Document:

irix-ex101_7.htm

 

 

 

Exhibit 10.1

 

 

 

Silicon Valley Bank

 

U.S. Small Business Administration Paycheck Protection Program

Note

 

			
	
SBA Loan No.
	
9560177107

	
SBA Loan Name
	
Borrower Legal Name
	
 

IRIDEX CORPORATION

	
DBA
	
 

	
Date
	
4/22/2020

	
Loan Amount
	
$2,497,199

	
Interest Rate
	
1.0% per annum

	
Borrower
	
 

IRIDEX CORPORATION

	
Operating Company
	
Not applicable

	
Lender
	
Silicon Valley Bank

 

 

	
 
	
1.
	
PROMISE TO PAY.

 

In return or the Loan, Borrower promises to pay to the order of Lender the amount of $2,497,199, interest on the unpaid principal balance, and all other amounts required by this Note.

 

	
 
	
2.
	
DEFINITIONS.

 

“Collateral” means any property taken as security for payment of this Note or any guarantee of this Note. “CARES Act” means the Coronavirus Aid, Relief, and Economic Security Act.

“Guarantor” means each person or entity that signs a guarantee of payment of this Note. “Loan” means the loan evidenced by this Note.

“Loan Documents” means the documents related to this loan signed by Borrower, any Guarantor, or anyone who pledges collateral.

 

“Paycheck Protection Program” means loan program created by Section 1102 of the CARES Act.

 

1

 

 

 
 

 

 

 

 

 

“Per Annum” means for a year deemed to be comprised of 360 days.

 

“SBA” means the Small Business Administration, an Agency of the United States of America.

 

	
 
	
3.
	
PAYMENT TERMS: Borrower must make all payments at the place Lender designates. The payment terms for this Note are:
	
 

 

	
 
	
A.
	
Conditions Precedent to Disbursement of Loan Proceeds.

 

Before the funding of the Loan, the following conditions must be satisfied:

 

	
 
	
1.
	
Lender has approved the request for the Loan.

 

	
 
	
2.
	
Lender has received approval from SBA to fund the Loan.

 

	
 
	
B.
	
No Payments During Deferral Period. There shall be no payments due by Borrower during the six- month period beginning on the date of this Note (the “Deferral Period”). However, during the Deferral Period interest will accrue at the Interest Rate on the unpaid principal balance computed on the basis of the actual number of days elapsed in a year of 360 days.
	
 

 

	
 
	
C.
	
Principal and Interest Payments. Commencing one month after the expiration of the Deferral Period, and continuing on the same day of each month thereafter until the Maturity Date, Borrower shall pay to Lender monthly payments of principal and interest, each in such equal amount required to fully amortize the principal amount outstanding on the Note on the last day of the Deferral Period by the Maturity Date.
	
 

 

	
 
	
D.
	
Maturity Date. On the date which is twenty-four (24) months from the date of this Note (the “Maturity Date”), Borrower shall pay to Lender any and all unpaid principal plus accrued and unpaid interest plus interest accrued during the Deferral Period. This Note will mature on the Maturity Date.
	
 

 

	
 
	
E.
	
Not a Business Day. If any payment is due on a date for which there is no numerical equivalent in a particular calendar month then it shall be due on the last day of such month. If any payment is due on a day that is a Saturday, Sunday or any other day on which California chartered banks are authorized to be closed, the payment will be made on the next business day.
	
 

 

	
 
	
F.
	
Payment Allocation. Payments shall be allocated among principal and interest at the discretion of Lender unless otherwise agreed or required by applicable law (including the CARES Act). Notwithstanding, in the event the Loan, or any portion thereof, is forgiven pursuant to the Paycheck Protection Program under the federal CARES Act, the amount so forgiven shall be applied to principal.
	
 

 

	
 
	
F.
	
Prepayments. Borrower may prepay this Note at any time without payment of any penalty or premium.
	
 

 

2

 

 

 
 

 

 

 

 

 

	
 
	
G.
	
Borrower Certifications.

 

Borrower certifies to Lender as follows:

 

	
 
	
1.
	
Current economic uncertainty makes this Loan necessary to support the ongoing operations of Borrower.
	
 

 

	
 
	
2.
	
Loan funds will be used by Borrower to retain its workers and maintain its payroll or make its mortgage payments, lease payments, and utility payments.
	
 

 

	
 
	
3.
	
For the period beginning on February 15, 2020 and ending on December 31, 2020, Borrower did not receive, and agrees it will not apply for or receive, another loan under the Paycheck Protection Program.
	
 

 

	
 
	
4.
	
Borrower was in operation on February 15, 2020 and (i) had employees for whom it paid salaries and payroll taxes or (ii) paid independent contractors as reported on a 1099-Misc.
	
 

 

	
 
	
5.
	
Borrower has reviewed and understands Sections 1102 and 1106 of the CARES Act and the related guidelines and has completed the Application, including Borrower’s eligibility in conformity with those provisions.
	
 

 

	
 
	
6.
	
Borrower has taken its “affiliates” (as defined by the SBA) into account when determining the number of employees and the total amount of loans permitted under the Paycheck Protection Program.
	
 

 

	
 
	
7.
	
Borrower is a small business concern or is otherwise eligible to receive a covered loan.

 

	
 
	
8.
	
The person who has completed and signed the application, this Note and the Loan Documents has been validly authorized by Borrower to enter into borrowings on behalf of Borrower.
	
 

 

	
 
	
H.
	
Agreements.

 

Borrower understands and agrees, and waives and releases Lender, its affiliates and their respective directors, officers, agents and employees, as follows:

 

	
 
	
1.
	
The Loan will be made under the SBA’s Paycheck Protection Program. Accordingly, this Note and the other Loan Documents must be submitted to and approved by the SBA. There is limited funding available under the Paycheck Protection Program and accordingly, all applications submitted will not be approved by the SBA.
	
 

 

	
 
	
2.
	
Lender is participating in the Payroll Protection Program to help businesses impacted by the economic impact from COVID-19. However, Lender anticipates high volumes and there may be processing delays and system failures along with other issues that interfere with submission of Borrower’s application to SBA. Lender does not represent or guarantee that it will submit the application while SBA funding remains available under the Payroll Protection Program or at all. Borrower hereby agrees that Lender is not responsible or liable to Borrower or any of its affiliates (i) if the Lender does not submit Borrower’s  application  to  the  SBA  until  after  the  date  that  SBA  stops  approving
	
 

 

3

 

 

 
 

 

 

 

 

 

applications under the Paycheck Protection Program, for any reason or (ii) if the application is not processed by Lender. Borrower forever releases and waives any claims against Lender, its affiliates and their respective directors, officers, agents and employees concerning failure to obtain the Loan. This release and waiver applies to, but is not limited to, any claims concerning Lender’s (i) pace, manner or systems for processing or prioritizing applications, or (ii) representations by Lender regarding the application process, the Paycheck Protection Program, or availability of funding. This agreement to release and waiver supersedes any prior communications, understandings, agreements or communications on the issues set forth herein.

