Shares.

 

7.

Legal
Requirements. If the listing, registration or qualification
of the Option Shares upon any securities exchange or under any
federal or state law, or the consent or approval of any
governmental regulatory body is necessary as a condition of or in
connection with the purchase of such Option Shares, the Company
shall not be obligated to issue or deliver the certificates
representing the Option Shares as to which the Option has been
exercised unless and until such listing, registration,
qualification, consent or approval shall have been effected or
obtained. If registration is considered unnecessary by the Company
or its counsel, the Company may cause a legend to be placed on the
Option Shares being issued calling attention to the fact that they
have been acquired for investment and have not been
registered.

 

8.

Administration.
The Option has been granted pursuant to, and is subject to the
terms and provisions of, this Plan. All questions of interpretation
and application of this Plan and the Option shall be determined by
the Administrator, and such determination shall be final, binding
and conclusive. The Option shall not be treated as an incentive
stock option (as such term is defined in section 422(b) of the
Code) for federal income tax purposes unless expressly indicated as
same hereupon.

 

 A-2

 

 

9.

Severability.
Should a court of competent jurisdiction deem any of the provisions
in this Agreement to be unenforceable in any respect, it is the
intention of the parties to this Agreement that this Agreement be
deemed, without further action on the part of the parties hereto,
modified, amended and limited to the extent necessary to render the
same valid and enforceable. It is further the parties’ intent
that all provisions not deemed to be overbroad shall be given their
full force and effect. You acknowledge that you are freely,
knowingly and voluntarily entering into this Agreement after having
an opportunity for consultation with your own independent
counsel.

 

10.

Notices. Any
notice to be given to the Company shall be addressed to the
Administrator at its principal executive office, and any notice to
be given to the Participant shall be addressed to the Participant
at the address then appearing on the personnel or other records of
the Company, or at such other address as either party hereafter may
designate in writing to the other. Any such notice shall be deemed
to have been duly given when deposited in the United States mail,
addressed as aforesaid, registered or certified mail, and with
proper postage and registration or certification fees
prepaid.

 

11.

Reservation of Right to
Terminate. Nothing herein contained shall affect the right
of the Company or any Affiliate to terminate the Participant in its
applicable capacity as a Service Provider at any time for any
reason whatsoever.

 

12.

Choice of Law; Jurisdiction.
This Grant shall be governed by and construed and interpreted in
accordance with the substantive laws of the State of Nevada,
without giving effect to any conflicts of law rule or principle
that might require the application of the laws of another
jurisdiction. ANY LEGAL SUIT, ACTION OR PROCEEDING ARISING OUT OF
OR BASED UPON THIS AGREEMENT SHALL BE INSTITUTED SOLELY IN THE
COURTS OF THE STATE OF FLORIDA OR THE FEDERAL COURTS OF THE UNITED
STATES, IN EACH LOCATED IN BREVARD COUNTY, FLORIDA AND EACH PARTY
IRREVOCABLY SUBMITS TO THE PERSONAL JURISDICTION OF SUCH COURTS IN
ANY SUCH SUIT, ACTION OR PROCEEDING.

 

13.

Taxes.
You agree to comply with the appropriate procedures established by
the Company, from time to time, to provide for payment or
withholding of such income or other taxes as may be required by law
to be paid or withheld in connection with the Options and exercise
thereof.

 

***

 

A-3

 

 

Exhibit B

 

Form of Stock Appreciation Right Award Agreement

 

 

Sollensys Corp

Stock Appreciation Rights Award Agreement

 

 

	

Number of SARs

	

Grant Date

	

Vesting Schedule

	
 

	
 

	
 

	
 

	
 

	
 

 

 Exercise Price:
$_______________ per share of Common Stock

 

Sollensys
Corp, a Nevada corporation (the “Company”), hereby
grants to [_________] (the “Participant”, also referred
to as “you”) Stock Appreciation Rights (the
“SAR”), pursuant to the terms of the attached Stock
Appreciation Rights Award Agreement and the Sollensys Corp 2021
Equity Incentive Plan (the “Plan”).

