Document:

Exhibit 10.90

Exhibit 10.90

As Amended as of April 25, 2011

MIMEDX GROUP, INC.

ASSUMED 2006 STOCK INCENTIVE PLAN

1. Definitions

In addition to other terms defined herein, the following terms shall have the meanings given
below:

(a) Administrator means the Board, and, upon its delegation of all or part of its
authority to administer the Plan to the Committee, the Committee.

(b) Affiliate means any Parent or Subsidiary of the Corporation, and also includes
any other business entity which is controlled by, under common control with or controls the
Corporation; provided, however, that the term “Affiliate” shall be construed in a manner in
accordance with the registration provisions of applicable federal securities laws and any
requirements imposed under Code Section 409A, related regulations or other guidance.

(c) Applicable Laws means any applicable laws, rules or regulations (or similar
guidance), including but not limited to the Securities Act, the Exchange Act and the Code.

(d) Award means, individually or collectively, a grant under the Plan of an Option
(including an Incentive Option or Nonqualified Option); a Stock Appreciation Right (including a
Related SAR or a Freestanding SAR); a Restricted Award (including a Restricted Stock Award or a
Restricted Unit Award); a Dividend Equivalent Award; or any other award granted under the Plan.

(e) Award Agreement means an agreement (which may be in written or electronic form,
in the Administrator’s discretion, and which includes any amendment or supplement thereto)
between the Corporation and a Participant specifying the terms, conditions and restrictions of
an Award granted to the Participant. An Award Agreement may also state such other terms,
conditions and restrictions, including but not limited to terms, conditions and restrictions
applicable to shares or any other benefit underlying an Award, as may be established by the
Administrator.

(f) Board or Board of Directors means the Board of Directors of the
Corporation.

 

 

 

(g) Cause means, unless the Administrator determines otherwise, a Participant’s
termination of employment or service resulting from the Participant’s (i) termination for
“cause” as defined under the Participant’s employment, consulting or other agreement with the
Corporation or an Affiliate, if any, or (ii) if the Participant has not entered into any such
employment, consulting or other agreement (or if any such agreement does not address the effect
of a “cause” termination),
then the Participant’s termination shall be for “Cause” if termination results due to the
Participant’s (A) dishonesty; (B) refusal or continued failure to perform his duties for the
Corporation, as determined by the Administrator or its designee; (C) engaging in fraudulent
conduct; or (D) engaging in any conduct that could be materially damaging to the Corporation
without a reasonable good faith belief that such conduct was in the best interest of the
Corporation. The determination of “Cause” shall be made by the Administrator and its
determination shall be final and conclusive. Without in any way limiting the effect of the
foregoing, for the purposes of the Plan and any Award, a Participant’s employment or service
shall be deemed to have terminated for Cause if, after the Participant’s employment or service
has terminated, facts and circumstances are discovered that would have justified, in the opinion
of the Administrator, a termination for Cause.

(h) Change in Control:

(i) General: Except as may be otherwise provided in an individual Award Agreement or
as may be otherwise required in order to comply with Code Section 409A, a Change in
Control shall be deemed to have occurred on the earliest to occur of a change in the
ownership of the Corporation, a change in the effective control of the Corporation, a change
in ownership of a substantial portion of the Corporation’s assets and a disposition of a
substantial portion of the Corporation’s assets, all as defined below:

(a) A change in the ownership of the Corporation occurs on the date that any
one person, or more than one person acting as a group, acquires ownership of stock
of the Corporation which, together with stock held by such person or group,
represents more than fifty percent (50%) of the total fair market value or total
voting power of the stock of the Corporation. An increase in the percentage of
stock owned by any one person, or persons acting as a group, as a result of a
transaction in which the Corporation acquires its stock in exchange for property
will be treated as an acquisition of stock.

(b) A change in the effective control of the Corporation occurs on the date
that either: any one person, or more than one person acting as a group becomes the
beneficial owner of stock of the Corporation possessing more than fifty percent
(50%) of the total voting power of the stock of the Corporation; or a majority of
members of the Corporation’s board of directors is replaced during any 24-month
period by directors whose appointment or election is not endorsed by at least
two-thirds (2/3) of the members of the Corporation’s board of directors who were
directors prior to the date of the appointment or election of the first of such new
directors.

 

 

 

(c) A change in the ownership of a substantial portion of the Corporation’s
assets occurs on the date that any one person, or more than one person acting as a
group, acquires (or has acquired during the 12-month period ending on the date of
the most recent acquisition by such person or persons) assets from the Corporation
that
have a total fair market value equal to seventy-five percent (75%) or more of
the total fair market value of all of the assets of the Corporation immediately
prior to such acquisition or acquisitions. The transfer of assets by the
Corporation is not treated as a change in the ownership of such assets if the assets
are transferred to an entity more than fifty percent (50%) of the total value or
voting power of which is owned, directly or indirectly, by the Corporation.

(d) A disposition of a substantial portion of the Corporation’s assets occurs
on the date that the Corporation transfers assets by sale, lease, exchange,
distribution to shareholders, assignment to creditors, foreclosure or otherwise, in
a transaction or transactions not in the ordinary course of the Corporation’s
business (or has made such transfers during the 12-month period ending on the date
of the most recent transfer of assets) that have a total fair market value equal to
seventy-five percent (75%) or more of the total fair market value of all of the
assets of the Corporation as of the date immediately prior to the first such
transfer or transfers. The transfer of assets by the Corporation is not treated as
a disposition of a substantial portion of the Corporation’s assets if the assets are
transferred to an entity, more than fifty percent (50%) of the total value or voting
power of which is owned, directly or indirectly, by the Corporation.

(e) The Administrator shall have full and final authority, in its discretion,
to determine whether a Change in Control of the Corporation has occurred pursuant to
the above definition, the date of the occurrence of such Change in Control and any
incidental matters relating thereto.

For purposes of the above-definition of a “Change in Control,” the terms “person,”
“acting as a group” and “ownership” shall have the meanings prescribed in Sections 3(a)(9)
and 13(d)(3) of the Securities Exchange Act of 1934, as amended, and Rule 13d-3 promulgated
thereunder; provided, however, that in any merger, consolidation or share exchange in which
less than fifty percent (50%) of the outstanding voting securities of the Corporation or its
successor corporation are held by the former shareholders of the Corporation, the
shareholders of the other parties to the transaction shall be deemed to have acted as a
group that acquired ownership of more than fifty percent (50%) of the outstanding voting
securities of the Corporation, resulting in a change in ownership under (a) above.

(ii) Definition Applicable to Awards subject to Code Section 409A: Notwithstanding the
preceding provisions of Section 1(h)(i), in the event that any Awards granted under the Plan
are deemed to be deferred compensation subject to the provisions of Code Section 409A, then
distributions related to such Awards may be permitted, in the Administrator’s discretion,
upon the occurrence of one or more of the following events (as they are defined and
interpreted under Code Section 409A, related regulations or other guidance): (A) a change in
the ownership of the Corporation, (B) a change in effective control of the Corporation, or
(C) a change in the ownership of a substantial portion of the assets of the Corporation.

 

 

 

(i) Code means the Internal Revenue Code of 1986, as amended.

(j) Committee means the Compensation Committee of the Board, which may be
appointed to administer the Plan.

(k) Common Stock means the common stock of MiMedx Group, Inc., $0.001 par value
per share.

(l) Corporation means MiMedx Group, Inc., a Florida corporation, together with
any successor thereto.

(m) Covered Employee shall have the meaning given the term in Section 162(m) of
the Code and related regulations.

(n) Director means a member of the Board or of the board of directors of an
Affiliate.

(o) Disability shall, except as may be otherwise determined by the
Administrator or required under Code Section 409A or related regulations or other guidance,
have the meaning given in any employment agreement, consulting agreement or other similar
agreement, if any, to which a Participant is a party, or, if there is no such agreement (or
if any such agreement does not address the effect of termination due to disability),
“Disability” shall mean the inability to engage in any substantial gainful activity by
reason of any medically determinable physical or mental impairment which can be expected to
result in death, or which has lasted or can be expected to last for a continuous period of
not less than 12 months. The Administrator shall have discretion to determine if a
termination due to Disability has occurred.

(p) Displacement shall, as applied to any Participant, be as defined in any
employment agreement, consulting agreement or other similar agreement, if any, to which the
Participant is a party, or, if there is no such agreement (or if any such agreement does not
address the effect of a termination due to displacement), “Displacement” shall mean the
termination of the Participant’s employment or service due to the elimination of the
Participant’s job or position without fault on the part of the Participant (as determined by the
Administrator).

(q) Dividend Equivalent Award means a right granted to a Participant pursuant to
Section 10 to receive the equivalent value (in cash or shares of Common Stock) of dividends paid
on Common Stock.

(r)  Effective Date means the effective date of the Plan, as provided in Section 4.

(s) Employee means any person who is an employee of the Corporation or any
Affiliate (including entities which become Affiliates after the Effective Date of the Plan).
For this purpose, an individual shall be considered to be an Employee only if there exists
between the individual and the Corporation or an Affiliate the legal and bona fide relationship
of employer and Employee; provided,
however, that, with respect to Incentive Options, “Employee” means any person who is
considered an employee of the Corporation or any Parent or Subsidiary for purposes of Treas.
Reg. Section 1.421-1(h) (or any successor provision related thereto).

 

 

 

(t) Exchange Act means the Securities Exchange Act of 1934, as amended.

(u) Fair Market Value per share of the Common Stock shall be established in good
faith by the Administrator and, unless otherwise determined by the Administrator, the Fair
Market Value shall be determined in accordance with the following provisions: (A) if the shares
of Common Stock are listed for trading on the New York Stock Exchange or the American Stock
Exchange, the Fair Market Value shall be the closing sales price per share of the shares on the
New York Stock Exchange or the American Stock Exchange (as applicable) on the date immediately
preceding the date an Option is granted or other determination is made (such date of
determination being referred to herein as a “valuation date”), or, if there is no transaction on
such date, then on the trading date nearest preceding the valuation date for which closing price
information is available, and, provided further, if the shares are quoted on the Nasdaq National
Market or the Nasdaq SmallCap Market of the Nasdaq Stock Market but are not listed for trading
on the New York Stock Exchange or the American Stock Exchange, the Fair Market Value shall be
the closing sales price for such stock (or the closing bid, if no sales were reported) as quoted
on such system on the date immediately or nearest preceding the valuation date for which such
information is available, and, provided further, if the shares are not listed for trading on the
New York Stock Exchange or the American Stock Exchange or quoted on the Nasdaq National Market
or the Nasdaq SmallCap Market, the Fair Market Value shall be the average between the highest
bid and lowest asked prices for such stock on the date immediately or nearest preceding the
valuation date as reported on the Nasdaq OTC Bulletin Board Service or by the National Quotation
Bureau, Incorporated or a comparable service; or (B) if the shares of Common Stock are not
listed or reported in any of the foregoing, then the Fair Market Value shall be determined by
the Administrator based on such valuation measures or other factors as it deems appropriate.
Notwithstanding the foregoing, (i) with respect to the grant of Incentive Options, the Fair
Market Value shall be determined by the Administrator in accordance with the applicable
provisions of Section 20.2031-2 of the Federal Estate Tax Regulations, or in any other manner
consistent with the Code Section 422 and accompanying regulations; and (ii) Fair Market Value
shall be determined in accordance with Section 409A, related regulations or other guidance to
the extent required by such provisions.

(v) Freestanding SAR means an SAR that is granted without relation to an Option, as
provided in Section 8.

(w) Incentive Option means an Option that is designated by the Administrator as an
Incentive Option pursuant to Section 7 and intended to meet the requirements of incentive stock
options under Code Section 422 and related regulations.

(x) Independent Contractor means an independent contractor, consultant or advisor
providing services to the Corporation or an Affiliate.

 

 

 

(y) Nonqualified Option means an Option granted under Section 7 that is not
intended to qualify as an incentive stock option under Code Section 422 and related regulations.

(z) Option means a stock option granted under Section 7 that entitles the holder to
purchase from the Corporation a stated number of shares of Common Stock at the price set forth
in an Award Agreement.

(aa) Option Period means the term of an Option, as provided in Section 7(d)(i).

(bb) Option Price means the price at which an Option may be exercised, as provided
in Section 7(b).

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

(dd) Participant means an individual employed by, or providing services to, the
Corporation or an Affiliate who satisfies the requirements of Section 6 and is selected by the
Administrator to receive an Award under the Plan.

(ee) Performance Measures mean one or more performance factors which may be
established by the Administrator with respect to an Award. Performance factors may be based on
such corporate, business unit or division and/or individual performance factors and criteria as
the Administrator in its discretion may deem appropriate; provided, however, that, if and to the
extent that Section 162(m) of the Code is applicable, then such performance factors shall be
limited to one or more of the following (as determined by the Administrator in its discretion):
(i) cash flow; (ii) return on equity; (iii) return on assets; (iv) earnings per share; (v)
operations expense efficiency milestones; (vi) consolidated earnings before or after taxes
(including earnings before interest, taxes, depreciation and amortization); (vii) net income;
(viii) operating income; (ix) book value per share; (x) return on investment; (xi) return on
capital; (xii) improvements in capital structure; (xiii) expense management; (xiv) profitability
of an identifiable business unit or product; (xv) maintenance or improvement of profit margins;
(xvi) stock price or total shareholder return; (xvii) market share; (xviii) revenues or sales;
(xix) costs; (xx) working capital; (xxi) economic wealth created; (xxii) strategic business
criteria; (xxiii) efficiency ratio(s); (xxiv) achievement of division, group, function or
corporate financial, strategic or operational goals; and (xxv) comparisons with stock market
indices or performances of metrics of peer companies. If and to the extent that Section 162(m)
of the Code is applicable, the Administrator shall, within the time and in the manner prescribed
by Section 162(m) of the Code and related regulations, define in an objective fashion the manner
of calculating the Performance Measures it selects to use for Participants during any specific
performance period and determine whether such Performance Measures have been met. Such
performance factors may be adjusted or modified due to extraordinary items, transactions, events
or developments, or in recognition of, or in anticipation of, any other unusual or nonrecurring
events affecting the Corporation or the financial statements of the Corporation, or in response
to, or
in anticipation of, changes in Applicable Laws, accounting principles or business
conditions, in each case as determined by the Administrator.

 

 

 

(ff) Plan means the MiMedx Group, Inc. Assumed 2006 Stock Incentive Plan, as it may
be hereafter amended and/or restated.

(gg) Related SAR means an SAR granted under Section 8 that is granted in relation
to a particular Option and that can be exercised only upon the surrender to the Corporation,
unexercised, of that portion of the Option to which the SAR relates.

(hh) Restricted Award means a Restricted Stock Award and/or a Restricted Stock Unit
Award, as provided in Section 9.

(ii) Restricted Stock Award means shares of Common Stock awarded to a Participant
under Section 9. Shares of Common Stock subject to a Restricted Stock Award shall cease to be
restricted when, in accordance with the terms of the Plan and the terms and conditions
established by the Administrator, the shares vest and become transferable and free of
substantial risks of forfeiture.

(jj) Restricted Stock Unit means a Restricted Award granted to a Participant
pursuant to Section 9 which is settled (i) by the delivery of one share of Common Stock for each
Restricted Stock Unit, (ii) in cash in an amount equal to the Fair Market Value of one share of
Common Stock for each Restricted Stock Unit, or (iii) in a combination of cash and Shares equal
to the Fair Market Value of one share of Common Stock for each Restricted Stock Unit, as
determined by the Administrator. A Restricted Stock Unit Award represents the promise of the
Corporation to deliver shares, cash or a combination thereof, as applicable, upon vesting of the
Award and compliance with such other terms and conditions as may be determined by the
Administrator.