 

	
 
	
3.
	
Forgiveness of the Loan is only available for principal that is used for the limited purposes that expressly qualify for forgiveness under SBA requirements, and that to obtain forgiveness, Borrower must request forgiveness from the Lender, provide documentation in accordance with the SBA requirements, and certify that the amounts Borrower is requesting to be forgiven qualify under those requirements. Borrower also understands that Borrower shall remain responsible under the Loan for any amounts not forgiven, and that interest payable under the Loan will not be forgiven, but that the SBA may pay the Loan interest on forgiven amounts.
	
 

 

	
 
	
4.
	
Forgiveness of the Loan is not automatic and Borrower must request forgiveness of the Loan from Lender. Borrower is not relying on Lender for its understanding of the requirements for forgiveness such as eligible expenditures, necessary records/documentation, or possible reductions due to changes in number of employees or compensation. Borrower agrees that will consult the SBA’s program materials and consult with its own counsel regarding the criteria forgiveness.
	
 

 

	
 
	
5.
	
The Loan Documents are subject to review, and Borrower may not receive the Loan. The Loan also remains subject to availability of funds under the SBA’s Payment Protection Program, and to the SBA issuing an SBA loan number.
	
 

 

	
 
	
6.
	
Borrower's liability under this Note will continue with respect to any amounts SBA may pay Bank based on an SBA guarantee of this Note. Any agreement with Bank under which SBA may guarantee this Note does not create any third party rights or benefits for Borrower and, if SBA pays Bank under such an agreement, SBA or Bank may then seek recovery from Borrower of amounts paid by SBA.
	
 

 

	
 
	
7.
	
Lender reserves the right to modify the Note Amount based on documentation received from Borrower.
	
 

 

	
 
	
8.
	
Borrower’s execution of this Note has been duly authorized by all necessary actions of its governing body. The person signing this Note is duly authorized to do so on behalf of Borrower.
	
 

 

	
 
	
9.
	
This Note shall not be governed by any existing or future credit agreement or loan agreement with Lender. The liabilities guaranteed pursuant to any existing or future guaranty in favor of Lender shall not include this Note. The liabilities secured by any existing or future security instrument in favor of Lender shall not include the Loan.
	
 

 

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10.
	
The proceeds of the Loan will be used to retain workers and maintain payroll or make mortgage interest payments, lease payments, and utility payments, as specified under the Paycheck Protection Program Rule. Borrower understands that if the funds are knowingly used for unauthorized purposes, the federal government may hold Borrower legally liable, such as for charges of fraud.
	
 

 

Electronic Execution of Loan Documents.

 

The words “execution,” “signed,” “signature” and words of like import in this  Note and  any Loan Document shall be deemed to include electronic signatures or the keeping of records in electronic form, each of which shall be of the same legal effect, validity and enforceability as a manually executed signature or the use of a paper-based recordkeeping systems, as the case may be, to the extent and as provided for in any applicable law, including, without limitation, any state law based on the Uniform Electronic Transactions Act.

 

	
 
	
4.
	
DEFAULT:

 

Borrower is in default under this Note if Borrower does not make a payment when due under this Note, or if Borrower or Operating Company:

 

	
 
	
A.
	
Fails to do anything required by this Note and other Loan Documents;

 

	
 
	
B.
	
Defaults on any other loan with Lender;

 

	
 
	
C.
	
Does not preserve, or account to Lender’s satisfaction for, any of the Collateral or its proceeds;

 

	
 
	
D.
	
Does not disclose, or anyone acting on their behalf does not disclose, any material fact to Lender or SBA;
	
 

 

	
 
	
E.
	
Makes, or anyone acting on their behalf makes, a materially false or misleading representation to Lender or SBA;
	
 

 

	
 
	
F.
	
Defaults on any loan or agreement with another creditor, if Lender believes the default may materially affect Borrower’s ability to pay this Note;
	
 

 

	
 
	
G.
	
Fails to pay any taxes when due;

 

	
 
	
H.
	
Becomes the subject of a proceeding under any bankruptcy or insolvency law;

 

	
 
	
I.
	
Has a receiver or liquidator appointed for any part of their business or property;

 

	
 
	
J.
	
Makes an assignment for the benefit of creditors;

 

	
 
	
K.
	
Has any adverse change in financial condition or business operation that Lender believes may materially affect Borrower’s ability to pay this Note;
	
 

 

	
 
	
L.
	
Reorganizes, merges, consolidates, or otherwise changes ownership or business structure without Lender’s prior written consent; or
	
 

 

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M.
	
Becomes the subject of a civil or criminal action that Lender believes may materially affect Borrower’s ability to pay this Note.
	
 

 

	
 
	
5.
	
LENDER’S RIGHTS IF THERE IS A DEFAULT.

 

Without notice or demand and without giving up any of its rights, Lender may:

 

	
 
	
A.
	
Require immediate payment of all amounts owing under this Note;

 

	
 
	
B.
	
Collect all amounts owing from any Borrower or Guarantor;

 

	
 
	
C.
	
File suit and obtain judgment.

 

	
 
	
D.
	
Take possession of any Collateral; or

 

	
 
	
E.
	
Sell, lease, or otherwise dispose of, any Collateral at public or private sale, with or without advertisement.
	
 

 

	
 
	
6.
	
LENDER’S GENERAL POWERS.

 

Without notice and without Borrower’s consent, Lender may:

 

	
 
	
A.
	
Bid on or buy the Collateral at its sale or the sale of another lienholder, at any price it chooses;

 

	
 
	
B.
	
Incur expenses to collect amounts due under this Note, enforce the terms of this Note or any other Loan Document, and preserve or dispose of the Collateral. Among other things, the expenses may include payments for property taxes, prior liens, insurance, appraisals, environmental remediation costs, and reasonable attorney’s fees and costs. If Lender incurs such expenses, it may demand immediate repayment from Borrower or add the expenses to the principal balance;
	
 

 

	
 
	
C.
	
Release anyone obligated to pay this Note;

 

	
 
	
D.
	
Compromise, release, renew, extend or substitute any of the Collateral; and

 

	
 
	
E.
	
Take any action necessary to protect the Collateral or collect amounts owing on this Note.

 

	
 
	
7.
	
WHEN FEDERAL LAW APPLIES; GOVERNING LAW; FORUM SELECTION.