 

By signing this cover sheet, you agree to all of the terms and
conditions described in the attached Stock Appreciation Rights
Award Agreement and this Plan.

 

 

 

Participant:
_____________________________

 

Signature:
____________________________

 

 

 

Sollensys
Corp

 

By:           _________________________

 

Name:                      _________________________

 

Title:                      _________________________

 

 

This is not a stock certificate or a negotiable instrument. This
grant of SAR is a

voluntary, revocable grant from the Company and Participant hereby
acknowledges that the

Company has no obligation to make additional grants in the
future.

 

UPON RECEIPT OF YOUR SIGNED AGREEMENT, A BOOKKEEPING
ENTRY

WILL BE ENTERED INTO THE COMPANY’S BOOKS AND
RECORDS

TO EVIDENCE THE SAR GRANTED TO YOU.

 

 

 B-1

 

 

Sollensys Corp

 

 

STOCK APPRECIATION RIGHTS AWARD AGREEMENT

 

1.

SAR/Nontransferability.
This Stock Appreciation Rights Award Agreement (this
“Agreement”) evidences the grant to you on the Grant
Date set forth on the cover page of this Agreement the Stock
Appreciation Right as set forth therein (the “SAR”)
under the Sollensys Corp 2021 Equity Incentive Plan (the
“Plan”). These SARs represent the right to receive,
upon exercise thereof, an amount in cash as set forth in this Plan.
This SAR will NOT be credited with dividends to the extent
dividends are paid on the Common Stock of the Company. Your SAR may
not be transferred, assigned, pledged or hypothecated, whether by
operation of law or otherwise, nor may the SAR be made subject to
execution, attachment or similar process. Any capitalized, but
undefined, term used in this Agreement shall have the meaning
ascribed to it in this Plan.

 

2.

The
Plan. The SAR is issued in
accordance with and is subject to and conditioned upon all of the
terms and conditions of this Agreement and this Plan as amended
from time to time; provided, however, that no future amendment or
termination of this Plan shall, without your consent, alter or
impair any of your rights or obligations under this Plan, all of
which are incorporated by reference in this Agreement as if fully
set forth herein.

 

3.

Cash Value
Determination upon Vesting and Exercise. Subject to the terms and conditions set forth in
this Agreement, the SARs covered by this grant shall vest on the
vesting date set forth on the cover page of this Agreement,
provided the Participant is a Service Provider of the
Company on the Date of Vesting. The
payment of the value of the SARs shall be made no later than ten
(10) days following exercise. The payment of amounts with
respect to the SARs is subject to the provisions of this Plan and
to interpretations, regulations and determinations concerning this
Plan as established from time to time by the Administrator in
accordance with the provisions of this Plan, including, but not
limited to, provisions relating to (i) rights and obligations
with respect to withholding taxes, (ii) capital or other
changes of the Company and (iii) other requirements of
applicable law.

 

4.

No Shareholder
Rights. SARs are not Shares.
Neither the Participant, nor any Person entitled to exercise the
Participant’s rights in the event of the Participant’s
death, shall have any of the rights and privileges of a holder of
Shares.

 

5.

Severability.
Should a court of competent jurisdiction deem any of the provisions
in this Agreement to be unenforceable in any respect, it is the
intention of the parties to this Agreement that this Agreement be
deemed, without further action on the part of the parties hereto,
modified, amended and limited to the extent necessary to render the
same valid and enforceable. It is further the parties’ intent
that all provisions not deemed to be overbroad shall be given their
full force and effect. You acknowledge that you are freely,
knowingly and voluntarily entering into this Agreement after having
an opportunity for consultation with your own independent
counsel.

 

6.

