Document:

Exhibit 10.1

 

 

 

Jernigan
Capital, Inc. 

 

AMENDED
AND RESTATED 2015 Equity Incentive Plan 

 

 

 

     

     

    

 

TABLE OF CONTENTS

 

	 	 	Page
	1.         PURPOSE	1
	2.          DEFINITIONS	1
	3.          ADMINISTRATION OF THE PLAN	8
	3.1	Committee	8
	3.2	Terms of Awards	8
	3.3	Forfeiture; Recoupment	9
	3.4	No Repricing	10
	3.5	Deferral Arrangement	10
	3.6	No Liability	10
	3.7	Share Issuance/Book-Entry	10
	4.          SHARES SUBJECT TO THE PLAN	11
	4.1	Number of Shares Available for Awards	11
	4.2	Adjustments in Authorized Shares	11
	4.3	Share Usage	11
	5.          EFFECTIVE DATE, DURATION AND AMENDMENTS	11
	5.1	Effective Date	11
	5.2	Term	11
	5.3	Amendment and Termination of the Plan	12
	6.          AWARD ELIGIBILITY AND LIMITATIONS	12
	6.1	Service Providers and Other Persons	12
	6.2	Limitation on Shares Subject to Awards and Cash Awards	12
	6.3	Stand-Alone, Additional, Tandem and Substitute Awards	13
	7.          AWARD AGREEMENT	13
	8.          TERMS AND CONDITIONS OF OPTIONS	13
	8.1	Option Price	13
	8.2	Vesting	13
	8.3	Term	14
	8.4	Termination of Service	14
	8.5	Limitations on Exercise of Option	14
	8.6	Method of Exercise	14
	8.7	Rights of Holders of Options	14
	8.8	Delivery of Share Certificates	15
	8.9	Transferability of Options	15
	8.10	Family Transfers	15
	8.11	Limitations on Incentive Stock Options	15
	8.12	Notice of Disqualifying Disposition	15
	9.          TERMS AND CONDITIONS OF STOCK APPRECIATION RIGHTS	16
	9.1	Right to Payment and Grant Price	16
	9.2	Other Terms	16
	9.3	Term	16
	9.4	Transferability of SARS	16
	9.5	Family Transfers	17

 

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	10.          TERMS AND CONDITIONS OF RESTRICTED STOCK AND STOCK UNITS	17
	10.1	Grant of Restricted Stock or Stock Units	17
	10.2	Restrictions	17
	10.3	Restricted Stock Certificates	18
	10.4	Rights of Holders of Restricted Stock	18
	10.5	Rights of Holders of Stock Units	18
	10.6	Termination of Service	19
	10.7	Delivery of Shares	19
	11.          TERMS AND CONDITIONS OF UNRESTRICTED STOCK AWARDS AND OTHER EQUITY-BASED AWARDS	19
	12.          FORM OF PAYMENT FOR OPTIONS AND RESTRICTED STOCK	20
	12.1	General Rule	20
	12.2	Surrender of Shares	20
	12.3	Cashless Exercise	20
	12.4	Other Forms of Payment	20
	13.          TERMS AND CONDITIONS OF DIVIDEND EQUIVALENT RIGHTS	21
	13.1	Dividend Equivalent Rights	21
	13.2	Termination of Service	21
	14.          TERMS AND CONDITIONS OF PERFORMANCE AWARDS AND ANNUAL INCENTIVE AWARDS	21
	14.1	Grant of Performance Awards and Annual Incentive Awards	21
	14.2	Value of Performance Awards and Annual Incentive Awards	21
	14.3	Earning of Performance Awards and Annual Incentive Awards	21
	14.4	Form and Timing of Payment of Performance Awards and Annual Incentive Awards	22
	14.5	Performance Conditions	22
	14.6	Performance Awards or Annual Incentive Awards Granted to Designated Covered Employees	22
	14.7	Status of Awards Under Code Section 162(m)	25
	15.          TERMS AND CONDITIONS OF LONG-TERM INCENTIVE UNITS	26
	15.1	Vesting	26
	16.          PARACHUTE LIMITATIONS	26
	17.          REQUIREMENTS OF LAW	27
	17.1	General	27
	17.2	Rule 16b-3	28
	18.          EFFECT OF CHANGES IN CAPITALIZATION	28
	18.1	Changes in Shares	28
	18.2	Reorganization in Which the Company Is the Surviving Entity Which Does not Constitute a Change in Control	29
	18.3	Change in Control in which Awards are not Assumed	29
	18.4	Change in Control in which Awards are Assumed	30
	18.5	Adjustments	30
	18.6	No Limitations on Company	31
	19.          GENERAL PROVISIONS	31
	19.1	Disclaimer of Rights	31
	19.2	Nonexclusivity of the Plan	31
	19.3	Withholding Taxes	32
	19.4	Captions	32
	19.5	Other Provisions	32
	19.6	Number and Gender	33
	19.7	Severability	33
	19.8	Governing Law	33
	19.9	Code Section 409A	33

 

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Jernigan
Capital, Inc.

2015 EQUITY INCENTIVE PLAN

(as amended and restated effective May 3,
2017)

 

Jernigan Capital, Inc., a Maryland corporation
(the “Company”), sets forth herein the terms of its 2015 Equity Incentive Plan (the “Plan”), as follows:

 

1.            PURPOSE

 

The Plan is intended to provide (a) incentive
to officers, investment professionals, employees, directors, consultants and other eligible persons to stimulate their efforts
towards the success of the Company and to operate and manage its business in a manner that will provide for the long term growth
and profitability of the Company; and (b) a means of obtaining, rewarding and retaining key personnel. To this end, the Plan provides
for the grant of stock options, stock appreciation rights, restricted stock, unrestricted stock, stock units (including deferred
stock units), dividend equivalent rights, long-term incentive units, performance awards, annual incentive cash awards and other
equity-based awards. Any of these awards may, but need not, be made as performance incentives to reward attainment of annual or
long-term performance goals in accordance with the terms hereof. Stock options granted under the Plan may be non-qualified stock
options or incentive stock options, as provided herein.