 

When SBA is the holder, this Note will be interpreted and enforced under federal law, including SBA regulations. Lender or SBA may use state or local procedures for filing papers, recording documents, giving notice, foreclosing liens, and other purposes. By using such procedures, SBA does not waive any federal immunity from state or local control, penalty, tax, or liability. As to this Note, Borrower may not claim or assert against SBA any local or state law to deny any obligation, defeat any claim of SBA, or preempt federal law.

 

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8.
	
SUCCESSORS AND ASSIGNS.

 

Under this Note, Borrower and Operating Company includes its successors, and Lender includes its successors and assigns.

 

	
 
	
9.
	
GENERAL PROVISIONS.

 

	
 
	
A.
	
All individuals and entities signing this Note are jointly and severally liable.

 

	
 
	
B.
	
Borrower waives all suretyship defenses.

 

	
 
	
C.
	
Borrower must sign all documents necessary at any time to comply with the Loan Documents and to enable Lender to acquire, perfect, or maintain Lender’s liens on Collateral.
	
 

 

	
 
	
D.
	
Lender may exercise any of its rights separately or together, as many times and in any order it chooses. Lender may delay or forgo enforcing any of its rights without giving up any of them.
	
 

E.Borrower may not use an oral statement of Lender or SBA to contradict or alter the written terms of this Note.

 

	
 
	
E.
	
If any part of this Note is unenforceable, all other parts remain in effect.

 

	
 
	
F.
	
To the extent allowed by law, Borrower waives all demands and notices in connection with this Note, including presentment, demand, protest, and notice of dishonor. Borrower also waives any defenses based upon any claim that Lender did not obtain any guarantee; did not obtain, perfect, or maintain a lien upon Collateral; impaired Collateral; or did not obtain the fair market value of Collateral at a sale.
	
 

 

	
 
	
10.
	
STATE-SPECIFIC PROVISIONS:

 

If the SBA is not the holder, this Note shall be governed by and construed in accordance with the laws of the State of California where the main office of Lender is located. MATTERS REGARDING INTEREST TO BE CHARGED BY LENDER AND THE EXPORTATION OF INTEREST SHALL BE GOVERNED BY FEDERAL LAW (INCLUDING WITHOUT LIMITATION 12 U.S.C. SECTIONS 85 AND 1831(u) AND THE LAW OF THE STATE OF

CALIFORNIA. Borrower agrees that any legal action or proceeding with respect to any of its obligations under this Note may be brought by Lender in any state or federal court located in the State of California, as Lender in its sole discretion may elect. Borrower submits to and accepts in respect of its property, generally and unconditionally, the non-exclusive jurisdiction of those courts. Borrower waives any claim that the State of California is not a convenient forum or the proper venue for any such suit, action or proceeding. The extension of credit that is the subject of this Note is being made by Lender in California.

 

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11.
	
BORROWER’S NAME(S) AND SIGNATURE(S).

 

BORROWER CERTIFIES THAT THE INFORMATION PROVIDED IN THIS APPLICATION AND THE INFORMATION PROVIDED IN ALL SUPPORTING DOCUMENTS AND FORMS IS TRUE AND ACCURATE IN ALL MATERIAL RESPECTS. BORROWER UNDERSTANDS THAT KNOWINGLY MAKING A FALSE STATEMENT TO OBTAIN A GUARANTEED LOAN FROM SBA IS PUNISHABLE UNDER THE LAW, INCLUDING UNDER 18 USC 1001 AND 3571 BY IMPRISONMENT OF NOT MORE THAN FIVE YEARS AND/OR A FINE OF UP TO $250,000; UNDER

15 USC 645 BY IMPRISONMENT OF NOT MORE THAN TWO YEARS AND/OR A FINE OF NOT MORE THAN

$5,000;  AND,  IF  SUBMITTED  TO  A  FEDERALLY  INSURED  INSTITUTION,  UNDER  18  USC  1014  BY IMPRISONMENT OF NOT MORE THAN THIRTY YEARS AND/OR A FINE OF NOT MORE THAN $1,000,000.

 

By signing below, each individual or entity becomes obligated under this Note as Borrower.

Funds will be credited to your Deposit Account Number ending in:  

8674

 

			
	
 
	
 
	
BORROWER:

	
 
	
 
	
 

	
By:
	
 
	
/s/ Emmanuel Reamico

	
 
	
 
	
 

	
Name:
	
 
	
Emmanuel Reamico

	
 
	
 
	
 

	
Title:
	
 
	
Controller

	
 
	
 

	
Date:
	
 
	
4/22/2020

 

8Exhibit 10.1

 

CLPS INCORPORATION

2020 Equity Incentive Plan

______________________

 

Section 1. Establishment and
Purpose.

 

1.1 The purpose of
the Plan is to attract and retain outstanding individuals as Employees, Directors and Consultants of the Company and its Subsidiaries,
to recognize the contributions made to the Company and its Subsidiaries by Employees, Directors and Consultants, and to provide
such Employees, Directors and Consultants with additional incentive to expand and improve the profits and achieve the objectives
of the Company and its Subsidiaries, by providing such Employees, Directors and Consultants with the opportunity to acquire or
increase their proprietary interest in the Company through receipt of Awards.

 

Section
2. Definitions.

 

As used in the Plan,
the following terms shall have the meanings set forth below:

 

2.1 “Award”
means any award or benefit granted under the Plan, which shall be a Stock Option, a Stock Award, a Stock Unit Award or an SAR.

 

2.2 “Award
Agreement” means, as applicable, a Stock Option Agreement, Stock Award Agreement, Stock Unit Award Agreement or SAR Agreement
evidencing an Award granted under the Plan.

 

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

 

2.4 “Change
in Control” has the meaning set forth in Section 8.2 of the Plan.

 

2.5 “Code”
means the Internal Revenue Code of 1986, as amended from time to time.

 

2.6 “Committee”
means the Compensation Committee of the Board or such other committee as may be designated by the Board from time to time to administer
the Plan, or, if no such committee has been designated at the time of any grants, it shall mean the Board.

 

2.7 “Company”
means CLPS Incorporation.

 

2.8 “Consultant”
means any person, including an advisor, who is engaged by the Company or a Subsidiary to render consulting or advisory services
and is compensated for such services. However, service solely as a Director, or payment of a fee for such service, will not cause
a Director to be considered a “Consultant” for purposes of the Plan. Notwithstanding the foregoing, a person is treated
as a Consultant under this Plan only if a Form S-8 Registration Statement under the Securities Act is available to register either
the offer or the sale of the Company’s securities to such person.

 

2.9 “Director”
means a director of the Company who is not an employee of the Company or a Subsidiary.

 

2.10 “Effective
Date” means February 28, 2020.

 

2.11 “Exchange
Act” means the Securities Exchange Act of 1934, as amended from time to time.

