Document:

Exhibit 10.3 Innocap, Inc. Amended 2017 Nonstatutory Stock Option Plan and form of Stock Option Agreement.

 

INNOCAP, INC. 

 

AMENDED 2017 NON-STATUTORY STOCK OPTION PLAN 

 

1. Purpose of this Plan 

 

This Non-Statutory Stock Option Plan (the "Plan") is intended as an employment incentive, to aid in attracting and retaining in the employ or service of Innocap, Inc. (the "Company"), a Nevada corporation, and any Affiliated Corporation, persons of experience and ability and whose services are considered valuable, to encourage the sense of proprietorship in such persons, and to stimulate the active interest of such persons in the development and success of the Company. This Plan provides for the issuance of non-statutory stock options ("NSOs" or "Options") which are not intended to qualify as "incentive stock options" within the meaning of Section 422 of the Internal Revenue Code of 1986, as amended (the "Code"). 

 

2. Administration of this Plan 

 

The Company’s Board of Directors (“Board”) may appoint and maintain as administrator of this Plan the Compensation Committee (the “Committee”) of the Board which shall consist of at least three members of the Board. Until such time as the Committee is duly constituted, the Board itself shall have and fulfill the duties herein allocated to the Committee. The Committee shall have full power and authority to designate Plan participants, to determine the provisions and terms of respective NSOs (which need not be identical as to number of shares covered by any NSO, the method of exercise as related to exercise in whole or in installments, or otherwise), including the NSO price, and to interpret the provisions and supervise the administration of this Plan. The Committee may, in its discretion, provide that certain NSOs not vest (that is, become exercisable) until expiration of a certain period after issuance or until other conditions are satisfied, so long as not contrary to this Plan. The Committee shall also have total authority and discretion with respect to the awarding of any Stock Grants

 

A majority of the members of the Committee shall constitute a quorum. All decisions and selections made by the Committee pursuant to this Plan's provisions shall be made by a majority of its members. Any decision reduced to writing and signed by all of the members shall be fully effective as if it had been made by a majority at a meeting duly held. The Committee shall select one of its members as its chairman and shall hold its meetings at such times and places as it deems advisable. If at any time the Board shall consist of seven or more members, then the Board may amend this Plan to provide that the Committee shall consist only of Board members who shall not have been eligible to participate in this Plan (or similar stock or stock option plan) of the Company or its affiliates at any time within one year prior to appointment to the Committee. 

 

All NSOs granted under this Plan are subject to, and may not be exercised before, the approval of this Plan by the holders of a majority of the Company's outstanding shares, and if such approval is not obtained, all NSOs previously granted shall be void. Each NSO shall be evidenced by a written agreement containing terms and conditions established by the Committee consistent with the provisions of this Plan. 

 

3. Designation of Participants 

 

The persons eligible for participation in this Plan as recipients of NSOs shall include full-time and part-time employees (as determined by the Committee) and officers of the Company or of an Affiliated Corporation. In addition, directors of the Company or any Affiliated Corporation who are not employees of the Company or an Affiliated Corporation and any attorney, consultant or other adviser to the Company or any Affiliated Corporation shall be eligible to participate in this Plan. For all purposes of this Plan, any director who is not also a common law employee and is granted an option under this Plan shall be considered an "employee" until the effective date of the director's resignation or removal from the Board of Directors, including removal due to death or disability. The Committee shall have full power to designate, from among eligible individuals, the persons to whom NSOs may be granted. A person who has been granted an NSO hereunder may be granted an additional NSO or NSOs, if the Committee shall so determine. The granting of an NSO shall not be construed as a contract of employment or as entitling the recipient thereof to any rights of continued employment. 

 

4. Stock Reserved for this Plan 

 

Subject to adjustment as provided in Paragraph 9 below, a total of 33,000,000 shares of Common Stock ("Stock"), of the Company shall be subject to this Plan. The Stock subject to this Plan shall consist of un-issued shares or previously issued shares reacquired and held by the Company or any Affiliated Corporation, and such amount of shares shall be and is hereby reserved for sale for such purpose. Any of such shares which may remain unsold and which are not subject to outstanding NSOs at the termination of this Plan shall cease to be reserved for the purpose of this Plan, but until termination of this Plan, the Company shall at all times reserve a sufficient number of shares to meet the requirements of this Plan. Should any NSO expire or be canceled prior to its exercise in full, the unexercised shares theretofore subject to such NSO may again be subjected to an NSO under this Plan. 

