Document:

EXHIBIT 10.1

  

Arlington Asset Investment Corp.

2014 Long-Term Incentive Plan

 

Arlington Asset Investment
Corp., a corporation existing under the laws of the Commonwealth of Virginia (the “Company”), hereby establishes and
adopts the following 2014 Long-Term Incentive Plan (the “Plan”).

 

ARTICLE
1

PURPOSE OF THE PLAN

 

1.1           Purpose.  The
purpose of the Plan is to assist the Company and its Affiliates in attracting and retaining selected individuals to serve as directors,
employees, consultants and/or advisors of the Company who are expected to contribute to the Company’s success and to achieve
long-term objectives which will inure to the benefit of all stockholders of the Company through the additional incentives inherent
in the Awards hereunder.

 

ARTICLE
2

DEFINITIONS

 

2.1           “Accounting
Firm” shall have the meaning set forth in Section 11.4.

 

2.2           “Affiliate” shall
mean (i) any person or entity that directly, or through one or more intermediaries, controls, or is controlled by, or is under
common control with, the Company (including any Subsidiary) or (ii) any entity in which the Company has a significant equity interest,
as determined by the Committee.

 

2.3           “Award” shall
mean any Option, Stock Appreciation Right, Restricted Stock Award, Restricted Stock Unit Award, Performance Award, Dividend Equivalent,
Interest Equivalent, Other Stock-Based Award, or any other right, interest or option relating to Shares or other property (including
cash) granted pursuant to the provisions of the Plan.

 

2.4           “Award
Agreement” shall mean any written agreement, contract or other instrument or document evidencing any Award granted
by the Committee hereunder.

 

2.5           “Board” shall
mean the board of directors of the Company.

 

2.6           
“Change in Control” shall have the meaning set forth in Section 11.1.

 

2.7           
“Code” shall mean the Internal Revenue Code of 1986, as amended from time to time, and any successor
thereto.

 

2.8           “Committee” shall
mean the Compensation Committee of the Board.

 

2.9           “Covered
Employee” shall mean a “covered employee” within the meaning of Section 162(m)(3) of the Code, or
any successor provision thereto.

 

    	 

    	 

    

 

2.10         “Director” shall
mean a non-employee member of the Board.

 

2.11         “Dividend
Equivalents” shall have the meaning set forth in Section 12.5.

 

2.12         “Employee” shall
mean any employee of the Company or any Affiliate. Solely for purposes of the Plan, an Employee shall also mean any consultant
or advisor who provides services to the Company or any Affiliate, so long as such person (i) renders bona fide services that are
not in connection with the offer and sale of the Company’s securities in a capital-raising transaction and (ii) does not
directly or indirectly promote or maintain a market for the Company’s securities.

 

2.13         “Exchange
Act” shall mean the Securities Exchange Act of 1934, as amended.

 

2.14         “Fair
Market Value” shall mean, with respect to any property other than Shares, the market value of such property
determined by such methods or procedures as shall be established from time to time by the Committee. The Fair Market Value of Shares
as of any date shall be (i) the per Share closing price of the Shares as reported on the principal U.S. national securities exchange
on which the Shares are listed and traded on such date (or if there was no reported closing price on such date, on the last preceding
date on which the closing price was reported); (ii) if the Shares are not listed on any U.S. national securities exchange but are
quoted in an inter-dealer quotation system on a last sale basis, the final ask price of the Shares reported on the inter-dealer
quotation system for such date (or if there was no such sale on such date, on the last preceding date on which a sale was reported);
or, (iii) if the Shares are neither listed on a U.S. national securities exchange nor quoted on an inter-dealer quotation system
on a last sale basis, the Fair Market Value of Shares shall be determined by the Committee in its sole discretion using appropriate
criteria.

 

2.15         “Freestanding
Stock Appreciation Right” shall have the meaning set forth in Section 6.1.

 

2.16         “Interest
Equivalent” shall have the meaning set forth in Section 12.5

 

2.17         “Limitations” shall
have the meaning set forth in Section 3.3.

 

2.18         “Option” shall
mean any right granted to a Participant under the Plan allowing such Participant to purchase Shares at such price or prices and
during such period or periods as the Committee shall determine. Options shall be “nonstatutory” options that are not
subject to Section 421 of the Code.

 

2.19         “Other
Stock-Based Award” shall have the meaning set forth in Section 8.1.

 

2.20         “Participant” shall
mean an Employee or Director who is selected by the Committee to receive an Award under the Plan.

 

2.21         “Payee” shall
have the meaning set forth in Section 13.1.

 

2.22         “Performance
Award” shall mean any Award of Performance Shares or Performance Units granted pursuant to Section 9.

 

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2.23         “Performance
Period” shall mean that period established by the Committee at the time any Performance Award is granted or
at any time thereafter during which any performance goals specified by the Committee with respect to such Award are to be measured.

 

2.24         “Performance
Share” shall mean any grant pursuant to Section 9 of a unit valued by reference to a designated number of Shares,
which value may be paid to the Participant by delivery of such property as the Committee shall determine, including cash, Shares,
other property, or any combination thereof, upon achievement of such performance goals during the Performance Period as the Committee
shall establish at the time of such grant or thereafter.

 

2.25         “Performance
Unit” shall mean any grant pursuant to Section 9 of a unit valued by reference to a designated amount of property
(including cash) other than Shares, which value may be paid to the Participant by delivery of such property as the Committee shall
determine, including cash, Shares, other property, or any combination thereof, upon achievement of such performance goals during
the Performance Period as the Committee shall establish at the time of such grant or thereafter.

 

2.26         “Permitted
Assignee” shall have the meaning set forth in Section 12.3.

 

2.27         “Prior
Plans” shall mean, collectively, the Arlington Asset Investment Corp. 2011 Long-Term Incentive Plan, the FBR
Stock and Annual Incentive Plan, the Friedman, Billings, Ramsey Group, Inc. 2004 Long-Term Incentive Plan, and the Company’s
Non-Employee Director Stock Compensation Plan.

 

2.28         “Restricted
Stock” shall mean any Share issued with the restriction that the holder may not sell, transfer, pledge or assign
such Share and with such other restrictions as the Committee, in its sole discretion, may impose (including any restriction on
the right to vote such Share and the right to receive any dividends), which restrictions may lapse separately or in combination
at such time or times, in installments or otherwise, as the Committee may deem appropriate.

 

2.29         “Restricted
Stock Award” shall have the meaning set forth in Section 7.1.

 

2.30         “Restricted
Stock Unit” means an Award that is valued by reference to a Share, which value may be paid to the Participant
upon the satisfaction of vesting restrictions as the Committee may establish, which restrictions may lapse separately or in combination
at such time or times, in installments or otherwise, as the Committee may deem appropriate.

 

2.31         “Restricted
Stock Unit Award” shall have the meaning set forth in Section 7.1

 

2.32         “Restriction
Period” shall have the meaning set forth in Section 7.1.

 

2.33         “Shares” shall
mean the shares of Class A common stock of the Company, par value $0.01 per share.

 

2.34         “Stock
Appreciation Right” shall mean the right granted to a Participant pursuant to Section 6.

 

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2.35        “Subsidiary” shall
mean any corporation (other than the Company) in an unbroken chain of corporations beginning with the Company if, at the time of
the granting of the Award, each of the corporations other than the last corporation in the unbroken chain owns stock possessing
50% or more of the total combined voting power of all classes of stock in one of the other corporations in the chain.

 

2.36        “Substitute
Awards” shall mean Awards granted or Shares issued by the Company in assumption of, or in substitution or exchange
for, awards previously granted, or the right or obligation to make future awards, by a company acquired by the Company or any Subsidiary
or with which the Company or any Subsidiary combines.

 

2.37        “Tandem
Stock Appreciation Right” shall have the meaning set forth in Section 6.1.

 

In addition, certain
other terms used in the Plan have definitions provided to them in the first place in which they are used herein.

 

ARTICLE
3

SHARES SUBJECT TO THE PLAN

 

3.1          Number
of Shares.  

 

(a)          Subject
to adjustment as provided in Section 12.2, a total of 2,000,000 Shares, plus any Shares that become available for the Plan under
Sections 3.1(b) and 3.1(c) shall be authorized for grant under the Plan.

 

(b)          If
any Shares subject to an Award or to an award under the Prior Plans are forfeited, expire or otherwise terminate without issuance
of such Shares on or after the effective date of the Plan, or any Award or award under the Prior Plans is settled for cash or otherwise
does not result in the issuance of all or a portion of the Shares subject to such Award on or after the effective date of the Plan,
the Shares, to the extent of such forfeiture, expiration, termination, cash settlement or non-issuance, shall again be available
for Awards under the Plan.