 

     

     

    

 

2.12 “Fair
Market Value” means as of any date, the closing price of a Share on the national securities exchange on which the Shares
are listed, or, if the Shares are not listed on a national securities exchange, the over-the-counter market on which the Shares
trades, or, if the Shares is not listed on a national securities exchange or an over-the-counter market, as determined by the Board
as of such date in accordance with the requirements of Code Section 422 or 409A, as applicable, or, if no trading occurred on such
date, as of the trading day immediately preceding such date.

 

2.13 “Incentive
Stock Option” or “ISO” means a Stock Option granted under Section 5 of the Plan that meets the requirements
of Section 422(b) of the Code or any successor provision.

 

2.14 “Employee”
means an employee of the Company or any Subsidiary selected to participate in the Plan in accordance with Section 3. A Employee
may also include a person who is granted an Award (other than an Incentive Stock Option) in connection with the hiring of the person
prior to the date the person becomes an employee of the Company or any Subsidiary, provided that such Award shall not vest prior
to the commencement of employment.

 

2.15 “Family
Member” unless otherwise defined by applicable tax laws, shall mean any child, stepchild, grandchild, parent, stepparent,
spouse, former spouse, sibling, niece, nephew, mother-in-law, father-in-law, son-in-law, daughter-in-law, brother-in-law or sister-in-law,
including adoptive relationships, any person sharing the Participant’s household (other than a tenant or employee of the
Participant), a trust in which such persons have more than fifty percent (50%) of the beneficial interest, a foundation in which
such persons (or the Participant) control the management of assets, and any other entity in which such persons (or the Participant)
own more than fifty percent (50%) of the voting interests.

 

2.16 “Founder”
means the Company’s co-founder Raymond Lin.

 

2.17 “Non-Qualified
Stock Option” or “NSO” means a Stock Option granted under Section 5 of the Plan that is not an Incentive
Stock Option.

 

2.18 “Participant”
means an Employee, Director or Consultant selected to receive an Award under the Plan.

 

2.19 “Plan”
means this 2020 Equity Incentive Plan.

 

2.20 “Shares”
means ordinary common shares with a par value $0.0001 per share, of the Company.

 

2.21 “Stock
Appreciation Right” or “SAR” means a grant of a right to receive Shares or cash under Section 8 of
the Plan.

 

2.22 “Stock
Award” means a grant of Shares under Section 6 of the Plan.

 

2.23 “Stock
Option” means an Incentive Stock Option or a Non-Qualified Stock Option granted under Section 5 of the Plan.

 

2.24 “Stock
Unit Award” means a grant of a right to receive Shares or cash under Section 7 of the Plan.

 

2.25 “Subsidiary”
means an entity of which the Company is the direct or indirect beneficial owner of not less than 50% of all issued and outstanding
equity interest of such entity.

 

    2

     

    

 

2.26 “Termination
of Service” means a termination of a Participant’s service with the Company or a Subsidiary, as applicable, for
any reason, including, without limitation, disability or death. In the event Termination of Service shall constitute a payment
event with respect to any Award subject to Code Section 409A, Termination of Service shall only be deemed to occur upon a “separation
from service” as such term is defined under Code Section 409A.

 

Section 3. Administration.

 

3.1 The Committee.

 

The Plan shall be administered
by the Committee, which shall be comprised of at least two members of the Board who satisfy the “non-employee director”
definition set forth in Rule 16b-3 under the Exchange Act, unless the Board otherwise determines.

 

3.2 Authority of
the Committee.

 

(a) The
Committee, in its sole discretion, shall determine the Employees and Directors to whom, and the time or times at which Awards will
be granted, the form and amount of each Award, the expiration date of each Award, the time or times within which the Awards may
be exercised, the cancellation of the Awards and the other limitations, restrictions, terms and conditions applicable to the grant
of the Awards. The terms and conditions of the Awards need not be the same with respect to each Participant or with respect to
each Award.

 

(b) To
the extent permitted by applicable law, regulation, and rules of a stock exchange on which the Shares are listed or traded, the
Committee may delegate its authority to grant Awards to Employees and to determine the terms and conditions thereof to such officer
of the Company as it may determine in its discretion, on such terms and conditions as it may impose, except with respect to Awards
to officers subject to Section 16 of the Exchange Act.

 

(c) The
Committee may, subject to the provisions of the Plan, establish such rules and regulations as it deems necessary or advisable for
the proper administration of the Plan, and may make determinations and may take such other action in connection with or in relation
to the Plan as it deems necessary or advisable. Each determination or other action made or taken pursuant to the Plan, including
interpretation of the Plan and the specific terms and conditions of the Awards granted hereunder, shall be final and conclusive
for all purposes and upon all persons.

 

(d) No
member of the Board or the Committee shall be liable for any action taken or determination made hereunder in good faith. Service
on the Committee shall constitute service as a Director so that the members of the Committee shall be entitled to indemnification
and reimbursement as Directors of the Company pursuant to the Company’s Certificate of Incorporation and By-Laws.

 

3.3 Award Agreements.

 

(a) Each
Award shall be evidenced by a written Award Agreement specifying the terms and conditions of the Award. In the sole discretion
of the Committee, the Award Agreement may condition the grant of an Award upon the Participant’s entering into one or more
of the following agreements with the Company: (i) an agreement not to compete with the Company and its Subsidiaries which shall
become effective as of the date of the grant of the Award and remain in effect for a specified period of time following termination
of the Participant’s employment with the Company; (ii) an agreement to cancel any employment agreement, fringe benefit or
compensation arrangement in effect between the Company and the Participant; and (iii) an agreement to retain the confidentiality
of certain information. Such agreements may contain such other terms and conditions as the Committee shall determine. If the Participant
shall fail to enter into any such agreement at the request of the Committee, then the Award granted or to be granted to such Participant
shall be forfeited and cancelled.

 

    3

     

    

 

Section 4. Shares Subject to
Plan.

 

4.1 Total Number
of Shares.

 

(a) The
total number of Shares that may be issued under the Plan shall be 11,011,663. Such Shares may be either authorized but unissued
shares or treasury shares, and shall be adjusted in accordance with the provisions of Section 4.3 of the Plan.

 

(b) The
number of Shares delivered by a Participant or withheld by the Company on behalf of any such Participant as full or partial payment
of an Award, including the exercise price of a Stock Option or of any required withholding taxes, shall not again be available
for issuance pursuant to subsequent Awards, and shall count towards the aggregate number of Shares that may be issued under the
Plan. Any Shares purchased by the Company with proceeds from a Stock Option exercise shall not again be available for issuance
pursuant to subsequent Awards, shall count against the aggregate number of Shares that may be issued under the Plan and shall not
increase the number of shares available under the Plan.