 

 

5. Option Price 

 

The purchase price of each share of Stock placed under NSO shall be determined by the Board but not be less than ten percent (10%) of the fair market value of such share on the date the NSO is granted or more than the fair market value of such share on the date the NSO is granted. The fair market value of a share on a particular date shall be deemed to be the average of either (i) the highest and lowest prices at which shares were sold on the date of grant, if traded on a national securities exchange, (ii) the high and low prices reported in the consolidated reporting system, if traded on a "last sale reported" system, such as NASDAQ, or (iii) the high bid and high asked price for over-the-counter securities. If no transactions in the Stock occur on the date of grant, the fair market value shall be determined as of the next earliest day for which reports or quotations are available. If the common shares are not then quoted on any exchange or in any quotation medium at the time the option is granted, then the Board of Directors or Committee will use its discretion in selecting a good faith value believed to represent fair market value based on factors then known to them. The cash proceeds from the sale of Stock are to be added to the general funds of the Company. 

 

6. Exercise Period 

 

a)The NSO exercise period shall be a term determined by the Committee but not for a period of more than ten (10) years from the date of granting of each NSO and shall automatically terminate:  

 

1)Upon termination of the optionee's employment with the Company for cause;  

 

2)At the expiration of twelve (12) months from the date of termination of the optionee's employment with the Company for any reason other than death, without cause; provided, that if the optioned dies within such twelve month period, subclause (iii) below shall apply; or  

 

3)At the expiration of fifteen (15) months after the date of death of the optioned.  

 

b)"Employment with the Company" as used in this Plan shall include employment with any Affiliated Corporation, and NSOs granted under this Plan shall not be affected by an employee's transfer of employment among the Company and any Parent or Subsidiary thereof. An optionee's employment with the Company shall not be deemed interrupted or terminated by a bona fide leave of absence (such as sabbatical leave or employment by the Government) duly approved, military leave, maternity leave or sick leave.  

 

7. Exercise of Options 

 

a)The Committee, in granting NSOs, shall have discretion to determine the terms upon which NSOs shall be exercisable, subject to applicable provisions of this Plan. Once available for purchase, un-purchased shares of Stock shall remain subject to purchase until the NSO expires or terminates in accordance with Paragraph 6 above. Unless otherwise provided in the NSO, an NSO may be exercised in whole or in part, one or more times, but no NSO may be exercised for a fractional share of Stock.  

 

b)NSOs may be exercised solely by the optioned during his lifetime, or after his death (with respect to the number of shares which the optioned could have purchased at the time of death) by the person or persons entitled thereto under the decedent's will or the laws of descent and distribution.  

 

c)The purchase price of the shares of Stock as to which an NSO is exercised shall be paid in full at the time of exercise and no shares of Stock shall be issued until full payment is made therefore. Payment shall be made either (i) in cash, represented by bank or cashier's check, certified check or money order or (ii) in lieu of payment for bona fide services rendered, and such services were not in connection with the offer or sale of securities in a capital raising transaction, (iii) by delivering shares of the Company's Common Stock which have been beneficially owned by the optioned, the optionee's spouse, or both of them for a period of at least six (6) months prior to the time of exercise (the "Delivered Stock") in a number equal to the number of shares of Stock being purchased upon exercise of the NSO or (iv) by delivery of shares of corporate stock which are freely tradable without restriction and which are part of a class of securities which has been listed for trading on the NASDAQ system or a national securities exchange, with an aggregate fair market value equal to or greater than the exercise price of the shares of Stock being purchased under the NSO, or (v) a combination of cash, services, Delivered Stock or other corporate shares. An NSO shall be deemed exercised when written notice thereof, accompanied by the appropriate payment in full, is received by the Company. No holder of an NSO shall be, or have any of the rights and privileges of, a shareholder of the Company in respect of any shares of Stock purchasable upon exercise of any part of an NSO unless and until certificates representing such shares shall have been issued by the Company to him or her.  

 

 

8. Stock Grants

 

Grants of common stock can be issued by the Company under this Plan to all eligible individuals as listed under Item 3.

 

9. Assignability 

 

No NSO shall be assignable or otherwise transferable (by the optioned or otherwise) except by will or the laws of descent and distribution or except as permitted in accordance with SEC Release No.33-7646 as effective April 7, 1999 and in particular that portion thereof which expands upon transferability as is contained in Article III entitled "Transferable Options and Proxy Reporting" as indicated in Section A 1 through 4 inclusive and Section B thereof. No NSO shall be pledged or hypothecated in any manner, whether by operation of law or otherwise, nor be subject to execution, attachment or similar process. 

 

10. Reorganizations and Recapitalizations of the Company 

 

a)The existence of this Plan and NSOs granted hereunder shall not affect in any way the right or power of the Company or its shareholders to make or authorize any and all adjustments, recapitalizations, reorganizations or other changes in the Company's capital structure or its business, or any merger or consolidation of the Company, or any issue of bonds, debentures, preferred or prior preference stocks ahead of or affecting the Company's Common Stock or the rights thereof, or the dissolution or liquidation of the Company, or any sale, exchange or transfer of all or any part of its assets or business, or the other corporation act or proceeding, whether of a similar character or otherwise.  