 

(c)          In
the event that (i) any Option or other Award granted hereunder is exercised through the tendering of Shares (either actually or
by attestation) or by the withholding of Shares by the Company, or (ii) withholding tax liabilities arising from such Option or
other Award are satisfied by the tendering of Shares (either actually or by attestation) or by the withholding of Shares by the
Company, then the Shares so tendered or withheld shall be available for issuance under the Plan. In the event that on or after
the effective date of the Plan (i) any option or award granted under the Prior Plans is exercised through the tendering of Shares
(either actually or by attestation) or by the withholding of Shares by the Company, or (ii) withholding tax liabilities arising
from such options or awards are satisfied by the tendering of Shares (either actually or by attestation) or by the withholding
of Shares by the Company, then the Shares so tendered or withheld shall again be available for Awards under the Plan.

 

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(d)          Substitute
Awards shall not reduce the Shares authorized for grant under the Plan and Substitute Awards may be granted without regard to the
Limitations prescribed by Section 3.3. Shares subject to a Substitute Award shall not again be available for Awards under the Plan
to the extent of any forfeiture, expiration or cash settlement as provided in paragraph (b) above. Additionally, in the event that
a company acquired by the Company or any Subsidiary or with which the Company or any Subsidiary combines has shares available under
a pre-existing plan approved by shareholders and not adopted in contemplation of such acquisition or combination, the shares available
for grant pursuant to the terms of such pre-existing plan (as adjusted, to the extent appropriate, using the exchange ratio or
other adjustment or valuation ratio or formula used in such acquisition or combination to determine the consideration payable to
the holders of common stock of the entities party to such acquisition or combination) may be used for Awards under the Plan and
shall not reduce the Shares authorized for grant under the Plan; provided that Awards using such available shares shall not be
made after the date awards or grants could have been made under the terms of the pre-existing plan, absent the acquisition or combination,
and shall only be made to individuals who were not Employees or Directors or any Affiliate prior to such acquisition or combination.

 

3.2          Character
of Shares.  Any Shares issued hereunder may consist, in whole or in part, of authorized and unissued shares,
treasury shares or shares purchased in the open market or otherwise.

 

ARTICLE
4

ELIGIBILITY AND ADMINISTRATION

 

4.1          Eligibility.  Any
Employee or Director shall be eligible to be selected as a Participant.

 

4.2          Administration.  

 

(a)          The
Plan shall be administered by the Committee. The Directors may remove from, add members to, or fill vacancies on, the Committee.

 

(b)          The
Committee shall have full power and authority, subject to the provisions of the Plan and subject to such orders or resolutions
not inconsistent with the provisions of the Plan as may from time to time be adopted by the Board, to: (i) select the Employees
and Directors to whom Awards may from time to time be granted hereunder; (ii) determine the type or types of Awards, not inconsistent
with the provisions of the Plan, to be granted to each Participant hereunder; (iii) determine the number of Shares to be covered
by each Award granted hereunder; (iv) determine the terms and conditions, not inconsistent with the provisions of the Plan, of
any Award granted hereunder; (v) determine whether, to what extent and under what circumstances Awards may be settled in cash,
Shares or other property; (vi) determine whether, to what extent, and under what circumstances cash, Shares, other property and
other amounts payable with respect to an Award made under the Plan shall be deferred either automatically or at the election of
the Participant; (vii) determine whether, to what extent and under what circumstances any Award shall be canceled or suspended;
(viii) interpret and administer the Plan and any instrument or agreement entered into under or in connection with the Plan, including
any Award Agreement; (ix) correct any defect, supply any omission or reconcile any inconsistency in the Plan or any Award in the
manner and to the extent that the Committee shall deem desirable to carry it into effect; (x) establish such rules and regulations
and appoint such agents as it shall deem appropriate for the proper administration of the Plan; (xi) determine whether any Award
will have Dividend Equivalents or Interest Equivalents; and (xii) make any other determination and take any other action that the
Committee deems necessary or desirable for administration of the Plan.

 

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(c)          Decisions
of the Committee shall be final, conclusive and binding on all persons or entities, including the Company, any Participant, any
stockholder and any Employee or any Affiliate. A majority of the members of the Committee may determine its actions and fix the
time and place of its meetings. Notwithstanding the foregoing, any action or determination by the Committee specifically affecting
or relating to an Award to a Director shall require the final approval of the Board.

 

(d)          To
the extent not inconsistent with applicable law or the rules and regulations of the principal U.S. national securities exchange
on which the Shares are traded, the Committee may delegate to (i) a committee of one or more Directors of the Company any of the
authority of the Committee under the Plan, including the right to grant, cancel or suspend Awards and (ii) to the extent permitted
by law, to one or more officers or a committee of officers the right to grant Awards to Employees who are not Directors or officers
of the Company and the authority to take action on behalf of the Committee pursuant to the Plan to cancel or suspend Awards to
Employees who are not Directors or officers of the Company.

 

ARTICLE
5

OPTIONS

 

5.1          Grant
of Options.  Options may be granted hereunder to Participants either alone or in addition to other Awards granted
under the Plan. Any Option shall be subject to the terms and conditions of this Section 5 and to such additional terms and conditions,
not inconsistent with the provisions of the Plan, as the Committee shall deem desirable.

 

5.2          Award
Agreements.  All Options granted pursuant to this Section 5 shall be evidenced by a written Award Agreement in
such form and containing such terms and conditions as the Committee shall determine which are not inconsistent with the provisions
of the Plan. The terms and conditions of Options need not be the same with respect to each Participant. The grant of an Option
pursuant to the Plan shall impose no obligation on the recipient to exercise such Option. Any individual who is granted an Option
pursuant to this Section 5 may hold more than one Option granted pursuant to the Plan at the same time.

 

5.3          Option
Price.  Other than in connection with Substitute Awards, the option price per each Share purchasable under any
Option granted pursuant to this Section 5 shall not be less than 100% of the Fair Market Value of such Share on the date of grant
of such Option. Other than pursuant to Section 11.2 or Section 12.2, the Committee shall not without the approval of the Company’s
stockholders (a) lower the option price per Share of an Option after it is granted, (b) cancel an Option when the option price
per Share exceeds the Fair Market Value of one Share in exchange for cash or another Award (other than in connection with a Change
in Control as described in Section 11.3 or Substitute Awards), and (c) take any other action with respect to an Option that may
be treated as a repricing under the rules and regulations of the principal U.S. national securities exchange on which the Shares
are traded.

 

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5.4          Option
Term.  The term of each Option shall be fixed by the Committee in its sole discretion; provided that no Option
shall be exercisable after the expiration of ten years from the date the Option is granted, except in the event of death or disability.
Notwithstanding the foregoing, if on the last business day coincident with or immediately preceding the expiration date of an Option
(i) the exercise of the Option is prohibited by applicable law or (ii) Shares may not be purchased or sold by the Participant or
other holder of the Option due to the “black-out period” of a Company policy or a “lock-up” agreement entered
into in connection with an issuance of securities by the Company, the expiration date of the Option shall be extended until the
thirtieth (30th) day after the end of the legal prohibition, black-out period or lock-up agreement.

 

5.5          Exercise
of Options.  

 

(a)          The
Award Agreement shall specify when Options vest and become exercisable. Vested Options granted under the Plan shall be exercised
by the Participant or by a Permitted Assignee thereof (or by the Participant’s executors, administrators, guardian or legal
representative, as may be provided in an Award Agreement) as to all or part of the Shares covered thereby, by giving notice of
exercise to the Company or its designated agent, specifying the number of Shares to be purchased. The notice of exercise shall
be in such form, made in such manner, and shall comply with such other requirements consistent with the provisions of the Plan
as the Committee may prescribe from time to time.

 

(b)          Unless
otherwise provided in an Award Agreement, full payment of such purchase price shall be made at the time of exercise and shall be
made (i) in cash or cash equivalents (including by certified check or bank check or wire transfer of immediately available funds),
(ii) by tendering previously acquired Shares (either actually or by attestation), valued at their then Fair Market Value, (iii)
with the consent of the Committee, by delivery of other consideration (including, where permitted by law and the Committee, other
Awards) having a Fair Market Value on the exercise date equal to the total purchase price, (iv) with the consent of the Committee,
by withholding Shares otherwise issuable in connection with the exercise of the Option, (v) through any other method specified
in an Award Agreement, or (vi) any combination of any of the foregoing. The notice of exercise, accompanied by such payment, shall
be delivered to the Company at its principal business office or such other office as the Committee may from time to time direct,
and shall be in such form, containing such further provisions consistent with the provisions of the Plan, as the Committee may
from time to time prescribe. In no event may any Option granted hereunder be exercised for a fraction of a Share. Except under
certain circumstances contemplated by Section 11 or as may be set forth in an Award Agreement with respect to death or disability
of a Participant, Options granted to employees of the Company or any Subsidiary will not be exercisable before the expiration of
one year from the date the Option is granted (but may be exercisable pro rata over such time).