 

2.            DEFINITIONS

 

For purposes of interpreting the Plan and related
documents (including Award Agreements), the following definitions shall apply:

 

2.1           “Affiliate”
means, with respect to the Company, any company or other trade or business that controls, is controlled by or is under common control
with the Company within the meaning of Rule 405 of Regulation C under the Securities Act, including, without limitation, any Subsidiary
and, unless otherwise determined by the Committee, JCap Advisors, LLC. Notwithstanding anything to the contrary, for purposes of
granting Options or Stock Appreciation Rights, an entity may not be considered an Affiliate of the Company unless the Company holds
a “controlling interest” in such entity, where the term “controlling interest” has the same meaning as
provided in Treasury Regulation Section 1.414(c)-2(b)(2)(i), provided that the language “at least 50 percent” is used
instead of “at least 80 percent” and, provided further, that where granting of Options or Stock Appreciation Rights
is based upon a legitimate business criteria, the language “at least 20 percent” is used instead of “at least
80 percent” each place it appears in Treasury Regulation Section 1.414(c)-2(b)(2)(i).

 

2.2           “Annual
Incentive Award” means an Award, denominated in cash, made subject to attainment of performance goals (as described in
Section 14) over a Performance Period of up to one (1) year (which shall correspond to the Company’s fiscal year,
unless otherwise specified by the Committee).

 

     

     

    

 

2.3           “Applicable
Laws” means the legal requirements relating to the Plan and the Awards under applicable provisions of the corporate,
securities, tax and other laws, rules, regulations and government orders, and the rules of any applicable stock exchange or national
market system, of any jurisdiction applicable to Awards granted to residents therein.

 

2.4           “Award”
means a grant of an Option, Stock Appreciation Right, Restricted Stock, Unrestricted Stock, Stock Unit, Dividend Equivalent Right,
Performance Award, Annual Incentive Award, LTIP Unit, or Other Equity-Based Award under the Plan.

 

2.5           “Award
Agreement” means the agreement between the Company and a Grantee that evidences and sets out the terms and conditions
of an Award.

 

2.6           “Benefit
Arrangement” shall have the meaning set forth in Section 16.

 

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

 

2.8           “Cause”
means, unless defined otherwise in a Service Provider’s Award Agreement or employment, consulting or services agreement
with the Company or an Affiliate (in which case such definition shall control), as determined by the Committee, the Service Provider’s
(i) continued failure to substantially perform duties, or gross negligence or willful misconduct in connection with the performance
of duties; (ii) conviction or plea of guilty or nolo contendere of a felony; (iii) conviction of any other criminal offense involving
an act of dishonesty intended to result in substantial personal enrichment of such Grantee at the expense of the Company or an
Affiliate; or (iv) material breach of any Company policy or term of any employment, consulting or other services, confidentiality,
intellectual property or non-competition agreements, if any, between the Service Provider and the Company or an Affiliate.

 

2.9           “Change
in Control” means:

 

(i)          Any
“person” as such term is used in Section 13(d) and 14(d) of the Exchange Act (other than the Company, any trustee or
other fiduciary holding securities under any employee benefit plan of the Company or any corporation owned, directly or indirectly,
by the stockholders of the Company in substantially the same proportion as their ownership of stock of the Company), is or becomes
the “beneficial owner” (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of securities of
the Company representing 50% or more of the combined voting power of the Company’s then outstanding voting securities;

 

(ii)         During
any period of twelve consecutive months, individuals who at the beginning of such period constitute the Board, and any new director
(other than a director designated by a person who has entered into an agreement with the Company to effect a transaction described
in clause (i), (iii) or (iv) hereof) whose election by the Board or nomination for election by the Company’s stockholders
was approved by a vote of at least a majority of the directors then still in office who either were directors at the beginning
of the period or whose election or nomination for election was previously so approved, cease for any reason to constitute at least
a majority thereof, 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 actual threatened solicitation
of proxies or consents by or on behalf of a person other than the Board;

 

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(iii)        The
consummation of a merger or consolidation of the Company with any other entity or the issuance of voting securities in connection
with a merger or consolidation of the Company (or any direct or indirect subsidiary thereof) pursuant to applicable exchange requirements,
other than (A) a merger or consolidation which would result in the voting securities of the Company outstanding immediately prior
thereto continuing to represent (either by remaining outstanding or by being converted into voting securities of the surviving
or parent entity) at least 50.1% of the combined voting power of the voting securities of the Company or such surviving or parent
entity outstanding immediately after such merger or consolidation or (B) a merger or consolidation effected to implement a recapitalization
of the Company (or similar transaction) in which no “person” (as defined above) is or becomes the beneficial owner,
directly or indirectly, of securities of the Company representing 50% or more of either of the then outstanding shares of Common
Stock or the combined voting power of the Company’s then outstanding voting securities; or

 

(iv)        The
consummation of the sale or disposition by the Company of all or substantially all of the Company’s assets (or any transaction
or series of transactions within a period of twelve months ending on the date of the last sale or disposition having a similar
effect).

 

Notwithstanding the foregoing, if an Award constitutes
deferred compensation within the meaning of Code Section 409A, no payment, settlement or vesting (if vesting would be deemed a
distribution with respect to the Award under Section 409A) shall occur with respect to such Award on account of the Change in Control
transaction or event unless the transaction or event also constitutes a change in the ownership or effective control of the Company
or a change in the ownership of a substantial portion of the Company’s assets, as those terms are used in Code Section 409A(a)(2)(c)(v).

 

2.10         “Code”
means the Internal Revenue Code of 1986, as now in effect or as hereafter amended.

 

2.11         “Committee”
means the Committee constituted under Section 3 to administer the Plan.

 

2.12         “Common
Stock” means the common stock of the Company, par value $0.01 per share.

 

2.13         “Company”
means Jernigan Capital, Inc., a Maryland corporation.

 

2.14         “Covered
Employee” means a Grantee who is a covered employee within the meaning of Code Section 162(m)(3).