 

b)The shares of Stock with respect to which NSOs may be granted hereunder are shares of the Common Stock of the Company as currently constituted. If, and whenever, prior to delivery by the Company of all of the shares of Stock which are subject to NSOs granted hereunder, the Company shall effect a subdivision or consolidation of shares or other capital readjustment, the payment of a Stock dividend, a stock split, combination of shares (reverse stock split) or recapitalization or other increase or reduction of the number of shares of the Common Stock outstanding without receiving compensation therefore in money, services or property, then the number of shares of Stock available under this Plan and the number of shares of Stock with respect to which NSOs granted hereunder may thereafter be exercised shall (i) in the event of an increase in the number of outstanding shares, be proportionately increased, and the cash consideration payable per share shall be proportionately reduced; and (ii) in the event of a reduction in the number of outstanding shares, be proportionately reduced, and the cash consideration payable per share shall be proportionately increased.  

 

c)If the Company is reorganized, merged, consolidated or party to a plan of exchange with another corporation pursuant to which shareholders of the Company receive any shares of stock or other securities, there shall be substituted for the shares of Stock subject to the unexercised portions of outstanding NSOs an appropriate number of shares of each class of stock or other securities which were distributed to the shareholders of the Company in respect of such shares of Stock in the case of a reorganization, merger, consolidation or plan of exchange; provided, however, that all such NSOs may be canceled by the Company as of the effective date of a reorganization, merger, consolidation, plan of exchange, or any dissolution or liquidation of the Company, by giving notice to each optioned or his personal representative of its intention to do so and by permitting the purchase of all the shares subject to such outstanding NSOs for a period of not less than thirty (30) days during the sixty (60) days next preceding such effective date.  

 

d)Except as expressly provided above, the Company's issuance of shares of Stock of any class, or securities convertible into shares of Stock of any class, for cash or property, or for labor or services, either upon direct sale or upon the exercise of rights or warrants to subscribe therefor, or upon conversion of shares or obligations of the Company convertible into shares of Stock or other securities, shall not affect, and no adjustment by reason thereof shall be made with respect to, the number of shares of Stock subject to NSOs granted hereunder or the purchase price of such shares.  

 

11. Purchase for Investment 

 

Unless the shares of Stock covered by this Plan have been registered under the Securities Act of 1933, as amended, each person exercising an NSO under this Plan may be required by the Company to give a representation in writing that he is acquiring such shares for his own account for investment and not with a view to, or for sale in connection with, the distribution of any part thereof. 

 

12. Effective Date and Expiration of this Plan 

 

This Plan shall be effective as of July 26, 2017, the date of its adoption by the Board, subject to the approval of the Company's shareholders, and no NSO shall be granted pursuant to this Plan after its expiration. This Plan shall expire on July 2, 2027 except as to NSOs then outstanding, which shall remain in effect until they have expired or been exercised. 

 

 

13. Amendments or Termination 

 

The Board may amend, alter or discontinue this Plan at any time in such respects as it shall deem advisable in order to conform to any change in any other applicable law, or in order to comply with the provisions of any rule or regulation of the Securities and Exchange Commission required to exempt this Plan or any NSOs granted thereunder from the operation of Section 16(b) of the Securities Exchange Act of 1934, as amended ("Exchange Act"), or in any other respect not inconsistent with Section 16(b) of the Exchange Act; provided, that no amendment or alteration shall be made which would impair the rights of any participant under any NSO theretofore granted, without his consent (unless made solely to conform such NSO to, and necessary because of, changes in the foregoing laws, rules or regulations), and except that no amendment or alteration shall be made without the approval of shareholders which would: 

 

a)Increase the total number of shares reserved for the purposes of this Plan or decrease the NSO price provided for in Paragraph 5 (except as provided in Paragraph 9), or change the classes of persons eligible to participate in this Plan as provided in Paragraph 3; or  

 

b)Extend the NSO period provided for in Paragraph 6; or  

 

c)Materially increase the benefits accruing to participants under this Plan; or  

 

d)Materially modify the requirements as to eligibility for participation in this Plan; or  

 

e)Extend the expiration date of this Plan as set forth in Paragraph 11.  

 

14. Government Regulations 

 

This Plan, and the granting and exercise of NSOs hereunder, and the obligation of the Company to sell and deliver shares of Stock under such NSOs, shall be subject to all applicable laws, rules and regulations, and to such approvals by any governmental agencies or national securities exchanges as may be required. 

 

15. Liability 

 

No member of the Board of Directors, the Committee or officers or employees of the Company or any Affiliated Corporation shall be personally liable for any action, omission or determination made in good faith in connection with this Plan. 

