Document:

Exhibit 10.3

Nabriva Therapeutics AG

 

Amended and Restated Stock Option Plan 2015

 

I. INTRODUCTION

 

(A)            On April 2, 2015 the shareholders, the Management Board and the Supervisory Board of Nabriva Therapeutics AG (Nabriva or the Company) resolved to implement a stock option plan under which the Company’s employees, including members of the Management Board, and members of the Supervisory Board are eligible to receive options to purchase Shares of the Company (any recipient of an award of options, a Beneficiary). On 30 June 2015 the shareholders of the Company resolved to amend the stock option plan so implemented by approving this Amended and Restated Stock Option Plan 2015 (the amended and restated plan, as it may be amended from time to time, the SOP 2015).

 

(B)            Options granted hereunder entitle each Beneficiary to acquire Shares in Nabriva or otherwise settle the options under the conditions set forth herein. Nabriva believes that this SOP 2015 enhances the commitment of the Beneficiaries to contribute to Nabriva’s success by allowing them to participate in the increase in the value of the Company and thereby aligns the interests of the Beneficiaries with those of the Company’s shareholders.

 

(C)            Each Beneficiary will receive an Accession Statement (the form of which is attached hereto at Annex ./2) informing the Beneficiary of the SOP 2015 and any awards made to the Beneficiary under it. The provisions set forth herein regulate the SOP 2015 in its entirety. If any of the information communicated to the potential participants of the SOP 2015 diverges from this SOP 2015, the provisions of this SOP 2015 shall prevail.

 

(D)            Options pursuant to this SOP 2015 are neither granted as remuneration nor as bonus in exchange for the performance of Beneficiaries during a specific period. Rather, the participation in the SOP 2015 and the vesting of options pursuant to this SOP 2015 constitute a voluntary benefit of the Company. Following the nature of voluntary benefits these are solely granted to foster the motivation and solidarity of all Beneficiaries.

 

II. STRUCTURE OF THE STOCK OPTION PLAN

 

A. Options

 

Subject to adjustment as set forth in Clause II.D.13 hereof, options may be granted and vested to all Beneficiaries under the SOP 2015 for up to 95,000 Shares (the Overall Number of Options). The number of Shares subject to any option granted to a Beneficiary is set forth on such Beneficiary’s Accession Statement. If an option granted under the SOP 2015 expires or is terminated, surrendered or canceled without having been fully exercised or is forfeited in whole or in part or otherwise results in Shares not being issued, the unused Shares shall again be available for the grant of options. Notwithstanding the date and duration of their participation herein and without prejudice to the provisions of this SOP 2015, no person (whether or not he or she is already a Beneficiary under the SOP 2015) shall be entitled to (further) options under this SOP 2015 once the Overall Number of Options are granted, taking into account any permitted share recycling as set forth herein, unless the shareholders of Nabriva resolve upon an increase of the Overall Number of Options.

 

 

1.                   Vesting

 

1.1            The period in which granted options are vested in accordance with the SOP 2015 shall be four years (Vesting Period) unless otherwise determined by the Company; except with respect to options awarded to members of the Supervisory Board, any alternative vesting period determined by the Company must be approved by the Supervisory Board or the Management Board. The Vesting Period with respect to a Beneficiary shall commence on the Date of Participation.

 

(i)                  Year 1

 

On the last day of the last calendar month of the first year of the Vesting Period following the Date of Participation, 25% of the options eligible to be vested per Beneficiary shall be vested automatically with that Beneficiary.

 

(ii)               Year 2, Year 3 and Year 4

 

During the second, third and fourth years of the Vesting Period following the Date of Participation, the remaining 75% of the options eligible to be vested per Beneficiary shall be vested with that Beneficiary on a monthly pro rata basis (i.e. 2.083% per month). Options eligible to be vested for any given month in years two, three and four of the Vesting Period will be vested automatically on the last day of each calendar month.

 

1.2            Options shall be vested to Beneficiaries taking maternity leave (Maternity Leave Employees) in accordance with this Clause II.A.1, provided that options shall not be vested during the time the Maternity Leave Employee is on maternity leave 

 

1.3            For the avoidance of doubt, options vested prior to the Maternity Leave Employee having taken maternity leave shall not be forfeited. 

 

2.                   Exercise Price 

 

2.1            The exercise price per option shall be equal to 100% of the Fair Market Value per Share on the Date of Participation (the Exercise Price). If the Management Board, Supervisory Board, or shareholders, as the case may be, approve the grant of an option with an Exercise Price to be determined on a future date, the Exercise Price shall be equal to 100% of the Fair Market Value on such future date. 

 

2.2            Subject to the provisions set forth herein, each vested option entitles a Beneficiary to acquire one Share at the Exercise Price. 

 

2.3            The Company shall pay for any costs arising in connection with the determination of the Exercise Price. 

 

3.                   Exercising vested options 

 

3.1            Options granted under the SOP 2015 shall have a term of no more than 10 years from the Date of Participation. 

 

3.2            Unless otherwise specifically permitted in the Accession Statement or resolved upon by the Management Board with the approval of the Supervisory Board, the exercise of a vested option is only permissible in case of a Liquidity Event or following an initial public offering occurring during the term of the option. In the case of a Liquidity Event occurring prior to an initial public offering of the Company, the Beneficiaries are entitled to exercise their vested options, taking into account any vesting acceleration provided for under Clause II.B.8 

 

 

hereof, within the six-week period commencing the day after notification of all Beneficiaries of the upcoming Liquidity Event; provided that, if the acquiring or succeeding corporation (or an affiliate thereof) assumes any options in the Liquidity Event, such assumed options may be exercised, to the extent vested in accordance with their terms and Clause II.B.8 hereof, at any time during the remaining term of the option while the Beneficiary is providing services to the acquiring or succeeding corporation (or an affiliate thereof) and within the three-month period following a termination of the Beneficiary’s services to such entity due to a Good Leaver Event. In the case of an initial public offering, the Beneficiaries are entitled to exercise their vested options at any time, following such offering, during the remaining term of the option while the Beneficiary is providing services to the Company and within the three month period following a termination of the Beneficiary’s services due to a Good Leaver Event. The period during which an option may be exercised is the Exercise Period. 

 

3.3            In order to exercise a vested option, the Beneficiary must notify the Company by submitting an exercise notice to the Company in the form of Annex ./3 (the Exercise Notice) one week (or such shorter period as is permitted by the Company) prior to the date he wishes to exercise the option as specified in the Exercise Notice. 

 

3.4            In case of a Liquidity Event, the Beneficiaries will — following their exercise of options — only receive a portion of the remainder, if any, of the proceeds from such Liquidity Event after satisfaction of the holders of certain preferred shares pursuant to liquidation preference agreements as in force at the date of exercise of options, whereas the Beneficiaries will participate in such remainder, if any, pro rata corresponding to their shareholding in the Company (in case Shares would have been transferred to the Beneficiaries); whereas the Company in case of a distributable remainder in its sole discretion may opt to provide the Beneficiaries with Shares in the Company rather than with cash amounts. A Beneficiary’s obligation to deposit the Exercise Price shall be subject to notification by the Company that a distributable remainder exists. 

 

4.                   Rights and restrictions attached to vested options 

 

4.1            The Beneficiaries shall not be entitled to transfer vested options, except to individuals by way of inheritance or bequest. For the avoidance of doubt, Beneficiaries shall also not be entitled to transfer vested options by virtue of bilateral legal transactions causa mortis with or without consideration. 

 

4.2            The Beneficiaries shall not be entitled to grant rights to, encumber or dispose of vested options in any other manner (in particular pledge, transfer by way of security or derivative transactions having the same commercial effect). 

 

4.3            Options do not entitle the Beneficiary to exercise any shareholder rights. The Beneficiary may only exercise shareholder rights if and to the extent he holds Shares. 

 

4.4            In the event of an Insolvency of a Beneficiary, the options not yet exercised by such Beneficiary shall automatically be forfeited. 

 

4.5            Any options not exercised by the end of the Exercise Period shall automatically and finally lapse and be forfeited. 

 

B. Termination of Employment or Board Position

 

In case a Beneficiary’s services to the Company are terminated, the following shall apply:

 

 

 

5.                   Good Leaver Events 

 

5.1            If a Beneficiary’s service or employment relationship ends during the term of the SOP 2015 due to (and each of the following a Good Leaver Event) 

 

(i)                           retirement due to age or permanent disability (Ausscheiden aufgrund Alters oder dauernder Arbeitsunfähigkeit);

 

(ii)                        death;

 

(iii)                     ordinary termination by maintaining the contractual or statutory periods and deadlines (ordentliche Kündigung) by the Company or the Beneficiary;

 

(iv)                    justified premature resignation with immediate effect (berechtigter vorzeitiger Austritt);

 

(v)                       unjustified dismissal (ungerechtfertigte Entlassung);

 

(vi)                    mutual termination (einvernehmliche Auflösung);

 

(vii)                 expiry of a Management Board or Supervisory Board mandate (Nichtverlängerung eines Mandats);

 

(viii)              premature revocation of a Management Board or Supervisory Board mandate without good cause (Abberufung ohne wichtigen Grund); or

 

(ix)                    resignation of a member of the Management Board or Supervisor Board with good cause (Rücktritt aus wichtigem Grund);

 

all rights and entitlements under the SOP 2015 to the options which have not been vested upon the occurrence of a Good Leaver Event shall be automatically forfeited. For the avoidance of doubt, except as otherwise determined by the Supervisory Board, with respect to members of the Management Board, or the shareholders, with respect to members of the Supervisory Board, none of the events set forth in (vii), (viii) or (ix) shall constitute a termination of services to the extent the board member continues to provide services to the Company as an employee or otherwise.

 

Options eligible to be vested to a Beneficiary in a fiscal year which are not actually vested in respect of such Beneficiary in that fiscal year shall not be available to that Beneficiary at any other time.

 

5.2            Beneficiaries with options vested but not exercised at the time of a Good Leaver Event shall retain such options and be entitled to exercise such options according to the provisions set forth herein. 

 

6.                   Bad Leaver Events 

 

6.1            If a Beneficiary’s service or employment relationship with the Company ends during the term of the SOP 2015 due to an event other than a Good Leaver Event (a Bad Leaver Event), all options of the Beneficiary vested but not exercised at the time a Bad Leaver Event occurs shall be forfeited. The revocation of a member of the Management Board pursuant to a vote of non-confidence by the General Assembly (Vertrauensentzug) shall not constitute a Bad Leaver Event as long as no reason for justified dismissal is set by the Beneficiary. 

 

6.2            The Supervisory Board may within its discretion decide whether to grant to a Beneficiary advantages as from a Good Leaver event even though the end of a Beneficiary’s service or employment relationship constitutes a Bad Leaver Event as described in this Clause II.B.6. In case the Beneficiary concerned functions as a member of the Supervisory Board, the shareholders shall decide on the advantages granted to the Beneficiary as set forth above. 

 

 

7.                   Exercised options 

 

The termination of a service or an employment relationship with the Company shall have no effect on options that were exercised prior to the date of a declaration of termination of the Beneficiary’s services.

 

8.                   Accelerated Vesting 

 

In case a Liquidity Event occurs, all options outstanding under the SOP 2015 at such time, shall be assumed, or substantially equivalent options shall be substituted, by the acquiring or succeeding corporation (or an affiliate thereof) and any such options that are not yet vested shall continue to become vested in accordance with the original vesting schedule set forth on the Beneficiary’s original Accession Statement. However, each such option shall be immediately exercisable in full if, on or prior to the first anniversary of the date of the consummation of the Liquidity Event, the Beneficiary’s services with the Company or the acquiring or succeeding corporation (or an affiliate thereof) is terminated due to a Good Leaver Event. If the acquiring or succeeding corporation (or an affiliate thereof) refuses to assume or substitute substantial equivalent options in accordance with the first sentence of this Clause II.B.8, then all remaining options not yet vested with a Beneficiary at the time of such Liquidity Event shall vest with the Beneficiaries with immediate effect.

 

C. Duration, Expiry, Amendments to and Termination of 
 the Stock Option Plan

 

9.                   Duration and Expiry 

 

9.1            The SOP 2015 shall become effective on upon the registration of the conditional capital increase of the Company resolved upon in the shareholders’ meeting on 30 June 2015 with the commercial register (the Effective Date). 

 

9.2            No options shall be granted under the SOP 2015 after the expiration of 10 years from the Effective Date, but options previously granted may extend beyond that date. 

 

10.            Amendments 

 

10.1     The Management Board, Supervisory Board or shareholders, as the case may be, may amend, modify or terminate any outstanding option. The Beneficiary’s consent to such action shall be required unless (i) the Management Board, Supervisory Board or shareholders, as the case may be, determine that the action, taking into account any related action, does not materially and adversely affect the Beneficiary’s rights under the SOP 2015 or (ii) the change is permitted under Clause II.D.13. 