 

2.15         “Determination
Date” means the Grant Date or such other date as of which the Fair Market Value of a Share is required to be established
for purposes of the Plan.

 

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2.16         “Disability”
means, unless defined otherwise in a Service Provider’s Award Agreement or employment, consulting or services agreement with
the Company or an Affiliate (in which case such definition shall control), the Grantee is unable to perform each of the essential
duties of such Grantee’s position by reason of a medically determinable physical or mental impairment which is potentially
permanent in character or which can be expected to last for a continuous period of not less than 12 months; provided, however,
that, with respect to rules regarding expiration of an Incentive Stock Option following termination of the Grantee’s Service,
Disability shall mean the Grantee is unable to engage in any substantial gainful activity by reason of a medically determinable
physical or mental impairment which can be expected to result in death or which has lasted or can be expected to last for a continuous
period of not less than 12 months.

 

2.17         “Dividend
Equivalent Right” means a right, granted to a Grantee under Section 13, to receive cash, Shares, other Awards
or other property equal in value to dividends paid with respect to a specified number of Shares, or other periodic payments.

 

2.18         “Effective
Date” means March 13, 2015, the date the Plan was approved by the stockholders of the Company.

 

2.19         “Exchange
Act” means the Securities Exchange Act of 1934, as now in effect or as hereafter amended.

 

2.20         “Fair
Market Value” means the fair market value of a Share for purposes of the Plan, which shall be determined as of any Determination
Date as follows:

 

(i)          If
on such Determination Date the Shares are listed on a Stock Exchange, or are publicly traded on another established securities
market (a “Securities Market”), the Fair Market Value of a Share shall be the closing price of a Share as reported
on such Stock Exchange or such Securities Market (provided that, if there is more than one such Stock Exchange or Securities Market,
the Committee shall designate the appropriate Stock Exchange or Securities Market for purposes of the Fair Market Value determination).
If there is no such reported closing price on such Determination Date, the Fair Market Value of a Share shall be the closing price
of a Share on the most recent date prior to such Determination Date on which any sale of Shares shall have been reported on such
Stock Exchange or such Securities Market.

 

(ii)         If
on such Determination Date the Shares are not listed on a Stock Exchange or publicly traded on a Securities Market, the Fair Market
Value of a Share shall be the value of a Share as determined by the Committee in good faith; provided, however, that if such Fair
Market Value is used to determine an Option Price or a SAR Exercise Price, the Committee shall use a reasonable application of
a reasonable valuation method, in a manner consistent with Code Section 409A.

 

2.21         “Family
Member” means a person who is a spouse, former spouse, child, stepchild, grandchild, parent, stepparent, grandparent,
niece, nephew, mother-in-law, father-in-law, son-in-law, daughter-in-law, brother, sister, brother-in-law, or sister-in-law, including
adoptive relationships, of the Grantee, any person sharing the Grantee’s household (other than a tenant or employee), a trust
in which any one or more of these persons have more than fifty percent (50%) of the beneficial interest, a foundation in which
any one or more of these persons (or the Grantee) control the management of assets, and any other entity in which one or more of
these persons (or the Grantee) own more than fifty percent (50%) of the voting interests.

 

    	 	4	 

     

    

 

2.22         “Good
Reason” means, unless defined otherwise in a Service Provider’s Award Agreement or employment, consulting
or services agreement with the Company or an Affiliate (in which case such definition shall control), as determined by the Committee
(i) the assignment to the Service Provider of substantial duties or responsibilities inconsistent with the Service Provider’s
position at the Company, or any other action by the Company which results in a substantial diminution of the Service Provider’s
duties, authorities or responsibilities (other than temporarily while physically or mentally incapacitated or as required by applicable
law); (ii) a material reduction in the Service Provider’s aggregate base salary and other compensation (including annual
target bonus opportunity and retirement plans, welfare plans and fringe benefits) taken as a whole, excluding any reductions caused
by the failure to achieve performance targets (as the same may be in effect from time to time); (iii) the relocation of the Service
Provider’s principal place of employment to a location more than 30 miles from the Service Provider’s principal place
of employment or the Company’s requiring the Service Provider to be based anywhere other than such principal place of employment
(or permitted relocation thereof) except for required travel on the Company’s business to an extent substantially consistent
with the Service Provider’s business travel obligations as of immediately prior to the Change in Control or (iv) the Company’s
material breach of the terms of any employment agreement with the Service Provider; provided, however, that the Service Provider
must provide the Company with a written notice detailing the specific circumstances alleged to constitute “Good Reason”
within ninety (90) days after the first occurrence of such circumstances that the Service Provider knows or reasonably should have
known to constitute “Good Reason,” such condition must not have been remedied by the Company within thirty (30) days
of such written notice, and the termination must occur within ninety (30) days after such failure to remedy the event.

 

2.23         “Grant
Date” means, as determined by the Committee, the latest to occur of (i) the date as of which the Company completes the
action constituting the Award, (ii) the date on which the recipient of an Award first becomes eligible to receive an Award under
Section 6, or (iii) such other date as may be specified by the Committee.

 

2.24         “Grantee”
means a natural person who receives or holds an Award under the Plan.

 

2.25         “Incentive
Stock Option” means an “incentive stock option” within the meaning of Code Section 422, or the corresponding
provision of any subsequently enacted tax statute, as amended from time to time.

 

2.26         “Long-Term
Incentive Unit” or “LTIP Unit” means an Award under Section 15 of an interest in the operating
partnership affiliated with the Company.

 

2.27         “Non-Qualified
Stock Option” means an Option that is not an Incentive Stock Option.

 

2.28         “Option”
means an option to purchase one or more Shares pursuant to the Plan.

 

2.29         “Option
Price” means the exercise price for each Share subject to an Option.

 

2.30         “Other
Agreement” shall have the meaning set forth in Section 16.

 

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2.31         “Other
Equity-Based Award” means a right or other interest that may be denominated or payable in, valued in whole or in part
by reference to, or otherwise based on, or related to, Shares, other than an Option, Stock Appreciation Right, Restricted Stock,
Unrestricted Stock, Stock Unit, Dividend Equivalent Right, Performance Award or Annual Incentive Award.