(kk) Retirement shall, as applied to any Participant, be as defined in any
employment agreement, consulting agreement or other similar agreement, if any, to which the
Participant is a party, or, if there is no such agreement (or if any such agreement does address
the effect of termination due to retirement), “Retirement” shall mean retirement in accordance
with the retirement policies and procedures established by the Corporation, as determined by the
Administrator.

(ll) SAR means a stock appreciation right granted under Section 8 entitling the
Participant to receive, with respect to each share of Common Stock encompassed by the exercise
of such SAR, the excess of the Fair Market Value on the date of exercise over the SAR base
price, subject to the terms of the Plan and any other terms and conditions established by the
Administrator. References to “SARs” include both Related SARs and Freestanding SARs, unless the
context requires otherwise.

(mm) Securities Act means the Securities Act of 1933, as amended.

 

 

 

(nn) Shareholders’ Agreement means that certain Shareholders’ Agreement which may
be entered into between the Corporation and certain or all shareholders of the Corporation, as
it may be amended.

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

(pp) Termination Date means the date of termination of a Participant’s employment
or service with the Company as a non-employee Director or Independent Contractor, for any
reason, as determined by the Administrator in its discretion.

2. Purpose

The purpose of the Plan is to encourage and enable selected Employees, Directors and
Independent Contractors of the Corporation and its Affiliates to acquire or to increase their
holdings of Common Stock of the Corporation and other proprietary interests in the Corporation
in order to promote a closer identification of their interests with those of the Corporation and
its shareholders, thereby further stimulating their efforts to enhance the efficiency,
soundness, profitability, growth and shareholder value of the Corporation. This purpose may be
carried out through the grant of Awards to selected Employees, Directors and Independent
Contractors, which may include the grant to selected Participants of Options in the form of
Incentive Stock Options and Nonqualified Options; SARs in the form of Related SARs and
Freestanding SARs; Restricted Awards in the form of Restricted Stock Awards and Restricted Stock
Units; and/or Dividend Equivalent Awards.

3. Administration of the Plan

(a) The Plan shall be administered by the Board of Directors of the Corporation, or, upon
its delegation, by the Committee. In the event that the Corporation shall become subject to the
reporting requirements of the Exchange Act, the Committee shall be comprised solely of two or
more “non-employee directors,” as such term is defined in Rule 16b-3 under the Exchange Act, or
as may otherwise be permitted under Rule 16b-3, unless the Board determines otherwise. Further,
in the event that the provisions of Section 162(m) of the Code or related regulations become
applicable to the Corporation, the Plan shall be administered by a committee comprised of two or
more “outside directors” (as such term is defined in Section 162(m) or related regulations) or
as may otherwise be permitted under Section 162(m) and related regulations. For the purposes of
the Plan, the term “Administrator” shall refer to the Board and, upon its delegation to the
Committee of all or part of its authority to administer the Plan, to the Committee.
Notwithstanding the foregoing, the Board shall have sole authority to grant Awards to Directors
who are not Employees of the Corporation or its Affiliates.

 

 

 

(b) Subject to the provisions of the Plan, the Administrator shall have full and final
authority in its discretion to take any action with respect to the Plan including, without
limitation, the
authority (i) to determine all matters relating to Awards, including selection of
individuals to be granted Awards, the types of Awards, the number of shares of the Common Stock,
if any, subject to an Award, and all terms, conditions, restrictions and limitations of an
Award; (ii) to prescribe the form or forms of Award Agreements evidencing any Awards granted
under the Plan; (iii) to establish, amend and rescind rules and regulations for the
administration of the Plan; and (iv) to construe and interpret the Plan, Awards and Award
Agreements made under the Plan, to interpret rules and regulations for administering the Plan
and to make all other determinations deemed necessary or advisable for administering the Plan.
Except to the extent otherwise required or restricted under Code Section 409A or related
regulations or other guidance, (i) the Administrator shall have the authority, in its sole
discretion, to accelerate the date that any Award which was not otherwise exercisable, vested or
earned shall become exercisable, vested or earned in whole or in part without any obligation to
accelerate such date with respect to any other Award granted to any recipient; and (ii) the
Administrator also may in its sole discretion modify or extend the terms and conditions for
exercise, vesting or earning of an Award. The Administrator may determine that a Participant’s
rights, payments and/or benefits with respect to an Award (including but not limited to any
 shares issued or issuable and/or cash paid or payable with respect to an Award) shall be subject
to reduction, cancellation, forfeiture or recoupment upon the occurrence of certain specified
events, in addition to any otherwise applicable vesting or performance conditions of an Award.
Such events may include, but shall not be limited to, termination of employment for cause,
violation of policies of the Corporation or an Affiliate, breach of non-solicitation,
noncompetition, confidentiality, proprietary rights and invention assignment agreements or other
restrictive covenants that may apply to the Participant, or other conduct by the Participant
that is determined by the Administrator to be detrimental to the business or reputation of the
Corporation or any Affiliate.

 

 

 

In addition, the Administrator shall have the authority and discretion to establish terms and
conditions of Awards (including but not limited to the establishment of subplans) as the
Administrator determines to be necessary or appropriate to conform to the applicable
requirements or practices of jurisdictions outside of the United States. In addition to action
by meeting in accordance with Applicable Laws, any action of the Administrator with respect to
the Plan may be taken by a written instrument signed by all of the members of the Board or
Committee, as appropriate, and any such action so taken by written consent shall be as fully
effective as if it had been taken by a majority of the members at a meeting duly held and
called. No member of the Board or Committee, as applicable, shall be liable while acting as
Administrator for any action or determination made in good faith with respect to the Plan, an
Award or an Award Agreement. The members of the Board or Committee, as applicable, shall be
entitled to indemnification and reimbursement in the manner provided in the Corporation’s
articles of incorporation and bylaws and/or under Applicable Laws.

(c) Notwithstanding the other provisions of Section 3, the Administrator may delegate to
one or more officers of the Corporation the authority to grant Awards, and to make any or all of
the determinations reserved for the Administrator in the Plan and summarized in Section 3(b)
with respect to such Awards (subject to any restrictions imposed by Applicable Laws, and such
terms and conditions as may be established by the Administrator); provided, however, that, if
and to the extent required by Section 16 of the Exchange Act or Section 162(m) of the Code, the
Participant, at the time of said grant or other determination, (i) is not deemed to be an
officer or director of the Corporation within the meaning of Section 16 of the Exchange Act; and
(ii) is not deemed to be a Covered Employee as defined under Section 162(m) of the Code and
related regulations. To the extent that the Administrator has delegated authority to grant
Awards pursuant to this Section 3(c) to one or more officers of the Corporation, references to
the Administrator shall include references to such officer or officers, subject, however, to the
requirements of the Plan, Rule 16b-3, Section 162(m) of the Code and other Applicable Laws.

4. Effective Date; Term

The Effective Date of the Plan shall be November 27, 2006. Awards may be granted under the
Plan on and after the Effective Date, but not after November 26, 2016. Awards that are
outstanding at the end of the Plan term (or such earlier termination date as may be established
by the Board pursuant to Section 12(a)) shall continue in accordance with their terms, unless
otherwise provided in the Plan or an Award Agreement.

 

 

 

5. Shares of Stock Subject to the Plan; Award Limitations

(a) Shares of Stock Subject to the Plan: Subject to adjustments as provided in Section
5(d), the aggregate number of shares of Common Stock that may be issued pursuant to Awards
granted under the Plan shall not exceed 8,500,000 shares. Shares delivered under the Plan shall
be authorized but unissued shares, treasury shares or shares purchased on the open market or by
private purchase. The Corporation hereby reserves sufficient authorized shares of Common Stock
to meet the grant of Awards hereunder.

(b) Award Limitations: Notwithstanding any provision in the Plan to the contrary, the
following limitations shall apply to Awards granted under the Plan, in each case subject to
adjustments pursuant to Section 5(d):

(i) The maximum number of shares of Common Stock that may be issued to any one
Participant under the Plan pursuant to the grant of Incentive Options shall not exceed
8,500,000 shares;

(ii) If and to the extent Section 162(m) of the Code is applicable:

(A) In any calendar year, no Participant may be granted Options and SARs that
are not related to an Option for more than 1,000,000 shares of Common Stock;

(B) No Participant may be granted Awards in any calendar year for more than
1,000,000 shares of Common Stock; and

(C) No Participant may be paid more than $2,000,000 with respect to any
cash-settled award or awards which were granted during any single calendar year.

(For purposes of Section 5(b)(iii)(A) and (B), an Option and Related SAR shall be treated as a
single Award.)

 

 

 

(c) Shares Not Subject to Limitations: The following will not be applied to the share
limitations of Section 5(a) above: (i) dividends, including dividends paid in shares, or
dividend equivalents paid in cash in connection with outstanding Awards; (ii) Awards which by
their terms are settled in cash rather than the issuance of shares; (iii) any shares subject to
an Award under the Plan which Award is forfeited, cancelled, terminated, expires or lapses for
any reason or any shares subject to an Award which shares are repurchased or reacquired by the
Corporation; and (iv) any shares surrendered by a Participant or withheld by the Corporation to
pay the Option Price or purchase price for an Award or shares used to satisfy any tax
withholding requirement in connection with the exercise, vesting or earning of an Award if, in
accordance with the terms of the Plan, a Participant pays such Option Price or purchase price or
satisfies such tax withholding by either tendering previously owned shares or having the
Corporation withhold shares.

(d) Adjustments: If there is any change in the outstanding shares of Common Stock because
of a merger, consolidation or reorganization involving the Corporation or an Affiliate, or if
the Board of Directors of the Corporation declares a stock dividend, stock split distributable
in shares of Common Stock, reverse stock split, combination or reclassification of the Common
Stock, or if there is a similar change in the capital stock structure of the Corporation or an
Affiliate affecting the Common Stock, the number of shares of Common Stock reserved for issuance
under the Plan shall be correspondingly adjusted, and the Administrator shall make such
adjustments to Awards and to any provisions of this Plan as the Administrator deems equitable to
prevent dilution or enlargement of Awards or as may be otherwise advisable.

6. Eligibility

An Award may be granted only to an individual who satisfies all of the following
eligibility requirements on the date the Award is granted:

(a) The individual is either (i) an Employee, (ii) a Director, or (iii) an Independent
Contractor.

(b) With respect to the grant of Incentive Options, the individual is otherwise eligible to
participate under Section 6, is an Employee of the Corporation or a Parent or Subsidiary and
does not own, immediately before the time that the Incentive Option is granted, stock possessing
more than 10% of the total combined voting power of all classes of stock of the Corporation or a
Parent or Subsidiary. Notwithstanding the foregoing, an Employee who owns more than 10% of the
total combined voting power of the Corporation or a Parent or Subsidiary may be granted an
Incentive Option if the Option Price is at least 110% of the Fair Market Value of the Common
Stock, and the Option Period does not exceed five years. For this purpose, an individual will
be deemed to own stock which is attributable to him under Section 424(d) of the Code.

 

 

 

(c) With respect to the grant of substitute awards or assumption of awards in connection
with a merger, consolidation, acquisition, reorganization or similar business combination
involving the Corporation or an Affiliate, the recipient is otherwise eligible to receive the
Award and the terms of the award are consistent with the Plan and Applicable Laws (including, to
the extent necessary,
the federal securities laws registration provisions and Section 409A and Section 424(a) of
the Code and related regulations or other guidance).

(d) The individual, being otherwise eligible under this Section 6, is selected by the
Administrator as an individual to whom an Award shall be granted (as defined above, a
“Participant”).

 

 

 

7. Options

(a) Grant of Options: Subject to the limitations of the Plan, the Administrator may in its
sole and absolute discretion grant Options to such eligible individuals in such numbers, subject
to such terms and conditions, and at such times as the Administrator shall determine. Both
Incentive Options and Nonqualified Options may be granted under the Plan, as determined by the
Administrator; provided, however, that Incentive Options may only be granted to Employees of the
Corporation or a Parent or Subsidiary. To the extent that an Option is designated as an
Incentive Option but does not qualify as such under Section 422 of the Code, the Option (or
portion thereof) shall be treated as a Nonqualified Option. An Option may be granted with or
without a Related SAR.

(b) Option Price: The Option Price shall be established by the Administrator and stated in
the Award Agreement evidencing the grant of the Option; provided, that (i) the Option Price of
an Option shall be no less than 100% of the Fair Market Value per share of the Common Stock as
determined on the date the Option is granted (or 110% of the Fair Market Value with respect to
Incentive Options granted to an Employee who owns stock possessing more than 10% of the total
voting power of all classes of stock of the Corporation or a Parent or Subsidiary, as provided
in Section 6(b)); and (ii) in no event shall the Option Price per share of any Option be less
than the par value per share (if any) of the Common Stock. Notwithstanding the foregoing, the
Administrator may in its discretion authorize the grant of substitute or assumed options of an
acquired entity with an Option Price not equal to at least 100% of the Fair Market Value on the
date of grant, if such options are assumed or substituted in accordance with Reg. Section
1.424-1 (or any successor provision thereto) and if the option price of any such assumed or
substituted option was at least equal to 100% of the fair market value of the underlying stock
on the original date of grant, or if the terms of such assumed or substituted option otherwise
comply with Code Section 409A, related regulations and other guidance. The preceding sentence
shall also apply to SARs that are assumed or substituted in a corporate transaction, to the
extent required under Code Section 409A, related regulations or other guidance.

(c) Date of Grant: An Incentive Option shall be considered to be granted on the date that
the Administrator acts to grant the Option, or on any later date specified by the Administrator
as the effective date of the Option. A Nonqualified Option shall be considered to be granted on
the date the Administrator acts to grant the Option or any other date specified by the
Administrator as the date of grant of the Option.

(d) Option Period and Limitations on the Right to Exercise Options:

 

 

 

(i) The Option Period shall be determined by the Administrator at the time the Option
is granted and shall be stated in the Award Agreement. With respect to Incentive Options,
the Option Period shall not extend more than 10 years from the date on which the Option is
granted (or five years with respect to Incentive Options granted to an Employee who owns
stock possessing more than 10% of the total combined voting power of all classes of stock of
the Corporation or a Parent or Subsidiary, as provided in Section 6(b)). Any Option or
portion thereof not exercised before expiration of the Option Period shall terminate. The
period or periods during which, and conditions pursuant to which, an Option may become
exercisable shall be determined by the Administrator in its discretion, subject to the terms
of the Plan.

(ii) An Option may be exercised by giving written notice to the Corporation in form
acceptable to the Administrator at such place and subject to such conditions as may be
established by the Administrator or its designee. Such notice shall specify the number of
 shares to be purchased pursuant to an Option and the aggregate purchase price to be paid
therefore and shall be accompanied by payment of such purchase price. Unless an Award
Agreement provides otherwise, such payment shall be in the form of cash or cash equivalent;
provided that, where permitted by the Administrator and Applicable Laws (and subject to such
terms and conditions as may be established by the Administrator), payment may also be made:

(A) By delivery (by either actual delivery or attestation) of shares of Common
Stock owned by the Participant for a time period, if any, determined by the
Administrator and otherwise acceptable to the Administrator;

(B) With respect only to purchases upon exercise of an Option after a public
market for the Common Stock exists, by delivery of written notice of exercise to the
Corporation and delivery to a broker of written notice of exercise and irrevocable
instructions to promptly deliver to the Corporation the amount of sale or loan
proceeds to pay the Option Price;

(C) By cash bonuses, loans or such other payment methods as may be approved by
the Administrator (and subject to such terms as may be established by the
Administrator), and which methods are acceptable under Applicable Laws; or

(D) By any combination of the foregoing methods.

Shares tendered or withheld in payment on the exercise of an Option shall be valued at their
Fair Market Value on the date of exercise, as determined by the Administrator. For the purposes
of the Plan, a “public market” for the Common Stock shall be deemed to exist (i) upon
consummation of a firm commitment underwritten public offering of the Common Stock pursuant to
an effective registration statement under the Securities Act, or (ii) if the Administrator
otherwise determines that there is an established public market for the Common Stock.