 

(c)          Notwithstanding
the foregoing, an Award Agreement may provide that if on the last day of the term of an Option the Fair Market Value of one Share
exceeds the option price per Share, the Participant has not exercised the Option (or a Tandem Stock Appreciation Right, if applicable)
and the Option has not expired, the Option shall be deemed to have been exercised by the Participant on such day with payment made
by withholding Shares otherwise issuable in connection with the exercise of the Option. In such event, the Company shall deliver
to the Participant the number of Shares for which the Option was deemed exercised, less the number of Shares required to be withheld
for the payment of the total purchase price and required withholding taxes; provided, however, any fractional Share shall be settled
in cash.

 

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5.6          Form
of Settlement.  In its sole discretion, the Committee may provide, at the time of grant, that the Shares to be
issued upon an Option’s exercise shall be in the form of Restricted Stock or other similar securities, or may reserve the
right so to provide after the time of grant.

 

ARTICLE
6

STOCK APPRECIATION RIGHTS

 

6.1          Grant
and Exercise.  The Committee may grant Stock Appreciation Rights (a) in conjunction with all or part of any Option
granted under the Plan or at any subsequent time during the term of such Option (“Tandem Stock Appreciation Right”),
(b) in conjunction with all or part of any Award (other than an Option) granted under the Plan or at any subsequent time during
the term of such Award, or (c) without regard to any Option or other Award (a “Freestanding Stock Appreciation Right”),
in each case upon such terms and conditions as the Committee may establish in its sole discretion.

 

6.2          Terms
and Conditions.  Stock Appreciation Rights shall be subject to such terms and conditions, not inconsistent with
the provisions of the Plan, as shall be determined from time to time by the Committee, including the following:

 

(a)          Upon
the exercise of a Stock Appreciation Right, the holder shall have the right to receive the excess of (i) the Fair Market Value
of one Share on the date of exercise or such other lesser amount as the Committee shall so determine at any time during a specified
period before the date of exercise over (ii) the grant price of the right on the date of grant which, except in the case of Substitute
Awards or in connection with an adjustment provided in Section 12.2, shall not be less than the Fair Market Value of one Share
on such date of grant of the right or, in the case of a Tandem Stock Appreciation Right granted on the date of grant of the related
Option, the option price per share of the related Option.

 

(b)          The
Committee shall determine in its sole discretion whether payment on exercise of a Stock Appreciation Right shall be made in cash,
in whole Shares or other property, or any combination thereof.

 

(c)          Any
Tandem Stock Appreciation Right may be granted at the same time as the related Option is granted or at any time thereafter before
exercise or expiration of such Option.

 

(d)          Any
Tandem Stock Appreciation Right related to an Option may be exercised only when the related Option would be exercisable and the
Fair Market Value of the Shares subject to the related Option exceeds the option price at which Shares can be acquired pursuant
to the Option. Any Option related to a Tandem Stock Appreciation Right shall no longer be exercisable to the extent the Tandem
Stock Appreciation Right has been exercised and any Tandem Stock Appreciation Right shall no longer be exercisable to the extent
the related Option has been exercised; provided, however, that if a Tandem Stock Appreciation Right exists with respect to less
than the full number of Shares covered by a related Option, then an exercise or termination of such Option shall not reduce the
number of Shares to which the Tandem Stock Appreciation Right applies until the number of Shares then exercisable under such Option
equals the number of Shares to which the Tandem Stock Appreciation Right applies.

 

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(e)          The
provisions of Stock Appreciation Rights need not be the same with respect to each recipient.

 

(f)          The
Committee may impose such other conditions or restrictions on the terms of exercise and the exercise price of any Stock Appreciation
Right, as it shall deem appropriate. In connection with the foregoing, the Committee shall consider the applicability and effect
of Section 162(m) of the Code. Notwithstanding the foregoing provisions of this Section 6.2(f), but subject to Section 12.2, a
Freestanding Stock Appreciation Right shall not have (i) a grant price less than Fair Market Value on the date of grant, or (ii)
except in the event of death or disability, a term of greater than ten years. Except under certain circumstances contemplated by
Section 11 or as may be set forth in an Award Agreement with respect to death or disability of a Participant, Freestanding Stock
Appreciation Rights will not be exercisable before the expiration of one year from the date the right is granted. Notwithstanding
the foregoing, if on the last business day coincident with or immediately preceding the expiration date of a Stock Appreciation
Right (i) the exercise of the Stock Appreciation Right is prohibited by applicable law or (ii) Shares may not be purchased or sold
by the Participant or other holder of the Stock Appreciation Right due to the “black-out period” of a Company policy
or a “lock-up” agreement entered into in connection with an issuance of securities by the Company, the expiration date
of the Stock Appreciation Right shall be extended until the thirtieth (30th) day after the end of the legal prohibition,
black-out period or lock-up agreement.

 

(g)          The
Committee may impose such terms and conditions on Stock Appreciation Rights granted in conjunction with any Award (other than an
Option) as the Committee shall determine in its sole discretion.

 

(h)          An
Award Agreement may provide that if on the last day of the term of a Stock Appreciation Right the Fair Market Value of one Share
exceeds the grant price per Share of the Stock Appreciation Right, the Participant has not exercised the Stock Appreciation Right
or the related Option (if applicable), and the Stock Appreciation Right has not expired, the Stock Appreciation Right (or the related
Option, but not both) shall be deemed to have been exercised by the Participant on such day. In such event, the Company shall make
payment to the Participant in accordance with this Section, reduced by the number of Shares (or cash) required for withholding
taxes and any fractional Share shall be settled in cash.

 

(i)          Without
the approval of the Company’s stockholders, other than pursuant to Section 11.2 or Section 12.2, the Committee shall not
(a) reduce the grant price of any Stock Appreciation Right after the date of grant (b) cancel any Stock Appreciation Right when
the grant price per Share exceeds the Fair Market Value of one Share in exchange for cash or another Award (other than in connection
with a Change in Control as defined in Section 11.3 or a Substitute Award), or (c) take any other action with respect to a Stock
Appreciation Right that would be treated as a repricing under the rules and regulations of the principal U.S. national securities
exchange on which the Shares are traded.

 

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ARTICLE
7

RESTRICTED STOCK AWARDS AND RESTRICTED STOCK UNITS

 

7.1           Grants.  Awards
of Restricted Stock and Restricted Stock Units may be issued hereunder to Participants either alone or in addition to other Awards
granted under the Plan (a “Restricted Stock Award” or “Restricted Stock Unit Award,” respectively). To
the extent provided in the Award Agreement evidencing a Performance Award or the terms of other cash-based incentive compensation
awards, Restricted Stock Awards and Restricted Stock Unit Awards shall also be available as a form of payment of Performance Awards
and other earned cash-based incentive compensation. A Restricted Stock Award or Restricted Stock Unit Award shall be subject to
vesting restrictions imposed by the Committee covering a period of time specified by the Committee (the “Restriction Period”).
The provisions of Restricted Stock Awards and Restricted Stock Unit Awards need not be the same with respect to each recipient.
The Committee has absolute discretion to determine whether any consideration (other than services) is to be received by the Company
or any Affiliate as a condition precedent to the issuance of Restricted Stock or Restricted Stock Units.

 

7.2           Award
Agreements.  The terms of any Restricted Stock Award or Restricted Stock Unit Award granted under the Plan shall
be set forth in a written Award Agreement which shall contain provisions determined by the Committee and not inconsistent with
the Plan.

 

7.3           Rights
of Holders of Restricted Stock and Restricted Stock Units.  Unless otherwise provided in the Award Agreement,
beginning on the date of grant of the Restricted Stock Award and subject to execution of the Award Agreement, the Participant shall
become a shareholder of the Company with respect to all Shares subject to the Award Agreement and shall have all of the rights
of a shareholder, including the right to vote such Shares and the right to receive distributions made with respect to such Shares.
A Participant receiving a Restricted Stock Unit Award shall not possess voting or other rights of a shareholder with respect to
such Award (unless and until the Restricted Stock Unit Award is settled in Shares) but the Award Agreement evidencing the Restricted
Stock Unit Award may provide for the payment (on a current or deferred basis) of Dividend Equivalents under Section 12.5. Except
as otherwise provided in an Award Agreement, any Shares or any other property (other than cash) distributed as a dividend or otherwise
with respect to any Restricted Stock Award and any Dividend Equivalents representing a distribution of property (but not cash)
for the number of Shares covered by a Restricted Stock Unit Award as to which the restrictions have not yet lapsed shall be subject
to the same restrictions as such Restricted Stock Award or Restricted Stock Unit Award.