 

10.2     The Management Board may amend, suspend or terminate the SOP 2015 or any portion thereof at any time; provided that if at any time the approval of the Company’s shareholders is required, including by application of Austrian law, the Management Board may not effect such modification or amendment without such approval. Unless otherwise specified in the amendment, any amendment to the SOP 2015 adopted in accordance with this Clause II.C.10.2 shall apply to, and be binding on the Beneficiaries of, all options outstanding under the SOP 2015 at the time the amendment is adopted, provided the Management Board or shareholders, as the case may be, determine that such amendment, taking into account any related action, does not materially and adversely affect the rights of Beneficiaries under the SOP 2015. 

 

 

11.            Termination 

 

The Company may terminate any option granted to a Beneficiary under the SOP 2015 for good cause if that Beneficiary breaches significant statutory or contractual obligations in connection with its service or employment relationship with the Company. Such good cause shall be a reason pursuant to sec 75 Austrian Stock Company Act (Aktiengesetz) for members of the Management Board and the Supervisory Board of the Company and pursuant to sec 27 Austrian Employees Act (Angestelltengesetz) for employees of the Company whereby the revocation of a member of the Management Board pursuant to a vote of non-confidence (Vertrauensentzug) by the shareholders shall not constitute such good cause in the meaning of this paragraph as long as no reason for justified dismissal is set by the Beneficiary. To the extent the members of the Management Board are affected, the Supervisory Board shall exercise such termination right. To the extent members of the Supervisory Board are affected, the Company’s shareholders shall be competent to resolve upon such termination by simple majority.

 

D. Risks

 

12.            Risks 

 

12.1     Neither the Company nor any shareholder of the Company (or any of their officers, employees or consultants) 

 

(i)                           assumes any responsibility or liability for the development of the value of the market price of the Shares;

 

(ii)                        warrant, assure or guarantee any increase in value of the Shares, in particular it is neither warranted, assured or guaranteed that a Beneficiary will be able to sell his participation in the Company with a profit in the future nor that no loss will be incurred;

 

(iii)                     warrant, assure or guarantee a profit of a Beneficiary from this SOP 2015;

 

(iv)                    makes any representations or warranty and shall have no liability to the Beneficiary or any other person if any provisions of or payments, compensation or other benefits under the SOP 2015 are determined to constitute nonqualified deferred compensation subject to Section 409A of the Internal Revenue Code but do not to satisfy the conditions of that section.

 

12.2     Each Beneficiary declares with his participation in the SOP 2015 that the participation is voluntary. Each Beneficiary is aware of the fact that he alone bears the risk of a decrease in or total loss of value of his investments. Each Beneficiary accepts the offer to participate in the SOP 2015 at his own risk and assumes any liability relating thereto. 

 

12.3     Each Beneficiary is responsible for obtaining legal and tax advice before participating in the SOP 2015 and for evaluating the tax effects connected with the SOP 2015. Each Beneficiary accepts and declares that he has not been advised by or on behalf of the Company with respect to his participation in the SOP 2015 (in particular regarding legal and tax issues of the participation). 

 

12.4     The Company declares to undertake the best efforts for a risk minimal and tax efficient settlement of this SOP 2015. 

 

 

D. Miscellaneous

 

13.            Stock Adjustments 

 

13.1     If, during the term of the SOP 2015, changes to the capital of the Company or restructuring measures have an effect on the capital of the Company, such as a stock split or reverse split of stocks, (together Stock Adjustments) which result in a change in the value of the options, the Company is entitled to adjust the price or the amount of the options respectively, to the extent necessary to compensate changes in value (but not a dilution of shareholding) resulting from any Stock Adjustments. For the avoidance of doubt, this Clause II.D.13 shall not apply to measures, such as future financing rounds, in which new shareholders of the Company are introduced. 

 

13.2     The Supervisory Board decides on an adjustment based on a proposal by the Management Board. After execution of the Stock Adjustments the total value of the granted options shall equal the total value of the options before execution of such Stock Adjustments. The Company will inform the Beneficiaries about the Stock Adjustment and the effective date of the Stock Adjustment. 

 

14.            Agreement in connection with an Initial Public Offering 

 

14.1     Each Beneficiary agrees, in connection with the initial underwritten public offering of Shares pursuant to a registration statement under the Securities Act, (i) not to (a) offer, pledge, announce the intention to sell, sell, contract to sell, sell any option or contract to purchase, purchase any option or contract to sell, grant any option, right or warrant to purchase, or otherwise transfer or dispose of, directly or indirectly, any Shares or any other securities of the Company or (b) enter into any swap or other agreement that transfers, in whole or in part, any of the economic consequences of ownership of Shares or other securities of the Company, whether any transaction described in clause (a) or (b) is to be settled by delivery of securities, in cash or otherwise, during the period beginning on the date of the filing of such registration statement with the United States Securities and Exchange Commission and ending 180 days after the date of the final prospectus relating to the offering (plus up to an additional 34 days to the extent requested by the managing underwriters for such offering in order to address Rule 2711(f) of the National Association of Securities Dealers, Inc. or any similar successor provision), and (ii) to execute any agreement reflecting clause (i) above as may be requested by the Company or the managing underwriters at the time of such offering. The Company may impose stop-transfer instructions with respect to the Shares or other securities subject to the foregoing restriction until the end of the “lock-up” period. 

 

15.            No business practice (“Betriebliche Übung”) 

 

15.1     The granting of options and the implementation of the SOP 2015 is the free and discretionary choice of the Company, constitutes a voluntary benefit and shall not give rise to any legal claim by a Beneficiary for the future, not even in the case of repeated granting. 

 

15.2     Beneficiaries of the SOP 2015 do not have a right for the introduction of another option plan or any vesting of options in addition to those under the SOP 2015, even if the Company implements any other option plan or vests further options under any other option plan. 

 

15.3     Vested options under this SOP 2015 do not affect the calculation of severance, premiums, royalties, pension plans or any other remuneration of the Beneficiary. 

 

16.            Taxes, duties and social contributions 

 

16.1     All taxes, social contributions, further duties and costs accrued by the Beneficiary in connection with its participation in the SOP 2015 or due to the distribution of profits shall be borne by each Beneficiary. Each 

 

 

Beneficiary is obliged to pay taxes relating to the respective options granted/exercised under the SOP 2015 to the competent tax authorities, also in the course of tax audits or any other procedures. Each Beneficiary shall fully indemnify the Company in respect of all such liabilities and obligations against tax authorities. 

 

16.2     The employer of the Beneficiary is entitled, if required by statutory law, to withhold wage tax or any other taxes or duties or social contributions to be paid by the Beneficiary. This applies even after termination of the employment of a Beneficiary with the Company, if the vested options granted are non-lapsable but not yet exercisable. The Company is entitled to demand the full cooperation of the Beneficiary even after his leave with respect to the withholding of taxes, social contributions, other duties and costs in connection with this SOP 2015. The Beneficiary undertakes to co-operate. 

 

16.3     Withholdings mentioned above do not release the Beneficiary from his responsibility and obligation to pay all taxes, social contributions, further duties and costs being due and accruing in connection with his participation in the SOP 2015 or in connection with the distribution of profits. 

 

17.            Notices 

 

17.1     Notifications to the Company with respect to the terms of the SOP 2015 shall only be made to: 

 

Nabriva Therapeutics AG

Corporate Human Resources

fax: +43 1 74093 1202

email: ralf.schmid@nabriva.com

 

17.2     Notifications by the Company to the Beneficiary relating to the SOP 2015 shall be made in writing (including email or fax) to each Beneficiary to the respective Beneficiary’s address last disclosed to the Company. 

 

18.            Saving provisions 

 

If any provision of this SOP 2015 in full or in part is or becomes invalid, this shall not affect the validity of all other provisions or the valid part of an invalid provision. To the extent legally possible, an agreement shall be made replacing the invalid provision by a provision which best meets the intent of the terms of the SOP 2015. The same applies to loopholes of the terms of the SOP 2015, which may arise in the course of implementation of the terms of the SOP 2015.

 

19.            Governing law and jurisdiction 

 

The terms of the SOP 2015, its interpretation and all rights and obligations arising there from shall be governed by Austrian law, except for international private law and the UN Convention on Contracts for the International Sales of Goods. The courts of Vienna, Austria, shall, to the extent legally possible, have exclusive jurisdiction regarding all claims in connection with and the terms of the SOP 2015.

 

Annex:

./1               Definitions 

./2               Accession Statement 

./3               Exercise Notice 

 

 

Annex ./1

 

I. Definitions

 

	
 
    	
 
    	
 
    
	
Bad Leaver Event
    	
 
    	
has the meaning ascribed thereto in Clause II.C.2
    
	
 
    	
 
    	
 
    
	
Insolvency
    	
 
    	
means the initiation of insolvency proceedings in   regard to the assets of a Beneficiary, the dismissal of an application for   insolvency due to a lack of assets or the initiation of private insolvency   proceedings pursuant to secs. 181 et seq. of the Austrian Insolvency Code (“IO”) or any equivalent rule in any other relevant   jurisdiction
    
	
 
    	
 
    	
 
    
	
Beneficiary
    	
 
    	
is any employee (for the avoidance of doubt including   any member of the Management Board), member of the Supervisory Board of the   Company or any other individual eligible to receive options hereunder, who   receives an award of options
    
	
 
    	
 
    	
 
    
	
Company
    	
 
    	
Nabriva Therapeutics AG and its legal successors
    
	
 
    	
 
    	
 
    
	
Date of Participation
    	
 
    	
means the date on which an option is awarded and the   recipient becomes a Beneficiary in this SOP 2015. A Beneficiary’s Date   of Participation is set forth on the Beneficiary’s Accession Statement
    
	
 
    	
 
    	
 
    
	
Effective Date
    	
 
    	
has the meaning ascribed thereto in Clause II.C.9
    
	
 
    	
 
    	
 
    
	
Exercise Notice
    	
 
    	
has the meaning ascribed thereto in Clause II.A.3
    
	
 
    	
 
    	
 
    
	
Exercise Period
    	
 
    	
has the meaning ascribed thereto in Clause II.A.3
    
	
 
    	
 
    	
 
    
	
Exercise Price
    	
 
    	
has the meaning ascribed thereto in Clause II.A.2
    
	
 
    	
 
    	
 
    
	
Fair Market Value
    	
 
    	
shall, for each Share for purposes of the SOP 2015,   be determined as follows:
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
(i) if the Shares are not publicly traded, the   Management Board, subject to the approval of the Supervisory Board, will   determine the Fair Market Value for purposes of the SOP 2015 on the basis of   an enterprise value of the Company of US$148,045,201 as determined by the   independent third-party expert evaluator Duff & Phelps B.V. as of   March 31, 2015, and taking into account any measure of value it   determines to be appropriate to reflect changes in the value of the Company   since March 31, 2015 in a manner consistent with the valuation   principles under Section 409A of the Internal Revenue Code;
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
(ii) if the Shares trade on a national   securities exchange, the closing sale price (for the primary trading session)   on the Date of Participation; or
    

 

 

	
 
    	
 
    	
(iii) if the Shares do not trade on any such   exchange, the average of the closing bid and asked prices as reported by an   authorized OTCBB market data vendor as listed on the OTCBB website otcbb.com)   on the Date of Participation.
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
For any date that is not a trading day, the Fair   Market Value of a Share for such date will be determined by using the closing   sale price or average of the bid and asked prices, as appropriate, for the   immediately preceding trading day and with the timing in the formulas above   adjusted accordingly. The Management Board can substitute a particular time   of day or other measure of “closing sale price” or “bid and asked prices” if   appropriate because of exchange or market procedures or can, in its sole   discretion, use weighted averages either on a daily basis or such longer   period as complies with Section 409A of the Internal Revenue Code.
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
The Management Board and Supervisory Board have,   within the framework determined by the shareholders in this SOP 2015, sole   discretion to determine the Fair Market Value for purposes of the SOP 2015,   and all options are conditioned on the Beneficiary’s agreement that the Management   Board’s and Supervisory Board’s determination is conclusive and binding even   though others might make a different determination.
    
	
 
    	
 
    	
 
    
	
Good Leaver Event
    	
 
    	
has the meaning ascribed thereto in Clause II.B.5
    
	
 
    	
 
    	
 
    
	
Internal Revenue Code
    	
 
    	
means the United States Internal Revenue Code of   1986, as amended or any successor thereto
    
	
 
    	
 
    	
 
    
	
Liquidity Event
    	
 
    	
means:
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
(i) an exclusive license of or the sale, the   lease or other disposal of all or substantially all of the assets of the   Company;
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
(ii) a sale or other disposal (for the   avoidance of doubt, the term disposal shall not include a pledge) in any   transaction or series of transactions to which the Company is a party of 50%   or more of the voting power of the Company, other than any transaction or series   of transactions principally for bona fide equity financing purposes in which   cash is received by the Company or indebtedness of the Company is cancelled   or converted, or a combination thereof;
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
(iii) a merger or consolidation of the Company   with or into any third party, other than any merger or consolidation in which   the shares of the Company immediately preceding such merger or consolidation   continue to represent a majority of the voting power of the surviving entity   immediately after the closing of such merger or consolidation; and
    

 

 

	
 
    	
 
    	
(iv) a liquidation, winding up or any other   form of dissolution of the Company.
    