 

 

 

(iii) Unless the Administrator determines otherwise, no Option granted to a Participant who
was an Employee at the time of grant shall be exercised unless the Participant is, at the time
of exercise, an Employee, and has been an Employee continuously since the date the Option was
granted, subject to the following:

(A) The employment relationship of a Participant shall be treated as continuing
intact for any period that the Participant is on military or sick leave or other
bona fide leave of absence, provided that the period of such leave does not exceed
three months, or, if longer, as long as the Participant’s right to reemployment is
guaranteed either by statute or by contract. The employment relationship of a
Participant shall also be treated as continuing intact while the Participant is not
in active service because of Disability. The Administrator shall have sole
authority to determine whether a Participant is disabled and, if applicable, the
Participant’s Termination Date.

(B) Unless the Administrator determines otherwise, if the employment of a
Participant is terminated because of Disability or death, the Option may be
exercised only to the extent exercisable on the Participant’s Termination Date,
except that the Administrator may in its sole discretion accelerate the date for
exercising all or any part of the Option which was not otherwise exercisable on the
Termination Date. The Option must be exercised, if at all, prior to the first to
occur of the following, whichever shall be applicable: (X) the close of the one-year
period following the Termination Date (or such other period stated in the Award
Agreement); or (Y) the close of the Option Period. In the event of the
Participant’s death, such Option shall be exercisable by such person or persons as
shall have acquired the right to exercise the Option by will or by the laws of
intestate succession.

(C) Unless the Administrator determines otherwise, if the employment of the
Participant is terminated for any reason other than Disability, death or for
“Cause,” his Option may be exercised to the extent exercisable on his Termination
Date, except that the Administrator may in its sole discretion accelerate the date
for exercising all or any part of the Option which was not otherwise exercisable on
the Termination Date. The Option must be exercised, if at all, prior to the first
to occur of the following, whichever shall be applicable: (X) the close of the
period of three months next succeeding the Termination Date (or such other period
stated in the Award Agreement); or (Y) the close of the Option Period. If the
Participant dies following such termination of employment and prior to the earlier
of the dates specified in (X) or (Y) of this subparagraph (C), the Participant shall
be treated as having died while employed under subparagraph (B) (treating for this
purpose the Participant’s date of termination of employment as the Termination
Date). In the event of the Participant’s death, such Option shall be exercisable by
such person or persons as shall have acquired the right to exercise the Option by
will or by the laws of intestate succession.

 

 

 

(D) Unless the Administrator determines otherwise, if the employment of the
Participant is terminated for “Cause,” his Option shall lapse and no longer be
exercisable as of his Termination Date, as determined by the Administrator.

(E) Notwithstanding the foregoing, the Administrator may, in its sole
discretion (subject to any requirements imposed under Code Section 409A, related
regulations or other guidance), accelerate the date for exercising all or any part
of an Option which was not otherwise exercisable on the Termination Date, extend the
period during which an Option may be exercised, modify the terms and conditions to
exercise, or any combination of the foregoing.

(iv) Unless the Administrator determines otherwise, an Option granted to a Participant
who was a Director but who was not an Employee at the time of grant may be exercised only to
the extent exercisable on the Participant’s Termination Date (unless the termination was for
Cause), and must be exercised, if at all, prior to the first to occur of the following, as
applicable: (X) the close of the period of three months next succeeding the Termination Date
(or such other period stated in the Award Agreement); or (Y) the close of the Option Period.
If the services of a Participant are terminated for Cause, his Option shall lapse and no
longer be exercisable as of his Termination Date, as determined by the Administrator.
Notwithstanding the foregoing, the Administrator may in its sole discretion (subject to any
requirements imposed under Code Section 409A, related regulations or other guidance)
accelerate the date for exercising all or any part of an Option which was not otherwise
exercisable on the Termination Date, extend the period during which an Option may be
exercised, modify the other terms and conditions to exercise, or any combination of the
foregoing.

(v) Unless the Administrator determines otherwise, an Option granted to a Participant
who was an Independent Contractor at the time of grant (and who does not thereafter become
an Employee, in which case he shall be subject to the provisions of Section 7(d)(iii)) may
be exercised only to the extent exercisable on the Participant’s Termination Date (unless
the termination was for Cause), and must be exercised, if at all, prior to the first to
occur of the following, as applicable: (X) the close of the period of three months next
succeeding the Termination Date (or such other period stated in the Award Agreement); or (Y)
the close of the Option Period. If the services of a Participant are terminated for Cause,
his Option shall lapse and no longer be exercisable as of his Termination Date, as
determined by the Administrator. Notwithstanding the foregoing, the Administrator may in
its sole discretion (subject to any requirements imposed under Code Section 409A, related
regulations or other guidance) accelerate the date for exercising all or any part of an
Option which was not otherwise exercisable on the Termination Date, extend the period during
which an Option may be exercised, modify the other terms and conditions to exercise, or any
combination of the foregoing.

 

 

 

(e) Notice of Disposition: If shares of Common Stock acquired upon exercise of an
Incentive Option are disposed of within two years following the date of grant or one year
following the transfer of such shares to a Participant upon exercise, the Participant shall,
promptly following such disposition, notify the Corporation in writing of the date and terms
of such disposition and provide such other information regarding the disposition as the
Administrator may reasonably require.

(f) Limitation on Incentive Options: In no event shall there first become exercisable
by an Employee in any one calendar year Incentive Options granted by the Corporation or any
Parent or Subsidiary with respect to shares having an aggregate Fair Market Value
(determined at the time an Incentive Option is granted) greater than $100,000. To the
extent that any Incentive Options are first exercisable by a Participant in excess of such
limitation, the excess shall be considered a Nonqualified Option.

 

 

 

(g) Nontransferability: Incentive Options shall not be transferable (including by sale,
assignment, pledge or hypothecation) other than by will or the laws of intestate succession or,
in the Administrator’s discretion, as may otherwise be permitted in accordance with Treas. Reg.
Section 1.421-1(b)(2) or any successor provision thereto. Nonqualified Options shall not be
transferable (including by sale, assignment, pledge or hypothecation) other than by will or the
laws of intestate succession, except for such transfers to immediate family members or related
entities as may be permitted by the Administrator in a manner consistent with the registration
provisions of the Securities Act. Except as may be permitted by the preceding sentence, an
Option shall be exercisable during the Participant’s lifetime only by him or by his guardian or
legal representative. The designation of a beneficiary in accordance with the Plan does not
constitute a transfer.

8. Stock Appreciation Rights

(a) Grant of SARs: Subject to the limitations of the Plan, the Administrator may in its
sole and absolute discretion grant SARs to such eligible individuals, in such numbers, upon such
terms and at such times as the Administrator shall determine. SARs may be granted to the holder
of an Option (a “Related Option”) with respect to all or a portion of the shares of Common Stock
subject to the Related Option (a “Related SAR”) or may be granted separately to an eligible
individual (a “Freestanding SAR”). The base price per share of an SAR shall be no less than
100% the Fair Market Value per share of the Common Stock on the date the SAR is granted (except
as may be otherwise permitted in the case of substituted or assumed SARs in accordance with
Section 7(b)).

(b) Related SARs: A Related SAR may be granted either concurrently with the grant of the
Related Option or (if the Related Option is a Nonqualified Option) at any time thereafter prior
to the complete exercise, termination, expiration or cancellation of such Related Option;
provided, however, that Related SARs must be granted in accordance with Code Section 409A,
related regulations and other guidance. The base price of a Related SAR shall be equal to the
Option Price of the Related Option. Related SARs shall be exercisable only at the time and to
the extent that the Related Option is exercisable (and may be subject to such additional
limitations on exercisability as the Administrator may provide in the Award Agreement), and in
no event after the complete termination or full exercise of the Related Option. Notwithstanding
the foregoing, a Related SAR that is related to an Incentive Option may be exercised only to the
extent that the Related Option is exercisable and only when the Fair Market Value exceeds the
Option Price of the Related Option. Upon the exercise of a Related SAR granted in connection
with a Related Option, the Option shall be canceled to the extent of the number of shares as to
which the Related SAR is exercised, and upon the exercise of a Related Option, the Related SAR
shall be canceled to the extent of the number of shares as to which the Related Option is
exercised or surrendered.

(c) Freestanding SARs: An SAR may be granted without relationship to an Option (as defined
above, a “Freestanding SAR”) and, in such case, will be exercisable upon such terms and subject
to such conditions as may be determined by the Administrator, subject to the terms of the Plan.

 

 

 

(d) Exercise of SARs:

(i) Subject to the terms of the Plan, SARs shall be exercisable in whole or in part upon
such terms and conditions as may be established by the Administrator and stated in the
applicable Award Agreement. The period during which an SAR may be exercisable shall not exceed
10 years from the date of grant or, in the case of Related SARs, such shorter Option Period as
may apply to the Related Option. Any SAR or portion thereof not exercised before expiration of
the period established by the Administrator shall terminate.

(ii) SARs may be exercised by giving written notice to the Corporation in form acceptable
to the Administrator at such place and subject to such terms and conditions as may be
established by the Administrator or its designee. Unless the Administrator determines
otherwise, the date of exercise of an SAR shall mean the date on which the Corporation shall
have received proper notice from the Participant of the exercise of such SAR.

(iii) Each Participant’s Award Agreement shall set forth the extent to which the
Participant shall have the right to exercise an SAR following termination of the Participant’s
employment or service with the Corporation. Such provisions shall be determined in the sole
discretion of the Administrator, need not be uniform among all SARs issued pursuant to this
Section 8, and may reflect distinctions based on the reasons for termination of employment or
service. Notwithstanding the foregoing, unless the Administrator determines otherwise, no SAR
may be exercised unless the Participant is, at the time of exercise, an eligible Participant, as
described in Section 6, and has been a Participant continuously since the date the SAR was
granted, subject to the provisions of Sections 7(d)(iii), (iv) and (v).

(e) Payment Upon Exercise: Subject to the limitations of the Plan, upon the exercise of an
SAR, a Participant shall be entitled to receive payment from the Corporation in an amount
determined by multiplying (i) the difference between the Fair Market Value of a share of Common
Stock on the date of exercise of the SAR over the base price of the SAR by (ii) the number of
 shares of Common Stock with respect to which the SAR is being exercised. Notwithstanding the
foregoing, the Administrator in its discretion may limit in any manner the amount payable with
respect to an SAR. The consideration payable upon exercise of an SAR shall be paid in cash,
 shares of Common Stock (valued at Fair Market Value on the date of exercise of the SAR) or a
combination of cash and shares of Common Stock, as determined by the Administrator.

(f) Nontransferability: Unless the Administrator determines otherwise, (i) SARs shall not
be transferable (including by sale, assignment, pledge or hypothecation) other than by will or
the laws of intestate succession, and (ii) SARs may be exercised during the Participant’s
lifetime only by him or by his guardian or legal representative. The designation of a
beneficiary in accordance with the Plan does not constitute a transfer.

 

 

 

9. Restricted Awards

(a) Grant of Restricted Awards: Subject to the limitations of the Plan, the Administrator
may in its sole and absolute discretion grant Restricted Awards to such individuals in such
numbers, upon such terms and at such times as the Administrator shall determine. Such
Restricted Awards may be in the form of Restricted Stock Awards and/or Restricted Stock Units
that are subject to certain conditions, which conditions must be met in order for the Restricted
Award to vest and be earned (in whole or in part) and no longer subject to forfeiture.
Restricted Stock Awards shall be payable in shares of Common Stock. Restricted Stock Units
shall be payable in cash or shares of Common Stock, or partly in cash and partly in shares of
Common Stock, in accordance with the terms of the Plan and the discretion of the Administrator.
The Administrator shall determine the nature, length and starting date of the period, if any,
during which a Restricted Award may be earned (the “Restriction Period”), and shall determine
the conditions which must be met in order for a Restricted Award to be granted or to vest or be
earned (in whole or in part), which conditions may include, but are not limited to, payment of a
stipulated purchase price, attainment of performance objectives, continued service or employment
for a certain period of time (or a combination of attainment of performance objectives and
continued service), Retirement, Displacement, Disability, death or any combination of such
conditions. In the case of Restricted Awards based upon performance criteria, or a combination
of performance criteria and continued service, the Administrator shall determine the Performance
Measures applicable to such Restricted Awards (subject to Section 1(ee)).

(b) Vesting of Restricted Awards: Subject to the terms of the Plan and Code Section 409A,
related regulations or other guidance, the Administrator shall have sole authority to determine
whether and to what degree Restricted Awards have vested and been earned and are payable and to
establish and interpret the terms and conditions of Restricted Awards. The Administrator may
(subject to any restrictions imposed under Code Section 409A, related regulations or other
guidance) accelerate the date that any Restricted Award granted to a Participant shall be deemed
to be vested or earned in whole or in part, without any obligation to accelerate such date with
respect to other Restricted Awards granted to any Participant.

(c) Forfeiture of Restricted Awards: Unless the Administrator determines otherwise, if the
employment or service of a Participant shall be terminated for any reason and all or any part of
a Restricted Award has not vested or been earned pursuant to the terms of the Plan and the
individual Award, such Award, to the extent not then vested or earned, shall be forfeited
immediately upon such termination and the Participant shall have no further rights with respect
to the Award or any shares of Common Stock, cash or other benefits related to the Award.

(d) Shareholder Rights; Share Certificates: The Administrator shall have sole discretion to
determine whether a Participant shall have dividend rights, voting rights or other rights as a
shareholder with respect to shares subject to a Restricted Stock Award which has not yet vested
or been earned. If the Administrator so determines, a certificate or certificates for whole
 shares of Common Stock subject to a Restricted Stock Award may be issued in the name of the
Participant as soon as practicable after the Award has been granted; provided, however, that,
notwithstanding the foregoing, the Administrator or its designee shall have the right to retain
custody of certificates
evidencing the shares subject to a Restricted Stock Award and to require the Participant to
deliver to the Corporation a stock power, endorsed in blank, with respect to such Award, until
such time as the Restricted Stock Award vests (or is forfeited) and is no longer subject to a
substantial risk of forfeiture.

 

 

 

(e) Nontransferability: Unless the Administrator determines otherwise, Restricted Awards
that have not vested shall not be transferable (including by sale, assignment, pledge or
hypothecation) other than by will or the laws of intestate succession, and the recipient of a
Restricted Award shall not sell, transfer, assign, pledge or otherwise encumber shares subject
to the Award until the Restriction Period has expired and until all conditions to vesting have
been met. The designation of a beneficiary in accordance with the Plan does not constitute a
transfer.

10. Dividends and Dividend Equivalents

Awards granted under the Plan shall, to the extent vested, earn dividends or dividend
equivalents. Such dividends or dividend equivalents may be paid currently or may be credited to
a Participant’s account. Any crediting of dividends or dividend equivalents may be subject to
such restrictions and conditions as the Administrator may establish, including reinvestment in
additional shares of Common Stock or share equivalents. Notwithstanding the other provisions
herein, any dividends or dividend equivalent rights related to an Award shall be structured in a
manner so as to avoid causing the Award to be subject to Code Section 409A or shall otherwise be
structured so that the Award and dividends or dividend equivalents are in compliance with Code
Section 409A, related regulations or other guidance.

11. No Right or Obligation of Continued Employment or Service

Neither the Plan, the grant of an Award nor any other action related to the Plan shall
confer upon the Participant any right to continue in the service of the Corporation or an
Affiliate as an Employee, Director or Independent Contractor or to interfere in any way with the
right of the Corporation or an Affiliate to terminate the Participant’s employment or service at
any time. Except as otherwise provided in the Plan, an Award Agreement or as may be determined
by the Administrator, all rights of a Participant with respect to an Award shall terminate upon
the termination of the Participant’s employment or service.