 

(c) If
there is a lapse, forfeiture, expiration, termination or cancellation of any Award for any reason (including for reasons described
in Section 3.3), or if Shares are issued under such Award and thereafter are reacquired by the Company pursuant to rights reserved
by the Company upon issuance thereof, the Shares subject to such Award or reacquired by the Company shall again be available for
issuance pursuant to subsequent Awards, and shall not count towards the aggregate number of Shares that may be issued under the
Plan.

 

4.2 Shares Under
Awards.

 

Of the Shares authorized
for issuance under the Plan pursuant to Section 4.1:

 

(a) The
maximum number of Shares as to which an Employee (other than the Founder to whom no annual limit is applicable) may receive Stock
Options or SARs in any calendar year is 800,000, except that the maximum number of Shares as to which an Employee (other than the
Founder) may receive Stock Options or SARs in the calendar year in which such Employee begins employment with the Company or its
Subsidiaries is 1,000,000.

 

(b) The
maximum number of Shares that may be subject to Stock Options (ISOs and/or NSOs) is full amount of Shares authorized under Section
4.1.

 

(c) The
maximum number of Shares that may be used for Stock Awards and/or Stock Unit Awards that may be granted to any Employee (other
than the Founder) in any calendar year is 800,000, or, in the event the Award is settled in cash, an amount equal to the Fair Market
Value of such number of Shares on the date on which the Award is settled.

 

(d) The
maximum number of Shares subject to Awards granted under the Plan or otherwise during any one calendar year to any Director for
service on the Board, taken together with any cash fees paid by the Company to such Director during such calendar year for service
on the Board, will not exceed $1,000,000 in total value (calculating the value of any such Awards based on the grant date fair
value of such Awards for financial reporting purposes).

 

    4

     

    

 

The numbers of Shares
described herein shall be as adjusted in accordance with Section 4.3 of the Plan.

 

4.3 Adjustment.

 

In the event of any
reorganization, recapitalization, stock split, stock distribution, merger, consolidation, split-up, spin-off, combination, subdivision,
consolidation or exchange of shares, any change in the capital structure of the Company or any similar corporate transaction, the
Committee shall make such adjustments as it deems appropriate, in its sole discretion, to preserve the benefits or intended benefits
of the Plan and Awards granted under the Plan. Such adjustments may include: (a) adjustment in the number and kind of shares reserved
for issuance under the Plan; (b) adjustment in the number and kind of shares covered by outstanding Awards; (c) adjustment in the
exercise price of outstanding Stock Options or SARs or the price of Stock Awards or Stock Unit Awards under the Plan; (d) adjustments
to any of the shares limitations set forth in Section 4.1 or 4.2 of the Plan; and (e) any other changes that the Committee determines
to be equitable under the circumstances.

 

Section 5. Grants of Stock Options.

 

5.1 Grant.

 

Subject to the terms
of the Plan, the Committee may from time to time grant Stock Options to Participants. Stock Options granted under the Plan to Employees
shall be NSOs unless the Award Agreement expressly provides that the Stock Option is an ISO. Stock Options granted under the Plan
to Consultants and Directors who are not Employees shall be NSOs.

 

5.2 Stock Option
Agreement.

 

The grant of each Stock
Option shall be evidenced by a written Stock Option Agreement specifying the type of Stock Option granted, the exercise period,
the exercise price, the terms for payment of the exercise price, the expiration date of the Stock Option, the number of Shares
to be subject to each Stock Option and such other terms and conditions established by the Committee, in its sole discretion, not
inconsistent with the Plan.

 

5.3 Exercise Price
and Exercise Period.

 

With respect to each
Stock Option granted to a Participant:

 

(a) The
per Share exercise price of each Stock Option shall be the Fair Market Value of the Shares subject to the Stock Option on the date
on which the Stock Option is granted, but such exercise price shall not be less than its par value.

 

(b) Each
Stock Option shall become exercisable as provided in the Stock Option Agreement; provided that the Committee shall have the discretion
to accelerate the date as of which any Stock Option shall become exercisable.

 

(c) No
dividends or dividend equivalents shall be paid with respect to any Shares subject to a Stock Option prior to the exercise of the
Stock Option.

 

    5

     

    

 

(d) Each
Stock Option shall expire, and all rights to purchase Shares thereunder shall expire, on the tenth anniversary of the date the
Stock Option was granted, unless an earlier expiration date is specified in the Award Agreement or dictated by Section 5.4.

 

5.4 Required Terms
and Conditions of ISOs.

 

In addition to the
foregoing, each ISO granted to an Employee shall be subject to the following specific rules:

 

(a) The
aggregate Fair Market Value (determined with respect to each ISO at the time such Option is granted) of the Shares with respect
to which ISOs are exercisable for the first time by an Employee during any calendar year (under all incentive stock option plans
of the Company and its Subsidiaries) shall not exceed $100,000. If the aggregate Fair Market Value (determined at the time of grant)
of the Shares subject to an ISO which first becomes exercisable in any calendar year exceeds the limitation of this Section 5.4(a),
so much of the ISO that does not exceed the applicable dollar limit shall be an ISO and the remainder shall be a NSO; but in all
other respects, the original Stock Option Agreement shall remain in full force and effect.

 

(b) Notwithstanding
anything herein to the contrary, if an ISO is granted to an Employee who owns stock possessing more than 10% of the total combined
voting power of all classes of stock of the Company (or its parent or subsidiaries within the meaning of Section 422(b)(6) of the
Code): (i) the purchase price of each Shares subject to the ISO shall be not less than 110% of the Fair Market Value of the Shares
on the date the ISO is granted; and (ii) the ISO shall expire, and all rights to purchase Shares thereunder shall expire, no later
than the fifth anniversary of the date the ISO was granted.

 

(c) No
ISOs shall be granted under the Plan after ten years from the earlier of the date the Plan is adopted or approved by shareholders
of the Company.

 

5.5 Exercise of
Stock Options.

 

(a) A Participant
entitled to exercise a Stock Option may do so by delivering written notice to that effect specifying the number of Shares with
respect to which the Stock Option is being exercised and any other information the Committee may prescribe. All notices or requests
provided for herein shall be delivered to the Chief Financial Officer of the Company.

 

(b) The
Committee in its sole discretion may make available one or more of the following alternatives for the payment of the Stock Option
exercise price: (i) in cash; (ii) in cash received from a broker-dealer to whom the Participant has submitted an exercise notice
together with irrevocable instructions to deliver promptly to the Company the amount of sales proceeds from the sale of the Shares
subject to the Stock Option to pay the exercise price; (iii) by directing the Company to withhold such number of Shares otherwise
issuable in connection with the exercise of the Stock Option having an aggregate Fair Market Value equal to the exercise price;
or (iv) by delivering previously acquired Shares that are acceptable to the Committee and that have an aggregate Fair Market Value
on the date of exercise equal to the Stock Option exercise price. The Committee shall have the sole discretion to establish the
terms and conditions applicable to any alternative made available for payment of the Stock Option exercise price.