Notices. Any
notice to be given to the Company shall be addressed to the
Administrator at its principal executive office, and any notice to
be given to the Participant shall be addressed to the Participant
at the address then appearing on the personnel or other records of
the Company, or at such other address as either party hereafter may
designate in writing to the other. Any such notice shall be deemed
to have been duly given when deposited in the United States mail,
addressed as aforesaid, registered or certified mail, and with
proper postage and registration or certification fees
prepaid.

 

7.

Reservation of Right to
Terminate. Nothing herein contained shall affect the right
of the Company or any Affiliate to terminate the Participant in its
applicable capacity as a Service Provider at any time for any
reason whatsoever.

 

8.

Choice of Law; Jurisdiction.
This Grant shall be governed by and construed and interpreted in
accordance with the substantive laws of the State of Nevada,
without giving effect to any conflicts of law rule or principle
that might require the application of the laws of another
jurisdiction. ANY LEGAL SUIT, ACTION OR PROCEEDING ARISING OUT OF
OR BASED UPON THIS AGREEMENT SHALL BE INSTITUTED SOLELY IN THE
COURTS OF THE STATE OF FLORIDA OR THE FEDERAL COURTS OF THE UNITED
STATES, IN EACH LOCATED IN BREVARD COUNTY, FLORIDA AND EACH PARTY
IRREVOCABLY SUBMITS TO THE PERSONAL JURISDICTION OF SUCH COURTS IN
ANY SUCH SUIT, ACTION OR PROCEEDING.

 

9.

Taxes.
You agree to comply with the appropriate procedures established by
the Company, from time to time, to provide for payment or
withholding of such income or other taxes as may be required by law
to be paid or withheld in connection with the
SARs.

 

 

***

 

B-2

 

 

Exhibit C

 

Form of Restricted Stock Award Agreement

 

 

Sollensys Corp

Restricted Stock Award Agreement

 

 

	

Number of Shares

	

Grant Date

	

Vesting Schedule

	
 

	
 

	
 

	
 

	
 

	
 

 

Sollensys
Corp, a Nevada corporation (the “Company”), hereby
grants to [_________] (the “Participant”, also referred
to as “you”) shares of Restricted Stock (the
“Shares”), pursuant to the terms of the attached
Restricted Stock Award Agreement and the Sollensys Corp 2021 Equity
Incentive Plan (the “Plan”).

 

By signing this cover sheet, you agree to all of the terms and
conditions described in the attached Restricted Stock Award
Agreement and this Plan.

 

 

 

Participant:
_____________________________

 

Signature:
____________________________

 

 

 

Sollensys
Corp

 

By:           _________________________

 

Name:     
_________________________

 

Title:    
  
_________________________

 

 

This is not a stock certificate or a negotiable instrument. This
grant of Shares is a

voluntary, revocable grant from the Company and Participant hereby
acknowledges that the

Company has no obligation to make additional grants in the
future.

 

UPON RECEIPT OF YOUR SIGNED AGREEMENT, A BOOKKEEPING
ENTRY

WILL BE ENTERED INTO THE COMPANY’S BOOKS AND
RECORDS

TO EVIDENCE THE SHARES GRANTED TO YOU.

 

 

 

C-1

 

 

Sollensys Corp

 

 

RESTRICTED STOCK AWARD AGREEMENT

 

1.

Award.
This Restricted Stock Award Agreement (this
“Agreement”) evidences the grant to Participant on the
Grant Date set forth on the cover page of this Agreement the shares
of Restricted Stock as set forth therein (the “Shares”)
under the Sollensys Corp 2021 Equity Incentive Plan (the
“Plan”). Any capitalized, but undefined, term used in
this Agreement shall have the meaning ascribed to it in this
Plan.

 

2.