 

16. Miscellaneous. 

 

The term "Affiliated Corporation" used herein shall mean any Parent or Subsidiary. 

 

a)The term "Parent" used herein shall mean any corporation owning 50 percent or more of the total combined voting stock of all classes of the Company or of another corporation qualifying as a Parent within this definition.  

 

b)The term "Subsidiary" used herein shall mean any corporation more than 50 percent of whose total combined voting stock of all classes is held by the Company or by another corporation qualifying as a Subsidiary within this definition.  

 

17. Options in Substitution for Other Options 

 

The Committee may, in its sole discretion, at any time during the term of this Plan, grant new options to an employee under this Plan or any other stock option plan of the Company on the condition that such employee shall surrender for cancellation one or more outstanding options which represent the right to purchase (after giving effect to any previous partial exercise thereof) a number of shares, in relation to the number of shares to be covered by the new conditional grant hereunder, determined by the Committee. If the Committee shall have so determined to grant such new options on such a conditional basis ("New Conditional Options"), no such New Conditional Option shall become exercisable in the absence of such employee's consent to the condition and surrender and cancellation as appropriate. New Conditional Options shall be treated in all respects under this Plan as newly granted options. Option may be granted under this Plan from time to time in substitution for similar rights held by employees of other corporations who are about to become employees of the Company or an Affiliated Corporation, or the merger or consolidation of the employing corporation with the Company or an Affiliated Corporation, or the acquisition by the Company or an Affiliated Corporation of the assets of the employing corporation, or the acquisition by the Company or an Affiliated Corporation of stock of the employing corporation as the result of which it becomes an Affiliated Corporation. 

 

 

18. Withholding Taxes 

 

Pursuant to applicable federal and state laws, the Company may be required to collect withholding taxes upon the exercise of a NSO. The Company may require, as a condition to the exercise of a NSO, that the optioned concurrently pay to the Company the entire amount or a portion of any taxes which the Company is required to withhold by reason of such exercise, in such amount as the Committee or the Company in its discretion may determine. In lieu of part or all of any such payment, the optioned may elect to have the Company withhold from the shares to be issued upon exercise of the option that number of shares having a Fair Market Value equal to the amount which the Company is required to withhold. 

 

19. Transferability in accordance With SEC Release No. 33-7646 entitled "Registration of Securities on Form S-8" as effective April 7, 1999 

 

Notwithstanding anything to the contrary as may be contained in this Plan regarding rights as to transferability or lack thereof, all options granted hereunder may and shall be transferable to the extent permitted in accordance with SEC Release No. 33-7646 entitled "Registration of Securities on Form S-8" as effective April 7, 1999 and in particular in accordance with that portion of such Release which expands Form S-8 to include stock option exercise by family members so that the rules governing the use of Form S-8 (a) do not impede legitimate intra family transfer of options and (b) may facilitate transfer for estate planning purposes - all as more specifically defined in Article III, Sections A and B thereto, the contents of which are herewith incorporated by reference. 

 

 

CERTIFICATION OF PLAN ADOPTION 

 

I, the undersigned Secretary of this Corporation, hereby certify that the foregoing Innocap, Inc. Non-Statutory Stock Option Plan was duly approved by the requisite number of holders of the issued and outstanding Common Stock of this corporation as of February 24, 2019. 

 

 

/s/ Paul Tidwell

By:Paul Tidwell 

President and Chief Financial Officerohi_Ex10_8A

		
			Exhibit 10.8A
		

		
			 
		

		
			TIME-BASED RESTRICTED STOCK UNITS AGREEMENT
		

		
			PURSUANT TO THE OMEGA HEALTHCARE INVESTORS, INC.
		

		
			2018 STOCK INCENTIVE PLAN
		

		
			 
		

		
			THIS AGREEMENT is made as of the Grant Date, by Omega Healthcare Investors, Inc. (the “Company”) to ______________ (the “Recipient”).
		

		
			 
		

		
			Upon and subject to the Terms and Conditions attached hereto and incorporated herein by reference as part of this Agreement, the Company hereby awards as of the Grant Date to the Recipient the number of Restricted Stock Units set forth below (the “Restricted Stock Units Grant” or the “Award”). Underlined and capitalized captions in Items A through G below shall have the meanings therein ascribed to them.
		

		
			 
		

		
			A.        Grant Date:___________, 20__.
		

		
			 
		

		
			B.         Plan: (under which Restricted Stock Units Grant is granted): Omega Healthcare Investors, Inc. 2018 Stock Incentive Plan.
		

		
			 
		

		
			C.         Restricted Stock Units:  ______ Restricted Stock Units, which represents the right of the Recipient to receive upon vesting the same number of shares of the Company’s common stock (“Common Stock”), subject to adjustment as provided in the attached Terms and Conditions.
		