12. Amendment and Termination of the Plan

(a) Amendment and Termination: The Plan may be amended, altered and/or terminated at any
time by the Administrator; provided, however, that approval of an amendment to the Plan by the
shareholders of the Corporation shall be required to the extent, if any, that shareholder
approval of such amendment is required by Applicable Laws. Any Award may be amended, altered
and/or terminated at any time by the Administrator; provided, however, that any such amendment,
alteration or termination of an Award shall not, without the consent of the recipient of an
outstanding Award, materially adversely affect the rights of the recipient with respect to the
Award.

 

 

 

(b) Unilateral Authority of Administrator to Modify Plan and Awards: Notwithstanding
Section 12(a) herein, the following provisions shall apply:

(i) The Administrator shall have unilateral authority to amend the Plan and any Award
(without Participant consent and without shareholder approval, unless such shareholder
approval is required by Applicable Laws) to the extent necessary to comply with Applicable
Laws or changes to Applicable Laws (including but not limited to Code Section 409A and Code
Section 422, related regulations or other guidance and federal securities laws).

(ii) The Administrator shall have unilateral authority to make adjustments to the terms
and conditions of Awards in recognition of unusual or nonrecurring events affecting the
Corporation or any Affiliate, or the financial statements of the Corporation or any
Affiliate, or of changes in accounting principles, if the Administrator determines that such
adjustments are appropriate in order to prevent dilution or enlargement of the benefits or
potential benefits intended to be made available under the Plan or necessary or appropriate
to comply with applicable accounting principles.

(c) Cash Settlement: Notwithstanding any provision of the Plan, an Award or an Award
Agreement to the contrary, the Administrator shall have discretion (subject to (i) any
requirements imposed under Code Section 409A, related regulations or other guidance and (ii)
consideration of such accounting principles as the Administrator deems relevant) to cause any
Award (or portion thereof) granted under the Plan to be canceled in consideration of an
alternative award or cash payment of an equivalent cash value, as determined by the
Administrator in its sole discretion, made to the holder of such canceled Award.

13. Restrictions on Awards and Shares

(a) General: As a condition to the issuance and delivery of Common Stock hereunder, or the
grant of any benefit pursuant to the Plan, the Corporation shall require a Participant or other
person to become a party to an Award Agreement, the Shareholders Agreement, other agreement(s)
restricting the transfer, purchase or repurchase of shares of Common Stock of the Corporation,
voting agreement or such other agreements and any other employment agreements, consulting
agreements, non-competition agreements, confidentiality agreements, non-solicitation agreements
or other similar agreements imposing such restrictions as may be required by the Corporation.
In addition, without in any way limiting the effect of the foregoing, each Participant or other
holder of shares issued under the Plan shall be permitted to transfer such shares only if such
transfer is in accordance with the terms of Section 13 herein, the Award Agreement, the
Shareholders Agreement and any other applicable agreements. The acquisition of shares of Common
Stock under the Plan by a Participant or any other holder of shares shall be subject to, and
conditioned upon, the agreement of the Participant or other holder of such shares to the
restrictions described in this Section 13, the Award Agreement, the Shareholders Agreement and
any other applicable agreements.

 

 

 

(b) Compliance with Applicable Laws: The Corporation may impose such restrictions on
Awards, shares and any other benefits underlying Awards hereunder as it may deem advisable,
including without limitation restrictions under the federal securities laws, the requirements of
any stock exchange or similar organization and any blue sky, state or foreign securities laws
applicable to such securities. Notwithstanding any other Plan provision to the contrary, the
Corporation shall not be obligated to issue, deliver or transfer shares of Common Stock under
the Plan, make any other distribution of benefits under the Plan, or take any other action,
unless such delivery, distribution or action is in compliance with Applicable Laws (including
but not limited to the requirements of the Securities Act). The Corporation may cause a
restrictive legend to be placed on any certificate issued pursuant to an Award hereunder in such
form as may be prescribed from time to time by Applicable Laws or as may be advised by legal
counsel.

14. Change in Control

In the event of a Change in Control, all Awards shall vest and become immediately
exercisable in full.

15. Compliance with Code Section 409A

(a) General: Notwithstanding any other provision in the Plan or an Award to the contrary,
if and to the extent that Section 409A of the Code is deemed to apply to the Plan or any Award
granted under the Plan, it is the general intention of the Corporation that the Plan and all
such Awards shall comply with Code Section 409A, related regulations or other guidance, and the
Plan and any such Award shall, to the extent practicable, be construed in accordance therewith.
Deferrals of shares or any other benefit issuable pursuant to an Award otherwise exempt from
Code Section 409A in a manner that would cause Code Section 409A to apply shall not be permitted
unless such deferrals are in compliance with Code Section 409A, related regulations or other
guidance. Without in any way limiting the effect of the foregoing, in the event that Code
Section 409A, related regulations or other guidance require that any special terms, provisions
or conditions be included in the Plan or any Award, then such terms, provisions and conditions
shall, to the extent practicable, be deemed to be made a part of the Plan or Award, as
applicable. Further, in the event that the Plan or any Award shall be deemed not to comply with
Code Section 409A or any related regulations or other guidance, then neither the Corporation,
the Administrator nor its or their designees or agents shall be liable to any Participant or
other person for actions, decisions or determinations made in good faith.

(b) Special Code Section 409A Provisions for Nonqualified Options: Notwithstanding the
other provisions of the Plan, unless otherwise permitted under Code Section 409A, related
regulations or other guidance, (i) the Option Price for a Nonqualified Option may never be less
than the Fair Market Value of the Common Stock on the date of grant of the Option and the number
of shares subject to the Option shall be fixed on the original grant date; (ii) the transfer or
exercise of the Option shall be subject to taxation under Code Section 83 and related
regulations; and (iii) the Nonqualified Option may not include any feature for the deferral of
compensation other than the
deferral of recognition of income until the later of exercise or disposition of the Option
or the time the shares acquired pursuant to the exercise of the Option first became
substantially vested.

 

 

 

(c) Special Code Section 409A Provisions for SARs: Notwithstanding the other provisions
the Plan, unless otherwise permitted under Code Section 409A, related regulations or other
guidance, (i) compensation payable under an SAR cannot be greater than the difference between
the Fair Market Value of the Common Stock on the SAR grant date and the Fair Market Value of the
Common Stock on the SAR exercise date; (ii) the SAR base price may never be less than the Fair
Market Value of the Common Stock on the date the SAR is granted; and (iii) the SAR may not
include any feature for the deferral of compensation other than the deferral of recognition of
income until the exercise of the SAR.

(d) Short-Term Deferrals: Except to the extent otherwise required or permitted under Code
Section 409A, related regulations or other guidance, distributions pursuant to Restricted Stock
Units or any Awards granted under the Plan that are subject to Code Section 409A must be made no
later than the later of (A) the 15th day of the third month following the
Participant’s first taxable year in which the amount is no longer subject to a substantial risk
of forfeiture; or (B) the 15th day of the third month following the end of the
Corporation’s first taxable year in which the amount is no longer subject to a substantial risk
of forfeiture. Notwithstanding the foregoing, if and to the extent that the distribution of
 shares of Common Stock or any other benefit payable pursuant to an Award is deemed to involve
the deferral of compensation that is not otherwise exempt from Code Section 409A, then (i) the
distribution of such shares or benefit shall occur no later than the end of the calendar year in
which the Award vests; and (ii) if the Participant is or may be a “specified employee” (as
defined in Code Section 409A, related regulations or other guidance), a distribution due to
separation from service may not be made before the date that is six months after the date of
separation from service (or, if earlier, the date of death of the Participant), except as may be
otherwise permitted pursuant to Code Section 409A, related regulations or other guidance.

 

 

 

16. General Provisions

(a) Shareholder Rights: Except as otherwise determined by the Administrator (and subject
to the provisions of Section 9(d) regarding Restricted Stock Awards), a Participant and his
legal representative, legatees or distributes shall not be deemed to be the holder of any shares
subject to an Award and shall not have any rights of a shareholder unless and until certificates
for such shares have been issued and delivered to him or them under the Plan. A certificate or
certificates for shares of Common Stock acquired upon exercise of an Option or SAR shall be
promptly issued in the name of the Participant (or his beneficiary) and distributed to the
Participant (or his beneficiary) as soon as practicable following receipt of notice of exercise
and, with respect to Options, payment of the Option Price (except as may otherwise be determined
by the Corporation in the event of payment of the Option Price pursuant to Section 7(d)(ii)(C)).
Except as otherwise provided in Section 9(d) regarding Restricted Stock Awards, a certificate
for any shares of Common Stock issuable pursuant to a Restricted Award shall be promptly issued
in the name of the Participant (or his beneficiary) and distributed to the Participant (or his
beneficiary) after the Award (or portion thereof) has vested or been earned and any other
conditions to distribution have been met.

(b) Withholding: The Corporation shall withhold all required local, state, federal, foreign
and other taxes and any other amount required to be withheld by any governmental authority or
law from any amount payable in cash with respect to an Award. Prior to the delivery or transfer
of any certificate for shares or any other benefit conferred under the Plan, the Corporation
shall require any recipient of an Award to pay to the Corporation in cash the amount of any tax
or other amount required by any governmental authority to be withheld and paid over by the
Corporation to such authority for the account of such recipient. Notwithstanding the foregoing,
the Administrator may establish procedures to permit a recipient to satisfy such obligation in
whole or in part, and any local, state, federal, foreign or other income tax obligations
relating to such an Award, by electing (the “election”) to have the Corporation withhold shares
of Common Stock from the shares to which the recipient is entitled. The number of shares to be
withheld shall have a Fair Market Value as of the date that the amount of tax to be withheld is
determined as nearly equal as possible to (but not exceeding) the amount of such obligations
being satisfied. Each election must be made in writing to the Administrator in accordance with
election procedures established by the Administrator.

(c) Section 16(b) Compliance: If and to the extent that any Participants in the Plan are
subject to Section 16(b) of the Exchange Act, it is the general intention of the Corporation
that transactions under the Plan by such persons shall comply with Rule 16b-3 under the Exchange
Act and that the Plan shall be construed in favor of such Plan transactions meeting the
requirements of Rule 16b-3 or any successor rules thereto. Notwithstanding anything in the Plan
to the contrary, the Administrator, in its sole and absolute discretion, may bifurcate the Plan
so as to restrict, limit or condition the use of any provision of the Plan to Participants who
are officers or directors subject to Section 16 of the Exchange Act without so restricting,
limiting or conditioning the Plan with respect to other Participants.

 

 

 

(d) Code Section 162(m) Performance-Based Compensation. If and to the extent to which
Section 162(m) of the Code is applicable, the Corporation intends that compensation paid under
the Plan to Covered Employees will, to the extent practicable, constitute “qualified
performance-based compensation” within the meaning of Section 162(m) and related regulations,
unless otherwise determined by the Administrator. Accordingly, Awards granted to Covered
Employees which are intended to qualify for the performance-based exception under Code Section
162(m) and related regulations shall be deemed to include any such additional terms, conditions,
limitations and provisions as are necessary to comply with the performance-based compensation
exemption of Section 162(m), unless the Administrator, in its discretion, determines otherwise.

(e) Unfunded Plan; No Effect on Other Plans:

(i) The Plan shall be unfunded, and the Corporation shall not be required to create a
trust or segregate any assets that may at any time be represented by Awards under the Plan.
The Plan shall not establish any fiduciary relationship between the Corporation and any
Participant or other person. Neither a Participant nor any other person shall, by reason of
the Plan, acquire any right in or title to any assets, funds or property of the Corporation
or any Affiliate, including, without limitation, any specific funds, assets or other
property which the Corporation or any Affiliate, in their discretion, may set aside in
anticipation of a liability under the Plan. A Participant shall have only a contractual
right to the Common Stock or other amounts, if any, payable under the Plan, unsecured by any
assets of the Corporation or any Affiliate. Nothing contained in the Plan shall constitute
a guarantee that the assets of such entities shall be sufficient to pay any benefits to any
person.

(ii) The amount of any compensation deemed to be received by a Participant pursuant to
an Award shall not constitute compensation with respect to which any other employee benefits
of such Participant are determined, including, without limitation, benefits under any bonus,
pension, profit sharing, life insurance or salary continuation plan, except as otherwise
specifically provided by the terms of such plan or as may be determined by the
Administrator.

(iii) The adoption of the Plan shall not affect any other stock incentive or other
compensation plans in effect for the Corporation or any Affiliate, nor shall the Plan
preclude the Corporation from establishing any other forms of stock incentive or other
compensation for employees or service providers of the Corporation or any Affiliate.

(f) Applicable Laws: The Plan shall be governed by and construed in accordance with
the laws of the State of Florida, without regard to the conflict of laws provisions of any
state, and in accordance with applicable federal laws of the United States.

 

 

 

(g) Beneficiary Designation: The Administrator may in its discretion permit a Participant
to designate in writing a person or persons as beneficiary, which beneficiary shall be entitled
to receive settlement of Awards (if any) to which the Participant is otherwise entitled in the
event of death. In the absence of such designation by a Participant, and in the event of the
Participant’s death, the estate of the Participant shall be treated as beneficiary for purposes
of the Plan, unless the Administrator determines otherwise. The Administrator shall have sole
discretion to approve and interpret the form or forms of such beneficiary designation. A
beneficiary, legal guardian, legal representative or other person claiming any rights pursuant
to the Plan is subject to all terms and conditions of the Plan and any Award Agreement
applicable to the Participant, except to the extent that the Plan and/or Award Agreement provide
otherwise, and to any additional restrictions deemed necessary or appropriate by the
Administrator.

(h) Gender and Number: Except where otherwise indicated by the context, words in any
gender shall include any other gender, words in the singular shall include the plural and words
in the plural shall include the singular.

(i) Severability: If any provision of the Plan shall be held illegal or invalid for any
reason, such illegality or invalidity shall not affect the remaining parts of the Plan, and the
Plan shall be construed and enforced as if the illegal or invalid provision had not been
included.

(j) Rules of Construction: Headings are given to the sections of this Plan solely as a
convenience to facilitate reference. The reference to any statute, regulation or other
provision of law shall be construed to refer to any amendment to or successor of such provision
of law.

(k) Successors and Assigns: The Plan shall be binding upon the Corporation, its successors
and assigns, and Participants, their executors, administrators and permitted transferees and
beneficiaries.

(l) Right of Offset: Notwithstanding any other provision of the Plan or an Award
Agreement, the Corporation may reduce the amount of any payment or benefit otherwise payable to
or on behalf of a Participant by the amount of any obligation of the Participant to or on behalf
of the Corporation that is or becomes due and payable.

(m) Effect of Changes in Status: An Award shall not be affected by any change in the
terms, conditions or status of the Participant’s employment or service, provided that the
Participant continues to be an employee of, or in service to, the Corporation or an Affiliate.

(n) Shareholder Approval: The Plan is subject to approval by the shareholders of the
Corporation, which approval must occur, if at all, within 12 months of the Effective Date of the
Plan. Awards granted prior to such shareholder approval shall be conditioned upon and shall be
effective only upon approval of the Plan by such shareholders on or before such date.

(o) Fractional Shares: Except as otherwise provided by an Award Agreement or the
Administrator, (i) the total number of shares issuable pursuant to the exercise, vesting or
earning of an Award shall be rounded down to the nearest whole share, and (ii) no fractional
 shares shall be
issued. The Administrator may, in its discretion, determine that a fractional share shall
be settled in cash.

 

 

 

IN WITNESS WHEREOF, this MiMedx Group, Inc. Assumed 2006 Stock Incentive Plan, is, by the
authority of the Board of Directors of the Corporation, executed in behalf of the Corporation,
effective as of the
25th day of April 2011.

	 	 	 	 	 
	 	MIMEDX GROUP, INC.