Non-Transferability of
the Shares. Your Shares may not
be transferred, assigned, pledged or hypothecated, whether by
operation of law or otherwise, nor may the Shares be made subject
to execution, attachment or similar process. Except as may be
required by federal income tax withholding provisions or by the tax
laws of any state, your interests (and the interests of your
beneficiaries, if any) under this Agreement are not subject to the
claims of your creditors and may not be voluntarily or
involuntarily sold, transferred, alienated, assigned, pledged,
anticipated, or encumbered. Any attempt to sell, transfer,
alienate, assign, pledge, anticipate, encumber, charge or otherwise
dispose of any right to benefits payable hereunder shall be void.
Your rights to your Shares are no greater than that of other
general, unsecured creditors of the Company.

 

3.

Vesting.
Subject to the terms and conditions set forth in this Agreement,
the Shares covered by this grant shall vest on the vesting date set
forth on the cover page of this Agreement, provided the Participant
is a Service Provider of the Company or a member of the
Company Group on the Date of
Vesting.

 

4.

Delivery of
Shares.

 

(a)

Vesting.
Shares that vest (together with any payment due pursuant to the
terms herein in respect of such Shares) shall be delivered to
Participant (or the person to whom ownership rights may have passed
by will or the laws of descent and distribution), on or as soon as
administratively practicable after, the date of such
vesting.

 

(b)

Certain
Limitations. Notwithstanding
the foregoing provisions of this Section 3,
delivery of Shares, if any, by reason of Participant’s
termination of employment shall be delayed until the six (6) month
anniversary of the date of Participant’s termination of
employment to the extent necessary to comply with Code Section
409A(a)(B)(i), and the determination of whether or not there has
been a termination of Participant’s employment with the
Company shall be made by the Administrator consistent with the
definition of “separation from service” (as that phrase
is used for purposes of Code Section 409A, and as set forth in
Treasury Regulation Section 1.409A-1(h)).

 

5.

Withholding
Taxes. Participant shall be
responsible to pay to the Company the amount of withholding taxes
as determined by the Company with respect to the date the Shares
are delivered. If Participant does not arrange for payment of the
applicable withholding taxes by providing such amount to the
Company in cash prior to the date established by the Company as the
deadline for such payment, Participant shall be treated as having
elected to relinquish to the Company a portion of the Shares that
would otherwise have been transferred to Participant having a fair
market value, based on the Fair Market Value of the Common Stock on
the business day immediately preceding the date of delivery of the
Shares, equal to the amount of such applicable withholding taxes,
in lieu of paying such amount to the Company in cash. Participant
authorizes the Company to withhold in accordance with applicable
law from any compensation payable to him or her any taxes required
to be withheld for federal, state or local law in connection with
this Agreement.

 

6.

Legal
Requirements. If the listing,
registration or qualification of Shares deliverable in respect of
an Shares upon any securities exchange or under any federal or
state law, or the consent or approval of any governmental
regulatory body is necessary as a condition of or in connection
with the issuance of such Shares, the Company shall not be
obligated to issue or deliver such Shares unless and until such
listing, registration, qualification, consent or approval shall
have been effected or obtained. If registration is considered
unnecessary by the Company or its counsel, the Company may cause a
legend to be placed on any Shares being issued calling attention to
the fact that they have been acquired for investment and have not
been registered. The Administrator may from time to time impose any
other conditions on the Shares it deems necessary or advisable to
ensure that Shares are issued and resold in compliance with the
Securities Act of 1933, as amended.

 

7.

Severability.
Should a court of competent jurisdiction deem any of the provisions
in this Agreement to be unenforceable in any respect, it is the
intention of the parties to this Agreement that this Agreement be
deemed, without further action on the part of the parties hereto,
modified, amended and limited to the extent necessary to render the
same valid and enforceable. It is further the parties’ intent
that all provisions not deemed to be overbroad shall be given their
full force and effect. You acknowledge that you are freely,
knowingly and voluntarily entering into this Agreement after having
an opportunity for consultation with your own independent
counsel.

 

8.