		
			 
		

		
			D.        Dividend Equivalents:  Each Restricted Stock Unit shall accrue Dividend Equivalents, an amount equal to the dividends payable on one share of Common Stock to a shareholder of record on or after January 1, 20__ and until the date that the shares of Common Stock attributable to the Vested Stock Units are issued or the Restricted Stock Units are forfeited.
		

		
			 
		

		
			E.         Distribution Date of Common Stock:  The shares of Common Stock attributable to the Vested Stock Units (as defined below) shall be issued to the Recipient on the date the Restricted Stock Units become vested. Notwithstanding the foregoing or any other provision hereof, distribution of the shares of Common Stock shall be delayed to the extent provided in any deferral agreement between the Recipient and the Company as a result of the Recipient’s valid election to defer.
		

		
			 
		

		
			F.         Distribution Date of Dividend Equivalents:  The Dividend Equivalents shall be paid to the Recipient on the same date that the related dividends are paid to shareholders of record, subject to required tax withholding; provided, however that any Dividend Equivalents that are accrued and owing as of the Grant Date shall be paid within twenty  (20) days after the Grant Date.  Notwithstanding the foregoing or any other provision hereof, distribution of Dividend Equivalents shall be delayed to the extent provided in any deferral agreement between the Recipient and the Company as a result of the Recipient’s valid election to defer and shall be paid in the form provided in such agreement.
		

		
			 
		

		
			 
		

		
			

		 

 

		

		
			G.        Vesting Schedule:  The Restricted Stock Units shall vest according to the Vesting Schedule attached hereto as Exhibit 1 (the “Vesting Schedule”).  The Restricted Stock Units which have become vested pursuant to the Vesting Schedule are herein referred to as the “Vested Stock Units.”
		

		
			 
		

		
			IN WITNESS WHEREOF, the Company has executed this Agreement as of the Grant Date set forth above.
		

		
			 
		

			
					
						 

					
					
						OMEGA HEALTHCARE INVESTORS, INC.

				
	
					
						 

					
					
						 

					
					
						 

				
	
					
						 

					
					
						 

					
					
						 

				
	
					
						 

					
					
						By:

					
					
						 

				
	
					
						 

					
					
						 

					
					
						 

				
	
					
						 

					
					
						Title:

					
					
						 

				

		
			 
		

		
			
		

		
			

		 

		

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			TERMS AND CONDITIONS TO THE
		

		
			TIME-BASED RESTRICTED STOCK UNITS AGREEMENT
		

		
			PURSUANT TO THE OMEGA HEALTHCARE INVESTORS, INC.
		

		
			2018 STOCK INCENTIVE PLAN
		

		
			 
		

		
			1.         Vested Stock Units.  Upon vesting, the Company shall cause the shares of Common Stock attributable to the Vested Stock Units to be issued in book-entry form in the name of the Recipient.
		

		
			 
		

		
			2.         Tax Withholding, Dividends Equivalents.  Payment of Dividend Equivalents is subject to required tax withholding.
		

		
			 
		

		
			3.         Tax Withholding, Shares.
		

		
			 
		

		
			(a)        The minimum required amount of the tax withholding obligations imposed on the Company,  or at the Company’s discretion if tax withholding is required, tax withholding up to the maximum statutory rates, by reason of the issuance of the shares of Common Stock attributable to Vested Stock Units shall be satisfied by reducing the actual number of shares of Common Stock by the number of whole shares of Common Stock which, when multiplied by the Fair Market Value of the Common Stock on the Distribution Date of Common Stock, is sufficient, together with cash in lieu of any fractional share, to satisfy such tax withholding, assuming that (i) the Recipient does not make a valid election to satisfy tax withholding in cash pursuant to Subsection (b), and (ii) the Committee does not determine that tax withholding will be required to be satisfied in another manner.
		

		
			(b)        However, the Recipient may elect in writing by notice to the Company received at least ten (10) days before the earliest Distribution Date of Common Stock to satisfy such tax withholding obligation in cash by the earliest Distribution Date of Common Stock, as provided in Subsection (a)(i). If the Recipient fails to timely satisfy payment of the cash amount, then Subsection (a) shall apply.
		

		
			(c)        To the extent that the Recipient is required to satisfy the tax withholding obligation in this Section in cash, the Company shall withhold the cash from any cash payments then owed to the Recipient, or if none, the Recipient shall timely remit the cash amount.
		

		
			(d)        If the Recipient does not timely satisfy payment of the tax withholding obligation, the Recipient will forfeit the Vested Stock Units.
		