 

    6

     

    

 

(c) Except
to the extent inconsistent with the terms of the applicable Award Agreement and/or the provisions of Section 9, the following terms
and conditions shall apply with respect to a Participant’s Termination of Service, as applicable:

 

(i) The Participant’s
rights, if any, to exercise any vested Stock Option and/or SAR shall terminate ninety (90) days after the date of such Termination
of Service, provided that if such termination is on account of the Participant’s death or disability (as defined under Code
Section 422(c)(6)), one (1) year after the date of such Termination of Service; and

 

(ii) Upon such
applicable date the Participant (or other legal representative) shall forfeit any rights or interests in or with respect to any
such Award. Notwithstanding the foregoing, the Committee, in its sole discretion, may provide for a different time period in the
Award Agreement, or may extend the time period, following a Termination of Service, during which the Participant has the right
to exercise any vested NSO or SAR, which time period may not extend beyond the expiration date of the Award term.

 

Section 6. Stock Awards.

 

6.1 Grant.

 

The Committee may,
in its discretion, (a) grant Shares under the Plan to any Participant without consideration from such Participant or (b) sell Shares
under the Plan to any Participant for such amount of cash, Shares or other consideration as the Committee deems appropriate.

 

6.2 Stock Award
Agreement.

 

Each Shares granted
or sold hereunder shall be subject to such restrictions, conditions and other terms as the Committee may determine at the time
of grant or sale, the general provisions of the Plan, the restrictions, terms and conditions of the related Stock Award Agreement,
and the following specific rules:

 

(a) The
Award Agreement shall specify whether the Shares are granted or sold to the Participant and such other provisions, not inconsistent
with the terms and conditions of the Plan, as the Committee shall determine.

 

(b) The
restrictions to which the Shares awarded hereunder are subject shall lapse as provided in Stock Award Agreement; provided that
the Committee shall have the discretion to accelerate the date as of which the restrictions lapse with respect to any Award held
by a Participant.

 

(c) Except
as provided in this subsection (c) and unless otherwise set forth in the related Stock Award Agreement, the Participant receiving
a grant of or purchasing Shares shall thereupon be a shareholder of the Company with respect to such Shares and shall have the
rights of a shareholder of the Company with respect to such Shares, including the right to vote such Shares and to receive dividends
and other distributions paid with respect to such Shares; provided that any dividends or other distributions payable with respect
to the Stock Award shall be accumulated and held by the Company and paid to the Participant only upon, and to the extent, the restrictions
lapse in accordance with the terms of the applicable Stock Award Agreement. Any such dividends or other distributions held by the
Company attributable to the portion of a Stock Award that is forfeited shall also be forfeited.

 

    7

     

    

 

Section 7. Stock Unit Awards.

 

7.1 Grant.

 

The Committee may,
in its discretion, grant Stock Unit Awards to any Participant. Each Stock Unit subject to the Award shall entitle the Participant
to receive, on the date or the occurrence of an event (including the attainment of performance goals) as described in the Stock
Unit Award Agreement, a Share or cash equal to the Fair Market Value of a Share on the date of such event as provided in the Stock
Unit Award Agreement.

 

7.2 Stock Unit Agreement.

 

Each Stock Unit Award
shall be subject to such restrictions, conditions and other terms as the Committee may determine at the time of grant, the general
provisions of the Plan, the restrictions, terms and conditions of the related Stock Unit Award Agreement and the following specific
rules:

 

(a) The
Stock Unit Agreement shall specify such provisions, not inconsistent with the terms and conditions of the Plan, as the Committee
shall determine.

 

(b) The
restrictions to which the Shares of Stock Units awarded hereunder are subject shall lapse as provided in Stock Unit Agreement;
provided that the Committee shall have the discretion to accelerate the date as of which the restrictions lapse with respect to
any Award held by a Participant.

 

(c) Except
as provided in this subsection (c) and unless otherwise set forth in the Stock Unit Agreement, the Participant receiving a Stock
Unit Award shall have no rights of a shareholder of the Company, including voting or dividends or other distributions rights, with
respect to any Stock Units prior to the date they are settled in Shares; provided that a Stock Unit Award Agreement may provide
that until the Stock Units are settled in Shares or cash, the Participant shall be entitled to receive on each dividend or distribution
payment date applicable to the Shares an amount equal to the dividends or other distributions that the Participant would have received
had the Stock Units held by the Participant as of the related record date been actual Shares. Such amounts shall be accumulated
and held by the Company and paid to the Participant only upon, and to the extent, the restrictions lapse in accordance with the
terms of the applicable Stock Unit Award Agreement. Such amounts held by the Company attributable to the portion of the Stock Unit
Award that is forfeited shall also be forfeited.

 

Section 8. SARs.

 

8.1 Grant.

 

The Committee may grant
SARs to Participants. Upon exercise, an SAR entitles the Participant to receive from the Company the number of Shares having an
aggregate Fair Market Value equal to the excess of the Fair Market Value of one Share as of the date on which the SAR is exercised
over the exercise price, multiplied by the number of Shares with respect to which the SAR is being exercised. The Committee, in
its discretion, shall be entitled to cause the Company to elect to settle any part or all of its obligations arising out of the
exercise of an SAR by the payment of cash in lieu of all or part of the Shares it would otherwise be obligated to deliver in an
amount equal to the Fair Market Value of such Shares on the date of exercise. Cash shall be delivered in lieu of any fractional
Shares. The terms and conditions of any such Award shall be determined at the time of grant.

 

8.2 SAR Agreement.

 

(a) Each
SAR shall be evidenced by a written SAR Agreement specifying the terms and conditions of the SAR as the Committee may determine,
including the SAR exercise price, expiration date of the SAR, the number of Shares to which the SAR pertains, the form of settlement
and such other terms and conditions established by the Committee, in its sole discretion, not inconsistent with the Plan.

 

    8

     

    

 

(b) The
per Share exercise price of each SAR shall not be less than 100% of the Fair Market Value of a Share on the date the SAR is granted.

 

(c) Each
SAR shall expire and all rights thereunder shall cease on the date fixed by the Committee in the related SAR Agreement, which shall
not be later than the ten years after the date of grant; provided however, if a Participant is unable to exercise an SAR because
trading in the Shares is prohibited by law or the Company’s insider-trading policy, the SAR exercise date shall be extended
to the date that is 30 days after the expiration of the trading prohibition.

 

(d) Each
SAR shall become exercisable as provided in the related SAR Agreement; provided that notwithstanding any other Plan provision,
the Committee shall have the discretion to accelerate the date as of which any SAR shall become exercisable.

 

(e) No
dividends or dividend equivalents shall be paid with respect to any SAR prior to the exercise of the SAR.