	
 
    	
 
    	
 
    
	
Management Board
    	
 
    	
means the management board (Vorstand)   of the Company
    
	
 
    	
 
    	
 
    
	
Maternity Leave Employees
    	
 
    	
has the meaning ascribed thereto in Clause II. A
    
	
 
    	
 
    	
 
    
	
Overall Number of Options
    	
 
    	
has the meaning ascribed thereto in Clause II. A
    
	
 
    	
 
    	
 
    
	
Securities Act
    	
 
    	
means the United States Securities Act of 1933
    
	
 
    	
 
    	
 
    
	
Shares and   each a Share
    	
 
    	
means the common shares of the Company issued from   time to time
    
	
 
    	
 
    	
 
    
	
SOP 2015
    	
 
    	
has the meaning ascribed thereto in Clause I
    
	
 
    	
 
    	
 
    
	
Supervisory Board
    	
 
    	
means the supervisory board (Aufsichtsrat)   of the Company
    
	
 
    	
 
    	
 
    
	
Vesting Period
    	
 
    	
has the meaning ascribed thereto in Clause II.A.1
    

 

 

Annex ./2

 

Form of Accession Statement

 

To:

 

Ms / Mr [·],

 

[address]

 

REF: SOP 2015 / Accession Statement

 

Dear Ms / Mr [·],

 

You will participate in this SOP 2015 with effect as of [·] (Participation Date).

 

As Participant in the SOP 2015 you will be granted options to acquire shares in the Company pursuant to this SOP 2015 in the amounts as set forth in the Vesting Table attached.

 

 

Nabriva Therapeutics AG:

 

DATE:

 

PARTICIPANT:

 

DATE:

 

Annex:

 

./       Vesting Table 

 

 

Annex ./3

 

Form of Exercise Notice

 

To:

 

Nabriva Therapeutics AG

Corporate Human Resources

Leberstraße 20

1010 Vienna, Austria

 

REF: SOP 2015 / Exercise Notice

 

Dear Sirs,

 

I am a participant in the SOP 2015. Capitalized terms not otherwise defined herein shall have the meaning assigned to such term in the SOP 2015. This is an Exercise Notice.

 

I hereby irrevocably declare to exercise [·] vested options granted to me [on ·]

 

‰                When exercising the above number of options, I wish to acquire [·] Shares as determined in the vesting table attached to my Accession Statement at the Exercise Price per Share. Such Shares shall be delivered to my securities account no. [·] with [•] against payment in cash by me of the Exercise Price for each Share. I acknowledge that I must satisfy any applicable tax withholding (including social security contributions) resulting from the exercise of my options by making a cash payment to the Company (or otherwise in a manner as the Company may permit) before any Shares will be delivered to me.

 

‰                Whereas in the case of a Liquidity Event, (i) I acknowledge that in case of a distributable remainder the Company — in consideration of the Exercise Price — in its sole discretion may opt to provide me with Shares in the Company rather than with the cash amounts attributable to me according to the SOP 2015, (ii) I shall deposit the Exercise Price only upon notification by the Company that a distributable remainder exists, (iii) upon such notification, I shall deposit the Exercise Price within seven (7) business days.

 

I acknowledge that options have not been granted as remuneration or as a bonus for job performance but rather as a voluntary benefit to encourage motivation and solidarity with the Company and that I have no entitlement to any future comparable benefits.

 

Name

 

Date

 

 

ADDENDUM

 

with regard to the

 

Nabriva Therapeutics AG’s

 

Amended and Restated Stock Option Plan

 

dated 30 June 2015

 

 

PREAMBLE

 

WHEREAS, on 2 April 2015, the shareholders, Management Board and the Supervisory Board of Nabriva Therapeutics AG (Nabriva or the Company) resolved to implement a stock option plan under which the Company’s employees and members of the Management Board and the Supervisory Board are eligible to receive options to purchase Shares of the Company;

 

WHEREAS, on 30 June 2015, the shareholders of the Company resolved to amend the stock option plan so implemented by approving an amended and restated version of the stock option plan (the amended and restated plan, the SOP 2015); and

 

WHEREAS, on 22 July 2015, the shareholders of the Company resolved to amend the SOP 2015 and thus, the Company is interested in amending the SOP 2015 according to such shareholders’ resolution through this addendum to the SOP 2015 (the Addendum).

 

1.               INTERPRETATION

 

1.1        Definitions 

 

Unless explicitly stated otherwise herein, all capitalized terms used in this Addendum shall have the meaning assigned to them in the SOP 2015.

 

1.2        Supplemental 

 

Except as explicitly provided herein, the SOP 2015 shall remain in full force and effect, and the SOP 2015 together with this Addendum shall be read and construed as one document.

 

2.               AMENDMENTS TO THE SOP 2015 

 

2.1        Amendments to Clause II. A 

 

(1) Effective as of 22 July 2015, the first paragraph of Clause II. A (“II. Structure of the Stock Option Plan. A. Options”) of the SOP 2015 shall be deleted and replaced in its entirety by the following:

 

Subject to adjustment as set forth in Clause II.D.13 hereof, options (any or all of which may be in the form of Incentive Stock Options) may be granted and vested to all Beneficiaries (provided that only Company employees are eligible to receive Incentive Stock Options) under the SOP 2015 for up 95,000 Shares (the Overall Number of Options). The number of Shares subject to any option granted to a Beneficiary is set forth on such Beneficiary’s Accession Statement. If an option granted under the SOP 2015 expires or is terminated, surrendered or canceled without having been fully exercised or is forfeited in whole or in part or otherwise results in Shares not being issued, the unused Shares shall again be available for the grant of options (subject, however, in the case of Incentive Stock Options to any limitations of the Internal Revenue Code). Notwithstanding the date and duration of their participation herein and without prejudice to the provisions of this SOP 2015, no person (whether or not he or she is already a Beneficiary under the SOP 2015) shall be entitled to (further) options under this SOP 2015 once the Overall Number of Options are granted, taking into account any permitted share recycling as set forth herein, unless the shareholders of Nabriva resolve upon an increase of the Overall Number of Options.

 

(2) Effective as of the closing of an initial public offering of the Company, the Overall Number of Options shall be increased to 177,499 Shares.

 

 

2.2        Amendment to Clause II. C.9.2 

 

Clause II. C.9.2 shall be deleted and replaced in its entirety by the following:

 

No options shall be granted under the SOP 2015 after the expiration of 10 years from 22 July 2015, but options previously granted may extend beyond that date.

 

2.3        Amendment to Clause II. D.12.1 

 

The following provision shall be added to the end of Clause II. D.12.1:

 

(v)              shall have any liability to a Beneficiary or any other party, if an option (or any part thereof) that is intended to be an Incentive Stock Option is not an Incentive Stock Option or if the Company converts an Incentive Stock Option into an option that no longer qualifies as an Incentive Stock Option. 

 

2.4        Amendment to Clause II. D.13.1 

 

Clause II. D.13.1 shall be deleted and replaced in its entirety by the following:

 

If, during the term of the SOP 2015, changes to the capital of the Company or restructuring measures have an effect on the capital of the Company, such as a stock split or reverse split of stocks, (together Stock Adjustments), the Company is entitled to adjust (i) the number and class of securities available under the SOP 2015 and (ii) the price or the amount of the options respectively, to the extent necessary to compensate changes in value (but not a dilution of shareholding) resulting from any Stock Adjustments. For the avoidance of doubt, this Clause II.D.13 shall not apply to measures, such as future financing rounds, in which new shareholders of the Company are introduced.

 

2.5        Amendment to Annex ./1 I. Definitions: 

 

(1) The definition of “Company” shall be deleted and replaced in its entirety by the following:

 

	
Company
    	
 
    	
has the meaning ascribed thereto in Clause I.(A);   provided that the meaning of Company shall also include Nabriva’s legal   successors and, except where the context otherwise requires, Nabriva’s   present or future parent or subsidiary corporations as defined in Sections   424(e) or (f) of the Internal Revenue Code and any other business   venture (including, without limitation, joint venture or limited liability   company) in which the Company has a controlling interest, as determined by   the Supervisory Board.
    

 

(2) The following new definition shall be added:

 

	
Incentive Stock Options
    	
 
    	
means options that are “incentive stock options”   within the meaning of Section 422 of the Internal Revenue Code.
    

 

 

SECOND ADDENDUM

 

with regard to the

 

Nabriva Therapeutics AG’s

 

Amended and Restated Stock Option Plan

 

dated 25 August 2016

 

 

PREAMBLE

 

WHEREAS, on 2 April 2015, the shareholders, Management Board and the Supervisory Board of Nabriva Therapeutics AG (Nabriva or the Company) resolved to implement a stock option plan under which the Company’s employees and members of the Management Board and the Supervisory Board are eligible to receive options to purchase Shares of the Company;

 

WHEREAS, on 30 June 2015, the shareholders of the Company resolved to amend the stock option plan so implemented by approving an amended and restated version of the stock option plan (the amended and restated plan, the SOP 2015);

 

WHEREAS, on 22 July 2015, the shareholders of the Company resolved to amend the SOP 2015 and thus, the SOP 2015 was amended through the Addendum to the SOP dated 30 June 2015 regarding an increase in the Overall Number of Options and the ability of the Company to grant Incentive Stock Options (the First Addendum); and

 

WHEREAS, on 25 August 2016, the shareholders of the Company resolved to further amend the SOP 2015 according to the shareholders’ resolution through this second addendum to the SOP 2015 (the Second Addendum).

 

1.             INTERPRETATION

 

1.1          Definitions

 

Unless explicitly stated otherwise herein, all capitalized terms used in this Addendum shall have the meaning assigned to them in the SOP 2015.

 

1.2          Supplemental

 

Except as explicitly provided herein, the SOP 2015 shall remain in full force and effect, and the SOP 2015 together with this Addendum shall be read and construed as one document.

 

2.             AMENDMENTS TO THE SOP 2015

 

2.1          Amendments to Clause II. A

 

Effective as of 25 August 2016, the Overall Number of Options shall be increased to 343,899 Shares.

 

2.2          Amendment to Clause II. A.1

 

The following new Clause 1.4 shall be added:

 

Notwithstanding Section 1.1 hereof, options shall be granted to members of the Supervisory Board pursuant to the then-applicable shareholder-approved Supervisory Board Compensation Policy, shall vest as described in such Supervisory Board Compensation Policy and shall otherwise be subject to the terms and conditions applicable to options granted under the SOP 2015. For the avoidance of doubt, options granted to members of the Supervisory Board outside of the shareholder-approved Supervisory Board Compensation Policy shall be subject to all applicable terms and conditions of the SOP 2015, including Section 1.1 hereof.

 

 

THIRD ADDENDUM

 

with regard to

 

Nabriva Therapeutics AG’s 

 

Amended and Restated Stock Option

 

Plan

 

dated 30 June 2015

 

 

PREAMBLE

 

WHEREAS, on 2 April 2015, the shareholders, Management Board and the Supervisory Board of Nabriva Therapeutics AG (Nabriva or the Company) resolved to implement a stock option plan under which the Company’s employees and members of the Management Board and the Supervisory Board are eligible to receive options to purchase Shares of the Company;

 

WHEREAS, on 30 June 2015, the shareholders of the Company resolved to amend the stock option plan so implemented by approving an amended and restated version of the stock option plan (the amended and restated plan, the SOP 2015);

 

WHEREAS, on 22 July 2015, the shareholders of the Company resolved to amend the SOP 2015 and thus, the SOP 2015 was amended through the Addendum to the SOP dated 30 June 2015 (the First Addendum); and

 

WHEREAS, on 25 August 2016, the shareholders of the Company resolved to further amend the SOP 2015 according to the shareholders’ resolution through a second addendum to the SOP 2015 deleted 25 August 2016 (the Second Addendum).

 

WHEREAS on or around 13 and 14 April 2017, the Supervisory Board and the Management Board resolved to further amend the SOP 2015 (the Third Addendum) such amendments as are set out in this Third Addendum to be conditional on completion of the proposed exchange of Common Shares and ADS’s in the Company for Nabriva Therapeutics plc Ordinary Shares.

 

1.             INTERPRETATION

 

1.1          Definitions

 

Unless explicitly stated otherwise herein, all capitalized terms used in this Addendum shall have the meaning assigned to them in the SOP 2015.

 

1.2          Supplemental

 

Except as explicitly provided in the First Addendum, the Second Addendum and herein, the SOP 2015 shall remain in full force and effect, and the SOP 2015 together with the First Addendum, Second Addendum and this Third Addendum shall be read and construed as one document.

 

2.             AMENDMENTS TO THE SOP 2015

 

2.1          Amendments to Clause II 1.1

 

The existing clause 1.1 shall be amended so that references to the “Supervisory Board” are changed to “Board” and references to the “Management Board” are changed to “Committee”.