		
			4.         Restrictions on Transfer of Restricted Stock Units. Except for the transfer of any Restricted Stock Units by bequest or inheritance, the Recipient shall not have the right to make or permit to exist any transfer or hypothecation, whether outright or as security, with or without consideration, voluntary or involuntary, of all or any part of any right, title or interest in or to any Restricted Stock Units.  Any such disposition not made in accordance with this Agreement shall
		

		
			
		

		
			

		 

		

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			be deemed null and void.  Any permitted transferee under this Section shall be bound by the terms of this Agreement.
		

		
			 
		

		
			5.         Change in Capitalization.
		

		
			 
		

		
			(a)        The number and kind of shares issuable under this Agreement shall be proportionately adjusted for nonreciprocal transactions between the Company and the holders of Common Stock that cause the per share value of the shares of Common Stock subject to this Award to change, such as a stock dividend, stock split, spinoff, or rights offering (each an “Equity Restructuring”).  No fractional shares shall be issued in making such adjustment.
		

		
			 
		

		
			(b)        In the event of a merger, consolidation, extraordinary dividend, sale of substantially all of the Company’s assets or other material change in the capital structure of the Company, or a tender offer for shares of Common Stock, or other reorganization of the Company, in each case that does not result in an Equity Restructuring or a Change in Control, the Compensation Committee shall take such action to make such adjustments with respect to the Restricted Stock Units as the Compensation Committee, in its sole discretion, determines in good faith is necessary or appropriate, including, without limitation, adjusting the number and class of securities subject to the Award, substituting cash, other securities, or other property to replace the Award, or removing of restrictions.
		

		
			 
		

		
			(c)        All determinations and adjustments made by the Compensation Committee pursuant to this Section will be final and binding on the Recipient. Any action taken by the Compensation Committee need not treat all recipients of awards under the Plan equally.
		

		
			 
		

		
			(d)        The existence of the Plan and the Restricted Stock Units Grant shall not affect the right or power of the Company to make or authorize any adjustment, reclassification, reorganization or other change in its capital or business structure, any merger or consolidation of the Company, any issue of debt or equity securities having preferences or priorities as to the Common Stock or the rights thereof, the dissolution or liquidation of the Company, any sale or transfer of all or part of its business or assets, or any other corporate act or proceeding.
		

		
			 
		

		
			6.         Governing Laws.  This Award shall be construed, administered and enforced according to the laws of the State of Maryland; provided, however, no shares of Common Stock shall be issued except, in the reasonable judgment of the Compensation Committee, in compliance with exemptions under applicable state securities laws of the state in which Recipient resides, and/or any other applicable securities laws.
		

		
			 
		

		
			7.         Successors.  This Agreement shall be binding upon and inure to the benefit of the heirs, legal representatives, successors, and permitted assigns of the parties.
		

		
			 
		

		
			
		

		
			

		 

		

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			8.         Notice.  Except as otherwise specified herein, all notices and other communications under this Agreement shall be in writing and shall be deemed to have been given if personally delivered or if sent by registered or certified United States mail, return receipt requested, postage prepaid, addressed to the proposed recipient at the last known address of the Recipient.  Any party may designate any other address to which notices shall be sent by giving notice of the address to the other parties in the same manner as provided herein.
		

		
			 
		

		
			9.         Severability.  In the event that any one or more of the provisions or portion thereof contained in this Agreement shall for any reason be held to be invalid, illegal, or unenforceable in any respect, the same shall not invalidate or otherwise affect any other provisions of this Agreement, and this Agreement shall be construed as if the invalid, illegal or unenforceable provision or portion thereof had never been contained herein.
		

		
			 
		

		
			10.       Entire Agreement.  This Agreement, together with the terms and conditions set forth in the Plan, expresses the entire understanding and agreement of the parties with respect to the subject matter. In the event of a conflict between the terms of the Plan and this Agreement, the Plan shall govern.
		

		
			 
		

		
			11.       Specific Performance.  In the event of any actual or threatened default in, or breach of, any of the terms, conditions and provisions of this Agreement, the party or parties who are thereby aggrieved shall have the right to specific performance and injunction in addition to any and all other rights and remedies at law or in equity, and all such rights and remedies shall be cumulative.
		

		
			 
		

		
			12.       No Right to Continued Retention.  Neither the establishment of the Plan nor the award of Restricted Stock Units hereunder shall be construed as giving Recipient the right to continued service with the Company or an Affiliate.
		