 

Notwithstanding the provisions of this Section, cash dividends
with respect to any Restricted Stock Award and any other property (other than cash) distributed as a dividend or otherwise with
respect to any Restricted Stock Award that vests based on achievement of performance goals and any Dividend Equivalents representing
cash dividends or any property other than cash for the number of Shares covered by a Restricted Stock Unit Award that vests based
on achievement of performance goals shall be accumulated, shall be subject to restrictions and risk of forfeiture to the same extent
as the Restricted Stock or Restricted Stock Units with respect to which such cash, Shares or other property has been distributed
and shall be paid at the time and to the extent that such restrictions and risk of forfeiture lapse.

 

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ARTICLE
8

OTHER STOCK-BASED AWARDS

 

8.1           Stock
and Administration.  Other Awards of Shares and other Awards that are valued in whole or in part by reference
to, or are otherwise based on, Shares or securities convertible into Shares (“Other Stock-Based Awards”) may be granted
hereunder to Participants, either alone or in addition to other Awards granted under the Plan, and such Other Stock-Based Awards
shall also be available as a form of payment in the settlement of other Awards granted under the Plan and other earned cash-based
compensation.

 

8.2           Award
Agreements.  The terms of Other Stock-Based Awards granted under the Plan shall be set forth in an Award Agreement,
which shall contain provisions determined by the Committee and not inconsistent with the Plan. Subject to the provisions of the
Plan, the Committee shall have sole and complete authority to determine the Employees and Directors to whom and the time or times
at which such Other Stock-Based Awards shall be made, the number of Shares to be granted pursuant to such Awards, and all other
conditions of the Awards. In addition, the Committee may award unrestricted Shares to Participants in lieu of certain cash payments
awarded under other compensation plans or programs of the Company. Notwithstanding the provisions of this Section, dividends and
Dividend Equivalents with respect to Shares covered by an Other Stock-Based Award that vests based on achievement of performance
goals shall be subject to restrictions and risk of forfeiture to the same extent as the Shares covered by an Other Stock-Based
Award with respect to which such Dividend Equivalents have been credited.

 

8.3           Terms
and Conditions.  Shares (including securities convertible into Shares) subject to Awards granted under this Section
8 may be issued for no consideration or for such minimum consideration as may be required by applicable law. Shares (including
securities convertible into Shares) purchased pursuant to a purchase right awarded under this Section 8 shall be purchased for
such consideration as the Committee shall determine in its sole discretion. Other Stock-Based Awards shall be paid in Shares, cash
or a combination, as determined by the Committee.

 

8.4           Deferral
of Director Fees.  Directors shall, if determined by the Board, receive Other Stock-Based Awards in the form
of deferred stock units in lieu of all or a portion of their annual retainer. In addition Directors may elect to receive Other
Stock-Based Awards in the form of deferred stock units in lieu of all or a portion of their annual and committee retainers and
annual meeting fees, provided that such election is made in accordance with the requirements of Section 409A of the Code. The Committee
shall, in its absolute discretion, establish such rules and procedures as it deems appropriate for such elections and for the payment
the deferred stock units.

 

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ARTICLE
9

PERFORMANCE AWARDS

 

9.1           Terms
of Performance Awards.  Performance Awards in the form of Performance Shares or Performance Units may be issued
hereunder to Participants, for no consideration or for such minimum consideration as may be required by applicable law, either
alone or in addition to other Awards granted under the Plan. The performance criteria to be achieved during any Performance Period
and the length of the Performance Period shall be determined by the Committee upon the grant of each Performance Award; provided,
however, that a Performance Period shall not be shorter than 12 months. The performance goals to be achieved for each Performance
Period shall be conclusively determined by the Committee and may be based upon the criteria set forth in Section 10.2.

 

9.2           Award
Agreements.  The terms of any Performance Award granted under the Plan shall be set forth in an Award Agreement
(or, if applicable, in a resolution duly adopted by the Committee) which shall contain provisions determined by the Committee and
not inconsistent with the Plan, including whether such Awards shall have Dividend Equivalents. Dividend Equivalents with respect
to the Shares covered by a Performance Award shall be subject to restrictions and risk of forfeiture to the same extent as the
Shares covered by the Performance Award with respect to which such Dividend Equivalents have been credited. The terms of Performance
Awards need not be the same with respect to each Participant.

 

9.3           Payment.  Except
as provided in Section 11 or as may be provided in an Award Agreement, Performance Awards will be distributed only after the end
of the relevant Performance Period. Performance Awards may be paid in cash, Shares, other property, or any combination thereof,
in the sole discretion of the Committee at the time of payment. The amount of the Award to be distributed shall be conclusively
determined by the Committee. Performance Awards may be paid in a lump sum or in installments following the close of the Performance
Period or, in accordance with procedures established by the Committee, on a deferred basis, subject to the requirements of Section
409A of the Code.

 

ARTICLE
10

CODE SECTION 162(m) PROVISIONS

 

10.1         Covered
Employees.  Notwithstanding any other provision of the Plan, if the Committee determines at the time a Restricted
Stock Award, a Restricted Stock Unit Award, a Performance Award or an Other Stock-Based Award is granted to a Participant who is,
or is likely to be, as of the end of the tax year in which the Company would claim a tax deduction in connection with such Award,
a Covered Employee, then the Committee may provide that this Section 10 is applicable to such Award.

 

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10.2         Performance
Criteria.  If the Committee determines that a Restricted Stock Award, a Restricted Stock Unit Award, a Performance
Award or an Other Share-Based Award is intended to be subject to this Article 10, then the lapsing of restrictions on such an Award
and the distribution of cash, Shares or other property pursuant thereto, as applicable, shall be subject to the achievement of
one or more objective performance goals established by the Committee, which shall be based on the attainment of specified levels
of one or any combination of the following: net sales; revenues; revenue growth; asset growth; combined net worth; debt to equity
ratio; debt to capitalization ratio; debt reduction; earnings before interest and taxes, or earnings before interest, taxes, depreciation
and amortization; operating income (before or after taxes); operating margin, gross margin; operating cash flow; pre- or after-tax
net income or loss (before or after allocation of corporate overhead and/or bonus); cash flow or free cash flow; cash flow or free
cash flow per share (before or after dividends); core operating income or core operating income per share (before or after dividends);
year-end cash; cash margin; net income or loss (before or after taxes); earnings per share; return on equity; return on investment;
return on total capital; return on capital employed; return on assets or net assets; return on revenue; cash flow return on investment;
economic value added (or an equivalent metric); share price performance; total shareholder return; comparisons with various stock
market indices; attainment of strategic and operational initiatives; improvement in or attainment of expense levels; or improvement
in or attainment of working capital levels of the Company or any Affiliate, division or business unit of the Company for or within
which the Participant is primarily employed. Such performance goals also may be based solely by reference to the Company’s
performance or the performance of an Affiliate, division or business unit of the Company, or based upon the relative performance
of other companies or upon comparisons of any of the indicators of performance relative to other companies. The Committee may also
exclude the impact of an event or occurrence which the Committee determines should appropriately be excluded, including but not
limited to (a) restructurings, discontinued operations, extraordinary items, and other unusual or non-recurring charges, (b) an
event either not directly related to the operations of the Company, Affiliate, division or business unit or not within the reasonable
control of management, or (c) the cumulative effects changes in tax or accounting standards required by generally accepted accounting
principles. Such performance goals and any exclusions shall be set by the Committee within the time period prescribed by, and shall
otherwise comply with the requirements of, Section 162(m) of the Code, or any successor provision thereto, and the regulations
thereunder.

 

10.3         Adjustments.  Notwithstanding
any provision of the Plan (other than Section 11), with respect to any Restricted Stock Award, Restricted Stock Unit Award, Performance
Award or Other Stock-Based Award that is subject to this Section 10, the Committee may adjust downwards, but not upwards, the amount
payable pursuant to such Award, and the Committee may not waive the achievement of the applicable performance goals, except in
the case of the death or disability of the Participant.

 

10.4         Restrictions.  The
Committee shall have the power to impose such other restrictions on Awards subject to this Section 10 as it may deem necessary
or appropriate to ensure that such Awards satisfy all requirements for “performance-based compensation” within the
meaning of Section 162(m)(4)(C) of the Code, or any successor provision thereto.

 

10.5         Limitations
on Grants to Individual Participant.  Subject to adjustment as provided, in Section 12.2, no Participant may
be granted (i) Options or Stock Appreciation Rights during any twelve (12) month period with respect to more than 300,000 Shares
or (ii) Restricted Stock Awards, Restricted Stock Unit Awards, Performance Awards and/or Other Share-Based Awards during any calendar
year that are intended to comply with the performance-based compensation exception under Code Section 162(m) and are denominated
in Shares under which more than 300,000 Shares may be earned for each twelve (12) months in the vesting period or Performance Period.
During any calendar year no Participant may be granted Performance Awards that are intended to comply with the performance-based
compensation exception under Code Section 162(m) and are denominated in cash under which more than may $10,000,000 may be earned
for each twelve (12) months in the Performance Period. Each of the limitations in this section shall be multiplied by two (2) with
respect to Awards granted to a Participant during the first calendar year in which the Participant commences employment with the
Company and its Subsidiaries. If an Award is cancelled, the cancelled Award shall continue to be counted toward the applicable
limitation in this Section.