 

2.2          Amendment to Clause II 2.1

 

The existing clause 2.1 shall be deleted in its entirety and replaced with the following new clause 2.1:

 

The exercise price for an option should be equal to 100% of the Fair Market Value per Share on the Date of Participation (Exercise Price). If the Board or Committee, or shareholders, as the case may be, approve the grant of an option with an Exercise Price to be determined on a future date, the Exercise Price shall be equal to 100% of the Fair Market Value on such future date provided however that in all cases the Exercise Price to be paid is not less than the nominal value of a Share.

 

2.3          Amendment to Clause II 2.1

 

Clause 2.3 shall be amended by the inclusion of the following words after Exercise Price;

 

 

“subject to compliance with Irish law”.

 

2.4          Amendment to Clause II A 3.2

 

Clause 3.2 shall be amended by replacing any references to “Management Board” with “Board” and “Supervisory Board” with “Committee”.

 

2.5          Amendment to Clause II A 3.5

 

A new Clause 3.5 shall be added as follows:

 

In order to exercise a vested option, a Beneficiary must pay the applicable amount of the Exercise Price for the Shares by one of the following means in such manner and form as the Administrator may require from time to time, with such payment option(s) to be determined in the sole and absolute discretion of the Administrator and as specifically set forth in the applicable Accession Statement:

 

(i)             delivery of cash, certified or cashier’s check, money order or other cash equivalent acceptable to the Company in its discretion;

 

(ii)          a broker-assisted cashless exercise in accordance with Regulation T of the Board of Governors of the Federal Reserve System through a brokerage firm designated or approved by the Company;

 

(iii)       subject to such limits as the Company may impose from time to time, tender (via actual delivery or attestation) to the Company of other Shares of the Company which have a Fair Market Value on the date of tender equal to the Exercise Price;

 

(iv)      subject to such limits as the Company may impose from time to time, net share settlement;

 

(v)         any other method approved by the Company; or

 

(vi)      any combination of the foregoing.

 

Save that in respect of Beneficiaries who are not employees or executive directors of the Group, only the methods at 3.5 (i) and 3.5 (ii) may be utilised.

 

2.6          Amendment to Clause II B 5.1

 

The references in Clause 5.1 subsection vii, viii and ix to “Managing Board” or “Supervisory Board” shall be replaced by reference to “Board”.

 

2.7          Amendment to Clauses II B 6.1 and 6.2

 

The entirety of Clauses 6.1 and 6.2 shall be deleted and replaced in their entirety by the following:

 

If a Beneficiary’s service or employment relationship with the Group ends during the term of the SOP 2015 due to an event other than a Good Leaver Event (a “Bad Leaver Event”), all options of the Beneficiary vested but not exercised at the time a Bad Leaver Event occurs shall be forfeited and the SOP 2015 may be terminated in respect of that Beneficiary. In the event that a Director is not re-elected to the Board at an annual general meeting, this shall not constitute a Bad Leaver Event, except for cases where the non re-election is justified by the behaviour of the Director.

 

The Committee may within its discretion decide whether to grant to a Beneficiary advantages as from a Good Leaver event even though the end of a Beneficiary’s service or employment relationship constitutes a Bad Leaver Event as described in this clause 11.B.6.

 

 

2.8          Amendment to Clauses II C 10.1 and 10.2

 

The entirety of Clauses 10.1 and 10.2 shall be deleted and replaced in their entirety by the following:

 

The Board, Committee or shareholders, as the case may be, may amend, modify or terminate any outstanding option. The Beneficiary’s consent to such action shall be required unless (i) the Board, Committee or shareholders, as the case may be, determine that the action, taking into account any related action, does not materially and adversely affect the Beneficiary’s rights under the SOP 2015 or (ii) the change is permitted wider Clause II.D.13.

 

The Board or the Committee may amend, suspend or terminate the SOP 2015 or any portion thereof at any time; provided that if at any time the approval of the Company’s shareholders is required, including by application Irish law, the Board or the Committee may not effect such modification or amendment without such approval. Unless otherwise specified in the amendment, any amendment to the SOP 2015 adopted in accordance with this Clause II.C.10.2 shall apply to, and be binding on the Beneficiaries of, all options outstanding under the SOP 2015 at the time the amendment is adopted, provided the Board or the Committee or shareholders, as the case may be, determine that such amendment, taking into account any related action, does not materially and adversely affect the rights of Beneficiaries under the SOP 2015.

 

2.9          Amendment to Clause II C.11

 

The entirety of the Clause entitled “Termination” shall be deleted.

 

2.10        Amendment to Clause II D.19

 

The provisions of the paragraph entitled “Governing law and Jurisdiction” shall be deleted and replaced in its entirety by the following:

 

The terms of the SOP 2015, its interpretation and all rights and obligations arising there from shall be governed by Irish law. The courts of Ireland shall, to the extent legally possible, have exclusive jurisdiction regarding all claims in connection with the SOP and the terms of the SOP 2015.

 

2.11        Amendment to Section D, Clause 13.2

 

Clause 13.2 shall be amended by replacing any references to “Management Board” with “Board” and “Supervisory Board” with “Committee”.

 

2.12        Amendments to Sections D, Clause 17.1

 

Clause 17.1 shall be amended by replacing the notification contact details with the following: 

Nabriva Therapeutics AG

Mihovil Spoljaric

Email: mihovil.spoljaric@nabriva.com

 

2.13        Amendments to Annex 1 I Definitions

 

The following new definitions shall be added Annex I “Definitions”

 

Board                                                              means the board of directors for the time being of the Company or the directors present at a duly convened meeting of the board of the Company at which a quorum is present or a duly constituted committee of the Board.

 

Committee                                   means a duly constituted committee of the Board constituted to consider and review the remuneration and compensation of directors and employees of the Group.

 

 

Group                                                              means the Company and its Subsidiaries.

 

Subsidiary                                       means any company which is, for the time being, a subsidiary of the Company within the meaning of Section 7 of the Companies Act, 2014

 

The definition of “Beneficiary” shall be amended as follows:

 

Beneficiary is any employee (for the avoidance of doubt including any member of the Board or any other individual eligible to receive options hereunder, who receives an award of options.

 

The definition of “Company” shall be amended as follows:

 

Company means Nabriva Therapeutics plc and its legal successors and, except where the context otherwise requires, the Company’s present or future parent or subsidiary corporations as defined in Sections 424(e) or (f) of the Internal Revenue Code and any other business venture (including, without limitation, joint venture or limited liability company) in which the Company has a controlling interest, as determined by the Management Board.

 

The definition of Insolvency shall be amended as follows:

 

Means the initiation of insolvency proceedings in regard to the assets of a Beneficiary, the dismissal of an application for insolvency due to a lack of assets on the initiation of private insolvency proceedings pursuant to applicable law in the relevant jurisdiction or any equivalent rule in any other relevant jurisdiction.

 

The definition of “Shares” shall be amended as follows:

 

Shares and each a Share means the ordinary shares of the Company issued from time to time.

 

 

2.14        Amendments to Annex 2 — Form of Accession Statement 

 

The following shall replace Annex 2 in its entirety:

 

Form of Accession Statement

 

To: Mihovil Spoljaric (Mihovil.spoljaric@nabriva.com)

 

REF: SOP 2015 / Accession Statement

 

Dear Ms / Mr [·],

 

You will participate in this SOP 2015 with effect as of [·] (Participation Date).

 

As Participant in the SOP 2015 you will be granted options to acquire shares in the Company pursuant to this SOP 2015 in the amounts as set forth in the Vesting Table attached.

 

You may exercise your options by:

 

(i)                                     delivery of cash, certified or cashier’s check, money order or other cash equivalent acceptable to the [Company] in its discretion;

 

(ii)                                  a broker-assisted cashless exercise in accordance with Regulation T of the Board of Governors of the Federal Reserve System through a brokerage firm designated or approved by the [Company];

 

(iii)                               subject to such limits as the [Company] may impose from time to time, tender (via actual delivery or attestation) to the Company of other Shares of the Company which have a Fair Market Value on the date of tender equal to the Exercise Price;

 

(iv)                              subject to such limits as the [Company] may impose from time to time, net share settlement;

 

(v)                                 any other method approved by the [Company]; or

 

(vi)                              any combination of the foregoing(1).

 

 

	
Nabriva Therapeutics Plc:
    	
 
    
	
 
    	
 
    
	
DATE:
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
PARTICIPANT:
    	
 
    
	
 
    	
 
    
	
DATE:
    	
 
    

 

(1) Note: Specific exercise provisions to be included on a grant by grant basis as approved by Company. Note that only the alternatives at (i) and (ii) will be available to beneficiaries who are not employees or executive directors of the Company.

 

 

2.15        Amendments to Annex 3 — Form of Exercise Notice

 

The following shall replace Annex 3 in its entirety:

 

Form of Exercise Notice

 

To: Mihovil Spoljaric (Mihovil.spoljaric@nabriva.com)

 

REF: SOP 2015 / Exercise Notice

 

Dear Sirs,

 

I am a participant in the SOP 2015. Capitalized terms not otherwise defined herein shall have the meaning assigned to such term in the SOP 2015. This is an Exercise Notice.

 

I hereby irrevocably declare to exercise [·] vested options granted to me [on ·]

 

·                  When exercising the above number of options, I wish to acquire [·] Shares as determined in the vesting table attached to my Accession Statement at the Exercise Price per Share. Such Shares shall be delivered to my securities account no. [·] with [·] against payment in cash (or such consideration as permitted by my Accession Statement) by me of the Exercise Price for each Share. I acknowledge that I must satisfy any applicable tax withholding (including social security contributions) resulting from the exercise of my options by making a cash payment(2) to the Company (or otherwise in a manner as the Company may permit) before any Shares will be delivered to me.

 

·                  Whereas in the case of a Liquidity Event, (i) I acknowledge that in case of a distributable remainder the Company — in consideration of the Exercise Price — in its sole discretion may opt to provide me with Shares in the Company rather than with the cash amounts attributable to me according to the SOP 2015, (ii) I shall deposit the Exercise Price only upon notification by the Company that a distributable remainder exists, (iii) upon such notification, I shall deposit the Exercise Price within seven (7) business days.

 

I acknowledge that options have not been granted as remuneration or as a bonus for job performance but rather as a voluntary benefit to encourage motivation and solidarity with the Company and that I have no entitlement to any future comparable benefits.

 

 

	
Name
    	
 
    
	
 
    	
 
    
	
Date
    	
 
    

 

(2) Note: Confirm that value of vested options not to be used to assist with tax liability.Exhibit

EXHIBIT 10.1

VERINT SYSTEMS INC.
AMENDED AND RESTATED 2015 LONG-TERM STOCK INCENTIVE PLAN
Section 1.  Purpose.  The purposes of this Verint Systems Inc. 2015 Long-Term Stock Incentive Plan are to promote the interests of Verint Systems Inc. and its stockholders by (i) attracting and retaining employees and directors of, and consultants to, the Company and its Subsidiaries, as defined below; (ii) motivating such individuals by means of performance-related incentives to achieve longer-range performance goals; and (iii) enabling such individuals to participate in the long-term growth and financial success of the Company.
Section 2.  Definitions.  As used in the Plan, the following terms shall have the meanings set forth below:
“Affiliate” means any entity other than the Subsidiaries in which the Company has a substantial direct or indirect equity interest, as determined by the Board.
“Award” shall mean any Option, Stock Appreciation Right, Restricted Stock Award, Restricted Stock Unit Award, Performance Award, Other Stock-Based Award or Performance Compensation Award made or granted from time to time hereunder.
“Award Agreement” shall mean any written agreement, contract, or other instrument or document evidencing any Award, which may, but need not, be executed or acknowledged by a Participant.  An Award Agreement may be in an electronic medium and may be limited to notation on the books and records of the Company.
“Base Salary” means the base salary or wages of the Participant excluding overtime, bonuses, contributions to or benefits under benefit plans, fringe benefits, perquisites, and other such forms of compensation.  Base Salary shall include any elective contributions that are paid through a reduction in a Participant’s basic salary and which are not includible in the Participant’s gross income under Sections 125 or 402(e)(3) of the Code.
“Board” shall mean the Board of Directors of the Company.
“Cause” as a reason for a Participant’s termination of employment or service shall, unless otherwise agreed to in writing between the Participant and the Company or a Subsidiary or Affiliate of the Company, have the meaning assigned such term in the employment, severance or similar agreement, if any, between the Participant and the Company or a Subsidiary or Affiliate of the Company.  If the Participant is not a party to an employment, severance or similar agreement with the Company or a Subsidiary or Affiliate of the Company in which such term is defined, then unless otherwise defined in the applicable Award Agreement “Cause” shall mean the Participant’s: (A) conviction of, or plea of guilty or nolo contendere to, a felony or indictment for a crime involving dishonesty, fraud or moral turpitude; (B) willful and intentional breach of the Participant’s obligations to the Company or a Subsidiary or Affiliate of the Company; (C) willful misconduct, or any dishonest or fraudulent act or omission; (D) violation of any securities or financial reporting laws, rules or regulations or any policy of the Company or a Subsidiary or Affiliate of the Company relating to the foregoing; (E) violation of the policies of the Company or a Subsidiary or Affiliate of the Company on harassment, discrimination or substance abuse; or (F) gross negligence, gross neglect of duties or gross insubordination in the Participant’s performance of duties with the Company or a Subsidiary or Affiliate of the Company.
“Change in Control” shall be deemed to have occurred if the event set forth in any one of the following subparagraphs shall have occurred:
i.    the acquisition by any Person, entity or affiliated group in one or a series of transactions, of more than 50% of the voting power of the Company;