		
			 
		

		
			13.       Tax Effects under 409A.  It is intended that the Award under this Agreement be exempt from Section 409A of the Internal Revenue Code (the “Code”) to the maximum extent possible, and to the extent that it is subject to Code Section 409A, that it comply with Code Section 409A. All provisions of this Agreement shall be construed consistent with that intent. More specifically, the Award under this Agreement is intended to be exempt from Code Section 409A as a short-term deferral pursuant to Treas. Regs. Section 1.409A-1(b)(4) (except to the extent payment is delayed as provided in any deferral agreement between the Recipient and the Company as a result of the Recipient’s valid election to defer as provided in Item E or F on the cover page of this Agreement).  But if and to the extent that the Award does not qualify as a short-term deferral, notwithstanding any other provision of this Agreement, payment shall be made only in accordance with Code Section 409A, such that if payment is being made as a result of the Recipient’s termination of employment, that shall be construed to require a “separation from service” as defined under Code Section 409A and payment will be delayed for any “specified employee” as defined under Code Section 409A to the extent required to comply with Code Section 409A(a)(2)(B)(i).  The Company does not guarantee to the Recipient that the Award will not be subject to tax under 409A, and if it is, the Recipient shall be solely responsible for such tax.
		

		
			 
		

		
			
		

		
			

		 

		

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			14.       Headings and Capitalized Terms.  Except as otherwise provided in this Agreement, section headings used herein are for convenience of reference only and shall not be considered in construing this Award.  Capitalized terms used, but not defined, in this Agreement shall be given the meaning ascribed to them in the Plan.
		

		
			 
		

		
			15.       Definitions.  As used in these Terms and Conditions and this Agreement:
		

		
			 
		

		
			“Cause” shall have the meaning set forth in the employment agreement then in effect between the Recipient and the Company or an Affiliate, or, if there is none, then Cause shall mean the occurrence of any of the following events:
		

		
			 
		

		
			(a)        willful refusal by the Recipient to follow a lawful direction of the person to whom the Recipient reports or the Board of Directors of the Company (the “Board”), provided the direction is not materially inconsistent with the duties or responsibilities of the Recipient’s position with the Company or an Affiliate, which refusal continues after the Board has again given the direction in writing;
		

		
			 
		

		
			(b)        willful misconduct or reckless disregard by the Recipient of the Recipient’s duties or with respect to the interest or material property of the Company or an Affiliate;
		

		
			 
		

		
			(c)        material breach by the Recipient of the Intellectual Property Agreement between the Recipient and  the Company, which causes material harm to the Company or an Affiliate;
		

		
			 
		

		
			(d)        any act by the Recipient of fraud against, material misappropriation from or significant dishonesty to either the Company or an Affiliate, or any other party, but in the latter case only if in the reasonable opinion of at least two-thirds of the members of the Board (excluding the Recipient), such fraud, material misappropriation, or significant dishonesty could reasonably be expected to have a material adverse impact on the Company or its Affiliates; or
		

		
			 
		

		
			(e)        commission by the Recipient of a felony as reasonably determined by at least two-thirds of the members of the Board (excluding the Recipient).
		

		
			 
		

		
			“Change in Control” means any one of the following events which occurs following the Grant Date:
		

		
			 
		

		
			(a)        the acquisition within a twelve (12) month period, directly or indirectly, by any “person” or “persons” (as such terms are used in Sections 13(d) and 14(d) of the Securities Exchange Act of 1934, as amended), other than the Company or any employee benefit plan of the Company or an Affiliate, or any corporation pursuant to a reorganization, merger or consolidation, of equity securities of the Company that in the aggregate represent thirty percent (30%) or more of the total voting power of the Company’s then outstanding equity securities;
		

		
			
		

		
			

		 

		

			6

		

 

		

		
			(b)        the acquisition, directly or indirectly, by any “person” or “persons” (as such terms are used in Sections 13(d) and 14(d) of the Securities Exchange Act of 1934, as amended), other than the Company or any employee benefit plan of the Company or an Affiliate, or any corporation pursuant to a reorganization, merger or consolidation of equity securities of the Company, resulting in such person or persons holding equity securities of the Company that, together with equity securities already held by such person or persons, in the aggregate represent more than fifty percent (50%) of the total fair market value or total voting power of the Company’s then outstanding equity securities;
		

		
			 
		

		
			(c)        individuals who as of the date hereof, constitute the Board (the “Incumbent Board”) cease for any reason to constitute at least a majority of the Board; provided, however, that any individual becoming a director subsequent to the date hereof whose election, or nomination for election by the Company’s shareholders, was approved by a vote of at least two-thirds 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;
		

		
			 
		

		
			(d)        a reorganization, merger or consolidation, with respect to which persons who were the holders of equity securities of the Company immediately prior to such reorganization, merger or consolidation, immediately thereafter, own equity securities of the surviving entity representing less than fifty percent (50%) of the combined ordinary voting power of the then outstanding voting securities of the surviving entity; or
		

		
			 
		

		
			(e)        the acquisition within a twelve (12) month period, directly or indirectly, by any “person” or “persons” (as such terms are used in Sections 13(d) and 14(d) of the Securities Exchange Act of 1934, as amended), other than any corporation pursuant to a reorganization, merger or consolidation, of assets of the Company that have a total gross fair market value equal to or more than eighty-five percent (85%) of the total gross fair market value of all of the assets of the Company immediately before such acquisition.
		