Notices. Any
notice to be given to the Company shall be addressed to the
Administrator at its principal executive office, and any notice to
be given to the Participant shall be addressed to the Participant
at the address then appearing on the personnel or other records of
the Company, or at such other address as either party hereafter may
designate in writing to the other. Any such notice shall be deemed
to have been duly given when deposited in the United States mail,
addressed as aforesaid, registered or certified mail, and with
proper postage and registration or certification fees
prepaid.

 

9.

Reservation of Right to
Terminate. Nothing herein contained shall affect the right
of the Company or any Affiliate to terminate the Participant in its
applicable capacity as a Service Provider at any time for any
reason whatsoever.

 

10.

Choice of Law; Jurisdiction.
This Grant shall be governed by and construed and interpreted in
accordance with the substantive laws of the State of Nevada,
without giving effect to any conflicts of law rule or principle
that might require the application of the laws of another
jurisdiction. ANY LEGAL SUIT, ACTION OR PROCEEDING ARISING OUT OF
OR BASED UPON THIS AGREEMENT SHALL BE INSTITUTED SOLELY IN THE
COURTS OF THE STATE OF FLORIDA OR THE FEDERAL COURTS OF THE UNITED
STATES, IN EACH LOCATED IN BREVARD COUNTY, FLORIDA AND EACH PARTY
IRREVOCABLY SUBMITS TO THE PERSONAL JURISDICTION OF SUCH COURTS IN
ANY SUCH SUIT, ACTION OR PROCEEDING.

 

 

11.

Taxes.
You agree to comply with the appropriate procedures established by
the Company, from time to time, to provide for payment or
withholding of such income or other taxes as may be required by law
to be paid or withheld in connection with the Restricted
Stock.

 

 

***

 

C-2

 

 

Exhibit D

 

Form of Restricted Unit Award Agreement

 

 

Sollensys Corp

Restricted Unit Award Agreement

 

 

	

Number of Restricted Stock Units

	

Grant Date

	

Vesting Schedule/Performance Period/Performance Vesting
Requirements

	
 

	
 

	
 

	
 

	
 

	
 

 

Sollensys
Corp, a Nevada corporation (the “Company”), hereby
grants to [_________] (the “Participant”, also referred
to as “you”) the Restricted Stock Units (the
“Restricted Stock Units” or “RSUs”),
pursuant to the terms of the attached Restricted Unit Award
Agreement and the Sollensys Corp 2021 Equity Incentive Plan (the
“Plan”).

 

By signing this cover sheet, you agree to all of the terms and
conditions described in the attached Restricted Unit Award
Agreement and this Plan.

 

 

 

Participant:
_____________________________

 

Signature:
____________________________

 

 

 

Sollensys
Corp

 

By:           _________________________

 

Name:     _________________________

 

Title:      
_________________________

 

This is not a stock certificate or a negotiable instrument. This
grant of RSUs is a

voluntary, revocable grant from the Company and Participant hereby
acknowledges that the

Company has no obligation to make additional grants in the
future.

 

UPON RECEIPT OF YOUR SIGNED AGREEMENT, A BOOKKEEPING
ENTRY

WILL BE ENTERED INTO THE COMPANY’S BOOKS AND
RECORDS

TO EVIDENCE THE RSUs GRANTED TO YOU.

 

 

 

D-1

 

 

Sollensys Corp

 

 

RESTRICTED UNIT AWARD AGREEMENT

 

1.

Award.
This Restricted Unit Award Agreement (this “Agreement”)
evidences the grant to Participant on the Grant Date set forth on
the cover page of this Agreement the Restricted Stock Units as set
forth therein (the “Restricted Stock Units” or
“RSUs”) under the Sollensys Corp 2021 Equity Incentive
Plan (the “Plan”). As used herein, the term
“Restricted Stock Unit” or “RSU” shall mean
a non-voting unit of measurement which is deemed for bookkeeping
purposes to be equivalent to one outstanding Share solely for
purposes of this Plan and this Agreement. The Restricted Stock
Units shall be used solely as a device for the determination of the
payment to eventually be made to the Participant if such Restricted
Stock Units vest pursuant to this Award Agreement. The Restricted
Stock Units shall not be treated as property or as a trust fund of
any kind. Any capitalized, but undefined, term used in this
Agreement shall have the meaning ascribed to it in this
Plan.