 

2.32         “Outside
Director” means a member of the Board who is not an officer or employee of the Company.

 

2.33         “Performance
Award” means an Award made subject to the attainment of performance goals (as described in Section 14) over a
Performance Period of up to ten (10) years.

 

2.34         “Performance-Based
Compensation” means compensation under an Award that is intended to satisfy the requirements of Code Section 162(m) for
“qualified performance-based compensation” paid to Covered Employees. Notwithstanding the foregoing, nothing in the
Plan shall be construed to mean that an Award which does not satisfy the requirements for “qualified performance-based compensation”
under Code Section 162(m) does not constitute performance-based compensation for other purposes, including for purposes of Code
Section 409A.

 

2.35         “Performance
Measures” means measures as described in Section 14 on which the performance goals are based and which
have been approved by the Company’s stockholders pursuant to the Plan in order to qualify Awards as Performance-Based Compensation.

 

2.36         “Performance
Period” means the period of time during which the performance goals must be met in order to determine the degree of payout
and/or vesting with respect to an Award.

 

2.37         “Plan”
means this Jernigan Capital, Inc. 2015 Equity Incentive Plan, as amended from time to time.

 

2.38         “Purchase
Price” means the purchase price for each Share pursuant to a grant of Restricted Stock, Stock Units or Unrestricted Stock.

 

2.39         “Restatement
Effective Date” means May 3, 2017, the date the amendment and restatement of the Plan was approved by the stockholders
of the Company.

 

2.40         “Restricted
Stock” means Shares awarded to a Grantee pursuant to Section 10.

 

2.41         “SAR
Exercise Price” means the per share exercise price of a SAR granted to a Grantee under Section 9.

 

2.42         “Securities
Act” means the Securities Act of 1933, as now in effect or as hereafter amended.

 

    	 	6	 

     

    

 

2.43         “Service”
means service as a Service Provider to the Company or any Affiliate. Unless otherwise stated in the applicable Award Agreement,
a Grantee’s change in position or duties shall not result in interrupted or terminated Service, so long as such Grantee continues
to be a Service Provider to the Company or any Affiliate. Whether a termination of Service shall have occurred for purposes of
the Plan shall be determined by the Committee in its sole and absolute discretion, which determination shall be final, binding
and conclusive. Notwithstanding any other provision to the contrary, for any individual providing services solely as a director,
only service to the Company or any of its Subsidiaries constitutes Service. Except as may otherwise be required to comply with
Code Section 409A, if the Service Provider’s employment or other service relationship is with an Affiliate and that entity
ceases to be an Affiliate, a termination of Service shall be deemed to have occurred when the entity ceases to be an Affiliate
unless the Service Provider transfers his or her employment or other service relationship to the Company or its remaining Affiliates.

 

2.44         “Service
Provider” means an employee, officer, director, or a consultant or adviser (who is a natural person) providing services
to the Company or any of its Affiliates.

 

2.45         “Share”
means a share of Common Stock.

 

2.46         “Stock
Appreciation Right” or “SAR” means a right granted to a Grantee under Section 9.

 

2.47         “Stock
Units” means a bookkeeping entry representing the equivalent of one Share awarded to a Grantee pursuant to Section
10.

 

2.48         “Stock
Exchange” means the New York Stock Exchange or another established national or regional stock exchange.

 

2.49         “Subsidiary”
means any “subsidiary corporation” of the Company within the meaning of Code Section 424(f).

 

2.50         “Substitute
Award” means an Award granted upon assumption of, or in substitution for, outstanding awards previously granted by a
company or other entity acquired by the Company or an Affiliate or with which the Company or an Affiliate combines.

 

2.51         “Ten
Percent Stockholder” means an individual who owns more than ten percent (10%) of the total combined voting power of all
classes of outstanding voting securities of the Company, its parent or any of its Subsidiaries. In determining Share ownership,
the attribution rules of Code Section 424(d) shall be applied.

 

2.52         “Unrestricted
Stock” shall have the meaning set forth in Section 11.

 

Unless the context otherwise requires, all references
in the Plan to “including” shall mean “including without limitation.”

 

References in the Plan to any Code Section shall
be deemed to include, as applicable, regulations promulgated under such Code Section.

 

    	 	7	 

     

    

 

3.            ADMINISTRATION
OF THE PLAN

 

3.1           Committee.

 

The Plan shall be administered by the Committee,
constituted as follows:

 

(i)          The
Committee will consist of the Compensation Committee of the Board or, in the absence of a Compensation Committee, the Board or
such committee as the Board shall select. Once appointed, the Committee will serve in its designated capacity until otherwise directed
by the Board. The Board may increase the size of the Committee and appoint additional members, remove members (with or without
cause) and substitute new members, fill vacancies (however caused), or remove all members of the Committee and thereafter directly
administer the Plan. Notwithstanding the foregoing, unless the Board determines otherwise, at any time that the Company Shares
are registered pursuant to Section 12 of the Exchange Act, the Plan will be administered only by a committee consisting of no fewer
than two directors of the Company, each of whom is (A) a “non-employee director” within the meaning of Rule 16b-3 (or
any successor rule) of the Exchange Act, (B) an “outside director” within the meaning of Section 162(m)(4)(C)(i) of
the Code, and (C) an “independent director” for purpose of the rules and regulations of the Stock Exchange or quotation
system on which the Shares are principally traded; provided, however, the failure of the Committee to be composed solely of individuals
who are “non-employee directors,” “outside directors,” and “independent directors” shall not
render ineffective or void any Awards made by, or other actions taken by, such Committee.

 

(ii)         The
Plan may be administered by different bodies with respect to different Grantees.

 

(iii)        
Decisions of the Committee shall be final, conclusive and binding on all persons or entities, including the Company, any Grantee,
any stockholder and any employee or any Affiliate. A majority of the members of the Committee may determine its actions and fix
the time and place of its meetings.