 	 
	 	By:  	/s/
Parker H. Petit 	 
	 	 	Name:  	Parker H. “Pete” Petit 	 
	 	 	Title:  	Chairman 	 

ATTEST:

/s/
Roberta McCaw              
                        
               

Secretary

[Corporate Seal]d1190043_ex4-11.htm

EX-4.11 2 d1190043_ex4-11.htm

 

EXHIBIT 4.11

 

 

NORDIC AMERICAN TANKER SHIPPING LIMITED

2011 EQUITY INCENTIVE PLAN

 

 

ARTICLE I

General

 

1.1.         Purpose

 

The Nordic American Tanker Shipping Limited 2011 Equity Incentive Plan (the "Plan") is designed to provide certain Key Persons (as defined below), whose initiative and efforts are deemed to be important to the successful conduct of the business of Nordic American Tanker Shipping Limited (the "Company"), with incentives to (a) enter into and remain in the service of the Company or its Affiliates (as defined below), (b) acquire a proprietary interest in the success of the Company, (c) maximize their performance and (d) enhance the long-term performance of the Company.

 

1.2.          Administration

 

(a)           Administration.  The Plan shall be administered by the Company's Board of Directors (the "Board") or such committee of the Board as may be designated by the Board to administer the Plan (the "Administrator"); provided that (i) in the event the Company is subject to Section 16 of the U.S. Securities Exchange Act of 1934, as amended (the "1934 Act"), the Administrator shall be composed of two or more directors, each of whom is a "Non-Employee Director" (a "Non-Employee Director") under Rule 16b-3 (as promulgated and interpreted by the Securities and Exchange Commission (the "SEC") under the 1934 Act, or any successor rule or regulation thereto as in effect from time to time ("Rule 16b-3")), and (ii) the Administrator shall be composed solely of two or more directors who are "independent directors" under the rules of any stock exchange on which the Company's Common Stock (as defined below) is traded; provided further, however, that, (A) the requirement in the preceding clause (i) shall apply only when required to exempt an Award (as defined below) intended to qualify for an exemption under the applicable provisions referenced therein, (B) the requirement in the preceding clause (ii) shall apply only when required pursuant to the applicable rules of the applicable stock exchange and (C) if at any time the Administrator is not so composed as required by the preceding provisions of this sentence, that fact will not invalidate any grant made, or action taken, by the Administrator hereunder that otherwise satisfies the terms of the Plan.  Subject to the terms of the Plan and applicable law, and in addition to other express powers and authorizations conferred on the Administrator by the Plan, the Administrator shall have the full power and authority to: (1) designate the Persons (as defined below) to receive Awards under the Plan; (2) determine the types of Awards granted to a participant under the Plan; (3) determine the number of shares to be covered by, or with respect to which payments, rights or other matters are to be calculated with respect to, Awards; (4) determine the terms and conditions of any Awards; (5) determine whether, and to what extent, and under what circumstances, Awards

 

 

  

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may be settled or exercised in cash, shares, other securities, other Awards or other property, or cancelled, forfeited or suspended, and the methods by which Awards may be settled, exercised, cancelled, forfeited or suspended; (6) determine whether, to what extent, and under what circumstances cash, shares, other securities, other Awards, other property and other amounts payable with respect to an Award shall be deferred, either automatically or at the election of the holder thereof or the Administrator; (7) construe, interpret and implement the Plan and any Award Agreement (as defined below); (8) prescribe, amend, rescind or waive rules and regulations relating to the Plan, including rules governing its operation, and appoint such agents as it shall deem appropriate for the proper administration of the Plan; (9)  correct any defect, supply any omission and reconcile any inconsistency in the Plan or any Award Agreement; and (10) make any other determination and take any other action that the Administrator deems necessary or desirable for the administration of the Plan.  Unless otherwise expressly provided in the Plan, all designations, determinations, interpretations and other decisions under or with respect to the Plan or any Award shall be within the sole discretion of the Administrator, may be made at any time and shall be final, conclusive and binding upon all Persons.

 

(b)           General Right of Delegation.  Except to the extent prohibited by applicable law, the applicable rules of a stock exchange or any charter, memorandum of association, bye-laws or agreement governing the Administrator, the Administrator may delegate all or any part of its responsibilities to any Person or Persons selected by it; provided, however, that in no event shall an officer of the Company be delegated the authority to grant Awards to, or amend Awards held by, the following individuals: (i) individuals who are subject to Section 16 of the 1934 Act, or (ii) officers of the Company (or directors of the Company) to whom authority to grant or amend Awards has been delegated hereunder; provided, further, that any delegation of administrative authority shall only be permitted to the extent it is permissible under applicable securities laws (including, without limitation, Rule 16b-3, to the extent applicable) and the rules of any applicable stock exchange.  Any delegation hereunder shall be subject to the restrictions and limits that the Administrator specifies at the time of such delegation, and the Administrator may at any time rescind the authority so delegated or appoint a new delegate.  At all times, the delegatee appointed under this Section 1.2(b) shall serve in such capacity at the pleasure of the Administrator.

 

(c)           Indemnification.  No member of the Board, the Administrator or any employee or officer of the Company or an Affiliate (each such Person, a "Covered Person") shall be liable for any action taken or omitted to be taken or any determination made in good faith with respect to the Plan or any Award hereunder.  Each Covered Person shall be indemnified and held harmless by the Company against and from (i) any loss, cost, liability or expense (including attorneys' fees) that may be imposed upon or incurred by such Covered Person in connection with or resulting from any action, suit or proceeding to which such Covered Person may be a party or in which such Covered Person may be involved by reason of any action taken or omitted to be taken under the Plan or any Award Agreement and (ii) any and all amounts paid by such Covered Person, with the Company's approval, in settlement thereof, or paid by such Covered Person in satisfaction of any judgment in any such action, suit or proceeding against such Covered Person; provided that the Company shall have the right, at its own expense, to assume and defend any such action, suit or proceeding and, once the Company gives notice of its

 

 

  

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intent to assume the defense, the Company shall have sole control over such defense with counsel of the Company's choice.  The foregoing right of indemnification shall not be available to a Covered Person to the extent that a court of competent jurisdiction in a final judgment or other final adjudication, in either case not subject to further appeal, determines that the acts or omissions of such Covered Person giving rise to the indemnification claim resulted from such Covered Person's bad faith, fraud, dishonesty or willful criminal act or omission or that such right of indemnification is otherwise prohibited by law or by the Company's memorandum of association or bye-laws (in each case, as amended and/or restated).  The foregoing right of indemnification shall not be exclusive of any other rights of indemnification to which Covered Persons may be entitled under the Company's memorandum of association or bye-laws (in each case, as amended and/or restated), as a matter of law, or otherwise, or any other power that the Company may have to indemnify such Persons or hold them harmless.

 

(d)           Delegation of Authority to Senior Officers.  The Administrator may, in accordance with and subject to the terms of Section 1.2(b), delegate, on such terms and conditions as it determines, to one or more senior officers of the Company the authority to make grants of Awards to Key Persons who are employees of the Company and its Subsidiaries (as defined below)(including any such prospective employee) or consultants of the Company and its Subsidiaries.

 

(e)           Awards to Non-Employee Directors.  Notwithstanding anything to the contrary contained herein, the Board may, in its sole discretion, at any time and from time to time, grant Awards to Non-Employee Directors or administer the Plan with respect to such Awards.  In any such case, the Board shall have all the authority and responsibility granted to the Administrator herein with respect to such Awards.

 

1.3.          Persons Eligible for Awards

 

The Persons eligible to receive Awards under the Plan are those directors, officers and employees (including any prospective officer or employee) of the Company and its Subsidiaries and Affiliates and consultants and service providers to (including Persons who are employed by or provide services to any entity that is itself a consultant or service provider to) the Company and its Subsidiaries and Affiliates (collectively, "Key Persons") as the Administrator shall select.

 

1.4.          Types of Awards

 

Awards may be made under the Plan in the form of (a)  non-qualified stock options (i.e., stock options that are not "incentive stock options" for purposes of Sections 421 and 322 of the Code (as defined below)), (b) stock appreciation rights, (c) restricted stock, (d) restricted stock units, (e) dividend equivalents, (f) unrestricted stock and (g) other equity-based or equity-related Awards, all as more fully set forth in the Plan.  The term "Award" means any of the foregoing that are granted under the Plan.

 

1.5.          Shares Available for Awards; Adjustments for Changes in Capitalization

 

(a)           Maximum Number.  Subject to adjustment as provided in Section 1.5(c), the aggregate number of common shares of the Company, of par value US$0.01("Common Stock"), with respect to which Awards may at any time be

 

 

  

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granted under the Plan shall be 400,000.  The following shares of Common Stock shall again become available for Awards under the Plan: (i) any shares that are subject to an Award under the Plan and that remain unissued upon the cancellation or termination of such Award for any reason whatsoever; (ii) any shares of restricted stock forfeited pursuant to the Plan or the applicable Award Agreement; provided that any dividend equivalent rights with respect to such shares that have not theretofore been directly remitted to the grantee are also forfeited; and (iii) any shares in respect of which an Award is settled for cash without the delivery of shares to the grantee.  Any shares tendered or withheld to satisfy the grant or exercise price or tax withholding obligation pursuant to any Award shall again become available to be delivered pursuant to Awards under the Plan.

 

(b)           Source of Shares.  Shares issued pursuant to the Plan may be authorized but unissued Common Stock or treasury shares.  The Administrator may direct that any share certificate evidencing shares issued pursuant to the Plan shall bear a legend setting forth such restrictions on transferability as may apply to such shares.

 

(c)           Adjustments.  (i)  In the event that any dividend or other distribution (whether in the form of cash, Company shares, other securities or other property), reorganization, amalgamation, merger, consolidation, split-up, combination, repurchase or exchange of Company shares or other securities of the Company, issuance of warrants or other rights to purchase Company shares or other securities of the Company, or other similar corporate transaction or event, other than an Equity Restructuring (as defined below), affects the Company shares such that an adjustment is determined by the Administrator to be appropriate in order to prevent dilution or enlargement of the benefits or potential benefits intended to be made available under the Plan or with respect to an Award, then the Administrator shall, in such manner as it may deem equitable, adjust any or all of the number of shares or other securities of the Company (or number and kind of other securities or property) with respect to which Awards may be granted under the Plan.

 

(ii)           The Administrator is authorized to make adjustments in the terms and conditions of, and the criteria included in, Awards in recognition of unusual or nonrecurring events (including the events described in Section 1.5(c)(i) or the occurrence of a Change in Control (as defined below), other than an Equity Restructuring) affecting the Company, any Affiliate, or the financial statements of the Company or any Affiliate, or of changes in applicable rules, rulings, regulations or other requirements of any governmental body or securities exchange, accounting principles or law, whenever the Administrator determines that such adjustments are appropriate in order to prevent dilution or enlargement of the benefits or potential benefits intended to be made available under the Plan or with respect to an Award, including providing for (A) adjustment to (1) the number of shares or other securities of the Company (or number and kind of other securities or property) subject to outstanding Awards or to which outstanding Awards relate and (2) the Exercise Price (as defined below) with respect to any Award and (B) a substitution or assumption of Awards, accelerating the exercisability or vesting of, or lapse of restrictions on, Awards, or accelerating the termination of Awards by providing for a period of time for exercise prior to the occurrence of such event, or, if deemed appropriate or desirable, providing for a cash payment to the holder of an outstanding Award in consideration for the cancellation of such Award (it being

 

 

  

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understood that, in such event, any option or stock appreciation right having a per share Exercise Price equal to, or in excess of, the Fair Market Value (as defined below) of a share subject to such option or stock appreciation right may be cancelled and terminated without any payment or consideration therefor); provided, however, that with respect to options and stock appreciation rights, unless otherwise determined by the Administrator, such adjustment shall be made in accordance with the provisions of Section 424(h) of the Code.

 

(iii)           In the event of (A) a dissolution or liquidation of the Company, (B) a sale of all or substantially all the Company's assets or (C) a merger, amalgamation, reorganization or consolidation involving the Company or one of its Subsidiaries (as defined below), the Administrator shall have the power to:

 

(1)  provide that outstanding options, stock appreciation rights, restricted stock units (including any related dividend equivalent right) and/or other Awards granted under the Plan shall either continue in effect, be assumed or an equivalent award shall be substituted therefor by the successor corporation or a parent corporation or subsidiary corporation;

 

(2)  cancel, effective immediately prior to the occurrence of such event, options, stock appreciation rights, restricted stock units (including each dividend equivalent right related thereto) and/or other Awards granted under the Plan outstanding immediately prior to such event (whether or not then exercisable) and, in full consideration of such cancellation, pay to the holder of such Award a cash payment in an amount equal to the excess, if any, of the Fair Market Value (as of a date specified by the Administrator) of the shares subject to such Award (or the value of such Award, as determined by the Administrator, if not based on the Fair Market Value of shares) over the aggregate Exercise Price of such Award (or the grant price of such Award, if any, if applicable)(it being understood that, in such event, any option or stock appreciation right having a per share Exercise Price equal to, or in excess of, the Fair Market Value of a share subject to such option or stock appreciation right may be cancelled and terminated without any payment or consideration therefor); or

 

(3)  notify the holder of an option or stock appreciation right in writing or electronically that each option and stock appreciation right shall be fully vested and exercisable for a period of 30 days from the date of such notice, or such shorter period as the Administrator may determine to be reasonable, and the option or stock appreciation right shall terminate upon the expiration of such period (which period shall expire no later than immediately prior to the consummation of the corporate transaction).

 

(iv)           In connection with the occurrence of any Equity Restructuring, and notwithstanding anything to the contrary in this Section 1.5(c):

 

(A)           The number and type of securities or other property subject to each outstanding Award and the Exercise Price or grant price thereof, if applicable, shall be equitably adjusted; and

 

(B)           The Administrator shall make such equitable adjustments, if any, as the Administrator may deem appropriate to reflect such Equity

 

 

  

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Restructuring with respect to the aggregate number and kind of shares that may be issued under the Plan (including, but not limited to, adjustment of the limitation set forth in Section 1.5(a)).  The adjustments provided under this Section 1.5(c)(iv) shall be nondiscretionary and shall be final and binding on the affected participant and the Company.

 

1.6.         Definitions of Certain Terms

 

(a)           "Affiliate" shall mean (i) any entity that, directly or indirectly, is controlled by, controls or is under common control with, the Company and (ii) any entity in which the Company has a significant equity interest, in either case as determined by the Administrator.

 

(b)           Unless otherwise set forth in the applicable Award Agreement, in connection with a termination of employment or consultancy/service relationship or a dismissal from Board membership, for purposes of the Plan, the term "for Cause" shall be defined as follows:

 

(i)      if there is an employment, severance, consulting, service, change in control or other agreement governing the relationship between the grantee, on the one hand, and the Company or an Affiliate, on the other hand, that contains a definition of "cause" (or similar phrase), for purposes of the Plan, the term "for Cause" shall mean those acts or omissions that would constitute "cause" under such agreement; or

 

(ii)      if the preceding clause (i) is not applicable to the grantee, for purposes of the Plan, the term "for Cause" shall mean any of the following:

 

(A)   any failure by the grantee substantially to perform the grantee's employment or consulting/service or Board membership duties;

 

(B)    any excessive unauthorized absenteeism by the grantee;

 

(C)    any refusal by the grantee to obey the lawful orders of the Board or any other Person to whom the grantee reports;

 

(D)    any act or omission by the grantee that is or may be injurious to the Company or any Affiliate, whether monetarily, reputationally or otherwise;

 

(E)    any act by the grantee that is inconsistent with the best interests of the Company or any Affiliate;

 

(F)    the grantee's gross negligence that is injurious to the Company or any Affiliate, whether monetarily, reputationally or otherwise;

 

(G)    the grantee's material violation of any of the policies of the Company or an Affiliate, as applicable, including, without limitation, those policies relating to discrimination or sexual harassment;

 

(H)    the grantee's material breach of his or her employment or service contract with the Company or any Affiliate;

 

 

  

6

  

 

(I)    the grantee's unauthorized (1) removal from the premises of the Company or an Affiliate of any document (in any medium or form) relating to the Company or an Affiliate or the customers or clients of the Company or an Affiliate or (2) disclosure to any Person of any of the Company's, or any Affiliate's, confidential or proprietary information;

 

(J)    the grantee's being convicted of, or entering a plea of guilty or nolo contendere to, any crime that constitutes a felony or involves moral turpitude; and

 

(K)    the grantee's commission of any act involving dishonesty or fraud.