 

2.

Non-Transferability of
the RSUs. Your RSUs may not be
transferred, assigned, pledged or hypothecated, whether by
operation of law or otherwise, nor may the RSUs be made subject to
execution, attachment or similar process. Except as may be required
by federal income tax withholding provisions or by the tax laws of
any state, your interests (and the interests of your beneficiaries,
if any) under this Agreement are not subject to the claims of your
creditors and may not be voluntarily or involuntarily sold,
transferred, alienated, assigned, pledged, anticipated, or
encumbered. Any attempt to sell, transfer, alienate, assign,
pledge, anticipate, encumber, charge or otherwise dispose of any
right to benefits payable hereunder shall be void. Your rights to
your RSUs are no greater than that of other general, unsecured
creditors of the Company.

 

3.

Vesting.
Subject to the terms and conditions set forth in this Agreement,
the RSUs covered by this grant shall vest on the vesting date set
forth on the cover page of this Agreement and subject to the
satisfaction or attainment of the performance criteria set forth
therein, if any, provided the Participant is employed by the
Company on the date of vesting. The Administrator may not
accelerate vesting of Restricted Stock Units for any
reason.

 

4.

Dividends.
Participant shall not be entitled to any cash, securities or
property that would have been paid or distributed as dividends with
respect to the RSUs subject to this Agreement prior to the date the
RSUs are delivered to Participant; provided, however, that the
Company shall keep a hypothetical account in which any such items
shall be recorded, and shall pay to Participant the amount of such
dividends (in cash or in kind as determined by the Company) on the
same date that the RSUs to which such payments or distributions
relate are required to be delivered under this
Agreement.

 

5.

Timing and Manner of
Payment on RSUs.

 

(a)

On
or as soon as administratively practical following the vesting
event pursuant to this Agreement (and in all events not later than
two and one-half (21⁄2) months after such vesting event), the
Company shall deliver to the Participant a number of Shares (either
by delivering one or more certificates for such Shares or by
entering such Shares in book entry form, as determined by the
Company in its discretion) equal to the number of Shares subject to
the RSU that vest on the Vesting Date, less any withholding or
expenses as set forth herein, or may settle the RSU in cash or
other payment as provided in this Plan, as determined by the
Administrator. The Company’s obligation to deliver Shares or
otherwise make payment with respect to vested RSUs is subject to
the condition precedent that the Participant or other person
entitled under this Plan to receive any Shares or payment with
respect to the vested RSUs deliver to the Company any
representations or other documents or assurances required pursuant
to this Plan. The Participant shall have no further rights with
respect to any RSUs that are paid or that terminate pursuant to
this Agreement or this Plan.

 

(b)

Certain
Limitations. Notwithstanding
the foregoing provisions of this Section 3,
delivery of Shares or other payment, if any, with respect to RSUs
by reason of Participant’s termination of employment shall be
delayed until the six (6) month anniversary of the date of
Participant’s termination of employment to the extent
necessary to comply with Code Section 409A(a)(B)(i), and the
determination of whether or not there has been a termination of
Participant’s employment with the Company shall be made by
the Administrator consistent with the definition of
“separation from service” (as that phrase is used for
purposes of Code Section 409A, and as set forth in Treasury
Regulation Section 1.409A-1(h)).

 

6.

Rights of
Participant. Participant shall
have none of the rights of a shareholder at any time prior to the
delivery of any Shares pursuant to the RSUs subject to this
Agreement, except as expressly set forth in this Plan or
herein.

 

7.