 

(iv)        The
Committee may delegate to a committee of one or more Directors of the Company or, to the extent permitted by Applicable Law, to
one or more officers or a committee of officers, the authority to grant Awards to employees and officers of the Company and its
Affiliates who are not directors, Covered Employees, or “officers,” as such term is defined by Rule 16a-1(f) of the
Exchange Act.

 

3.2           Terms
of Awards.

 

Subject to the other terms and conditions of
the Plan, the Committee shall have full and final authority to:

 

(i)          designate
Grantees;

 

(ii)         determine
the type or types of Awards to be made to a Grantee;

 

(iii)        determine
the number of Shares to be subject to an Award;

 

    	 	8	 

     

    

 

(iv)        establish
the terms and conditions of each Award (including, but not limited to, the exercise price of any Option, the nature and duration
of any restriction or condition (or provision for lapse thereof) relating to the vesting, exercise, transfer, or forfeiture of
an Award or the Shares subject thereto, the treatment of an Award in the event of a Change in Control, and any terms or conditions
that may be necessary to qualify Options as Incentive Stock Options);

 

(v)         prescribe
the form of each Award Agreement evidencing an Award;

 

(vi)        interpret
and administer the Plan and any instrument or agreement entered into under or in connection with the Plan, including any Award
Agreement;

 

(vii)       correct
any defect, supply any omission or reconcile any inconsistency in the Plan or any Award in the manner and to the extent that the
Committee shall deem desirable to carry it into effect;

 

(viii)      establish
such rules and regulations and appoint such agents as it shall deem appropriate for the proper administration of the Plan;

 

(ix)         amend,
modify, or reprice (except as such practice is prohibited by Section 3.4 herein) the terms of any outstanding Award; and

 

(x)          make
any other determination and take any other action that the Committee deems necessary or desirable for administration of the Plan.

 

Such authority specifically includes the authority, in order to
effectuate the purposes of the Plan but without amending the Plan, to make or modify Awards to eligible individuals who are foreign
nationals or are individuals who are employed outside the United States to recognize differences in local law, tax policy, or custom.
Notwithstanding the foregoing, no amendment, modification or supplement of any Award shall, without the consent of the Grantee,
impair the Grantee’s rights under such Award.

 

3.3           Forfeiture;
Recoupment.

 

The Company may reserve the right in an Award
Agreement to cause a forfeiture of the gain realized by a Grantee with respect to an Award thereunder on account of actions taken
by, or failed to be taken by, such Grantee in violation or breach of or in conflict with any (a) employment agreement, (b) non-competition
agreement, (c) agreement prohibiting solicitation of employees or clients of the Company or any Affiliate, (d) confidentiality
obligation with respect to the Company or any Affiliate, or (e) other agreement, as and to the extent specified in such Award Agreement.
The Company may annul an outstanding Award if the Grantee thereof is an employee and is terminated for Cause as defined in the
Plan or the applicable Award Agreement or for “cause” as defined in any other agreement between the Company or any
Affiliate and such Grantee, as applicable.

 

    	 	9	 

     

    

 

If the Company adopts a “clawback”
or recoupment policy, any Award will be subject to repayment to the Company to the extent so provided under the terms of such policy.
Such policy may authorize the Company to recover from a Grantee incentive-based compensation (including Options awarded as compensation)
awarded to or received by such Grantee during a period of up to three (3) years, as determined by the Committee, preceding the
date on which the Company is required to prepare an accounting restatement due to material noncompliance by the Company, as a result
of misconduct, with any financial reporting requirement under the federal securities laws. In addition, and notwithstanding the
foregoing, such policy may otherwise authorize the Company to recover from a Grantee any amounts or awards as may in the future
be prescribed by the rules and regulations of the Securities and Exchange Commission and/or the primary stock exchange on which
the Shares are listed, if any.

 

3.4           No
Repricing.

 

Except for adjustments to Options or SARs contemplated
by Section 18, the Company may not, without obtaining stockholder approval: (a) amend the terms of outstanding Options or
SARs to reduce the Option Price or SAR Exercise Price of such outstanding Options or SARs; (b) cancel outstanding Options or SARs
in exchange for or substitution of Options or SARs with an Option Price or SAR Exercise Price that is less than the exercise price
of the original Options or SARs; (c) cancel outstanding Options or SARs with an Option Price or SAR Exercise Price above the current
Fair Market Value of a Share in exchange for cash or other securities; or (d) take any other action with respect to Options or
SARS that would be treated as a repricing under the Stock Exchange or quotation system on which the Shares are principally traded.

 

3.5           Deferral
Arrangement.

 

The Committee may permit or require the deferral
of any award payment into a deferred compensation arrangement, subject to such rules and procedures as it may establish, which
may include provisions for the payment or crediting of interest or Dividend Equivalent Rights and, in connection therewith, provisions
for converting such credits into Stock Units and for restricting deferrals to comply with hardship distribution rules affecting
tax-qualified retirement plans subject to Code Section 401(k)(2)(B)(IV), provided that no Dividend Equivalent Rights may
be granted in connection with, or related to, an Award of Options or SARs. Any such deferrals shall be made in a manner that complies
with Code Section 409A.

 

3.6           No
Liability.

 

No member of the Board or the Committee (or
any other person to whom administrative authority has been delegated hereunder) shall be liable for any action or determination
made in good faith with respect to the Plan or any Award or Award Agreement.

 

3.7           Share
Issuance/Book-Entry.

 

Notwithstanding any provision of the Plan to
the contrary, the issuance of the Shares under the Plan may be evidenced in such a manner as the Committee, in its discretion,
deems appropriate, including, without limitation, book-entry or direct registration or issuance of one or more share certificates.

 

    	 	10	 

     

    

 

4.            SHARES
SUBJECT TO THE PLAN

 

4.1           Number
of Shares Available for Awards.

 

Subject to adjustment as provided in Section
18, the aggregate number of Shares available for issuance under the Plan (including pursuant to Incentive Stock Options) shall
be 370,000. Shares issued or to be issued under the Plan shall be authorized but unissued shares or treasury Shares or any combination
of the foregoing, as may be determined from time to time by the Board or by the Committee.