 

Any rights the Company or its Affiliates may have under the Plan in respect of the events giving rise to a termination or dismissal "for Cause" shall be in addition to any other rights the Company or its Affiliates may have under any other agreement with a grantee or at law or in equity.  Any determination of whether a grantee's employment, consultancy/service relationship or Board membership is (or is deemed to have been) terminated "for Cause" shall be made by the Administrator.  If, subsequent to a grantee's voluntary termination of employment or consultancy/service relationship or voluntarily resignation from the Board or involuntary termination of employment or consultancy/service relationship without Cause or removal from the Board other than "for Cause", it is discovered that the grantee's employment or consultancy/service relationship or Board membership could have been terminated "for Cause", the Administrator may deem such grantee's employment or consultancy/service relationship or Board membership to have been terminated "for Cause" upon such discovery and determination by the Administrator.

 

(c)           "Code" shall mean the Internal Revenue Code of 1986, as amended.

 

(d)           Unless otherwise set forth in the applicable Award Agreement, "Disability" shall mean the grantee's being unable to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment that can be expected to result in death or can be expected to last for a continuous period of not less than 12 months, or the grantee's, by reason of any medically determinable physical or mental impairment that can be expected to result in death or can be expected to last for a continuous period of not less than 12 months, receiving income replacement benefits for a period of not less than three months under an accident and health plan covering employees of the grantee's employer.  The existence of a Disability shall be determined by the Administrator.

 

(e)           "Equity Restructuring" shall mean a non-reciprocal transaction between the Company and its shareholders, such as a stock dividend, stock split, reverse stock split, spin-off, rights offering or recapitalization through a large, nonrecurring cash dividend, that affects the shares of Common Stock (or other securities of the Company) or the share price thereof and causes a change in the per share value of the shares underlying outstanding Awards.

 

 

  

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(f)           "Exercise Price" shall mean (i) in the case of options, the price specified in the applicable Award Agreement as the price-per-share at which such share can be purchased pursuant to the option or (ii) in the case of stock appreciation rights, the price specified in the applicable Award Agreement as the reference price-per-share used to calculate the amount payable to the grantee.

 

(g)           The "Fair Market Value" of a share of Common Stock on any day shall be the closing price on the New York Stock Exchange, or such other primary stock exchange upon which such shares are then listed, as reported for such day in The Wall Street Journal (or, if not reported in the The Wall Street Journal, such other reliable source as the Administrator may determine), or, if no such price is reported for such day, the average of the high bid and low asked price of Common Stock as reported for such day.  If no quotation is made for the applicable day, the Fair Market Value of a share of Common Stock on such day shall be determined in the manner set forth in the preceding sentence for the next preceding trading day.  Notwithstanding the foregoing, if there is no reported closing price or high bid/low asked price that satisfies the preceding sentences, or if otherwise deemed necessary or appropriate by the Administrator, the Fair Market Value of a share of Common Stock on any day shall be determined by such methods and procedures as shall be established from time to time by the Administrator.  The "Fair Market Value" of any property other than Common Stock shall be the fair market value of such property determined by such methods and procedures as shall be established from time to time by the Administrator.

 

(h)           "Person" shall mean any individual, firm, corporation, partnership, limited liability company, trust, incorporated or unincorporated association, joint venture, joint stock company, governmental body or other entity of any kind.

 

(i)           "Repricing" shall mean (i) lowering the Exercise Price of an option or a stock appreciation right after it has been granted, (ii) the cancellation of an option or a stock appreciation right in exchange for cash or another Award when the Exercise Price exceeds the Fair Market Value of the underlying shares subject to the Award and (iii) any other action with respect to an option or a stock appreciation right that is treated as a repricing under (A) generally accepted accounting principles or (B) any applicable stock exchange rules.

 

(j)           "Subsidiary" shall mean any entity in which the Company, directly or indirectly, has a 50% or more equity interest.

 

ARTICLE II.

Awards Under The Plan

 

2.1.         Agreements Evidencing Awards

 

Each Award granted under the Plan shall be evidenced by a written certificate ("Award Agreement"), which shall contain such provisions as the Administrator may deem necessary or desirable and which may, but need not, require execution or acknowledgment by a grantee.  The Award shall be subject to all of the terms and provisions of the Plan and the applicable Award Agreement.

 

 

  

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2.2.         Grant of Stock Options and Stock Appreciation Rights

 

(a)           Stock Option Grants.  The Administrator may grant non-qualified stock options ("options") to purchase shares of Common Stock from the Company to such Key Persons, and in such amounts and subject to such vesting and forfeiture provisions and other terms and conditions, as the Administrator shall determine, subject to the provisions of the Plan.  No option will be treated as an "incentive stock option" for purposes of the Code.  It shall be the intent of the Administrator to not grant an Award in the form of stock options to any Key Person who is then subject to the requirements of Section 409A of the Code with respect to such Award if the Common Stock (as defined below) underlying such Award does not then qualify as "service recipient stock" for purposes of Section 409A.  Furthermore, it shall be the intent of the Administrator, in granting options to Key Persons who are subject to Section 409A and/or 457 of the Code, to structure such options so as to comply with the requirements of Section 409A and/or 457 of the Code, as applicable.

 

(b)           Stock Appreciation Right Grants; Types of Stock Appreciation Rights.  The Administrator may grant stock appreciation rights to such Key Persons, and in such amounts and subject to such vesting and forfeiture provisions and other terms and conditions, as the Administrator shall determine, subject to the provisions of the Plan.  The terms of a stock appreciation right may provide that it shall be automatically exercised for a payment upon the happening of a specified event that is outside the control of the grantee and that it shall not be otherwise exercisable.  Stock appreciation rights may be granted in connection with all or any part of, or independently of, any option granted under the Plan.  It shall be the intent of the Administrator to not grant an Award in the form of stock appreciation rights to any Key Person (i) who is then subject to the requirements of Section 409A of the Code with respect to such Award if the Common Stock underlying such Award does not then qualify as "service recipient stock" for purposes of Section 409A or (ii) if such Award would create adverse tax consequences for such Key Person under Section 457A of the Code.

 

(c)           Nature of Stock Appreciation Rights.  The grantee of a stock appreciation right shall have the right, subject to the terms of the Plan and the applicable Award Agreement, to receive from the Company an amount equal to (i) the excess of the Fair Market Value of a share of Common Stock on the date of exercise of the stock appreciation right over the Exercise Price of the stock appreciation right, multiplied by (ii) the number of shares with respect to which the stock appreciation right is exercised.  Each Award Agreement with respect to a stock appreciation right shall set forth the Exercise Price of such Award and, unless otherwise specifically provided in the Award Agreement, the Exercise Price of a stock appreciation right shall equal the Fair Market Value of a share of Common Stock on the date of grant; provided that in no event may such Exercise Price be less than the greater of (A) the Fair Market Value of a share of Common Stock on the date of grant and (B) the par value of a share of Common Stock.  Payment upon exercise of a stock appreciation right shall be in cash or in shares of Common Stock (valued at their Fair Market Value on the date of exercise of the stock appreciation right) or any combination of both, all as the Administrator shall determine.  Repricing of stock appreciation rights granted under the Plan shall not be permitted (1) to

 

 

  

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the extent such action could cause adverse tax consequences to the grantee under Sections 409A or 457A of the Code or (2) without prior shareholder approval, to the extent such approval would be required to be obtained by the Company pursuant to the applicable rules of any applicable stock exchange on which the Common Stock is then listed, and any action that would be deemed to result in a Repricing of a stock appreciation right shall be deemed null and void if it would cause such adverse tax consequences or if any requisite shareholder approval related thereto is not obtained prior to the effective time of such action.  Upon the exercise of a stock appreciation right granted in connection with an option, the number of shares subject to the option shall be reduced by the number of shares with respect to which the stock appreciation right is exercised.  Upon the exercise of an option in connection with which a stock appreciation right has been granted, the number of shares subject to the stock appreciation right shall be reduced by the number of shares with respect to which the option is exercised.

 

(d)           Option Exercise Price.  Each Award Agreement with respect to an option shall set forth the Exercise Price of such Award and, unless otherwise specifically provided in the Award Agreement, the Exercise Price of an option shall equal the Fair Market Value of a share of Common Stock on the date of grant; provided that in no event may such Exercise Price be less than the greater of (i) the Fair Market Value of a share of Common Stock on the date of grant and (ii) the par value of a share of Common Stock.  Repricing of options granted under the Plan shall not be permitted (1) to the extent such action could cause adverse tax consequences to the grantee under Sections 409A or 457A of the Code or (2) without prior shareholder approval, to the extent such approval would be required to be obtained by the Company pursuant to the applicable rules of any applicable stock exchange on which the Common Stock is then listed, and any action that would be deemed to result in a Repricing of an option shall be deemed null and void if it would cause such adverse tax consequences or if any requisite shareholder approval related thereto is not obtained prior to the effective time of such action.

 

2.3.           Exercise of Options and Stock Appreciation Rights

 

Subject to the other provisions of this Article II and the Plan, each option and stock appreciation right granted under the Plan shall be exercisable as follows:

 

(a)           Timing and Extent of Exercise.  Options and stock appreciation rights shall be exercisable at such times and under such conditions as determined by the Administrator and set forth in the corresponding Award Agreement, but in no event shall any portion of such Award be exercisable subsequent to the tenth anniversary of the date on which such Award was granted.  Unless the applicable Award Agreement otherwise provides, an option or stock appreciation right may be exercised from time to time as to all or part of the shares as to which such Award is then exercisable.

 

(b)           Notice of Exercise.  An option or stock appreciation right shall be exercised by the filing of a written notice with the Company or the Company's designated exchange agent (the "Exchange Agent"), on such form and in such manner as the Administrator shall prescribe.

 

 

 

  

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(c)           Payment of Exercise Price.  Any written notice of exercise of an option shall be accompanied by payment for the shares being purchased.  Such payment shall be made: (i) by certified or official bank check (or the equivalent thereof acceptable to the Company or its Exchange Agent) for the full option Exercise Price; (ii) with the consent of the Administrator, which consent shall be given or withheld in the sole discretion of the Administrator, by delivery of shares of Common Stock having a Fair Market Value (determined as of the exercise date) equal to all or part of the option Exercise Price and a certified or official bank check (or the equivalent thereof acceptable to the Company or its Exchange Agent) for any remaining portion of the full option Exercise Price; or (iii) at the sole discretion of the Administrator and to the extent permitted by law, by such other provision, consistent with the terms of the Plan, as the Administrator may from time to time prescribe (whether directly or indirectly through the Exchange Agent), or by any combination of the foregoing payment methods.

 

(d)           Delivery of Certificates Upon Exercise.  Subject to Sections 3.2, 3.4 and 3.13, promptly after receiving payment of the full option Exercise Price, or after receiving notice of the exercise of a stock appreciation right for which the Administrator determines payment will be made partly or entirely in shares, the Company or its Exchange Agent shall (i) deliver to the grantee, or to such other Person as may then have the right to exercise the Award, a certificate or certificates for the shares of Common Stock for which the Award has been exercised or, in the case of stock appreciation rights, for which the Administrator determines will be made in shares or (ii) establish an account evidencing ownership of the stock in uncertificated form.  If the method of payment employed upon an option exercise so requires, and if applicable law permits, an optionee may direct the Company or its Exchange Agent, as the case may be, to deliver the stock certificate(s) to the optionee's stockbroker.

 

(e)           No Shareholder Rights.  No grantee of an option or stock appreciation right (or other Person having the right to exercise such Award) shall have any of the rights of a shareholder of the Company with respect to shares subject to such Award until the issuance of a share certificate to such Person for such shares.  Except as otherwise provided in Section 1.5(c), no adjustment shall be made for dividends, distributions or other rights (whether ordinary or extraordinary, and whether in cash, securities or other property) for which the record date is prior to the date such share certificate is issued.

 

2.4.         Termination of Employment/Service; Death Subsequent to a Termination of Employment/Service

 

(a)           General Rule.  Except to the extent otherwise provided in paragraphs (b), (c), (d), (e) or (f) of this Section 2.4 or Section 3.5(b)(iii), a grantee who incurs a termination of employment or consultancy/service relationship with the Company and its Subsidiaries and Affiliates may exercise any outstanding option or stock appreciation right on the following terms and conditions: (i) exercise may be made only to the extent that the grantee was entitled to exercise the Award on the date of termination of employment or consultancy/service relationship, as applicable; and (ii) exercise must occur within three months after termination of employment or consultancy/service relationship but in no event after the original expiration date of the Award; it being

 

 

  

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understood that then outstanding options and stock appreciation rights shall not be affected by a change of employment or consultancy/service relationship with the Company and its Subsidiaries and Affiliates so long as the grantee continues to be a director, officer or employee of, or a consultant or service provider to (or a Person employed by or providing services to any entity that that is itself a consultant or service provider to), the Company or any of its Subsidiaries or Affiliates.

 

(b)           Dismissal "for Cause".  If a grantee incurs a termination of employment or consultancy/service relationship with the Company and its Subsidiaries and Affiliates "for Cause", all options and stock appreciation rights not theretofore exercised shall immediately terminate upon such termination of employment or consultancy/service relationship.

 

(c)           Retirement.  If a grantee incurs a termination of employment or consultancy/service relationship with the Company and its Subsidiaries and Affiliates as the result of his or her retirement (as defined below), then any outstanding option or stock appreciation right shall, to the extent exercisable at the time of such retirement, remain exercisable for a period of three years after such retirement; provided that in no event may such option or stock appreciation right be exercised following the original expiration date of the Award.  For this purpose, unless otherwise set forth in the applicable Award Agreement, "retirement" shall mean a grantee's resignation of employment or consultancy/service relationship with the Company and its Subsidiaries and Affiliates, with the Company's or its applicable Affiliate's prior consent, on or after (i) his or her 65th birthday, (ii) the date on which he or she has attained age 60 and completed at least five years of service with the Company or one or more of its Affiliates (using any method of calculation the Administrator deems appropriate) or (iii) if approved by the Administrator, on or after his or her having completed at least 20 years of service with the Company or one or more of its Affiliates (using any method of calculation the Administrator deems appropriate).

 

(d)           Disability.  If a grantee incurs a termination of employment or consultancy/service relationship with the Company and its Subsidiaries and Affiliates by reason of a Disability, then any outstanding option or stock appreciation right shall, to the extent exercisable at the time of such termination, remain exercisable for a period of one year after such termination; provided that in no event may such option or stock appreciation right be exercised following the original expiration date of the Award.

 

(e)           Death.

 

(i)      Termination of Employment/Service as a Result of Grantee's Death.  If a grantee incurs a termination of employment or consultancy/service relationship with the Company and its Subsidiaries and Affiliates as the result of his or her death, then any outstanding option or stock appreciation right shall, to the extent exercisable at the time of such death, remain exercisable for a period of one year after such death; provided that in no event may such option or stock appreciation right be exercised following the original expiration date of the Award.