 

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ARTICLE
11

CHANGE IN CONTROL PROVISIONS

 

11.1       Definition
of Change in Control.  For purposes of the Plan, a “Change in Control” shall mean the happening of
any of the following events:

 

(a)          acquisition
by any individual, entity or group (with the meaning of Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934, as
amended (the “Exchange Act”)) (a “Person”) of beneficial ownership (within the meaning of Rule 13d-3 promulgated
under the Exchange Act) of 50% or more of either (A) the then outstanding shares of common stock of the Company (the “Outstanding
Company Common Stock”) or (B) the combined voting power of the then outstanding voting securities of the Company entitled
to vote generally in the election of directors (the “Outstanding Company Voting Securities”); provided, however, that,
for purposes of this subsection (a), the following acquisitions shall not constitute a Change in Control: (1) any acquisition directly
from the Company, (2) any acquisition by the Company, (3) any acquisition by any employee benefit plan (or related trust) sponsored
or maintained by the Company or any corporation controlled by the Company, (4) any acquisition by any corporation pursuant to a
transaction which complies with clauses (A), (B) and (C) of subsection (c) of this Section 11.1 or (5) any acquisition of beneficial
ownership by Eric Billings or any entity that is controlled by Eric Billings; or

 

(b)          During
any 24 month period, individuals who, as of the beginning of such period, constitute the Board (the “Incumbent Board”)
cease to constitute at least a majority of the Board; provided, however, that any individual becoming a director subsequent to
the beginning of such period whose election, or nomination for election by the Company’s shareholders, was approved by a
vote of at least a majority of the directors then comprising the Incumbent Board shall be considered as though such individual
were a member of the Incumbent Board, but excluding, for this purpose, any such individual whose initial assumption of office occurs
as a result of an actual or threatened election contest with respect to the election or removal of directors or other actual or
threatened solicitation of proxies or consents by or on behalf of a Person other than the Board; or

 

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(c)          Consummation
of a reorganization, merger or consolidation or sale or other disposition of all or substantially all of the assets of the Company
or the acquisition of assets or stock of another corporation (a “Business Combination”), in each case, unless, following
such Business Combination, (A) all or substantially all of the individuals and entities who were the beneficial owners, respectively,
of the Outstanding Company Common Stock and Outstanding Company Voting Securities immediately prior to such Business Combination
beneficially own, directly or indirectly, more than 60% of, respectively, the then outstanding shares of common stock and the combined
voting power of the then outstanding voting securities entitled to vote generally in the election of directors, as the case may
be, of the corporation resulting from such Business Combination (including, without limitation, a corporation which as a result
of such transaction owns the Company or all or substantially all of the Company’s assets either directly or through one or
more subsidiaries) in substantially the same proportions as their ownership, immediately prior to such Business Combination of
the Outstanding Company Common Stock and Outstanding Company Voting Securities, as the case may be, (B) no Person (excluding any
corporation resulting from such Business Combination or any employee benefit plan (or related trust) of the Company or such corporation
resulting from such Business Combination or the Founders or Founder Affiliates) beneficially owns, directly or indirectly, 50%
or more of, respectively, the then outstanding shares of common stock of the corporation resulting from such Business Combination
or the combined voting power of the then outstanding voting securities of such corporation except to the extent that such ownership
existed prior to the Business Combination and (C) at least a majority of the members of the board of directors of the corporation
resulting from such Business Combination were members of the Incumbent Board at the time of the execution of the initial agreement,
or of the action of the Board, providing for such Business Combination; or

 

(d)          The
stockholders of the Company approve a plan of complete liquidation or dissolution of the Company.

 

(e)          If
a Change in Control constitutes a payment event with respect to any Award that provides for the deferral of compensation and that
is subject to Section 409A of the Code, no payment will be made under that Award on account of a Change in Control unless the event
described in subsection (a), (b) or (c) above, as applicable, constitutes a “change in control event” under Treasury
Regulation Section 1.409A-3(i)(5).

 

11.2       Assumption
Upon Change in Control.  In the event of a Change in Control the successor company may assume or grant a substitute
for an Option, Stock Appreciation Right, share of Restricted Stock, Restricted Stock Unit, Performance Award or Other Stock-Based
Award. For the purposes of this Section 11.2, an Option, Stock Appreciation Right, share of Restricted Stock, Restricted Stock
Unit, Performance Award or Other Stock-Based Award shall be considered assumed or substituted for if following the Change in Control
the award confers the right to purchase or receive, for each Share subject to the Option, Stock Appreciation Right, Restricted
Stock Award, Restricted Stock Unit Award, Performance Award or Other Stock-Based Award immediately prior to the Change in Control,
the consideration (whether stock, cash or other securities or property) received in the transaction constituting a Change in Control
by holders of Shares for each Share held on the effective date of such transaction (and if holders were offered a choice of consideration,
the type of consideration chosen by the holders of a majority of the outstanding shares); provided, however, that if such consideration
received in the transaction constituting a Change in Control is not solely common stock of the successor company, the Committee
may, with the consent of the successor company, provide that the consideration to be received upon the exercise or vesting of an
Option, Stock Appreciation Right, Restricted Stock Award, Restricted Stock Unit Award, Performance Award or Other Stock-Based Award,
for each Share subject thereto, will be solely common stock of the successor company substantially equal in fair market value to
the per share consideration received by holders of Shares in the transaction constituting a Change in Control. The determination
of such substantial equality of value of consideration shall be made by the Committee in its sole discretion and its determination
shall be conclusive and binding. In the event of an assumption or substitution of an Option or Stock Appreciation Right, the exercise
price and number of Shares shall be adjusted in accordance with Section 12.2. Notwithstanding the foregoing, on such terms and
conditions as may be set forth in an Award Agreement, in the event of an involuntary termination without cause or a voluntary termination
for good reason of a Participant’s employment in such successor company within a 24-month period following such Change in
Control, each Award held by such Participant at the time of the Change in Control shall be accelerated as described in Sections
11.3 below.

 

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11.3         Impact
of Change in Control.  Notwithstanding the foregoing, if the successor company in a Change in Control does not
assume or make a substitute grant for an Award in accordance with Section 11.2 (a) Options and Stock Appreciation Rights outstanding
as of the date of the Change in Control shall immediately vest and become fully exercisable, (b) restrictions and deferral limitations
on Restricted Stock and Restricted Stock Units shall lapse and the Restricted Stock become free of all restrictions and limitations
and become fully vested and the Restricted Stock Units shall be earned and payable (either in full or pro rata based on the portion
of the Restriction Period completed as of the date of the Change in Control) and any deferral or other restriction shall lapse
and such Restricted Stock Units shall be immediately settled or distributed, (c) all Performance Awards shall be considered to
be earned and payable (either in full or pro-rata based on the portion of Performance Period completed as of the date of the Change
in Control), and any deferral or other restriction shall lapse and such Performance Awards shall be immediately settled or distributed,
(d) the restrictions and deferral limitations and other conditions applicable to any Other Stock-Based Awards or any other Awards
shall lapse, and such Other Stock-Based Awards or such other Awards shall become free of all restrictions, limitations or conditions
and become fully vested and transferable to the full extent of the original grant, and (e) such other additional benefits as the
Committee deems appropriate shall apply, subject in each case to any terms and conditions contained in the Award Agreement evidencing
such Award. Notwithstanding the preceding sentence, if an Option or Stock Appreciation Right is not assumed or replaced with a
substitute grant in accordance with Section 11.2, the Committee, in its discretion, may determine that each such Option and Stock
Appreciation Right shall terminate within a specified number of days after notice to the Participant, and such Participant shall
receive, with respect to each Share subject to such Option or Stock Appreciation Right, an amount equal to the excess of the Fair
Market Value of such Share immediately prior to the occurrence of such Change in Control over the exercise price per share of such
Option and/or Stock Appreciation Right; such amount to be payable in cash, in one or more kinds of stock or property (including
the stock or property, if any, payable in the transaction) or in a combination thereof, as the Committee, in its discretion, shall
determine.

 

11.4         Limitations
on Benefits.  The benefits that a Participant may be entitled to receive under this Plan and other benefits that
a Participant is entitled to receive under other plans, agreements and arrangements (which, together with the benefits provided
under this Plan, are referred to as “Payments”), may constitute Parachute Payments that are subject to Sections 280G
and 4999 of the Code. As provided in this Section 11.4, the Parachute Payments will be reduced pursuant to this Section 11.4 if,
and only to the extent that, a reduction will allow a Participant to receive a greater Net After Tax Amount than the Participant
would receive absent a reduction.