 

4.2           Adjustments
in Authorized Shares.

 

The Committee shall have the right to substitute
or assume Awards in connection with mergers, reorganizations, separations, or other transactions to which Code Section 424(a) applies.
The number of Shares reserved pursuant to Section 4 shall be increased by the corresponding number of awards assumed and,
in the case of a substitution, by the net increase in the number of Shares subject to awards before and after the substitution.
Available shares under a stockholder approved plan of an acquired company (as appropriately adjusted to reflect the transaction)
may be used for Awards under the Plan and do not reduce the number of Shares available under the Plan, subject to requirements
of the Stock Exchange on which the Shares are listed.

 

4.3           Share
Usage.

 

Shares covered by an Award shall be counted
as used as of the Grant Date. Any Shares that are subject to Awards shall be counted against the limit set forth in Section
4.1 as one (1) Share for every one (1) Share subject to an Award. With respect to SARs, the number of Shares subject to an
award of SARs will be counted against the aggregate number of Shares available for issuance under the Plan regardless of the number
of Shares actually issued to settle the SAR upon exercise. If any Shares covered by an Award granted under the Plan are not purchased
or are forfeited or expire, or if an Award otherwise terminates without delivery of any Shares subject thereto, then the number
of Shares counted against the aggregate number of Shares available under the Plan with respect to such Award shall, to the extent
of any such forfeiture, termination or expiration, again be available for making Awards under the Plan in the same amount as such
Shares were counted against the limit set forth in Section 4.1. The number of Shares available for issuance under the Plan
shall not be increased by (i) any Shares tendered or withheld or Award surrendered in connection with the purchase of Shares upon
exercise of an Option as described in Section 12.2, (ii) any Shares deducted or delivered from an Award payment in connection
with the Company’s tax withholding obligations as described in Section 19.3 or (iii) any Shares purchased by
the Company with proceeds from option exercises.

 

5.            EFFECTIVE
DATE, DURATION AND AMENDMENTS

 

5.1           Effective
Date.

 

The Plan shall be effective as of the Effective
Date.

 

5.2           Term.

 

The Plan first became effective on the Effective
Date. The Plan was subsequently amended and restated, subject to approval by the stockholders of the Company effective as of the
Restatement Effective Date. The Plan shall continue in effect until the day immediately prior to the 10-year anniversary of the
Restatement Effective Date, unless sooner terminated on any date as provided in Section 5.3 or extended with approval
by the stockholders of the Company.

 

    	 	11	 

     

    

 

5.3           Amendment
and Termination of the Plan.

 

The Board may, at any time and from time to
time, amend, suspend, or terminate the Plan as to any Shares as to which Awards have not been made. An amendment shall be contingent
on approval of the Company’s stockholders to the extent stated by the Board, required by Applicable Laws or required by the
Stock Exchange on which the Shares are listed. No amendment will be made to the no-repricing provisions of Section 3.4 or
the option pricing provisions of Section 8.1 without the approval of the Company’s stockholders. No amendment, suspension,
or termination of the Plan shall, without the consent of the Grantee, impair rights or obligations under any Award theretofore
awarded under the Plan.

 

6.            AWARD
ELIGIBILITY AND LIMITATIONS

 

6.1           Service
Providers and Other Persons.

 

Subject to this Section 6, Awards may
be made under the Plan to: (i) any Service Provider, as the Committee shall determine and designate from time to time and (ii)
any other individual whose participation in the Plan is determined to be in the best interests of the Company by the Committee.

 

6.2           Limitation
on Shares Subject to Awards and Cash Awards.

 

During any time when the Company has a class
of equity security registered under Section 12 of the Exchange Act and the transition period under Treasury Regulation Section
1.162-27(f)(2) has lapsed or does not apply, Awards intended to qualify as Performance-Based Compensation shall be subject to the
following limitations:

 

(i)          the
maximum number of Shares subject to Options or SARs that can be granted under the Plan to any person eligible for an Award under
Section 6 is One Million (1,000,000) Shares in a calendar year (for this purpose, tandem SARs/Options shall be treated as
one Award);

 

(ii)         the
maximum number of Shares that can be granted under the Plan, other than pursuant to Options or SARs, to any person eligible for
an Award under Section 6 is One Million (1,000,000) Shares in a calendar year; and

 

(iii)        the
maximum amount that may be paid as an Annual Incentive Award in a calendar year to any person eligible for an Award shall be Five
Million Dollars ($5,000,000) and the maximum amount that may be paid pursuant to cash-settled Performance Award granted in a calendar
year to any person eligible for an Award shall be Five Million Dollars ($5,000,000).

 

The preceding limitations in this Section
6.2 are subject to adjustment as provided in Section 18.

 

    	 	12	 

     

    

 

6.3           Stand-Alone,
Additional, Tandem and Substitute Awards.

 

Subject to Section 3.4, Awards granted
under the Plan may, in the discretion of the Committee, be granted either alone or in addition to, in tandem with, or in substitution
or exchange for, any other Award or any award granted under another plan of the Company, any Affiliate, or any business entity
to be acquired by the Company or an Affiliate, or any other right of a Grantee to receive payment from the Company or any Affiliate.
Such additional, tandem, and substitute or exchange Awards may be granted at any time. Subject to Section 3.4, if an Award
is granted in substitution or exchange for another Award, the Committee shall require the surrender of such other Award in consideration
for the grant of the new Award. In addition, Awards may be granted in lieu of cash compensation, including in lieu of cash amounts
payable under other plans of the Company or any Affiliate. Notwithstanding Section 8.1 and Section 9.1 but subject
to Section 3.4, the Option Price of an Option or the SAR Exercise Price of an SAR that is a Substitute Award may be less
than 100% of the Fair Market Value of a Share on the original date of grant; provided, that, the Option Price or grant price is
determined in accordance with the principles of Code Section 424 and the regulations thereunder for any Incentive Stock Option
and consistent with Code Section 409A for any other Option or SAR.