		
			 
		

		
			Notwithstanding the foregoing, no Change in Control shall be deemed to have occurred for purposes of this Agreement (a) unless the event also constitutes a “change in the ownership or effective control of the corporation or in the ownership of a substantial portion of the assets of the corporation” within the meaning of Code Section 409A(a)(2)(v), or (b) by reason of any actions or events in which the Recipient participates in a capacity other than in his capacity as an officer, employee, or director of the Company or an Affiliate.
		

		
			 
		

		
			“Good Reason” shall have the meaning set forth in the employment agreement then in effect between the Recipient and the Company or an Affiliate, or, if there is none, then Good Reason shall mean   the occurrence of an event listed in (a) through (c) below:
		

		
			 
		

		
			
		

		
			

		 

		

			7

		

 

		

		
			(a)        the Recipient experiences a material diminution of the Recipient’s responsibilities of the Recipient’s position, as reasonably modified by the person to whom the Recipient reports or the Board from time to time, such that the Recipient would no longer have responsibilities substantially equivalent to those of other executives holding equivalent positions at companies with similar revenues and market capitalization;
		

		
			 
		

		
			(b)        the Company or the Affiliate which employs the Recipient reduces the Recipient’s annual base salary or annual bonus opportunity at high, target or threshold performance as a percentage of annual base salary; or
		

		
			 
		

		
			(c)        the Company or the Affiliate which employs the Recipient requires the Recipient to relocate the Recipient’s primary place of employment to a new location that is more than fifty (50) miles from its current location (determined using the most direct driving route), without the Recipient’s consent;
		

		
			 
		

		
			provided however, as to each event in Subsection (a) through (c),
		

		
			 
		

		
			(i)         the Recipient gives written notice to the Company within ten (10) days following the event or receipt of notice of the event of the Recipient’s objection to the event;
		

		
			 
		

		
			(ii)       the Company or the Affiliate which employs the Recipient fails to remedy the event within ten (10) days following the Recipient’s written notice; and
		

		
			 
		

		
			(iii)      the Recipient terminates his employment within thirty (30) days following the Company’s and the Affiliate’s failure to remedy the event.
		

		
			 
		

		
			 
		

		
			

		 

		

			8

		

 

		

		
			EXHIBIT 1
		

		
			 
		

		
			VESTING SCHEDULE
		

		
			 
		

		
			A.        Except as provided in Items B and C below, the Restricted Stock Units shall become Vested Stock Units in accordance with the schedule below:
		

			
					
						Date

					
					
						    

					
					
						Percentage of Restricted

					
						Stock Units which are Vested Stock Units

				
	
					
						 

					
					
						 

					
					
						 

				
	
					
						December 31, 20__

					
					
						 

					
					
						100%

				

		
			 
		

		
			, provided the Recipient must remain an employee, director or consultant of the Company or an Affiliate through the indicated date set forth above to vest in accordance with the schedule above.
		

		
			 
		

		
			B.        Except as provided in Item C below, if the Recipient ceases services as an employee, director or consultant of the Company and all Affiliates due to the Recipient’s death or Disability, the Recipient resigns from the Company and all Affiliates for Good Reason, or the Company and all Affiliates terminate the Recipient’s employment without Cause, (each such event referred to as a “Qualifying Termination”) in the year set forth in the schedule below, then the percentage of the Restricted Stock Units in the schedule set forth below (rounded to the closest whole number of Restricted Stock Units) shall become Vested Stock Units as of the date of the Qualifying Termination if they have not been previously forfeited:
		

		
			 
		

			
					
						Year of Qualifying Termination

					
					
						Percentage of Restricted

					
						Stock Units which are Vested Stock Units

				
	
					
						 

					
					
						 

				
	
					
						20__

					
					
						331/3%

				
	
					
						20__

					
					
						662/3%

				
	
					
						20__

					
					
						100%

				

		
			 
		

		
			C.        Notwithstanding Item B above, if a Change in Control occurs on or after the Grant Date and on or before December 31, 20__, and within (i) sixty (60) days before the Change in Control or (ii) after the Change in Control, the Recipient incurs a Qualifying Termination, then all Restricted Stock Units which have not previously become Vested Stock Units pursuant to Item B above shall become Vested Stock Units as of the later of the date of the Change in Control or the date of the Qualifying Termination, if they have not been previously forfeited.
		

		
			 
		

		
			D.       Restricted Stock Units which have not become Vested Stock Units as of the earlier of December 31, 20__ or, except as provided in Item C above, the Recipient’s cessation of services as an employee, director, or consultant of the Company and all Affiliates shall be forfeited.
		

		
			 
		

		 

		

			Exhibit 1 – Page 1

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