 

 

  

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(ii)         Restrictions on Exercise Following Death.  Any such exercise of an Award following a grantee's death shall be made only by the grantee's executor or administrator or other duly appointed representative reasonably acceptable to the Administrator, unless the grantee's will specifically disposes of such Award, in which case such exercise shall be made only by the recipient of such specific disposition.  If a grantee's personal representative or the recipient of a specific disposition under the grantee's will shall be entitled to exercise any Award pursuant to the preceding sentence, such representative or recipient shall be bound by all the terms and conditions of the Plan and the applicable Award Agreement which would have applied to the grantee.

 

(f)           Administrator Discretion.  The Administrator may, in writing, waive or modify the application of the foregoing provisions of this Section 2.4.

 

2.5.         Transferability of Options and Stock Appreciation Rights

 

Except as otherwise specifically provided in this Plan or the applicable Award Agreement evidencing an option or stock appreciation right, during the lifetime of a grantee, each such Award granted to a grantee shall be exercisable only by the grantee, and no such Award may be sold, assigned, transferred, pledged or otherwise encumbered or disposed of other than by will or by the laws of descent and distribution.  The Administrator may, in any applicable Award Agreement evidencing an option or stock appreciation right, permit a grantee to transfer all or some of the options or stock appreciation rights to (a) the grantee's spouse, children or grandchildren ("Immediate Family Members"), (b) a trust or trusts for the exclusive benefit of such Immediate Family Members or (c) other parties approved by the Administrator.  Following any such transfer, any transferred options and stock appreciation rights shall continue to be subject to the same terms and conditions as were applicable immediately prior to the transfer.

 

2.6.           Grant of Restricted Stock

 

(a)           Restricted Stock Grants.  The Administrator may grant restricted shares of Common Stock to such Key Persons, in such amounts and subject to such vesting and forfeiture provisions and other terms and conditions as the Administrator shall determine, subject to the provisions of the Plan.  A grantee of a restricted stock Award shall have no rights with respect to such Award unless such grantee accepts the Award within such period as the Administrator shall specify by accepting delivery of a restricted stock Award Agreement in such form as the Administrator shall determine.

 

(b)           Issuance of Share Certificate.  Promptly after a grantee accepts a restricted stock Award in accordance with Section 2.6(a), subject to Sections 3.2, 3.4 and 3.13, the Company or its Exchange Agent shall issue to the grantee a share certificate or share certificates for the shares of Common Stock covered by the Award or shall establish an account evidencing ownership of the share in uncertificated form.  Upon the issuance of such share certificates, or establishment of such account, the grantee shall have the rights of a shareholder with respect to the restricted stock, subject to: (i) the nontransferability restrictions and forfeiture provisions described in the Plan (including paragraphs (d)

 

 

  

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and (e) of this Section 2.6); (ii) in the Administrator's sole discretion, a requirement, as set forth in the Award Agreement, that any dividends paid on such shares shall be held in escrow and, unless otherwise determined by the Administrator, shall remain forfeitable until all restrictions on such shares have lapsed; and (iii) any other restrictions and conditions contained in the applicable Award Agreement.

 

(c)           Custody of Share Certificate.  Unless the Administrator shall otherwise determine, any share certificates issued evidencing shares of restricted stock shall remain in the possession of the Company (or such other custodian as may be determined by the Administrator) until such shares are free of any restrictions specified in the applicable Award Agreement.  The Administrator may direct that such share certificates bear a legend setting forth the applicable restrictions on transferability.

 

(d)           Nontransferability.  Shares of restricted stock may not be sold, assigned, transferred, pledged or otherwise encumbered or disposed of prior to the lapsing of all restrictions thereon, except as otherwise specifically provided in this Plan or the applicable Award Agreement.  The Administrator at the time of grant shall specify the date or dates (which may depend upon or be related to the attainment of performance goals and other conditions) on which the nontransferability of the restricted stock shall lapse.

 

(e)           Consequence of Termination of Employment/Service.  Unless otherwise set forth in the applicable Award Agreement, (i) a grantee's termination of employment or consultancy/service relationship with the Company and its Subsidiaries and Affiliates for any reason other than death or Disability shall cause the immediate forfeiture of all shares of restricted stock that have not yet vested as of the date of such termination of employment or consultancy/service relationship and (ii) if a grantee incurs a termination of employment or consultancy/service relationship with the Company and its Subsidiaries and Affiliates as the result of his or her death or Disability, all shares of restricted stock that have not yet vested as of the date of such termination shall immediately vest as of such date; it being understood that then outstanding restricted stock Awards shall not be affected by a change of employment or consultancy/service relationship with the Company and its Subsidiaries and Affiliates so long as the grantee continues to be a director, officer or employee of, or a consultant or service provider to (or a Person employed by or providing services to any entity that that is itself a consultant or service provider to), the Company or any of its Subsidiaries or Affiliates.  Unless otherwise determined by the Administrator, all dividends paid on shares forfeited under this Section 2.6(e) that have not theretofore been directly remitted to the grantee shall also be forfeited, whether by termination of any escrow arrangement under which such dividends are held or otherwise.  The Administrator may, in writing, waive or modify the application of the foregoing provisions of this Section 2.6(e).

 

2.7.         Grant of Restricted Stock Units

 

(a)           Restricted Stock Unit Grants.  The Administrator may grant restricted stock units to such Key Persons, and in such amounts and subject to such vesting and forfeiture provisions and other terms and conditions, as the Administrator shall determine, subject to the provisions of the Plan.  A restricted stock unit granted under the Plan shall confer upon the grantee a right to receive from the Company, conditioned upon

 

the occurrence of such vesting event as shall be determined by the Administrator and specified in the Award Agreement, the number of such grantee's restricted stock units that vest upon the occurrence of such vesting event multiplied by the Fair Market Value of a share of Common Stock on the date of vesting.  Payment upon vesting of a restricted stock unit shall be in cash or in shares of Common Stock (valued at their Fair Market Value on the date of vesting) or both, all as the Administrator shall determine, and such payments shall be made to the grantee at such time as provided in the Award Agreement, which the Administrator shall intend to be (i) if Section 409A of the Code is applicable to the grantee, within the period required by Section 409A such that it qualifies as a "short-term deferral" pursuant to Section 409A and the Treasury Regulations issued thereunder, unless the Administrator shall provide for deferral of the Award intended to comply with Section 409A, (ii) if Section 457A of the Code is applicable to the grantee, within the period required by Section 457A(d)(3)(B) such that it qualifies for the exemption thereunder, or (iii) if Sections 409A and 457A of the Code are not applicable to the grantee, at such time as determined by the Administrator.

 

  

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(b)           Dividend Equivalents.  The Administrator may include in any Award Agreement with respect to a restricted stock unit a dividend equivalent right entitling the grantee to receive amounts equal to the ordinary dividends that would be paid, during the time such Award is outstanding and unvested, and/or, if payment of the vested Award is deferred, during the period of such deferral following such vesting event, on the shares of Common Stock underlying such Award if such shares were then outstanding.  In the event such a provision is included in a Award Agreement, the Administrator shall determine whether such payments shall be (i) paid to the holder of the Award, as specified in the Award Agreement, either (A) at the same time as the underlying dividends are paid, regardless of the fact that the restricted stock unit has not theretofore vested, (B) at the time at which the Award's vesting event occurs, conditioned upon the occurrence of the vesting event, (C) once the Award has vested, at the same time as the underlying dividends are paid, regardless of the fact that payment of the vested restricted stock unit has been deferred, and/or (D) at the time at which the corresponding vested restricted stock units are paid, (ii) made in cash, shares of Common Stock or other property and (iii) subject to such other vesting and forfeiture provisions and other terms and conditions as the Administrator shall deem appropriate and as shall be set forth in the Award Agreement.

 

(c)           Consequence of Termination of Employment/Service.  Unless otherwise set forth in the applicable Award Agreement, (i) a grantee's termination of employment or consultancy/service relationship with the Company and its Subsidiaries and Affiliates for any reason other than death or Disability shall cause the immediate forfeiture of all restricted stock units that have not yet vested as of the date of such termination of employment or consultancy/service relationship and (ii) if a grantee incurs a termination of employment or consultancy/service relationship with the Company and its Subsidiaries and Affiliates as the result of his or her death or Disability, all restricted stock units that have not yet vested as of the date of such termination shall immediately vest as of such date; it being understood that then outstanding restricted stock units shall not be affected by a change of employment or consultancy/service relationship with the Company and its Subsidiaries and Affiliates so long as the grantee continues to be a director, officer or employee of, or a consultant or service provider to (or a Person employed by or providing services to any entity that that is itself a consultant or service provider to), the Company

 

 

  

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or any of its Subsidiaries or Affiliates.  Unless otherwise determined by the Administrator, any dividend equivalent rights on any restricted stock units forfeited under this Section 2.7(c) that have not theretofore been directly remitted to the grantee shall also be forfeited, whether by termination of any escrow arrangement under which such dividends are held or otherwise.  The Administrator may, in writing, waive or modify the application of the foregoing provisions of this Section 2.7(c).

 

(d)           No Shareholder Rights.  No grantee of a restricted stock unit shall have any of the rights of a shareholder of the Company with respect to such Award unless and until a share certificate is issued with respect to such Award upon the vesting of such Award (it being understood that the Administrator shall determine whether to pay any vested restricted stock unit in the form of cash or Company shares or both), which issuance shall be subject to Sections 3.2, 3.4 and 3.13.  Except as otherwise provided in Section 1.5(c), no adjustment to any restricted stock unit shall be made for dividends, distributions or other rights (whether ordinary or extraordinary, and whether in cash, securities or other property) for which the record date is prior to the date such share certificate, if any, is issued.

 

(e)           Transferability of Restricted Stock Units.  Except as otherwise specifically provided in this Plan or the applicable Award Agreement evidencing a restricted stock unit, no restricted stock unit granted under the Plan may be sold, assigned, transferred, pledged or otherwise encumbered or disposed of other than by will or by the laws of descent and distribution.  The Administrator may, in any applicable Award Agreement evidencing a restricted stock unit, permit a grantee to transfer all or some of the restricted stock units to (i) the grantee's Immediate Family Members, (ii) a trust or trusts for the exclusive benefit of such Immediate Family Members or (iii) other parties approved by the Administrator.  Following any such transfer, any transferred restricted stock units shall continue to be subject to the same terms and conditions as were applicable immediately prior to the transfer.

 

2.8.         Grant of Unrestricted Stock

 

The Administrator may grant (or sell at a purchase price at least equal to par value) shares of Common Stock free of restrictions under the Plan to such Key Persons and in such amounts and subject to such forfeiture provisions as the Administrator shall determine.  Shares may be thus granted or sold in respect of past services or other valid consideration.

 

	  	
2.9.

	
Other Stock-Based Awards

 

Subject to the provisions of the Plan (including, without limitation, Section 3.16), the Administrator shall have the sole and complete authority to grant to Key Persons other equity-based or equity-related Awards in such amounts and subject to such terms and conditions as the Administrator shall determine; provided that any such Awards must comply with applicable law and, to the extent deemed desirable by the Administrator, Rule 16b-3.

 

 

  

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2.10.

	
Dividend Equivalents

 

Subject to the provisions of the Plan (including, without limitation, Section 3.16), in the discretion of the Administrator, an Award, other than an option or stock appreciation right, may provide the Award recipient with dividends or dividend equivalents, payable in cash, shares, other securities, other Awards or other property, on a current or deferred basis, on such terms and conditions as may be determined by the Administrator, including, without limitation, payment directly to the Award recipient, withholding of such amounts by the Company subject to vesting of the Award, or reinvestment in additional shares, restricted shares or other Awards.

 

ARTICLE III.

Miscellaneous

 

3.1.          Amendment of the Plan; Modification of Awards

 

(a)           Amendment of the Plan.  The Board may from time to time suspend, discontinue, revise or amend the Plan in any respect whatsoever, except that no such amendment shall materially impair any rights or materially increase any obligations under any Award theretofore made under the Plan without the consent of the grantee (or, upon the grantee's death, the Person having the rights to the Award).  For purposes of this Section 3.1, any action of the Board or the Administrator that in any way alters or affects the tax treatment of any Award shall not be considered to materially impair any rights of any grantee.

 

(b)           Shareholder Approval Requirement.  If required by applicable rules or regulations of a national securities exchange or the SEC, the Company shall obtain shareholder approval with respect to any amendment to the Plan that (i) expands the types of Awards available under the Plan, (ii) materially increases the aggregate number of shares which may be issued under the Plan, except as permitted pursuant to Section 1.5(c), (iii) materially increases the benefits to participants under the Plan, including any material change to (A) permit, or that has the effect of, a Repricing of any outstanding Award, (B) reduce the price at which shares or options to purchase shares may be offered or (C) extend the duration of the Plan, or (iv) materially expands the class of Persons eligible to receive Awards under the Plan.

 

(c)           Modification of Awards.  The Administrator may cancel any Award under the Plan.  The Administrator also may amend any outstanding Award Agreement, including, without limitation, by amendment which would: (i) accelerate the time or times at which the Award becomes unrestricted, vested or may be exercised; (ii) waive or amend any goals, restrictions or conditions set forth in the Award Agreement; or (iii) waive or amend the operation of Sections 2.4, 2.6(e) or 2.7(c) with respect to the termination of the Award upon termination of employment or consultancy/service relationship or dismissal from the Board; provided, however, that no such amendment shall be made without shareholder approval if such approval is necessary to comply with any tax or regulatory requirement applicable to the Award.  However, any such cancellation or amendment (other than an amendment pursuant to Section 1.5, 3.5 or

 

 

  

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3.16) that materially impairs the rights or materially increases the obligations of a grantee under an outstanding Award shall be made only with the consent of the grantee (or, upon the grantee's death, the Person having the right to exercise the Award).  In making any modification to an Award (e.g., an amendment resulting in a direct or indirect reduction in the Exercise Price or a waiver or modification under Section 2.4(f), 2.6(e) or 2.7(c)), the Administrator may consider the implications, if any, of such modification under the Code with respect to Sections 409A and 457A of the Code with respect to Awards granted under the Plan to individuals subject to such provisions of the Code.

 

3.2.         Consent Requirement

 

(a)           No Plan Action Without Required Consent.  If the Administrator shall at any time determine that any Consent (as defined below) is necessary or desirable as a condition of, or in connection with, the granting of any Award under the Plan, the issuance or purchase of shares or other rights thereunder, or the taking of any other action thereunder (each such action being hereinafter referred to as a "Plan Action"), then such Plan Action shall not be taken, in whole or in part, unless and until such Consent shall have been effected or obtained to the full satisfaction of the Administrator.

 

(b)           Consent Defined.  The term "Consent" as used herein with respect to any Plan Action means (i) any and all listings, registrations or qualifications in respect thereof upon any securities exchange or under any federal, state or local law, rule or regulation, (ii) any and all written agreements and representations by the grantee with respect to the disposition of shares, or with respect to any other matter, which the Administrator shall deem necessary or desirable to comply with the terms of any such listing, registration or qualification or to obtain an exemption from the requirement that any such listing, qualification or registration be made and (iii) any and all consents, clearances and approvals in respect of a Plan Action by any governmental or other regulatory bodies or any other Person.

 

3.3.         Nonassignability

 

Except as provided in Sections 2.4(e), 2.5, 2.6(d) or 2.7(e), (a) no Award or right granted to any Person under the Plan or under any Award Agreement shall be assignable or transferable other than by will or by the laws of descent and distribution and (b) all rights granted under the Plan or any Award Agreement shall be exercisable during the life of the grantee only by the grantee or the grantee's legal representative or the grantee's permissible successors or assigns (as authorized and determined by the Administrator).  All terms and conditions of the Plan and the applicable Award Agreements will be binding upon any permitted successors or assigns.