 

7.            AWARD
AGREEMENT

 

Each Award granted pursuant to the Plan shall
be evidenced by an Award Agreement, in such form or forms as the Committee shall from time to time determine. Award Agreements
granted from time to time or at the same time need not contain similar provisions but shall be consistent with the terms of the
Plan. Each Award Agreement evidencing an Award of Options shall specify whether such Options are intended to be Non-Qualified Stock
Options or Incentive Stock Options, and in the absence of such specification such options shall be deemed Non-Qualified Stock Options.

 

8.            TERMS
AND CONDITIONS OF OPTIONS

 

8.1           Option
Price.

 

The Option Price of each Option shall be fixed
by the Committee and stated in the Award Agreement evidencing such Option. Except in the case of Substitute Awards, the
Option Price of each Option shall be at least the Fair Market Value of a Share on the Grant Date; provided, however, that
in the event that a Grantee is a Ten Percent Stockholder, the Option Price of an Option granted to such Grantee that is intended
to be an Incentive Stock Option shall be not less than one hundred ten percent (110%) of the Fair Market Value of a Share on the
Grant Date. In no case shall the Option Price of any Option be less than the par value of a Share.

 

8.2           Vesting.

 

Subject to Sections 8.3 and 18.3, each
Option granted under the Plan shall become exercisable at such times and under such conditions as shall be determined by the Committee
and stated in the Award Agreement. For purposes of this Section 8.2, fractional numbers of Shares subject to an Option shall
be rounded down to the next nearest whole number.

 

    	 	13	 

     

    

 

8.3           Term.

 

Each Option granted under the Plan shall terminate,
and all rights to purchase Shares thereunder shall cease, upon the expiration of ten (10) years from the date such Option is granted,
or under such circumstances and on such date prior thereto as is set forth in the Plan or as may be fixed by the Committee and
stated in the Award Agreement relating to such Option; provided, however, that in the event that the Grantee is a Ten Percent Stockholder,
an Option granted to such Grantee that is intended to be an Incentive Stock Option shall not be exercisable after the expiration
of five (5) years from its Grant Date.

 

8.4           Termination
of Service.

 

Each Award Agreement shall set forth the extent
to which the Grantee shall have the right to exercise the Option following termination of the Grantee’s Service. Such provisions
shall be determined in the sole discretion of the Committee, need not be uniform among all Options issued pursuant to the Plan,
and may reflect distinctions based on the reasons for termination of Service.

 

8.5           Limitations
on Exercise of Option.

 

Notwithstanding any other provision of the Plan,
in no event may any Option be exercised, in whole or in part, prior to the date the Plan is approved by the stockholders of the
Company as provided herein or after the occurrence of an event referred to in Section 18 which results in termination of
the Option.

 

8.6           Method
of Exercise.

 

Subject to the terms of Section 12 and
Section 19.3, an Option that is exercisable may be exercised by the Grantee’s delivery to the Company of notice of
exercise on any business day, at the Company’s principal office, on the form specified by the Company and in accordance with
any additional procedures specified by the Committee. Subject to the terms of Section 12 and Section 19.3, such notice
shall specify the number of Shares with respect to which the Option is being exercised and shall be accompanied by payment in full
of the Option Price of the Shares for which the Option is being exercised plus the amount (if any) of federal and/or other taxes
which the Company may, in its judgment, be required to withhold with respect to an Award.

 

8.7           Rights
of Holders of Options.

 

Unless otherwise stated in the applicable Award
Agreement, an individual or entity holding or exercising an Option shall have none of the rights of a stockholder (for example,
the right to receive cash or dividend payments or distributions attributable to the subject Shares or to direct the voting of the
subject Shares or to receive notice of any meeting of the Company’s stockholders) until the Shares covered thereby are fully
paid and issued to him. Except as provided in Section 18, no adjustment shall be made for dividends, distributions or other
rights for which the record date is prior to the date of such issuance.

 

    	 	14	 

     

    

 

8.8           Delivery
of Share Certificates.

 

Promptly after the exercise of an Option by
a Grantee and the payment in full of the Option Price with respect thereto, such Grantee shall be entitled to receive such evidence
of such Grantee’s ownership of the Shares subject to such Option as shall be consistent with Section 3.7.

 

8.9           Transferability
of Options.

 

Except as provided in Section 8.10, during
the lifetime of a Grantee, only the Grantee (or, in the event of legal incapacity or incompetency, the Grantee’s guardian
or legal representative) may exercise an Option. Except as provided in Section 8.10, no Option shall be assignable or transferable
by the Grantee to whom it is granted, other than by will or the laws of descent and distribution.

 

8.10         Family
Transfers.

 

If authorized in the applicable Award Agreement
or by the Committee, in its sole discretion, a Grantee may transfer, not for value, all or part of an Option which is not an Incentive
Stock Option to any Family Member. For the purpose of this Section 8.10, a “not for value” transfer is a transfer
which is (i) a gift, (ii) a transfer under a domestic relations order in settlement of marital property rights; or (iii) unless
Applicable Law does not permit such transfers, a transfer to an entity in which more than fifty percent (50%) of the voting interests
are owned by Family Members (or the Grantee) in exchange for an interest in that entity. Following a transfer under this Section
8.10, any such Option shall continue to be subject to the same terms and conditions as were applicable immediately prior to
transfer, and Shares acquired pursuant to the Option shall be subject to the same restrictions on transfer of shares as would have
applied to the Grantee. Subsequent transfers of transferred Options are prohibited except to Family Members of the original Grantee
in accordance with this Section 8.10 or by will or the laws of descent and distribution. The events of termination of Service
of Section 8.4 shall continue to be applied with respect to the original Grantee, following which the Option shall be exercisable
by the transferee only to the extent, and for the periods specified, in Section 8.4.

 

8.11         Limitations
on Incentive Stock Options.

 

An Option shall constitute an Incentive Stock
Option only (i) if the Grantee of such Option is an employee of the Company or any Subsidiary of the Company; (ii) to the extent
specifically provided in the related Award Agreement; and (iii) to the extent that the aggregate Fair Market Value (determined
at the time the Option is granted) of the Shares with respect to which all Incentive Stock Options held by such Grantee become
exercisable for the first time during any calendar year (under the Plan and all other plans of the Grantee’s employer and
its Affiliates) does not exceed $100,000. Except to the extent provided in the regulations under Code Section 422, this limitation
shall be applied by taking Options into account in the order in which they were granted.