1

ii.    a merger, combination, amalgamation, consolidation, spin-off or any other transaction in which the holders of the Company’s common stock immediately prior to such transaction do not hold in respect of their holdings of such stock 50% or more of the voting power of the merged, combined, amalgamated, consolidated, spun-off or other resulting entity;
iii.    a sale or other disposition, in one or a series of related transactions, of all or substantially all of the assets of the Company (including its Subsidiaries); or
iv.    during any period of two consecutive years, Incumbent Directors cease to constitute at least a majority of the board.  “Incumbent Directors” shall mean: (1) the directors who were serving at the beginning of such two-year period, or (2) any directors whose election or nomination was approved by the directors referred to in clause (1) or by a director approved under this clause (2).
“Code” shall mean the Internal Revenue Code of 1986, as amended from time to time.
“Committee” shall mean the Compensation Committee of the Board (or its successor(s)), or any other committee of the Board designated by the Board to administer the Plan and composed of not less than two directors, each of whom is required to be a “Non-Employee Director” (within the meaning of Rule 16b-3) and an “outside director” (within the meaning of Section 162(m) of the Code) to the extent Rule 16b-3 and Section 162(m) of the Code, respectively, are applicable to the Company and the Plan.  If at any time such a committee has not been so designated or is not so composed, the Board shall constitute the Committee.
“Company” shall mean Verint Systems Inc., together with any successor thereto.
“Continuous Service” shall mean the absence of any interruption or termination of service as an employee, director or consultant.  Continuous Service shall not be considered interrupted in the case of (i) sick leave; (ii) military leave; (iii) any other leave of absence approved by the Committee, in each case, provided that such leave is for a period of not more than 90 days, unless reemployment upon the expiration of such leave is guaranteed by contract or applicable law, or unless provided otherwise pursuant to Company policy, as adopted from time to time; or (iv) in the case of transfer between locations of the Company or between the Company, its Subsidiaries or Affiliates or their respective successors.  Changes in status between service as an employee, a director and a consultant will not constitute an interruption of Continuous Service; provided, however, that, unless otherwise determined by the Committee, consultants providing services to the Company or a Subsidiary or Affiliate of the Company for less than 32 hours per month shall incur an interruption of Continuous Service.
“Exchange Act” shall mean the Securities Exchange Act of 1934, as amended.
“Fair Market Value” shall mean, unless otherwise defined in the applicable Award Agreement (i) with respect to any property other than Shares, the fair market value of such property determined by such methods or procedures as shall be established from time to time by the Committee and (ii) with respect to the Shares, as of any date, (1) the closing sale price (excluding any “after hours” trading) of the Shares as reported on the Nasdaq Stock Market for such date (or if not then trading on the Nasdaq Stock Market, the closing sale price of the Shares on the stock exchange or over-the-counter market on which the Shares are principally trading on such date), or, if there were no sales on such date, on the closest preceding date on which there were sales of Shares or (2) in the event there shall be no public market for the Shares on such date, the fair market value of the Shares as determined in good faith by the Committee.
“GAAP” shall mean United States Generally Accepted Accounting Principles.
“Good Reason” as a reason for a Participant’s termination of employment or service shall, unless otherwise agreed to in writing between the Participant and the Company or a Subsidiary or Affiliate of the Company, have the meaning assigned such term in the employment, severance or similar agreement, if any, between the Participant and the Company or a Subsidiary or Affiliate of the Company.  If the Participant is not a party to an employment, severance agreement or similar agreement with the Company or a Subsidiary or Affiliate of the Company in which such term is defined, then unless otherwise defined in the 

2

applicable Award Agreement, for purposes of this Plan, “Good Reason” shall mean (i) a material reduction (i.e., at least a 10% reduction) by the Company or a Subsidiary or Affiliate of the Company in the Participant’s Base Salary; or (ii) the involuntary relocation of the Participant’s own office location by more than 50 miles; provided that all such events shall be Good Reason only if the Company (or the applicable Subsidiary or Affiliate of the Company) fails to cure such event within 30 days after receipt from the Participant of written notice of the event which constitutes Good Reason; provided, further, that Good Reason shall cease to exist for an event on the 90th day following the later of its occurrence or the Participant’s knowledge thereof, unless the Participant has given the Company written notice thereof prior to such date.
“Incentive Stock Option” shall mean a right to purchase Shares from the Company that is granted under Section 6 of the Plan and that is intended to meet the requirements of Section 422 of the Code or any successor provision thereto.  Incentive Stock Options may be granted only to Participants who meet the definition of “employees” under Section 3401(c) of the Code.
“Negative Discretion” shall mean the discretion authorized by the Plan to be applied by the Committee to eliminate or reduce the size of a Performance Compensation Award; provided that the exercise of such discretion would not cause the Performance Compensation Award to fail to qualify as “performance-based compensation” under Section 162(m) of the Code.  By way of example and not by way of limitation, in no event shall any discretionary authority granted to the Committee by the Plan including, but not limited to, Negative Discretion, be used to (a) grant or provide payment in respect of Performance Compensation Awards for a Performance Period if the Performance Goals for such Performance Period have not been attained or (b) increase a Performance Compensation Award above the maximum amount payable under Section 4(a) or 11(d)(vi) of the Plan.  In no event shall Negative Discretion be exercised by the Committee with respect to any Option or Stock Appreciation Right (other than an Option or Stock Appreciation Right that is intended to be a Performance Compensation Award under Section 11 of the Plan).
“Non-Qualified Stock Option” shall mean a right to purchase Shares from the Company that is granted under Section 6 of the Plan and that is not intended to be an Incentive Stock Option.
“Option” shall mean an Incentive Stock Option or a Non-Qualified Stock Option.
“Other Stock-Based Award” shall mean any right granted under Section 10 of the Plan.
“Participant” shall mean any (i) employee of, or consultant to, the Company or its Subsidiaries, or non-employee director who is a member of the Board or the board of directors of a Subsidiary of the Company, eligible for an Award under Section 5 and selected by the Committee to receive an Award under the Plan or (ii) any employee of, or consultant to, an Affiliate, eligible for a cash-settled Performance Award or cash-settled Restricted Stock Unit under Section 5 and selected by the Committee to receive a cash-settled Performance Award or a cash-settled Restricted Stock Unit under the Plan.
“Performance Award” shall mean any right granted under Section 9 of the Plan.
“Performance Compensation Award” shall mean any Award designated by the Committee as a Performance Compensation Award pursuant to Section 11 of the Plan.
“Performance Criteria” shall mean the measurable criterion or criteria that the Committee shall select for purposes of establishing the Performance Goal(s) for a Performance Period with respect to any performance-based award under the Plan, including, but not limited to, Performance Compensation Awards.  The Performance Criteria that will be used to establish the Performance Goal(s) shall be based on the attainment of specific levels of performance of the Company (or a Subsidiary, Affiliate, division or operational unit of the Company) and shall be limited to the following, whether determined on a GAAP or non-GAAP basis: revenue, operating income, contribution, day sales outstanding, return on net assets, return on stockholders’ equity, return on assets, return on capital, stockholder returns (on an absolute or relative basis), profit margin, operating margin, contribution margin, earnings per Share, net earnings, operating earnings, free cash flow, cash flow from operations, earnings 

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before interest, taxes, depreciation and amortization (EBITDA), including adjusted EBITDA, number of customers, operating expenses, capital expenses, customer acquisition costs, Share price, sales, bookings, or market share.
“Performance Formula” shall mean, for a Performance Period, one or more objective formulas applied against the relevant Performance Goal to determine, with regard to the Performance Compensation Award of a particular Participant, whether all, some portion but less than all, or none of the Performance Compensation Award has been earned for the Performance Period.
“Performance Goals” shall mean, for a Performance Period, one or more goals established by the Committee for the Performance Period based upon the Performance Criteria.  To the extent required under Section 162(m) of the Code with respect to Awards intended to qualify as “performance-based compensation” under Section 162(m) of the Code, the Committee shall, within the first 90 days of a Performance Period (or, if shorter, within the maximum period allowed under Section 162(m) of the Code), define in an objective fashion the manner of calculating the Performance Criteria it selects to use for such Performance Period.  The Committee is authorized at any time during the first 90 days of a Performance Period (or, if shorter, within the maximum period allowed under Section 162(m) of the Code for establishing Performance Goals), or at any time thereafter (but only to the extent the exercise of such authority after such period would not cause any Performance Compensation Awards intended to qualify as “performance-based compensation” under Section 162(m) of the Code granted to any Participant for the Performance Period to fail to qualify as “performance-based compensation” under Section 162(m) of the Code), in its sole discretion, to adjust or modify the calculation of a Performance Goal for such Performance Period to the extent permitted under Section 162(m) of the Code, if applicable, in order to prevent the dilution or enlargement of the rights of Participants, (a) in the event of, or in anticipation of, any unusual or extraordinary corporate item, transaction, event or development affecting the Company; or (b) in recognition of, or in anticipation of, any other unusual or nonrecurring events affecting the Company, or the financial statements of the Company, or in response to, or in anticipation of, changes in applicable laws, regulations, accounting principles, or business conditions.
“Performance Period” shall mean the one or more periods of time of at least six months in duration, as the Committee may select, over which the attainment of one or more Performance Goals will be measured for the purpose of determining a Participant’s right to and the payment of a performance-based award, including a Performance Compensation Award.
“Person” has the meaning given in Section 3(a)(9) of the Exchange Act, as modified and used in Sections 13(d) and 14(d) thereof, except that such term shall not include (i) the Company and its Subsidiaries, (ii) a trustee or other fiduciary holding securities under an employee benefit plan of the Company or any of its affiliates, (iii) an underwriter temporarily holding securities pursuant to an offering of such securities, or (iv) a corporation owned, directly or indirectly, by the shareowners of the Company in substantially the same proportions as their ownership of stock of the Company.
“Plan” shall mean this Verint Systems Inc. Amended and Restated 2015 Long-Term Stock Incentive Plan.
“Prior Plan” shall mean the Verint Systems Inc. 2015 Long-Term Stock Incentive Plan.
“Restricted Stock” shall mean any Share granted under Section 8 of the Plan.
“Restricted Stock Unit” shall mean any unit granted under Section 8 of the Plan.
“Rule 16b-3” shall mean Rule 16b-3 as promulgated and interpreted by the SEC under the Exchange Act, or any successor rule or regulation thereto as in effect from time to time.
“SEC” shall mean the Securities and Exchange Commission or any successor thereto and shall include the Staff thereof.
“Shares” shall mean the common stock of the Company, $.001 par value, or such other securities of the Company (i) into which such common stock shall be changed by reason of a recapitalization, merger, consolidation, split-up, combination, 

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exchange of shares or other similar transaction or (ii) as may be determined by the Committee pursuant to Section 4(b) of the Plan.
“Stock Appreciation Right” shall mean any right granted under Section 7 of the Plan.
“Subsidiary” of any Person means another Person (other than a natural Person), an aggregate amount of the voting securities, other voting ownership or voting partnership interests, of which is sufficient to elect at least a majority of the Board or other governing body (or, if there are no such voting interests, 50% or more of the equity interests of which is owned directly or indirectly by such first Person).
“Substitute Awards” shall mean any Awards granted under Section 4(a)(iii) of the Plan.
Section 3.  Administration.  (a) The Plan shall be administered by the Committee.  Subject to the terms of the Plan and applicable law, and in addition to other express powers and authorizations conferred on the Committee by the Plan, the Committee shall have full power and authority to: (i) designate Participants; (ii) determine the type or types of Awards to be granted to a Participant and designate those Awards which shall constitute Performance Compensation Awards; (iii) determine the number of Shares to be covered by, or with respect to which payments, rights, or other matters are to be calculated in connection with, Awards; (iv) determine the terms and conditions of any Award; (v) determine whether, to what extent, and under what circumstances Awards may be settled or exercised in cash, Shares, other securities, other Awards or other property, or canceled, forfeited, or suspended and the method or methods by which Awards may be settled, exercised, canceled, forfeited, or suspended; (vi) determine whether, to what extent, and under what circumstances cash, Shares, other securities, other Awards, other property, and other amounts payable with respect to an Award (subject to Section 162(m) of the Code with respect to any Performance Compensation Awards) shall be deferred either automatically or at the election of the holder thereof or of the Committee (in each case consistent with Section 409A of the Code); (vii) interpret, administer or reconcile any inconsistency, correct any defect, resolve ambiguities and/or supply any omission in the Plan, any Award Agreement, and any other instrument or agreement relating to, or Award made under, the Plan; (viii) establish, amend, suspend, or waive such rules and regulations and appoint such agents as it shall deem appropriate for the proper administration of the Plan; (ix) establish and administer Performance Goals and certify whether, and to what extent, they have been attained; (x) adopt and approve any supplements to or amendments, restatements or alternative versions of the Plan (including, without limitation, sub-plans) in accordance with Section 14(n) of the Plan; and  (xi) make any other determination and take any other action that the Committee deems necessary or desirable for the administration of the Plan.
(b)    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 Committee, may be made at any time and shall be final, conclusive, and binding upon all Persons, including the Company, any Subsidiary or Affiliate of the Company, any Participant, any holder or beneficiary of any Award, and any stockholder.
(c)    The mere fact that a Committee member shall fail to qualify as a “Non-Employee Director” or “outside director” within the meaning of Rule 16b-3 and Section 162(m) of the Code, respectively, shall not invalidate any Award made by the Committee which Award is otherwise validly made under the Plan.
(d)    No member of the Committee shall be liable to any Person for any action or determination made in good faith with respect to the Plan or any Award hereunder.
(e)    With respect to any Performance Compensation Award granted to a Covered Employee (within the meaning of Section 162(m) of the Code) under the Plan, the Plan shall be interpreted and construed in accordance with Section 162(m) of the Code.
(f)    The Committee may delegate to one or more officers of the Company (or, in the case of awards of Shares, the Board may delegate to a committee made up of one or more directors) the authority to grant Awards to Participants who are not 