 

(f) A person
entitled to exercise an SAR may do so by delivery of a written notice in accordance with procedures established by the Committee
specifying the number of Shares with respect to which the SAR is being exercised and any other information the Committee may prescribe.
As soon as reasonably practicable after the exercise of an SAR, the Company shall (i) issue the total number of full Shares to
which the Participant is entitled and cash in an amount equal to the Fair Market Value, as of the date of exercise, of any resulting
fractional Share, and (ii) if the Committee causes the Company to elect to settle all or part of its obligations arising out of
the exercise of the SAR in cash, deliver to the Participant an amount in cash equal to the Fair Market Value, as of the date of
exercise, of the Shares it would otherwise be obligated to deliver.

 

Section 9. Change in Control.

 

9.1 Effect of a
Change in Control.

 

(a) Notwithstanding
any of the provisions of the Plan or any outstanding Award Agreement, upon a Change in Control of the Company (as defined in Section
9.2), the Board is authorized and has sole discretion to provide that (i) all outstanding Awards shall become fully exercisable,
(ii) all restrictions applicable to all Awards shall terminate or lapse and (iii) performance goals applicable to any Awards shall
be deemed satisfied at the highest level, as applicable, in order that Participants may realize the benefits thereunder.

 

(b) In
addition to the Board’s authority set forth in Section 3, upon such Change in Control of the Company, the Board is authorized
and has sole discretion as to any Award, either at the time such Award is granted hereunder or any time thereafter, to take any
one or more of the following actions without Participant consent: (i) provide for the purchase of any vested or unvested outstanding
Stock Option, for an amount of cash equal to the difference between the exercise price and the then Fair Market Value of the Shares
covered thereby; (ii) make such adjustment to any such Award then outstanding as the Board deems appropriate to reflect such Change
in Control; and (iii) cause any such Award then outstanding to be assumed by or substituted for another form of Award issued by
the surviving corporation after such Change in Control.

 

    9

     

    

 

9.2 Definition of
Change in Control.

 

“Change in Control”
of the Company shall be deemed to have occurred if at any time during the term of an Award granted under the Plan any of the following
events occurs:

 

(a) any
Person (other than the Company, a trustee or other fiduciary holding securities under an employee benefit plan of the Company,
or a corporation owned directly or indirectly by the shareholders of the Company in substantially the same proportions as their
ownership of Shares) is or becomes the Beneficial Owner, directly or indirectly, of securities of the Company representing 30%
or more of the combined voting power of the Company’s then outstanding securities entitled to vote generally in the election
of directors (“Person” and “Beneficial Owner” being defined in Rule 13d-3 of the General Rules and Regulations
of the Exchange Act);

 

(b) the
Company is party to a merger, consolidation, reorganization or other similar transaction with another corporation or other Person
unless, following such transaction, more than 50% of the combined voting power of the outstanding securities of the surviving,
resulting or acquiring corporation or Person or its parent entity entitled to vote generally in the election of directors (or Persons
performing similar functions) is then beneficially owned, directly or indirectly, by all or substantially all of the individuals
and entities who were the beneficial owners of the Company’s outstanding securities entitled to vote generally in the election
of directors immediately prior to such transaction, in substantially the same proportions as their ownership, immediately prior
to such transaction, of the Company’s outstanding securities entitled to vote generally in the election of directors;

 

(c) the
election to the Board, without the recommendation or approval of two-thirds of the incumbent Board, of the lesser of: (i) three
Directors; or (ii) Directors constituting a majority of the number of Directors of the Company then in office; provided, however,
that Directors whose initial assumption of office is in connection with an actual or threatened election contest, including but
not limited to a consent solicitation, relating to the election of Directors of the Company will not be considered as incumbent
members of the Board for purposes of this Section; or

 

(d) there
is a complete liquidation or dissolution of the Company, or the Company sells all or substantially all of its business and/or assets
to another corporation or other Person unless, following such sale, more than 50% of the combined voting power of the outstanding
securities of the acquiring corporation or Person or its parent entity entitled to vote generally in the election of directors
(or Persons performing similar functions) is then beneficially owned, directly or indirectly, by all or substantially all of the
individuals and entities who were the beneficial owners of the Company’s outstanding securities entitled to vote generally
in the election of directors immediately prior to such sale, in substantially the same proportions as their ownership, immediately
prior to such sale, of the Company’s outstanding securities entitled to vote generally in the election of directors.

 

In no event, however,
shall a Change in Control be deemed to have occurred, with respect to a Participant, if that Participant is part of a purchasing
group which consummates the Change in Control transaction. A Participant shall be deemed “part of a purchasing group”
for purposes of the preceding sentence if the Participant is an equity participant or has agreed to become an equity participant
in the purchasing company or group (except for (a) passive ownership of less than 3% of the shares of the purchasing company; or
(b) ownership of equity participation in the purchasing company or group which is otherwise not deemed to be significant, as determined
prior to the Change in Control by a majority of the disinterested Directors).

 

    10

     

    

 

Section 10. Payment of Taxes.

 

(a) In
connection with any Award, and as a condition to the issuance or delivery of any Shares to the Participant in connection therewith,
the Company shall require the Participant to pay the Company the minimum amount of federal, state, local or foreign taxes required
to be withheld, and in the Company’s sole discretion, the Company may permit the Participant to pay the Company up to the
maximum individual statutory rate of applicable withholding.

 

(b) The
Company in its sole discretion may make available one or more of the following alternatives for the payment of such taxes: (i)
in cash; (ii) in cash received from a broker-dealer to whom the Participant has submitted notice together with irrevocable instructions
to deliver promptly to the Company the amount of sales proceeds from the sale of the Shares subject to the Award to pay the withholding
taxes; (iii) by directing the Company to withhold such number of Shares otherwise issuable in connection with the Award having
an aggregate Fair Market Value equal to the minimum amount of tax required to be withheld; (iv) by delivering previously acquired
Shares of the Company that are acceptable to the Board that have an aggregate Fair Market Value equal to the amount required to
be withheld; or (v) by certifying to ownership by attestation of such previously acquired Shares.

 

The Committee shall have
the sole discretion to establish the terms and conditions applicable to any alternative made available for payment of the required
withholding taxes.

 

Section 11. Section 409A.

 

Notwithstanding any
other provision of the Plan, the Committee shall have no authority to issue an Award under the Plan with terms and/or conditions
which would cause such Award to constitute non-qualified “deferred compensation” under Section 409A of the Code unless
such Award shall be structured to be exempt from or comply with all requirements of Code Section 409A. The Plan and all Award Agreements
are intended to comply with the requirements of Section 409A of the Code (or to be exempt therefrom) and shall be so interpreted
and construed and no amount shall be paid or distributed from the Plan unless and until such payment complies with all requirements
of Code Section 409A. It is the intent of the Company that the provisions of this Agreement and all other plans and programs sponsored
by the Company be interpreted to comply in all respects with Code Section 409A, however, the Company shall have no liability to
the Participant, or any successor or beneficiary thereof, in the event taxes, penalties or excise taxes may ultimately be determined
to be applicable to any payment or award under the Plan.