 

The Accounting Firm
will first determine the amount of any Parachute Payments that are payable to a Participant. The Accounting Firm also will determine
the Net After Tax Amount attributable to the Participant’s total Parachute Payments.

 

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The Accounting Firm
will next determine the largest amount of Payments that may be made to the Participant without subjecting the Participant to tax
under Section 4999 of the Code (the “Capped Payments”). Thereafter, the Accounting Firm will determine the Net After
Tax Amount attributable to the Capped Payments.

 

The Participant will
receive the total Parachute Payments or the Capped Payments, whichever provides the Participant with the higher Net After Tax Amount.
If the Participant will receive the Capped Payments, the total Parachute Payments will be adjusted by first reducing the amount
of any benefits under this Plan or any other plan, agreement or arrangement that are not subject to Section 409A of the Code (with
the source of the reduction to be directed by the Participant) and then by reducing the amount of any benefits under this Plan
or any other plan, agreement or arrangement that are subject to Section 409A of the Code (with the source of the reduction to be
directed by the Participant) in a manner that results in the best economic benefit to the Participant (or, to the extent economically
equivalent, in a pro rata manner). The Accounting Firm will notify the Participant and the Company if it determines that the Parachute
Payments must be reduced to the Capped Payments and will send the Participant and the Company a copy of its detailed calculations
supporting that determination.

 

As a result of the
uncertainty in the application of Sections 280G and 4999 of the Code at the time that the Accounting Firm makes it determinations
under this Section 11.4, it is possible that amounts will have been paid or distributed to the Participant that should not have
been paid or distributed under this Section 11.4 (“Overpayments”), or that additional amounts should be paid or distributed
to the Participant under this Section 11.4 (“Underpayments”). If the Accounting Firm determines, based on either the
assertion of a deficiency by the Internal Revenue Service against the Company or the Participant, which assertion the Accounting
Firm believes has a high probability of success or controlling precedent or substantial authority, that an Overpayment has been
made, the Participant must repay to the Company with interest; provided, however, that no loan will be deemed to have been made
and no amount will be payable by the Participant to the Company unless, and then only to the extent that, the deemed loan and payment
would either reduce the amount on which the Participant is subject to tax under Section 4999 of the Code or generate a refund of
tax imposed under Section 4999 of the Code. If the Accounting Firm determines, based upon controlling precedent or substantial
authority, that an Underpayment has occurred, the Accounting Firm will notify the Participant and the Company of that determination
and the amount of that Underpayment will be paid to the Participant promptly by the Company.

 

For purposes of this
Section 11.4, the term “Accounting Firm” means the independent accounting firm engaged by the Company immediately before
the Change in Control. For purposes of this Section 11.4, the term “Net After Tax Amount” means the amount of any Parachute
Payments or Capped Payments, as applicable, net of taxes imposed under Sections 1, 3101(b) and 4999 of the Code and any State or
local income taxes applicable to the Participant on the date of payment. The determination of the Net After Tax Amount shall be
made using the highest combined effective rate imposed by the foregoing taxes on income of the same character as the Parachute
Payments or Capped Payments, as applicable, in effect on the date of payment. For purposes of this Section 11.4, the term “Parachute
Payment” means a payment that is described in Section 280G(b)(2) of the Code, determined in accordance with Section 280G
of the Code and the regulations promulgated or proposed thereunder.

 

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Notwithstanding any
other provision of this Section 11.4, the limitations and provisions of this Section 11.4 shall not apply to any Participant who,
pursuant to an agreement with the Company or the terms of another plan maintained by the Company, is not entitled to receive Parachute
Payments in excess of the Capped Payments.

 

ARTICLE
12

GENERALLY APPLICABLE PROVISIONS

 

12.1         Amendment
and Modification of the Plan.  The Board may, from time to time, alter, amend, suspend or terminate the Plan
as it shall deem advisable; provided, however, that no such action may adversely impair the rights of Participants with respect
to outstanding Awards, without such Participants’ consent. In addition, an amendment, alteration or modification of the Plan
shall be subject to the approval of the Company’s stockholders to the extent required by law, the rules and regulations of
any exchange or quotation system on which the Shares are listed or quoted or if such action would materially increase the benefits
accruing to Participants under the Plan, materially increase the number of Shares that may be issued under the Plan (other than
an adjustment pursuant to Section 12.2) or materially modify the requirements for eligibility to participate in the Plan. For the
avoidance of doubt, the Board may not, (except pursuant to Section 12.2 or in connection with a Change in Control) without the
approval of the Company’s stockholders, (a) lower the option price per Share of an Option or the grant price of a Stock Appreciation
Right after it is granted, (b) cancel an Option or Stock Appreciation Right when the option price or grant price, as applicable,
per Share exceeds the Fair Market Value of one Share in exchange for cash or another Award (other than in connection with a Change
in Control or Substitute Awards), or (c) take any other action with respect to an Option or Stock Appreciation Right that may be
treated as a repricing under the rules and regulations of the principal U.S. national securities exchange on which the Shares are
traded.

 

12.2         Adjustments.  The
number, class and kind of securities that may be issued under the Plan, the terms of outstanding Awards and the Limitations shall
be adjusted as the Board shall determine to be equitably required in the event that (i) the Company (a) effects one or more nonreciprocal
transactions between the Company and its shareholders such as a stock dividend, stock split-up, extraordinary cash dividend, subdivisions
or consolidations of shares that affect the number or kind of shares (or other securities of the Company) or the Fair Market Value
(or the value of other Company securities) and causes a change in the Fair Market Value of the Shares subject to outstanding Awards
or (b) engages in a transaction to which Section 424 of the Code applies or (ii) there occurs any other event which, in the judgment
of the Board necessitates such action. Any determination made under this Section 12.2 by the Board shall be nondiscretionary, final
and conclusive.

 

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12.3        Transferability
of Awards.  Except as provided below, and except as otherwise authorized by the Committee in an Award Agreement,
no Award and no Shares subject to Awards that have not been issued or as to which any applicable restriction, performance or deferral
period has not lapsed, may be sold, assigned, transferred, pledged or otherwise encumbered, other than by will or the laws of descent
and distribution, or pursuant to a qualified domestic relations order, and such Award may be exercised during the life of the Participant
only by the Participant or the Participant’s guardian or legal representative. Notwithstanding the foregoing, a Participant
may assign or transfer an Award with the consent of the Committee (each transferee thereof, a “Permitted Assignee”)
to (i) the Participant’s spouse, children or grandchildren (including any adopted and step children or grandchildren), parents,
grandparents or siblings, (ii) to a trust for the benefit of one or more of the Participant or the persons referred to in clause
(i), (iii) to a partnership, limited liability company or corporation in which the Participant or the persons referred to in clause
(i) are the only partners, members or shareholders or (iv) for charitable donations; provided that such Permitted Assignee shall
be bound by and subject to all of the terms and conditions of the Plan and the Award Agreement relating to the transferred Award
and shall execute an agreement satisfactory to the Company evidencing such obligations; and provided further that such Participant
shall remain bound by the terms and conditions of the Plan. The Company shall cooperate with any Permitted Assignee and the Company’s
transfer agent in effectuating any transfer permitted under this Section 12.3.

 

12.4        Termination
of Employment.  Unless the Committee shall determine otherwise at or after the date of grant, the following termination
provisions shall apply:

 

(a)          Death
or Disability.  Upon a Participant’s termination due to death or disability, as those terms may be defined
in the Award Agreement, (i) Options and Stock Appreciation Rights outstanding as of the date of termination shall immediately vest
and become fully exercisable, and remain exercisable for one year, even if one year exceeds the original option term, and even
if death occurs during a post-termination exercise period; (ii) Performance Awards shall be considered to be earned and payable
(either in full or pro-rata based on the portion of Performance Period completed as of the date of termination and performance
to such date), and any deferral or other restriction shall lapse and such Performance Awards shall be immediately settled or distributed;
(iii) restrictions and deferral limitations on Restricted Stock, Other Stock-Based Awards, and any other Awards shall lapse and
the Restricted Stock shall become free of all restrictions, limitations, or conditions and become fully vested and transferable
to the full extent of the original grant; and (iv) such other additional benefits as the Committee deems appropriate shall apply,
subject in each case to any terms and conditions contained in the Award Agreement evidencing such Award.

 

(b)          Retirement.  Upon
a Participant’s retirement, as that term may be defined in the Award Agreement, and conditioned upon the Participant entering
into non-compete, non-solicitation, non-disclosure, and non-disparagement agreements, (i) Options and Stock Appreciation Rights
outstanding as of the date of termination shall continue to vest and, once vested, shall remain exercisable for the lesser of three
(3) years from vesting date or their original terms; (ii) Performance Awards shall continue to vest and shall be payable upon completion
of the applicable Performance Period to the extent the associated performance goals are achieved; (iii) Restricted Stock, Restricted
Stock Unit, Other Stock-Based Awards, or any other Awards shall continue to vest, as applicable; and (iv) such other additional
benefits as the Committee deems appropriate shall apply, subject in each case to any terms and conditions contained in the Award
Agreement evidencing such Award.