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executive officers or directors of the Company subject to Section 16 of the Exchange Act or Covered Employees (within the meaning of Section 162(m) of the Code).
Section 4.  Shares Available for Awards.
(a)    Shares Available.
(i)    Subject to adjustment as provided in Section 4(b), the aggregate number of Shares with respect to which Awards may be granted from time to time under the Plan shall in the aggregate not exceed, at any time, the sum of (i) 7,975,000, plus (ii) the number of Shares available for issuance under the Prior Plan on the date the stockholders of the Company approve the Plan, plus (iii) the number of Shares that become available for issuance under Section 4(a)(ii) of the Prior Plan or this Plan; provided, that, subject to adjustment as provided for in Section 4(b), the aggregate number of Shares with respect to which Incentive Stock Options may be granted under the Plan shall be 5,000,000.  Subject to adjustment as provided in Section 4(b), the maximum number of Shares with respect to which Options and Stock Appreciation Rights may be granted to any Participant in any fiscal year shall be 2,000,000 and the maximum number of Shares which may be paid to a Participant in the Plan in connection with the settlement of any Award(s) designated as “Performance Compensation Awards” in respect of a single fiscal year shall be 2,000,000 or, in the event such Performance Compensation Award is paid in cash, the equivalent cash value thereof on the first day of the Performance Period to which such Performance Compensation Award relates, and the maximum number of Shares with respect to which Awards (including, without limitation, Options and Stock Appreciation Rights) may be granted to any single non-employee member of the Board in any fiscal year shall be  100,000 Shares.  In the case of any Awards granted under the Plan, (x) each Share with respect to which an Option or stock-settled Stock Appreciation Right is granted under the Plan shall reduce the aggregate number of Shares that may be delivered under the Plan by one Share and (y) each share with respect to which any other Award denominated in Shares (other than an Option or stock-settled Stock Appreciation Right) is granted under the Plan shall reduce the aggregate number of Shares that may be delivered under the Plan by 2.47 Shares.
(ii)    If any Shares subject to an Award are forfeited, cancelled, exchanged, withheld or surrendered or if an Award terminates or expires without a distribution of Shares to the Participant, the Shares with respect to such Award shall, to the extent of any such forfeiture, cancellation, exchange, surrender, withholding, termination or expiration, again be available for Awards under the Plan.  For the avoidance of doubt, if two Awards are granted together in tandem, the Shares underlying any portion of the tandem Award which is not exercised or otherwise settled in Shares will again be available for Awards under the Plan.  Upon payment in cash of the benefit provided by any Award granted under this Plan, any Shares that were covered by that Award will again be available for Awards under the Plan.  If, under this Plan, a Participant has elected to give up the right to receive cash compensation in exchange for Shares based on fair market value, such Shares will not count against the aggregate limit described in Section 4(a)(i).  Notwithstanding the foregoing, any Shares which (1) are tendered to or withheld by the Company to satisfy payment or applicable tax withholding requirements in connection with the vesting or delivery of an Award, (2) are withheld by the Company upon exercise of an Option pursuant to a “net exercise” arrangement, or (3) underlie a Stock Appreciation Right that is settled in Shares, shall not again be available for Awards under the Plan.  In addition, Shares that are purchased by the Company in the open market pursuant to any repurchase plan or program, whether using Option proceeds or otherwise, shall not be made available for grants of Awards under the Plan.
(iii)    Awards may, in the discretion of the Committee, be made under the Plan in assumption of, or in substitution for, outstanding awards previously granted a company acquired by the Company or with which the Company combines (“Substitute Awards”).  The number of Shares underlying any Substitute Awards shall not be counted against the aggregate number of Shares available for Awards under the Plan.
(b)    Adjustments.  Notwithstanding any provisions of the Plan to the contrary, in the event that the Committee determines that any dividend or other distribution (whether in the form of cash, Shares, other securities, or other property), recapitalization, stock split, reverse stock split, reorganization, merger, consolidation, split-up, spin-off, combination, repurchase, or exchange of Shares or other securities of the Company, issuance of warrants or other rights to purchase Shares or 

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other securities of the Company, or other corporate transaction or event affects the Shares such that an adjustment is appropriate in order to prevent dilution or enlargement of the benefits or potential benefits intended to be made available under the Plan, then the Committee shall equitably adjust any or all of (i) 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, (ii) the number of Shares or other securities of the Company (or number and kind of other securities or property) subject to outstanding Awards, and (iii) the grant or exercise price with respect to any Award or, if deemed appropriate, make provision for a cash payment to the holder of an outstanding Award in consideration for the cancellation of such Award, which, in the case of Options and Stock Appreciation Rights shall equal the excess, if any, of the Fair Market Value of the Share subject to each such Option or Stock Appreciation Right over the per Share exercise price or grant price of such Option or Stock Appreciation Right.  The Committee will also make or provide for such adjustments in the number of shares specified in Section 4(a)(i) of this Plan as the Committee in its sole discretion, exercised in good faith, may determine is appropriate to reflect any transaction or event described in this Section 4(b); provided, however, that any such adjustment to the numbers specified in Section 4(a)(i) will be made only if and to the extent that such adjustment would not cause any Option intended to qualify as an Incentive Stock Option to fail to so qualify.
(c)    Sources of Shares Deliverable Under Awards.  Any Shares delivered pursuant to an Award may consist, in whole or in part, of authorized and unissued Shares or of treasury Shares.
Section 5.  Eligibility.  Any employee of, or consultant to, the Company or any of its Subsidiaries (including any prospective employee), or non-employee director who is a member of the Board or the board of directors of a Subsidiary of the Company, shall be eligible to be selected as a Participant and receive any Award as determined by the Committee.  Any employee of, or consultant to, an Affiliate (including any prospective employee), shall be eligible to be selected as a Participant and receive any cash-settled Performance Award or cash-settled Restricted Stock Unit as determined by the Committee.
Section 6.  Stock Options.
(a)    Grant.  Subject to the terms of the Plan, the Committee shall have sole authority to determine the Participants to whom Options shall be granted, the number of Shares to be covered by each Option, the exercise price thereof and the conditions and limitations applicable to the exercise of the Option.  The Committee shall have the authority to grant Incentive Stock Options, or to grant Non-Qualified Stock Options, or to grant both types of Options.  In the case of Incentive Stock Options, the terms and conditions of such grants shall be subject to and comply with such rules as may be prescribed by Section 422 of the Code, as from time to time amended, and any regulations implementing such statute.  All Options when granted under the Plan are intended to be Non-Qualified Stock Options, unless the applicable Award Agreement expressly states that the Option is intended to be an Incentive Stock Option.  If an Option is intended to be an Incentive Stock Option, and if for any reason such Option (or any portion thereof) shall not qualify as an Incentive Stock Option, then, to the extent of such nonqualification, such Option (or portion thereof) shall be regarded as a Non-Qualified Stock Option appropriately granted under the Plan; provided that such Option (or portion thereof) otherwise complies with the Plan’s requirements relating to Non-Qualified Stock Options.  No Option shall be exercisable more than ten years from the date of grant.
(b)    Exercise Price.  The Committee shall establish the exercise price at the time each Option is granted, which exercise price shall be set forth in the applicable Award Agreement and which exercise price (except with respect to Substitute Awards) shall not be less than the Fair Market Value per Share on the date of grant.
(c)    Exercise.  Each Option shall be exercisable at such times and subject to such terms and conditions as the Committee may, in its sole discretion, specify in the applicable Award Agreement.  The applicable Award Agreement shall specify the period or periods of Continuous Service by the Participant that is necessary before the Option or installments thereof will become exercisable.  The Committee may impose such conditions with respect to the exercise of Options, including without limitation, any relating to the application of federal or state securities laws, as it may deem necessary or advisable.

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(d)    Payment.  (i) No Shares shall be delivered pursuant to any exercise of an Option until payment in full of the aggregate exercise price therefor is received by the Company.  Such payment may be made  (A) in cash, or its equivalent, or  (B) subject to the Company’s consent, by exchanging Shares owned by the optionee (which are not the subject of any pledge or other security interest and which have been owned by such optionee for at least six months), or (C) subject to such rules as may be established by the Committee and applicable law, through delivery of irrevocable instructions to a broker to sell the Shares otherwise deliverable upon the exercise of the Option and to deliver promptly to the Company an amount equal to the aggregate exercise price, or (D) subject to any conditions or limitations established by the Committee, the Company’s withholding of Shares otherwise issuable upon exercise of an Option pursuant to a “net exercise” arrangement (it being understood that, solely for purposes of determining the number of treasury shares held by the Company, the Shares so withheld will not be treated as issued and acquired by the Company upon such exercise), or (E) by a combination of the foregoing, or (F) by such other methods as may be approved by the Committee, provided that the combined value of all cash and cash equivalents and the Fair Market Value of any such Shares so tendered to the Company or withheld as of the date of such tender or withholding is at least equal to such aggregate exercise price.
(ii)    Wherever in this Plan or any Award Agreement a Participant is permitted to pay the exercise price of an Option or taxes relating to the exercise of an Option by delivering Shares, the Participant may, subject to procedures satisfactory to the Committee, satisfy such delivery requirement by presenting proof of beneficial ownership of such Shares, in which case the Company shall treat the Option as exercised without further payment and shall withhold such number of Shares from the Shares acquired by the exercise of the Option.
Section 7.  Stock Appreciation Rights.
(a)    Grant.  Subject to the provisions of the Plan, the Committee shall have sole authority to determine the Participants to whom Stock Appreciation Rights shall be granted, the number of Shares to be covered by each Stock Appreciation Right Award, the grant price thereof and the conditions and limitations applicable to the exercise thereof.  Stock Appreciation Rights with a grant price equal to or greater than the Fair Market Value per Share as of the date of grant are intended to qualify as “performance-based compensation” under Section 162(m) of the Code.  In the sole discretion of the Committee, Stock Appreciation Rights may, but need not, qualify as performance-based compensation in accordance with Section 11 hereof.  Stock Appreciation Rights may be granted in tandem with another Award, in addition to another Award, or freestanding and unrelated to another Award.  Stock Appreciation Rights granted in tandem with or in addition to an Award may be granted either before, at the same time as the Award or at a later time.  No Stock Appreciation Right shall be exercisable more than ten years from the date of grant.
(b)    Exercise and Payment.  A Stock Appreciation Right shall entitle the Participant to receive an amount equal to the excess of the Fair Market Value of a Share on the date of exercise of the Stock Appreciation Right over the grant price thereof (which grant price (except with respect to Substitute Awards) shall not be less than the Fair Market Value on the date of grant).  The Committee shall determine in its sole discretion whether a Stock Appreciation Right shall be settled in cash, Shares or a combination of cash and Shares.
(c)    Other Terms and Conditions.  Subject to the terms of the Plan and any applicable Award Agreement, the Committee shall determine, at the grant of a Stock Appreciation Right, the term, methods of exercise, methods and form of settlement, and any other terms and conditions of any Stock Appreciation Right.  The Committee may impose such conditions or restrictions on the exercise of any Stock Appreciation Right as it shall deem appropriate.
Section 8.  Restricted Stock and Restricted Stock Units.
(a)    Grant.  Subject to the provisions of the Plan, the Committee shall have sole authority to determine the Participants to whom Shares of Restricted Stock and Restricted Stock Units shall be granted, the number of Shares of Restricted Stock and/or the number of Restricted Stock Units to be granted to each Participant, the duration of the period during 