 

Section 12. Postponement.

 

The Committee may postpone
any grant or settlement of an Award or exercise of a Stock Option or SAR for such time as the Board in its sole discretion may
deem necessary in order to permit the Company:

 

(a) to
effect, amend or maintain any necessary registration of the Plan or the Shares issuable pursuant to an Award, including upon the
exercise of a Stock Option or SAR, under the Securities Act of 1933, as amended, or the securities laws of any applicable jurisdiction;

 

(b) to
permit any action to be taken in order to (i) list such Shares on a stock exchange if Shares are then listed on such exchange or
(ii) comply with restrictions or regulations incident to the maintenance of a public market for its Shares, including any rules
or regulations of any stock exchange on which the Shares are listed; or

 

    11

     

    

 

(c) to
determine that such Shares and the Plan are exempt from such registration or that no action of the kind referred to in (b)(ii)
above needs to be taken; and the Company shall not be obligated by virtue of any terms and conditions of any Award or any provision
of the Plan to sell or issue Shares in violation of the Securities Act of 1933 or the law of any government having jurisdiction
thereof.

 

Any such postponement
shall not extend the term of an Award and shall comply with all requirements of Code Section 409A, and neither the Company nor
its Directors or officers shall have any obligation or liability to a Participant, the Participant’s successor or any other
person with respect to any Shares as to which the Award shall lapse because of such postponement.

 

Section 13. Nontransferability.

 

Awards granted under
the Plan, and any rights and privileges pertaining thereto, may not be transferred, assigned, pledged or hypothecated in any manner,
or be subject to execution, attachment or similar process, by operation of law or otherwise, except (i) by will or by the laws
of descent and distribution, or (ii) where permitted under applicable tax rules, by gift to any Family Member of the Participant,
subject to compliance with applicable laws. An Award may be exercisable during the lifetime of the Participant only by such Participant
or by the Participant’s guardian or legal representative unless it has been transferred by gift to a Family Member of the
Participant, in which case it shall be exercisable solely by such transferee. Notwithstanding any such transfer, the Participant
shall continue to be subject to the withholding requirements provided for under Section 10.

 

Section 14. Delivery of Shares.

 

Shares issued pursuant
to a Stock Award, the exercise of a Stock or SAR or the settlement of a Stock Unit Award shall be represented by share certificates
or on a non-certificated basis, with the ownership of such Shares by the Participant evidenced solely by book entry in the records
of the Company’s transfer agent; provided, however, that upon the written request of the Participant, the Company shall issue,
in the name of the Participant, share certificates representing such Shares. Notwithstanding the foregoing, Shares granted pursuant
to a Stock Award shall be held by the Secretary of the Company until such time as the Shares are forfeited or settled.

 

Section 15. Termination or Amendment
of Plan and Award Agreements.

 

15.1 Termination
or Amendment of Plan.

 

(a) Except
as described in Section 15.3 below, the Board may terminate, suspend, or amend the Plan, in whole or in part, from time to time,
without the approval of the shareholders of the Company, unless such approval is required by applicable law, regulation or rule
of any stock exchange on which the Shares are listed. No amendment or termination of the Plan shall adversely affect the right
of any Participant under any outstanding Award in any material way without the written consent of the Participant, unless such
amendment or termination is required by applicable law, regulation or rule of any stock exchange on which the Shares are listed.
Subject to the foregoing, the Committee may correct any defect or supply an omission or reconcile any inconsistency in the Plan
or in any Award granted hereunder in the manner and to the extent it shall deem desirable, in its sole discretion, to effectuate
the Plan.

 

(b) The
Board shall have the authority to amend the Plan to the extent necessary or appropriate to comply with applicable law, regulation
or accounting rules in order to permit Participants who are located outside of the United States to participate in the Plan.

 

    12

     

    

 

15.2 Amendment of
Award Agreements.

 

The Committee shall
have the authority to amend any Award Agreement at any time; provided however, that no such amendment shall adversely affect the
right of any Participant under any outstanding Award Agreement in any material way without the written consent of the Participant,
unless such amendment is required by applicable law, regulation or rule of any stock exchange on which the Shares are listed.

 

15.3 No Repricing
of Stock Options.

 

Notwithstanding the
foregoing, and except as described in Section 4.3, there shall be no amendment to the Plan or any outstanding Stock Option Agreement
or SAR Agreement that results in the repricing of Stock Options or SARs without shareholders’ approval. For this purpose,
repricing includes (i) a reduction in the exercise price of the Stock Option or SARs or (ii) the cancellation of a Stock Option
in exchange for cash, Stock Options or SARs with an exercise price less than the exercise price of the cancelled Options or SARs,
other Awards or any other consideration provided by the Company, but does not include any adjustment described in Section 4.3.

 

Section 16. No Contract of Employment.

 

Neither the adoption
of the Plan nor the grant of any Award under the Plan shall be deemed to obligate the Company or any Subsidiary to continue the
employment of any Participant for any particular period, nor shall the granting of an Award constitute a request or consent to
postpone the retirement date of any Participant.

 

Section 17. Applicable Law.

 

All questions pertaining
to the validity, construction and administration of the Plan and all Awards granted under the Plan shall be determined in conformity
with the laws of the state of New York, without regard to the conflict of law provisions of any state, and, in the case of Incentive
Stock Options, Section 422 of the Code and regulations issued thereunder.

 

Section 18. Effective Date and
Term of Plan.

 

18.1 Effective Date.

 

The Plan shall be effective
as of the Effective Date, provided that the Plan is approved by the shareholders of the Company within twelve (12) months of such
date. Awards may be granted or awarded prior to such shareholder approval, provided that such Awards shall not be exercisable,
shall not vest and the restrictions thereon shall not lapse prior to the time when the Plan is approved by the shareholders, and
provided further that if such approval has not been obtained at the end of said twelve month period, all Awards previously granted
or awarded under the Plan shall thereupon be canceled and become null and void. The Plan is intended to supersede and replace any
and all prior equity plans sponsored by the Company with respect to any authorized shares not made subject to any award under such
plans prior to the effective date of this Plan. Any outstanding awards under prior plans shall continue to be subject to and governed
by the terms of such plans.

 

18.2 Term of Plan.

 

Notwithstanding anything
to the contrary contained herein, no Awards shall be granted on or after the tenth anniversary of the adoption of this Plan.

 

 

13

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