Withholding
Taxes. Participant shall be
responsible to pay to the Company the amount of withholding taxes
as determined by the Company with respect to the date the RSUs are
settled. If Participant does not arrange for payment of the
applicable withholding taxes by providing such amount to the
Company in cash prior to the date established by the Company as the
deadline for such payment, Participant shall be treated as having
elected to relinquish to the Company a portion of the Shares that
would otherwise have been transferred to Participant having a fair
market value, based on the Fair Market Value of the Common Stock on
the business day immediately preceding the date of delivery of the
Shares, equal to the amount of such applicable withholding taxes,
in lieu of paying such amount to the Company in cash, or an amount
in cash if the RSU is settled in cash. Participant authorizes the
Company to withhold in accordance with applicable law from any
compensation payable to him or her any taxes required to be
withheld for federal, state or local law in connection with this
Agreement.

 

8.

Legal
Requirements. If the listing,
registration or qualification of Shares deliverable in respect of
an RSU upon any Securities Exchange or any Applicable
Requirement, or the consent or
approval of any governmental regulatory body is necessary as a
condition of or in connection with the issuance of such Shares, the
Company shall not be obligated to issue or deliver such Shares
unless and until such Applicable Requirements shall have been
effected or obtained. If registration is considered unnecessary by
the Company or its counsel, the Company may cause a legend to be
placed on any Shares being issued calling attention to the fact
that they have been acquired for investment and have not been
registered. The Administrator may from time to time impose any
other conditions on the Shares it deems necessary or advisable to
ensure that Shares are issued and resold in compliance with the
Securities Act of 1933, as amended.

 

9.

Severability.
Should a court of competent jurisdiction deem any of the provisions
in this Agreement to be unenforceable in any respect, it is the
intention of the parties to this Agreement that this Agreement be
deemed, without further action on the part of the parties hereto,
modified, amended and limited to the extent necessary to render the
same valid and enforceable. It is further the parties’ intent
that all provisions not deemed to be overbroad shall be given their
full force and effect. You acknowledge that you are freely,
knowingly and voluntarily entering into this Agreement after having
an opportunity for consultation with your own independent
counsel.

 

10.

Notices. Any
notice to be given to the Company shall be addressed to the
Administrator at its principal executive office, and any notice to
be given to the Participant shall be addressed to the Participant
at the address then appearing on the personnel or other records of
the Company, or at such other address as either party hereafter may
designate in writing to the other. Any such notice shall be deemed
to have been duly given when deposited in the United States mail,
addressed as aforesaid, registered or certified mail, and with
proper postage and registration or certification fees
prepaid.

 

11.

Reservation of Right to
Terminate. Nothing herein contained shall affect the right
of the Company or any Affiliate to terminate the Participant in its
applicable capacity as a Service Provider at any time for any
reason whatsoever.

 

12.

Choice of Law; Jurisdiction.
This Grant shall be governed by and construed and interpreted in
accordance with the substantive laws of the State of Nevada,
without giving effect to any conflicts of law rule or principle
that might require the application of the laws of another
jurisdiction. ANY LEGAL SUIT, ACTION OR PROCEEDING ARISING OUT OF
OR BASED UPON THIS AGREEMENT SHALL BE INSTITUTED SOLELY IN THE
COURTS OF THE STATE OF FLORIDA OR THE FEDERAL COURTS OF THE UNITED
STATES, IN EACH LOCATED IN BREVARD COUNTY, FLORIDA AND EACH PARTY
IRREVOCABLY SUBMITS TO THE PERSONAL JURISDICTION OF SUCH COURTS IN
ANY SUCH SUIT, ACTION OR PROCEEDING.

 

13.

Taxes.
You agree to comply with the appropriate procedures established by
the Company, from time to time, to provide for payment or
withholding of such income or other taxes as may be required by law
to be paid or withheld in connection with the
RSUs.

 

 

***

D-2

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