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which, and the conditions, if any, under which, the Restricted Stock and Restricted Stock Units may be forfeited to the Company, and the other terms and conditions of such Awards.
(b)    Transfer Restrictions.  Shares of Restricted Stock and Restricted Stock Units may not be sold, assigned, transferred, pledged or otherwise encumbered, except, in the case of Restricted Stock, as provided in the Plan or the applicable Award Agreements. Unless otherwise directed by the Committee, (i) certificates issued in respect of Shares of Restricted Stock shall be registered in the name of the Participant and deposited by such Participant, together with a stock power endorsed in blank, with the Company, or (ii) Shares of Restricted Stock shall be held at the Company’s transfer agent in book entry form with appropriate restrictions relating to the transfer of such Shares of Restricted Stock.  Upon the lapse of the restrictions applicable to such Shares of Restricted Stock, the Company shall, as applicable, either deliver such certificates to the Participant or the Participant’s legal representative or the transfer agent shall remove the restrictions relating to the transfer of such Shares.
(c)    Payment.  Each Restricted Stock Unit shall have a value equal to the Fair Market Value of a Share.  Restricted Stock Units shall be paid in cash, Shares, other securities or other property, as determined in the sole discretion of the Committee, upon or after the lapse of the restrictions applicable thereto, or otherwise in accordance with the applicable Award Agreement.  No dividends shall paid be on any Shares of Restricted Stock and no dividend equivalents shall be paid on any Restricted Stock Units prior to the vesting of the Restricted Stock or Restricted Stock Units, as applicable.
Section 9.  Performance Awards.
(a)    Grant.  The Committee shall have sole authority to determine the Participants who shall receive a “Performance Award”, which shall consist of a right which is (i) denominated in cash or Shares, (ii) valued, as determined by the Committee, in accordance with the achievement of such Performance Goals during such Performance Periods as the Committee shall establish, and (iii) payable at such time and in such form as the Committee shall determine.
(b)    Terms and Conditions.  Subject to the terms of the Plan and any applicable Award Agreement, the Committee shall determine the Performance Goals to be achieved during any Performance Period, the length of any Performance Period, the amount of any Performance Award and the amount and kind of any payment or transfer to be made pursuant to any Performance Award.
(c)    Payment of Performance Awards.  Performance Awards may be paid in a lump sum or in installments following the close of the Performance Period as set forth in the Award Agreement on the date of grant.
Section 10.  Other Stock-Based Awards.
The Committee shall have authority to grant to Participants an “Other Stock-Based Award”, which shall consist of any right which is (i) not an Award described in Sections 6 through 9 above and (ii) an Award of Shares or an Award denominated or payable in, valued in whole or in part by reference to, or otherwise based on or related to, Shares (including, without limitation, securities convertible into Shares), as deemed by the Committee to be consistent with the purposes of the Plan; provided that any such rights must comply, to the extent deemed desirable by the Committee, with Rule 16b-3 and applicable law.  Subject to the terms of the Plan and any applicable Award Agreement, the Committee shall determine the terms and conditions of any such Other Stock-Based Award, including the price, if any, at which securities may be purchased pursuant to any Other Stock-Based Award granted under this Plan.
Section 11.  Performance Compensation Awards.
(a)    General.  The Committee shall have the authority, at the time of grant of any Award described in Sections 6 through 10 (other than Options and Stock Appreciation Rights), to designate such Award as a Performance Compensation Award in order to qualify such Award as “performance-based compensation” under Section 162(m) of the Code.

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(b)    Eligibility.  The Committee will, in its sole discretion, designate which Participants will be eligible to receive Performance Compensation Awards in respect of such Performance Period.  Designation of a Participant eligible to receive an Award hereunder for a Performance Period shall not in any manner entitle the Participant to receive payment in respect of any Performance Compensation Award for such Performance Period.  The determination as to whether or not such Participant becomes entitled to payment in respect of any Performance Compensation Award shall be decided solely in accordance with the provisions of this Section 11.  Moreover, designation of a Participant eligible to receive an Award hereunder for a particular Performance Period shall not require designation of such Participant eligible to receive an Award hereunder in any subsequent Performance Period and designation of one person as a Participant eligible to receive an Award hereunder shall not require designation of any other person as a Participant eligible to receive an Award hereunder in such period or in any other period.
(c)    Discretion of Committee with Respect to Performance Compensation Awards.  With regard to a particular Performance Period, the Committee shall have full discretion to select the applicable Participants, the length of such Performance Period, the type(s) of Performance Compensation Awards to be issued, the Performance Criteria that will be used to establish the Performance Goal(s), the kind or level of each Performance Goal to apply to the Company, and the Performance Formula, as applicable.  Within the first 90 days of a Performance Period (or, if shorter, within the maximum period allowed under Section 162(m) of the Code), the Committee shall, with regard to the Performance Compensation Awards to be issued for such Performance Period, exercise its discretion with respect to each of the matters enumerated in the immediately preceding sentence of this Section 11(c) and record the same in writing.
(d)    Payment of Performance Compensation Awards.  (i) Condition to Receipt of Payment.  Unless otherwise provided in the applicable Award Agreement, a Participant must be employed by the Company on the last day of a Performance Period to be eligible for payment in respect of a Performance Compensation Award for such Performance Period.
(ii)    Limitation.  A Participant shall be eligible to receive payment in respect of a Performance Compensation Award only to the extent that: (1) the Performance Goals for such period are achieved; and (2) the Performance Formula as applied against such Performance Goals determines that all or some portion of such Participant’s Performance Award has been earned for the Performance Period.
(iii)    Certification.  Following the completion of a Performance Period, the Committee shall review and certify in writing whether, and to what extent, the Performance Goals for the Performance Period have been achieved and, if so, to calculate and certify in writing that amount of the Performance Compensation Awards earned for the Performance Period based upon the Performance Formula.
(iv)    Negative Discretion.  Unless otherwise determined by the Committee, in determining the final payout of an individual Performance Compensation Award for a Performance Period, the Committee may reduce or eliminate the amount of the Performance Compensation Award earned under the Performance Formula in the Performance Period through the use of Negative Discretion if, in its sole judgment, such reduction or elimination is appropriate.
(v)    Timing of Award Payments.  Unless otherwise set forth in the applicable Award Agreement, the Awards granted for a Performance Period shall be paid to Participants as soon as administratively possible following completion of the certifications required by this Section 11; provided, that, unless otherwise set forth in the applicable Award Agreement,  in no event shall any Award granted for a Performance Period be paid later than the 15th calendar day of the third month following the end of the Participant’s first taxable year in which the right to payment is no longer subject to a “substantial risk of forfeiture” (within the meaning of Section 409A of the Code) or the 15th calendar day of the third month following the end of the Company’s first taxable year in which the payment is no longer subject to a “substantial risk of forfeiture”.
(vi)    Maximum Award Payable.  Notwithstanding any provision contained in the Plan to the contrary, the maximum Performance Compensation Award payable to any one Participant under the Plan for any fiscal year in respect of a Performance Period is 2,000,000 Shares or, in the event the Performance Compensation Award is paid in cash, the equivalent 

10

cash value thereof on the first day of the Performance Period to which such Performance Compensation Award relates.  Furthermore, any Performance Compensation Award that has been deferred shall not (between the date as of which the Performance Compensation Award is deferred and the payment date) increase (i) with respect to Performance Compensation Award that is payable in cash, by a measuring factor for each fiscal year greater than a reasonable rate of interest set by the Committee or (ii) with respect to a Performance Compensation Award that is payable in Shares, by an amount greater than the appreciation of a Share from the date such Performance Compensation Award is deferred to the payment date.
Section 12.  Amendment and Termination.
(a)    Amendments to the Plan.  The Board may amend, alter, suspend, discontinue, or terminate the Plan or any portion thereof at any time; provided that if an amendment to the Plan (i) would materially increase the benefits accruing to Participants under the Plan, (ii) would materially increase the number of securities which may be issued under the Plan, (iii) would materially modify the requirements for participation in the Plan or (iv) must otherwise be approved by the stockholders of the Company in order to comply with applicable law or the rules of the Nasdaq Stock Market, or, if the Shares are not traded on the Nasdaq Stock Market, the principal national securities exchange upon which the Shares are traded or quoted, such amendment will be subject to stockholder approval and will not be effective unless and until such approval has been obtained; and provided, further, that any such amendment, alteration, suspension, discontinuance or termination that would impair the rights of any Participant or any holder or beneficiary of any Award previously granted shall not be effective as to such Participant without the written consent of the affected Participant, holder or beneficiary.
(b)    Amendments to Awards.  The Committee may amend any terms of, or alter, suspend, discontinue, cancel, or terminate, any Award theretofore granted; provided that any such amendment, alteration, suspension, discontinuance, cancellation, or termination that would impair the rights of any Participant or any holder or beneficiary of any Award previously granted shall not be effective as to such Participant without the written consent of the affected Participant, holder or beneficiary.
(c)    Adjustment of Awards Upon the Occurrence of Certain Unusual or Nonrecurring Events.  The Committee is hereby authorized to make equitable adjustments in the terms and conditions of, and the criteria included in, all outstanding Awards in recognition of unusual or nonrecurring events (including, without limitation, the events described in Section 4(b) hereof) affecting the Company, any Subsidiary of the Company, or the financial statements of the Company or any Subsidiary of the Company, or of changes in applicable laws, regulations, or accounting principles, whenever the Committee 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.
(d)    Repricing.  Except in connection with a corporate transaction or event described in Section 4(b) hereof, the terms of outstanding Awards may not be amended to reduce the exercise price of Options or the grant price of Stock Appreciation Rights, or cancel Options or Stock Appreciation Rights in exchange for cash, other Awards or Options or Stock Appreciation Rights with an exercise price or grant price, as applicable, that is less than the exercise price of the original Options or grant price of the original Stock Appreciation Rights, as applicable, without stockholder approval.  This Section 12(d) is intended to prohibit the repricing of “underwater” Options and Stock Appreciation Rights and will not be construed to prohibit the adjustments provided for in Section 4(b) of this Plan.
Section 13.  Change in Control.
(a)    Except as otherwise provided in an Award Agreement or by the Committee at the date of grant, to the extent outstanding Awards granted under this Plan are not assumed, converted or replaced by the resulting or continuing entity in the event of a Change in Control, all outstanding Awards that may be exercised shall become fully exercisable, all restrictions with respect to outstanding Awards shall lapse and such Awards shall become vested and non-forfeitable, and any specified Performance Goals with respect to outstanding Awards shall be deemed to be satisfied at target immediately prior to the consummation of a Change in Control. 

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(b)    Except as otherwise provided in an Award Agreement or by the Committee at the date of grant or thereafter, to the extent outstanding Awards granted under this Plan are assumed, converted or replaced by the resulting or continuing entity in the event of a Change in Control, (i) any outstanding Awards that are subject to Performance Goals shall be converted, assumed or replaced by the resulting or continuing entity as if target performance had been achieved as of the date of the Change in Control, (ii) each Performance Award or Performance Compensation Award with service requirements shall continue to vest with respect to such requirements during the remaining period set forth in the Award Agreement, and (iii) all other Awards shall continue to vest (and/or the restrictions thereon shall continue to lapse) during the remaining period set forth in the Award Agreement. 
(c)    Except as otherwise provided in an Award Agreement or by the Committee at the date of grant, to the extent outstanding Awards granted under this Plan are either assumed, converted or replaced by the resulting or continuing entity in the event of a Change in Control, if a Participant’s employment or service is terminated without Cause by the Company or a Subsidiary or Affiliate of the Company or a Participant terminates his or her employment or service with the Company or a Subsidiary or Affiliate of the Company for Good Reason, in either case, during the two year period following a Change in Control, all outstanding Awards held by the Participant that may be exercised shall become fully exercisable and all restrictions with respect to outstanding Awards shall lapse and become vested and non-forfeitable.
(d)    Notwithstanding anything in this Plan or any Award Agreement to the contrary, to the extent any provision of this Plan or an Award Agreement would cause a payment of deferred compensation that is subject to Section 409A of the Code to be made upon the occurrence of (i) a Change in Control, then such payment shall not be made unless such Change in Control also constitutes a “change in ownership”, “change in effective control” or “change in ownership of a substantial portion of the Company’s assets” within the meaning of Section 409A of the Code or (ii) a termination of employment or service, then such payment shall not be made unless such termination of employment or service also constitutes a “separation from service” within the meaning of Section 409A of the Code.  Any payment that would have been made except for the application of the preceding sentence shall be made in accordance with the payment schedule that would have applied in the absence of a Change in Control or termination of employment or service, but disregarding any future service or performance requirements.
Section 14.  General Provisions.
(a)    Nontransferability.
(i)    Each Award, and each right under any Award, shall be exercisable only by the Participant during the Participant’s lifetime, or, if permissible under applicable law, by the Participant’s legal guardian or representative.
(ii)    No Award may be sold, assigned, alienated, pledged, attached or otherwise transferred or encumbered by a Participant otherwise than by will or by the laws of descent and distribution, and any such purported sale, assignment, alienation, pledge, attachment, transfer or encumbrance shall be void and unenforceable against the Company or any Subsidiary or Affiliate of the Company; provided that the designation of a beneficiary shall not constitute a sale, assignment, alienation, pledge, attachment, transfer or encumbrance.
(iii)    Notwithstanding the foregoing, the Committee may, in the applicable Award Agreement evidencing an Option granted under the Plan or at any time thereafter in an amendment to an Award Agreement, provide that Options which are not intended to qualify as Incentive Options may be transferred by the Participant to whom such Option was granted (the “Grantee”) without consideration, after such time as all vesting conditions with respect to such Option have been satisfied, and subject to such rules as the Committee may adopt to preserve the purposes of the Plan, to: (1) the Grantee’s spouse, children or grandchildren (including adopted and stepchildren and grandchildren) (collectively, the “Immediate Family”); (2) a trust solely for the benefit of the Grantee and his or her Immediate Family; or (3) a partnership, corporation or limited liability company whose only partners, members or stockholders are the Grantee and his or her Immediate Family; (each transferee described in clauses (1), (2) and (3) above is hereinafter referred to as a “Permitted Transferee”); provided that the Grantee gives the Committee advance written notice describing the terms and conditions of the proposed transfer and the Committee 