 

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(c)          Involuntary
Termination Without Cause due to a Reduction in Force.  Upon a Participant’s involuntary termination without
cause due to a reduction in force, as that term may be defined in the Award Agreement, and conditioned upon the Participant entering
into non-solicitation, non-disclosure, and non-disparagement agreements, (i) vested Options and Stock Appreciation Rights outstanding
as of the date of termination shall remain exercisable for 90 days, and unvested Options and Stock Appreciation Rights shall be
forfeited; (ii) Performance Awards shall be payable at the end of the applicable Performance Period, to the extent the associated
performance goals are achieved, pro-rata based on the number of months of the Performance Period that have been completed as of
the date of termination divided by the total number of months in the Performance Period; (iii) Restricted Stock, Other Stock-Based
Awards or any other Awards subject to a cliff vesting or annual pro rata vesting provision shall vest pro-rata based on the number
of months of the vesting period completed as of the date of termination divided by the total number of months in the vesting period,
and unvested Restricted Stock, unvested Other Stock-Based Awards or any other unvested Awards shall be forfeited; and (iv) such
other additional benefits as the Committee deems appropriate shall apply, subject in each case to any terms and conditions contained
in the Award Agreement evidencing such Award.

 

(d)          Termination
for Cause.  Upon a Participant’s termination for cause, as that term may be defined in the Award Agreement,
(i) all Options and Stock Appreciation Rights outstanding as of the date of termination, whether vested or not vested, shall be
immediately canceled, and (ii) any unvested awards of Restricted Stock, Performance Awards, Other Stock-Based Awards or other Awards
shall be immediately forfeited.

 

(e)          Other
Termination.  Upon a Participant’s termination for any other reason, including voluntary resignation and involuntary
termination without cause not due to a reduction in force, as those terms may be defined in the Award Agreement, (i) vested Options
and Stock Appreciation Rights outstanding on the date of termination shall remain exercisable for 90 days, and unvested Options
and Stock Appreciation Rights shall be forfeited, and (ii) unvested Restricted Stock, Performance Awards, Other Stock-Based Awards
or other Awards shall be immediately forfeited.

 

12.5        Deferral;
Dividend Equivalents and Interest Equivalents.  The Committee shall be authorized to establish procedures pursuant
to which the payment of any Award may be deferred. Subject to the provisions of the Plan and any Award Agreement, the recipient
of an Award (including any deferred Award) may, if so determined by the Committee, be entitled to receive, currently or on a deferred
basis, cash, stock or other property dividends, or cash payments in amounts equivalent to cash, stock or other property dividends
on Shares (“Dividend Equivalents”) with respect to the number of Shares covered by the Award, as determined by the
Committee, in its sole discretion, and the Committee may provide that such amounts (if any) shall be deemed to have been reinvested
in additional Shares or otherwise reinvested. Any cash-based Award, including deferred Awards or accumulated cash Dividend Equivalents,
may be credited with interest (“Interest Equivalents”) on the same basis as provided above. Notwithstanding the foregoing,
Dividend Equivalents credited in connection with an Award that vests based on the achievement of performance goals shall be subject
to restrictions and risk of forfeiture to the same extent as the Award with respect to which such Dividend Equivalents have been
credited.

 

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ARTICLE
13

MISCELLANEOUS

 

13.1         Tax
Withholding.  The Company shall have the right to make all payments or distributions pursuant to the Plan to
a Participant (or a Permitted Assignee thereof) (any such person, a “Payee”) net of any applicable federal, state and
local taxes required to be paid or withheld as a result of (a) the grant of any Award, (b) the exercise of an Option or Stock Appreciation
Right, (c) the delivery of Shares or cash, (d) the lapse of any restrictions in connection with any Award or (e) any other event
occurring pursuant to the Plan. The Company or any Affiliate shall have the right to withhold from wages or other amounts otherwise
payable to such Payee such withholding taxes as may be required by law, or to otherwise require the Payee to pay such withholding
taxes. If the Payee shall fail to make such tax payments as are required, the Company or its Affiliates shall, to the extent permitted
by law, have the right to deduct any such taxes from any payment of any kind otherwise due to such Payee or to take such other
action as may be necessary to satisfy such withholding obligations. The Committee shall be authorized to establish procedures for
election by Participants to satisfy such obligation for the payment of such taxes by tendering previously acquired Shares (either
actually or by attestation, valued at their then Fair Market Value), or by directing the Company to retain Shares (up to the employee’s
minimum required tax withholding rate or such other rate that will not cause an adverse accounting consequence or cost) otherwise
deliverable in connection with the Award.

 

13.2         Right
of Discharge Reserved; Claims to Awards.  Nothing in the Plan nor the grant of an Award hereunder shall confer
upon any Employee or Director the right to continue in the employment or service of the Company or any Affiliate or affect any
right that the Company or any Affiliate may have to terminate the employment or service of (or to demote or to exclude from future
Awards under the Plan) any such Employee or Director at any time for any reason. Except as specifically provided by the Committee,
the Company shall not be liable for the loss of existing or potential profit from an Award granted in the event of termination
of an employment or other relationship. No Employee or Participant shall have any claim to be granted any Award under the Plan,
and there is no obligation for uniformity of treatment of Employees or Participants under the Plan.

 

13.3         Prospective
Recipient.  The prospective recipient of any Award under the Plan shall not, with respect to such Award, be deemed
to have become a Participant, or to have any rights with respect to such Award, until and unless such recipient shall have executed
an agreement or other instrument evidencing the Award and delivered a copy thereof to the Company, and otherwise complied with
the then applicable terms and conditions.

 

13.4         Cancellation
of Award.  Notwithstanding anything to the contrary contained herein, all outstanding Awards granted to any Participant
shall be canceled if the Participant, without the consent of the Company, while employed by the Company or any Affiliate or after
termination of such employment or service, establishes a relationship with a competitor of the Company or any Affiliate or engages
in activity that is in conflict with or adverse to the interest of the Company or any Affiliate, as determined by the Committee
in its sole discretion. The Committee may provide in an Award Agreement that if within the time period specified in the Agreement
the Participant establishes a relationship with a competitor or engages in an activity referred to in the preceding sentence, the
Participant will forfeit any gain realized on the vesting or exercise of the Award and must repay such gain to the Company.

 

    	21

    	 

    

 

13.5         Stop
Transfer Orders.  All certificates for Shares delivered under the Plan pursuant to any Award shall be subject
to such stop-transfer orders and other restrictions as the Committee may deem advisable under the rules, regulations and other
requirements of the Securities and Exchange Commission, any stock exchange upon which the Shares are then listed, and any applicable
federal or state securities law, and the Committee may cause a legend or legends to be put on any such certificates to make appropriate
reference to such restrictions.

 

13.6         Nature
of Payments.  All Awards made pursuant to the Plan are in consideration of services performed or to be performed
for the Company or any Affiliate, division or business unit of the Company. Any income or gain realized pursuant to Awards under
the Plan constitute a special incentive payment to the Participant and shall not be taken into account, to the extent permissible
under applicable law, as compensation for purposes of any of the employee benefit plans of the Company or any Affiliate except
as may be determined by the Committee or by the Board or board of directors of the applicable Affiliate.

 

13.7         Other
Plans.  Nothing contained in the Plan shall prevent the Board from adopting other or additional compensation
arrangements, subject to stockholder approval if such approval is required; and such arrangements may be either generally applicable
or applicable only in specific cases.

 

13.8         Severability.  If
any provision of the Plan shall be held unlawful or otherwise invalid or unenforceable in whole or in part by a court of competent
jurisdiction, such provision shall (a) be deemed limited to the extent that such court of competent jurisdiction deems it lawful,
valid and/or enforceable and as so limited shall remain in full force and effect, and (b) not affect any other provision of the
Plan or part thereof, each of which shall remain in full force and effect. If the making of any payment or the provision of any
other benefit required under the Plan shall be held unlawful or otherwise invalid or unenforceable by a court of competent jurisdiction,
such unlawfulness, invalidity or unenforceability shall not prevent any other payment or benefit from being made or provided under
the Plan, and if the making of any payment in full or the provision of any other benefit required under the Plan in full would
be unlawful or otherwise invalid or unenforceable, then such unlawfulness, invalidity or unenforceability shall not prevent such
payment or benefit from being made or provided in part, to the extent that it would not be unlawful, invalid or unenforceable,
and the maximum payment or benefit that would not be unlawful, invalid or unenforceable shall be made or provided under the Plan.