 

3.4.          Taxes

 

(a)           Withholding.  A grantee or other Award holder under the Plan shall be required to pay, in cash, to the Company, and the Company and its Affiliates shall have the right and are hereby authorized to withhold from any Award, from any payment due or transfer made under any Award or under the Plan or from any compensation or other amount owing to such grantee or other Award holder, the amount of any applicable

 

 

 

  

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withholding taxes in respect of an Award, its grant, its exercise, its vesting, or any payment or transfer under an Award or under the Plan, and to take such other action as may be necessary in the opinion of the Company to satisfy all obligations for payment of such taxes.  Whenever shares of Common Stock are to be delivered pursuant to an Award under the Plan, with the approval of the Administrator, which the Administrator shall have sole discretion whether or not to give, the grantee may satisfy the foregoing condition by electing to have the Company withhold from delivery shares having a value equal to the amount of minimum tax required to be withheld.  Such shares shall be valued at their Fair Market Value as of the date on which the amount of tax to be withheld is determined.  Fractional share amounts shall be settled in cash.  Such a withholding election may be made with respect to all or any portion of the shares to be delivered pursuant to an Award as may be approved by the Administrator in its sole discretion.

 

(b)           Liability for Taxes.  Grantees and holders of Awards are solely responsible and liable for the satisfaction of all taxes and penalties that may arise in connection with Awards (including, without limitation, any taxes arising under Sections 409A and 457A of the Code) and the Company shall not have any obligation to indemnify or otherwise hold any such Person harmless from any or all of such taxes.  The Administrator shall have the discretion to organize any deferral program, to require deferral election forms, and to grant or, notwithstanding anything to the contrary in the Plan or any Award Agreement, to unilaterally modify any Award in a manner that (i) conforms with the requirements of Sections 409A and 457A of the Code (to the extent applicable), (ii) voids any participant election to the extent it would violate Sections 409A or 457A of the Code (to the extent applicable) and (iii) for any distribution event or election that could be expected to violate Section 409A of the Code, make the distribution only upon the earliest of the first to occur of a "permissible distribution event" within the meaning of Section 409A of the Code or a distribution event that the participant elects in accordance with Section 409A of the Code.  The Administrator shall have the sole discretion to interpret the requirements of the Code, including, without limitation, Sections 409A and 457A, for purposes of the Plan and all Awards.

 

3.5.         Change in Control

 

(a)           Change in Control Defined.  Unless otherwise set forth in the applicable Award Agreement, for purposes of the Plan, "Change in Control" shall mean the occurrence of any of the following:

 

(i)      any "person" (as defined in Section 13(d)(3) of the 1934 Act), company or other entity acquires "beneficial ownership" (as defined in Rule 13d-3 under the 1934 Act), directly or indirectly, of more than 50% of the aggregate voting power of the capital shares ordinarily entitled to elect directors of the Company; provided, however, that no Change in Control shall have occurred in the event of such an acquisition by (A) the Company, (B) any trustee or other fiduciary holding securities under an employee benefit plan of the Company or an Affiliate or (C) any company or other entity owned, directly or indirectly, by the holders of the voting shares ordinarily entitled to elect directors of the Company in substantially the same proportions as their ownership of the aggregate voting power of the capital shares ordinarily entitled to elect directors of the Company immediately prior to such acquisition;

 

 

  

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(ii)      the sale of all or substantially all the Company's assets in one or more related transactions to any "person" (as defined in Section 13(d)(3) of the 1934 Act), company or other entity; provided, however, that no Change in Control shall have occurred in the event of such a sale (A) to a Subsidiary which does not involve a material change in the equity holdings of the Company or (B) to an entity (the "Acquiring Entity") which has acquired all or substantially all the Company's assets if, immediately following such sale, 50% or more of the aggregate voting power of the capital shares ordinarily entitled to elect directors of the Acquiring Entity (or, if applicable, the ultimate parent entity that directly or indirectly has beneficial ownership of more than 50% of the aggregate voting power of the capital shares ordinarily entitled to elect directors of the Acquiring Entity) is beneficially owned by the holders of the voting shares ordinarily entitled to elect directors of the Company immediately prior to such sale in substantially the same proportions as the aggregate voting power of the capital shares ordinarily entitled to elect directors of the Company immediately prior to such sale;

 

(iii)           any merger, amalgamation, consolidation, reorganization or similar event of the Company or any Subsidiary; provided, however, that no Change in Control shall have occurred in the event 50% or more of the aggregate voting power of the capital shares ordinarily entitled to elect directors of the surviving or amalgamated entity (or, if applicable, the ultimate parent entity that directly or indirectly has beneficial ownership of more than 50% of the aggregate voting power of the capital shares ordinarily entitled to elect directors of the surviving entity) is beneficially owned by the holders of the voting shares ordinarily entitled to elect directors of the Company immediately prior to such event in substantially the same proportions as the aggregate voting power of the capital shares ordinarily entitled to elect directors of the Company immediately prior to such event;

 

(iv)           the approval by the Company's shareholders of a plan of complete liquidation or dissolution of the Company; or

 

(v)    during any period of 12 consecutive calendar months, individuals:

 

	  	
(A)

	
who were directors of the Company on the first day of such period, or

 

	  	
(B)

	
whose election or nomination for election to the Board was recommended or approved by at least a majority of the directors then still in office who were directors of the Company on the first day of such period, or whose election or nomination for election were so approved,

 

shall cease to constitute a majority of the Board.

 

Notwithstanding the foregoing, unless otherwise set forth in the applicable Award Agreement, for each Award subject to Section 409A of the Code, a Change in Control shall be deemed to have occurred under this Plan with respect to such Award only if a change in the ownership or effective control of the Company or a change in the ownership of a substantial portion of the assets of the Company shall also be deemed to have occurred under Section 409A of the Code, provided that such limitation shall apply to such Award only to the extent necessary to avoid adverse tax effects under Section 409A of the Code.

 

 

 

  

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(b)           Effect of a Change in Control.  Unless the Administrator provides otherwise in an Award Agreement, upon the occurrence of a Change in Control:

 

(i)       notwithstanding any other provision of this Plan, any Award then outstanding shall become fully vested and any forfeiture provisions thereon imposed pursuant to the Plan and the Award Agreement shall lapse and any Award in the form of an option or stock appreciation right shall be immediately exercisable;

 

(ii)      to the extent permitted by law and not otherwise limited by the terms of the Plan, the Administrator may amend any Award Agreement in such manner as it deems appropriate;

 

(iii)     a grantee who incurs a termination of employment or consultancy/service relationship or dismissal from the Board for any reason, other than a termination or dismissal "for Cause", concurrent with or within one year following the Change in Control may exercise any outstanding option or stock appreciation right, but only to the extent that the grantee was entitled to exercise the Award on the date of his or her termination of employment or consultancy/service relationship or dismissal from the Board, until the earlier of (A) the original expiration date of the Award and (B) the later of (x) the date provided for under the terms of Section 2.4 without reference to this Section 3.5(b)(iii) and (y) the first anniversary of the grantee's termination of employment or consultancy/service relationship or dismissal from the Board.

 

(c)           Miscellaneous.  Whenever deemed appropriate by the Administrator, any action referred to in paragraph (b)(ii) of this Section 3.5 may be made conditional upon the consummation of the applicable Change in Control transaction.  For purposes of the Plan and any Award Agreement granted hereunder, the term "Company" shall include any successor to Nordic American Tanker Shipping Limited.

 

3.6.         Operation and Conduct of Business

 

Nothing in the Plan or any Award Agreement shall be construed as limiting or preventing the Company or any Affiliate from taking any action with respect to the operation and conduct of their business that they deem appropriate or in their best interests, including any or all adjustments, recapitalizations, reorganizations, exchanges or other changes in the capital structure of the Company or any Affiliate, any merger, amalgamation or consolidation of the Company or any Affiliate, any issuance of Company shares or other securities or subscription rights, any issuance of bonds, debentures, preferred or prior preference shares ahead of or affecting the Common Stock or other securities or rights thereof, any dissolution or liquidation of the Company or any Affiliate, any sale or transfer of all or any part of the assets or business of the Company or any Affiliate, or any other corporate act or proceeding, whether of a similar character or otherwise.

 

3.7.         No Rights to Awards

 

No Key Person or other Person shall have any claim to be granted any Award under the Plan.

 

 

  

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3.8.          Right of Discharge Reserved

 

Nothing in the Plan or in any Award Agreement shall confer upon any grantee the right to continue his or her employment with the Company or any Affiliate, his or her consultancy/service relationship with the Company or any Affiliate, or his or her position as a director of the Company or any Affiliate, or affect any right that the Company or any Affiliate may have to terminate such employment or consultancy/service relationship or service as a director.

 

3.9.          Non-Uniform Determinations

 

The Administrator's determinations and the treatment of Key Persons and grantees and their beneficiaries under the Plan need not be uniform and may be made and determined by the Administrator selectively among Persons who receive, or who are eligible to receive, Awards under the Plan (whether or not such Persons are similarly situated).  Without limiting the generality of the foregoing, the Administrator shall be entitled, among other things, to make non-uniform and selective determinations, and to enter into non-uniform and selective Award Agreements, as to (a) the Persons to receive Awards under the Plan, (b) the types of Awards granted under the Plan, (c) the number of shares to be covered by, or with respect to which payments, rights or other matters are to be calculated with respect to, Awards and (d) the terms and conditions of Awards.

 

3.10.       Other Payments or Awards

 

Nothing contained in the Plan shall be deemed in any way to limit or restrict the Company from making any award or payment to any Person under any other plan, arrangement or understanding, whether now existing or hereafter in effect.

 

3.11.       Headings

 

Any section, subsection, paragraph or other subdivision headings contained herein are for the purpose of convenience only and are not intended to expand, limit or otherwise define the contents of such subdivisions.

 

3.12.       Effective Date and Term of Plan

 

(a)           Adoption; Shareholder Approval.  The Plan was adopted by the Board on February 11, 2011.  The Board may, but need not, make the granting of any Awards under the Plan subject to the approval of the Company's shareholders.

 

(b)           Termination of Plan.  The Board may terminate the Plan at any time.  All Awards made under the Plan prior to its termination shall remain in effect until such Awards have been satisfied or terminated in accordance with the terms and provisions of the Plan and the applicable Award Agreements.  No Awards may be granted under the Plan following the tenth anniversary of the date on which the Plan was adopted by the Board.

 

 

 

  

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3.13.       Restriction on Issuance of Stock Pursuant to Awards

 

The Company shall not permit any shares of Common Stock to be issued pursuant to Awards granted under the Plan unless such shares of Common Stock are fully paid and non-assessable under applicable law.  Notwithstanding anything to the contrary in the Plan or any Award Agreement, at the time of the exercise of any Award, at the time of vesting of any Award, at the time of payment of shares of Common Stock in exchange for, or in cancellation of, any Award, or at the time of grant of any unrestricted shares under the Plan, the Company and the Administrator may, if either shall deem it necessary or advisable for any reason, require the holder of an Award (a) to represent in writing to the Company that it is the Award holder's then-intention to acquire the shares with respect to which the Award is granted for investment and not with a view to the distribution thereof or (b) to postpone the date of exercise until such time as the Company has available for delivery to the Award holder a prospectus meeting the requirements of all applicable securities laws; and no shares shall be issued or transferred in connection with any Award unless and until all legal requirements applicable to the issuance or transfer of such shares have been complied with to the satisfaction of the Company and the Administrator.  The Company and the Administrator shall have the right to condition any issuance of shares to any Award holder hereunder on such Person's undertaking in writing to comply with such restrictions on the subsequent transfer of such shares as the Company or the Administrator shall deem necessary or advisable as a result of any applicable law, regulation or official interpretation thereof, and all share certificates delivered under the Plan shall be subject to such stop transfer orders and other restrictions as the Company or the Administrator may deem advisable under the Plan, the applicable Award Agreement or the rules, regulations and other requirements of the SEC, any stock exchange upon which such shares are listed, and any applicable securities or other laws, and certificates representing such shares may contain a legend to reflect any such restrictions.  The Administrator may refuse to issue or transfer any shares or other consideration under an Award if it determines that the issuance or transfer of such shares or other consideration might violate any applicable law or regulation or entitle the Company to recover the same under Section 16(b) of the 1934 Act, and any payment tendered to the Company by a grantee or other Award holder in connection with the exercise of such Award shall be promptly refunded to the relevant grantee or other Award holder.  Without limiting the generality of the foregoing, no Award granted under the Plan shall be construed as an offer to sell securities of the Company, and no such offer shall be outstanding, unless and until the Administrator has determined that any such offer, if made, would be in compliance with all applicable requirements of any applicable securities laws.

 

3.14.        Requirement of Notification of Election Under Section 83(b) of the Code

 

If an Award recipient, in connection with the acquisition of Company shares under the Plan, makes an election under Section 83(b) of the Code (to include in gross income in the year of transfer the amounts specified in Section 83(b) of the Code), the grantee shall notify the Administrator of such election within ten days of filing notice of the election with the U.S. Internal Revenue Service, in addition to any filing and notification required pursuant to regulations issued under Section 83(b) of the Code.

 

 

  

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3.15.       Severability

 

If any provision of the Plan or any Award is or becomes or is deemed to be invalid, illegal, or unenforceable in any jurisdiction or as to any Person or Award, or would disqualify the Plan or any Award under any law deemed applicable by the Administrator, such provision shall be construed or deemed amended to conform to the applicable laws or, if it cannot be construed or deemed amended without, in the determination of the Administrator, materially altering the intent of the Plan or the Award, such provision shall be stricken as to such jurisdiction, Person or Award and the remainder of the Plan and any such Award shall remain in full force and effect.

 

3.16.       Sections 409A and 457A

 

To the extent applicable, the Plan and Award Agreements shall be interpreted in accordance with Sections 409A and 457A of the Code and Department of Treasury regulations and other interpretive guidance issued thereunder.  Notwithstanding any provision of the Plan or any applicable Award Agreement to the contrary, in the event that the Administrator determines that any Award may be subject to Section 409A or 457A of the Code, the Administrator may adopt such amendments to the Plan and the applicable Award Agreement or adopt other policies and procedures (including amendments, policies and procedures with retroactive effect), or take any other actions, that the Administrator determines are necessary or appropriate to (i) exempt the Plan and Award from Sections 409A and 457A of the Code and/or preserve the intended tax treatment of the benefits provided with respect to the Award, or (ii) comply with the requirements of Sections 409A and 457A of the Code and related Department of Treasury guidance and thereby avoid the application of penalty taxes under Sections 409A and 457A of the Code.

 

3.17.       Forfeiture; Clawback

 

The Administrator may, in its sole discretion, specify in the applicable Award Agreement that any realized gain with respect to options or stock appreciation rights and any realized value with respect to other Awards shall be subject to forfeiture or clawback, in the event of (a) a grantee's breach of any non-competition, non-solicitation, confidentiality or other restrictive covenants with respect to the Company or any Affiliate, (b) a grantee's breach of any employment or consulting agreement with the Company or any Affiliate, (c) a grantee's termination for Cause or (d) a financial restatement that reduces the amount of compensation under the Plan previously awarded to a grantee that would have been earned had results been properly reported.

 

3.18.           No Trust or Fund Created

 

Neither the Plan nor any Award shall create or be construed to create a trust or separate fund of any kind or a fiduciary relationship between the Company or any Affiliate and an Award recipient or any other Person.  To the extent that any Person acquires a right to receive payments from the Company or any Affiliate pursuant to an Award, such right shall be no greater than the right of any unsecured general creditor of the Company or its Affiliate.

 

 

  

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3.19.       No Fractional Shares

 

No fractional shares shall be issued or delivered pursuant to the Plan or any Award, and the Administrator shall determine whether cash, other securities, or other property shall be paid or transferred in lieu of any fractional shares or whether such fractional shares or any rights thereto shall be canceled, terminated, or otherwise eliminated.

 

3.20.       Governing Law

 

The Plan will be construed and administered in accordance with the laws of the State of New York, without giving effect to principles of conflict of laws.

 

 

 

 

 

 

 

 

 

 

 

  

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