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notifies the Grantee in writing that such a transfer would comply with the requirements of the Plan and any applicable Award Agreement evidencing the Option.
The terms of any Option transferred in accordance with the immediately preceding sentence shall apply to the Permitted Transferee and any reference in the Plan or in an Award Agreement to an optionee, Grantee or Participant shall be deemed to refer to the Permitted Transferee, except that (a) Permitted Transferees shall not be entitled to transfer any Options, other than by will or the laws of descent and distribution; (b) Permitted Transferees shall not be entitled to exercise any transferred Options unless there shall be in effect a registration statement on an appropriate form covering the Shares to be acquired pursuant to the exercise of such Option if the Committee determines that such a registration statement is necessary or appropriate, (c) the Committee or the Company shall not be required to provide any notice to a Permitted Transferee, whether or not such notice is or would otherwise have been required to be given to the Grantee under the Plan or otherwise and (d) the consequences of termination of the Grantee’s employment by, or services to, the Company under the terms of the Plan and the applicable Award Agreement shall continue to be applied with respect to the Grantee, following which the Options shall be exercisable by the Permitted Transferee only to the extent, and for the periods, specified in the Plan and the applicable Award Agreement.
(iv)    Notwithstanding anything to the contrary herein, only gratuitous transfers of Awards shall be permitted.  In no event may any Award granted under this Plan be transferred for value.
(b)    Dividend Equivalents.    No dividends or dividend equivalents shall paid be on any Award prior to vesting.  In the sole discretion of the Committee, an Award (other than Options or Stock Appreciation Rights), whether made as an Other Stock-Based Award described in Section 10 or as an Award granted pursuant to Sections 6 through 9 hereof, may provide the Participant with dividends or dividend equivalents, payable in cash, Shares, other securities or other property on a deferred basis; provided, that such dividends or dividend equivalents shall be subject to the same vesting conditions as the Award to which such dividends or dividend equivalents relate.
(c)    No Rights to Awards.  No Participant or other Person shall have any claim to be granted any Award, and there is no obligation for uniformity of treatment of Participants, or holders or beneficiaries of Awards.  The terms and conditions of Awards and the Committee’s determinations and interpretations with respect thereto need not be the same with respect to each Participant (whether or not such Participants are similarly situated).
(d)    Share Certificates.  Shares or other securities of the Company or any Subsidiary of the Company delivered under the Plan pursuant to any Award or the exercise thereof shall be subject to such stop transfer orders and other restrictions as the Committee may deem advisable under the Plan or the rules, regulations, and other requirements of the SEC, any stock exchange upon which such Shares or other securities are then listed, and any applicable Federal or state laws, and the Committee may cause a legend or legends to be put on any such certificates to make appropriate reference to such restrictions.
(e)    Withholding.  (i) A Participant may be required to pay to the Company or any Subsidiary or Affiliate of the Company, subject to Section 409A of the Code, and the Company or any Subsidiary or Affiliate of the Company shall have the right and is 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 a Participant the amount (in cash, Shares, other securities, other Awards or other property) of any applicable withholding taxes in respect of an Award, its exercise, 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 the payment of such taxes.
(ii)    Without limiting the generality of clause (i) above, subject to the Company’s consent, a Participant may satisfy, in whole or in part, the foregoing withholding liability by delivery of Shares owned by the Participant (which are not subject to any pledge or other security interest and which have been owned by the Participant for at least six months) with a Fair Market Value equal to such withholding liability or by having the Company withhold from the number of Shares otherwise deliverable to the Participant with respect to an Award a number of Shares with a Fair Market Value equal to such withholding 

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liability, or by such other methods as may be approved by the Committee, including, but not limited to, through a “broker-assisted” cashless exercise.
(iii)    Notwithstanding any provision of this Plan to the contrary, in connection with the transfer of an Option to a Permitted Transferee pursuant to Section 14(a), the Grantee shall remain liable for any withholding taxes required to be withheld upon the exercise of such Option by the Permitted Transferee.
(f)    Detrimental Activity and Recapture.  Any Award Agreement may provide for the cancellation or forfeiture of an Award or the forfeiture and repayment to the Company of any gain related to an Award, or other provisions intended to have a similar effect, upon such terms and conditions as may be determined by the Committee from time to time, if a Participant during employment or other service with the Company or a subsidiary, shall engage in activity detrimental to the Company.  In addition, notwithstanding anything in this Plan to the contrary, any Award Agreement may also provide for the cancellation or forfeiture of an Award or the forfeiture and repayment to the Company of any gain related to an Award, or other provision intended to have a similar effect, upon such terms and conditions as may be required by the Committee under Section 10D of the Exchange Act and any applicable rules or regulations promulgated by the SEC or any national securities exchange or national securities association on which the Shares may be traded.
(g)    Award Agreements.  Each Award hereunder shall be evidenced by an Award Agreement which shall be delivered to the Participant and shall specify the terms and conditions of the Award and any rules applicable thereto, including but not limited to, the effect on such Award of the death, disability or termination of employment or service of a Participant and the effect, if any, of such other events as may be determined by the Committee.
(h)    No Limit on Other Compensation Arrangements.  Nothing contained in the Plan shall prevent the Company or any Subsidiary or Affiliate of the Company from adopting or continuing in effect other compensation arrangements, which may, but need not, provide for the grant of options, restricted stock, Shares and other types of Awards provided for hereunder (subject to stockholder approval if such approval is required), and such arrangements may be either generally applicable or applicable only in specific cases.
(i)    No Right to Employment.  The grant of an Award shall not be construed as giving a Participant the right to be retained in the employ of, or in any consulting relationship to, or as a director on the Board or board of directors, as applicable, of, the Company or any Subsidiary or Affiliate of the Company.  Further, the Company or a Subsidiary or Affiliate of the Company may at any time dismiss a Participant from employment or discontinue any consulting relationship, free from any liability or any claim under the Plan, unless otherwise expressly provided in the Plan, any Award Agreement or any applicable employment contract or agreement.
(j)    No Rights as Stockholder.  Subject to the provisions of the applicable Award, no Participant or holder or beneficiary of any Award shall have any rights as a stockholder with respect to any Shares to be distributed under the Plan until he or she has become the holder of such Shares.  Notwithstanding the foregoing, in connection with each grant of Restricted Stock hereunder, the applicable Award shall specify if and to what extent the Participant shall not be entitled to the rights of a stockholder in respect of such Restricted Stock.
(k)    Governing Law.  Unless otherwise provided for in an applicable Award Agreement, the validity, construction, and effect of the Plan and any rules and regulations relating to the Plan and any Award Agreement shall be determined in accordance with the laws of the State of New York, applied without giving effect to its conflict of laws principles.
(l)    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 Committee, 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 Committee, materially altering the intent of 

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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.
(m)    Other Laws.  The Committee may refuse to issue or transfer any Shares or other consideration under an Award if, acting in its sole discretion, it determines that the issuance or transfer of such Shares or such other consideration might violate any applicable law or regulation or result in any liability under Section 16(b) of the Exchange Act, and any payment tendered to the Company by a Participant, other holder or beneficiary in connection with the exercise of such Award shall be promptly refunded to the relevant Participant, holder or beneficiary.  Without limiting the generality of the foregoing, no Award granted hereunder shall be construed as an offer to sell securities of the Company, and no such offer shall be outstanding, unless and until the Committee in its sole discretion has determined that any such offer, if made, would be in compliance with all applicable requirements of the U.S. federal securities laws.
(n)    Foreign Employees.  In order to facilitate the making of any Award or combination of Awards under this Plan, the Committee may provide for such special terms for awards to Participants who are foreign nationals or who are employed by the Company or any Subsidiary or Affiliate of the Company outside of the United States of America as the Committee may consider necessary or appropriate to accommodate differences in local law, tax policy or custom. Moreover, the Committee may approve such supplements to or amendments, restatements or alternative versions of this Plan (including, without limitation, sub-plans) as it may consider necessary or appropriate for such purposes, without thereby affecting the terms of this Plan as in effect for any other purpose, and the Secretary or other appropriate officer of the Company may certify any such document as having been approved and adopted in the same manner as this Plan. No such special terms, supplements, amendments or restatements, however, shall include any provisions that are inconsistent with the terms of this Plan as then in effect unless this Plan could have been amended to eliminate such inconsistency without further approval by the stockholders of the Company.
(o)    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 Subsidiary or Affiliate of the Company and a Participant or any other Person.  To the extent that any Person acquires a right to receive payments from the Company or any Subsidiary or Affiliate of the Company pursuant to an Award, such right shall be no greater than the right of any unsecured general creditor of the Company or any Subsidiary or Affiliate of the Company.
(p)    No Fractional Shares.  No fractional Shares shall be issued or delivered pursuant to the Plan or any Award, and the Committee 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.
(q)    Deferrals.  In the event the Committee permits a Participant to defer any Award payable in the form of cash, all such elective deferrals shall be accomplished by the delivery of a written, irrevocable election by the Participant on a form provided by the Company.  All deferrals shall be made in accordance with administrative guidelines established by the Committee to ensure that such deferrals comply with all applicable requirements of Section 409A of the Code.
(r)    Headings.  Headings are given to the Sections and subsections of the Plan solely as a convenience to facilitate reference.  Such headings shall not be deemed in any way material or relevant to the construction or interpretation of the Plan or any provision thereof.
Section 15.  Compliance with Section 409A of the Code.
(a)    To the extent applicable, it is intended that this Plan and any grants made hereunder comply with the provisions of Section 409A of the Code, so that the income inclusion provisions of Section 409A(a)(1) of the Code do not apply to the Participants.  This Plan and any grants made hereunder shall be administered in a manner consistent with this intent.  Any reference in this Plan to Section 409A of the Code will also include any regulations or any other formal guidance promulgated with respect to such Section by the U.S. Department of Treasury or the Internal Revenue Service.  In any case, a 

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Participant shall be solely responsible and liable for the satisfaction of all taxes and penalties that may be imposed on a Participant or for a Participant’s account in connection with this Plan and grants hereunder (including any taxes and penalties under Section 409A of the Code), and neither the Company nor any of its Subsidiaries shall have any obligation to indemnify or otherwise hold a Participant harmless from any or all of such taxes or penalties.
(b)    Neither a Participant nor any of a Participant’s creditors or beneficiaries shall have the right to subject any deferred compensation (within the meaning of Section 409A of Code) payable under this Plan and grants hereunder to any anticipation, alienation, sale, transfer, assignment, pledge, encumbrance, attachment or garnishment.  Except as permitted under Section 409A of the Code, any deferred compensation (within the meaning of Section 409A of the Code) payable to a Participant or for a Participant’s benefit under this Plan and grants hereunder may not be reduced by, or offset against, any amount owing by a Participant to the Company or any of its Subsidiaries. 
(c)    If, at the time of a Participant’s separation from service (within the meaning of Section 409A of the Code), (i) the Participant shall be a specified employee (within the meaning of Section 409A of the Code and using the identification methodology selected by the Company from time to time) and (ii) the Company shall make a good faith determination that an amount payable hereunder constitutes deferred compensation (within the meaning of Section 409A of the Code) the payment of which is required to be delayed pursuant to the six-month delay rule set forth in Section 409A of the Code in order to avoid taxes or penalties under Section 409A of the Code, then the Company shall not pay such amount on the otherwise scheduled payment date but shall instead pay it, without interest, on the earlier of the first business day of the seventh month following separation from service or death.
Section 16.  Term of the Plan.
(a)    Effective Date.  The Prior Plan was approved by the Board on May 12, 2015 and was subsequently approved by the stockholders of the Company on June 25, 2015.  This Plan was approved by the Board on May 9, 2017, and shall be effective subject to, and as of the date of, its approval by the stockholders of the Company (such date, the “Effective Date”).
(b)    Expiration Date.  No grant will be made under this Plan more than ten years after the Effective Date, but all grants made on or prior to such date will continue in effect thereafter subject to the terms thereof and of this Plan.

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