 

13.9         Construction.  All
references in the Plan to “Section or Sections” are intended to refer to the Section or Sections, as the case
may be, of the Plan. As used in the Plan, the words “include” and “including,” and variations
thereof, shall not be deemed to be terms of limitation, but rather shall be deemed to be followed by the words “without
limitation.”

 

13.10         Unfunded
Status of the Plan.  The Plan is intended to constitute an “unfunded” plan for incentive compensation.
With respect to any payments not yet made to a Participant by the Company, nothing contained herein shall give any such Participant
any rights that are greater than those of a general creditor of the Company. In its sole discretion, the Committee may authorize
the creation of trusts or other arrangements to meet the obligations created under the Plan to deliver the Shares or payments in
lieu of or with respect to Awards hereunder; provided, however, that the existence of such trusts or other arrangements is consistent
with the unfunded status of the Plan.

 

    	22

    	 

    

 

13.11         Governing
Law.  The Plan and all determinations made and actions taken thereunder, to the extent not otherwise governed
by the Code or the laws of the United States, shall be governed by the laws of the Commonwealth of Virginia and construed accordingly.

 

13.12         Effective
Date of Plan; Termination of Plan.  The Plan shall be effective if the votes cast in favor of the approval of
the Plan by the stockholders of the Company exceed the votes cast opposing such proposal at a duly constituted meeting of the stockholders
of the Company. The Plan shall be null and void and of no effect if the foregoing condition is not fulfilled and in such event
each Award shall, notwithstanding any of the preceding provisions of the Plan, be null and void and of no effect. Awards may be
granted under the Plan at any time and from time to time on or after the date the Plan is approved by shareholders in accordance
with the first sentence of this Section 13.12 and prior to the tenth anniversary of the effective date of the Plan, on which date
the Plan will expire except as to Awards then outstanding under the Plan. Such outstanding Awards shall remain in effect until
they have been exercised or terminated, or have expired.

 

13.13         Foreign
Employees.  Awards may be granted to Participants who are foreign nationals or employed outside the United States,
or both, on such terms and conditions different from those applicable to Awards to Employees employed in the United States as may,
in the judgment of the Committee, be necessary or desirable in order to recognize differences in local law or tax policy. The Committee
also may impose conditions on the exercise or vesting of Awards in order to minimize the Company’s obligation with respect
to tax equalization for Employees on assignments outside their home country.

 

13.14         Captions.  The
captions in the Plan are for convenience of reference only, and are not intended to narrow, limit or affect the substance or interpretation
of the provisions contained herein.

 

13.15         Compliance
with Section 409A of the Code.  All awards made under this Plan are intended to comply with, or otherwise be
exempt from, Section 409A of the Code (“Section 409A”), after giving effect to the exemptions in Treasury Regulation
sections 1.409A-1(b)(3) through (b)(12). This Plan and all Award Agreements shall be administered, interpreted and construed in
a manner consistent with Section 409A. If any provision of this Plan or any Award Agreement is found not to comply with, or otherwise
not be exempt from, the provisions of Section 409A, it shall be modified and given effect, in the sole discretion of the Committee
and without requiring the Participant’s consent, in such manner as the Committee determines to be necessary or appropriate
to comply with, or effectuate an exemption from, Section 409A. Each payment under an award granted under this Plan shall be treated
as a separate identified payment for purposes of Section 409A.

 

If a payment obligation
under an Award or an Award Agreement arises on account of the Participant’s termination of employment and such payment obligation
constitutes “deferred compensation” (as defined under Treasury Regulation section 1.409A-1(b)(1), after giving effect
to the exemptions in Treasury Regulation sections 1.409A-1(b)(3) through (b)(12)), it shall be payable only after the Participant’s
“separation from service” (as defined under Treasury Regulation section 1.409A-1(h)); provided, however, that if the
Participant is a “specified employee” (as defined under Treasury Regulation section 1.409A-1(i)), any such payment
that is scheduled to be paid within six months after such separation from service shall accrue without interest and shall be paid
on the first day of the seventh month beginning after the date of the Participant’s separation from service or, if earlier,
within fifteen days after the appointment of the personal representative or executor of the Participant’s estate following
the Participant’s death.

 

    	23

    	 

    

 

13.16         Return
of Awards; Repayment.  All awards granted under the Plan are subject to the condition that the Company may require
that such Award must be returned and that any payment made with respect to an Award must be repaid if such action is required under
the terms of any Company “clawback” policy as in effect on the date that the payment was made, on the date the Award
was granted or, as applicable, on the date the Award was exercised, vested or settled.

 

    	24EXHIBIT 10.2

 

ARLINGTON
ASSET INVESTMENT CORP.

 

Restricted Stock Unit Award Agreement

 

THIS AGREEMENT, effective
as of, between ARLINGTON ASSET INVESTMENT CORP., a Virginia corporation (the “Company”) and ___________________
(“Participant”), is made pursuant to and subject to the provisions of the Arlington Asset Investment Corp. 2014 Long-Term
Incentive Plan (the “Plan”), a copy of which has been made available to the Participant. All terms used herein that
are defined in the Plan have the same meaning given them in the Plan.

 

1.                 
Grant of Restricted Stock Units. Pursuant to the Plan, effective as of (the “Date of Grant”),
the Company granted to the Participant, subject to the terms and conditions of the Plan and subject further to the terms and conditions
of this Agreement, a Restricted Stock Unit Award (the “RSUs”) with respect to _______ Shares.

 

2.                 
Vesting of RSUs. The Participant’s interest in the RSUs shall be vested and nonforfeitable as of
the Date of Grant.

 

3.                 
Settlement of RSUs. The Participant’s interest in the RSUs shall be settled in one whole Share for
each RSU and a single cash payment in lieu of any fractional Share. The Company shall issue the Shares and make the cash payment
to the Participant within thirty days after the earlier of (a) the date of a Change in Control or (b) the later of (x) the
first anniversary of the Date of Grant or (y) the date the Participant Separates from Service.

 

The Participant may designate one or more
beneficiaries to receive any Shares and cash payment that remains payable to the Participant at the time of the Participant’s
death. The Participant may designate one or more beneficiaries only in writing and such designation shall be effective only when
received by the Company. A designation of one or more beneficiaries supersedes the prior beneficiary designation as of the date
that the later designation is received by the Company. If the Participant fails to designate a beneficiary or if no beneficiary
survives the Participant, the Participant’s estate shall be deemed to be the beneficiary.

 

4.                 
Dividend Equivalents. The Participant shall receive a cash payment from the Company for each RSU equal
to the dividend per Share with respect to each cash dividend paid on a Share for which the record date is on or after the Date
of Grant and on or before the date that the RSUs are settled in accordance with paragraph 3. Each cash payment shall be made to
the Participant on the date that the related cash dividend is paid to the Company’s shareholders.

 

5.                 
Separation from Service. For purposes of this Agreement, the term “Separation from Service”
means a separation from service as defined in Treasury Regulation § 1.409A-1(h).

 

6.                 
Nontransferability. The RSUs are nontransferable and may not be pledged, assigned or hypothecated.

 

    	1

    	 

    

 

 

7.                 
Shareholder Rights. The Participant shall not have any rights as a shareholder of the Company with respect
to the RSUs. Upon the issuance of Shares in settlement of the RSUs, the Participant shall have all of the rights of a shareholder
of the Company with respect to those Shares, including the right to vote the Shares and the right to receive all dividends on the
shares.

 

8.                 
No Right to Continued Service. The grant of the RSUs does not give the Participant any right with respect
to continuance of service on the Board or with the Company or an Affiliate, nor shall it interfere in any way with the right of
the Company or an Affiliate to terminate the Participant’s service at any time.

 

9.                 
Change in Capital Structure. The number of RSUs shall be adjusted as the Board determines is equitably
required in the event the Company effects one or more stock dividends, stock split-ups subdivisions or consolidations of shares,
other similar changes in capitalization or such other events as are described in the Plan.

 

10.             
Governing Law. This Agreement shall be governed by the laws of the Commonwealth of Virginia.

 

11.             
Conflicts. In the event of any conflict between the provisions of the Plan as in effect on the Date of
Grant and the provisions of this Agreement, the provisions of the Plan shall govern. All references herein to the Plan shall mean
the plan as in effect on the Date of Grant.

 

12.             
Participant Bound by Plan. The Participant hereby acknowledges that a copy of the Plan has been made available
to the Participant and agrees to be bound by all the terms and provisions of the Plan.

 

13.             
Binding Effect. Subject to the limitations stated above and in the Plan, this Agreement shall be binding
upon the Participant and the Participant’s successors in interest and the successors of the Company.

 

IN WITNESS WHEREOF,
the Company has caused this Agreement to be signed by a duly authorized officer and the Participant has signed this Agreement as
of the date first written above.

 

 

	ARLINGTON ASSET INVESTMENT CORP.	[PARTICIPANT] 
	 	 
	By:	 

 

 

    	2

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