 

8.12         Notice
of Disqualifying Disposition.

 

If any Grantee shall make any disposition of
Shares issued pursuant to the exercise of an Incentive Stock Option under the circumstances described in Code Section 421(b) (relating
to certain disqualifying dispositions), such Grantee shall notify the Company of such disposition within ten (10) days thereof.

 

    	 	15	 

     

    

 

9.            TERMS
AND CONDITIONS OF STOCK APPRECIATION RIGHTS

 

9.1           Right
to Payment and Grant Price.

 

A SAR shall confer on the Grantee to whom it
is granted a right to receive, upon exercise thereof, the excess of (A) the Fair Market Value of one Share on the date of exercise
over (B) the SAR Exercise Price as determined by the Committee. The Award Agreement for a SAR shall specify the SAR Exercise Price,
which shall be at least the Fair Market Value of one (1) Share on the Grant Date. SARs may be granted in conjunction with all or
part of an Option granted under the Plan or at any subsequent time during the term of such Option, in conjunction with all or part
of any other Award or without regard to any Option or other Award; provided that a SAR that is granted subsequent to the Grant
Date of a related Option must have a SAR Exercise Price that is no less than the Fair Market Value of one Share on the SAR Grant
Date; and provided further that a Grantee may only exercise either the SAR or the Option with which it is granted
in tandem and not both.

 

9.2           Other
Terms.

 

The Committee shall determine on the Grant Date
or thereafter, the time or times at which and the circumstances under which a SAR may be exercised in whole or in part (including
based on achievement of performance goals and/or future service requirements), the time or times at which SARs shall cease to be
or become exercisable following termination of Service or upon other conditions, the method of exercise, method of settlement,
form of consideration payable in settlement, method by or forms in which Shares will be delivered or deemed to be delivered to
Grantees, whether or not a SAR shall be in tandem or in combination with any other Award, and any other terms and conditions of
any SAR.

 

9.3           Term.

 

Each SAR granted under the Plan shall terminate,
and all rights thereunder shall cease, upon the expiration of ten (10) years from the date such SAR is granted, or under such circumstances
and on such date prior thereto as is set forth in the Plan or as may be fixed by the Committee and stated in the Award Agreement
relating to such SAR.

 

9.4           Transferability
of SARS.

 

Except as provided in Section 9.5, during
the lifetime of a Grantee, only the Grantee (or, in the event of legal incapacity or incompetency, the Grantee’s guardian
or legal representative) may exercise a SAR. Except as provided in Section 9.5, no SAR shall be assignable or transferable
by the Grantee to whom it is granted, other than by will or the laws of descent and distribution.

 

    	 	16	 

     

    

 

9.5           Family
Transfers.

 

If authorized in the applicable Award Agreement
and by the Committee, in its sole discretion, a Grantee may transfer, not for value, all or part of a SAR to any Family Member.
For the purpose of this Section 9.5, a “not for value” transfer is a transfer which is (i) a gift, (ii) a transfer
under a domestic relations order in settlement of marital property rights; or (iii) unless Applicable Law does not permit such
transfers, a transfer to an entity in which more than fifty percent (50%) of the voting interests are owned by Family Members (or
the Grantee) in exchange for an interest in that entity. Following a transfer under this Section 9.5, any such SAR shall
continue to be subject to the same terms and conditions as were applicable immediately prior to transfer, and Shares acquired pursuant
to a SAR shall be subject to the same restrictions on transfer or shares as would have applied to the Grantee. Subsequent transfers
of transferred SARs are prohibited except to Family Members of the original Grantee in accordance with this Section 9.5
or by will or the laws of descent and distribution.

 

10.          TERMS
AND CONDITIONS OF RESTRICTED STOCK AND STOCK UNITS

 

10.1         Grant
of Restricted Stock or Stock Units.

 

Awards of Restricted Stock or Stock Units may
be made for consideration or no consideration. To the extent required by Applicable Law, Grantees will be required to pay the par
value of the Shares; provided, however, that, to the extent permitted by Applicable Law, par value shall be deemed paid by past
Service or, if so provided in the related Award Agreement or a separate agreement, the promise by the Grantee to perform future
Service to the Company or an Affiliate of the Company).

 

10.2         Restrictions.

 

At the time a grant of Restricted Stock or Stock
Units is made, the Committee may, in its sole discretion, establish a period of time (a “restricted period”) applicable
to such Restricted Stock or Stock Units. Each Award of Restricted Stock or Stock Units may be subject to a different restricted
period. The Committee may in its sole discretion, at the time a grant of Restricted Stock or Stock Units is made, prescribe restrictions
in addition to or other than the expiration of the restricted period, including the satisfaction of corporate or individual performance
objectives, which may be applicable to all or any portion of the Restricted Stock or Stock Units as described in Section 14,
and which shall be set forth in the Award Agreement relating to such grant. Except as authorized by the Committee in writing, neither
Restricted Stock nor Stock Units may be sold, transferred, assigned, pledged or otherwise encumbered or disposed of during the
restricted period or prior to the satisfaction of any other restrictions prescribed by the Committee with respect to such Restricted
Stock or Stock Units.

 

    	 	17	 

     

    

 

10.3         Restricted
Stock Certificates.

 

Pursuant to Section 3.7, to the extent
that ownership of Restricted Stock is evidenced by a book-entry registration or direct registration, such registration shall be
notated to evidence the restrictions imposed on such Award of Restricted Stock under the Plan and the applicable Award Agreement.
Subject to Section 3.7 and the immediately following sentence, the Company may issue, in the name of each Grantee to whom
Restricted Stock have been granted, share certificates representing the total number of Restricted Stock granted to the Grantee,
as soon as reasonably practicable after the Grant Date. The Committee may provide in an Award Agreement that either (i) the Secretary
of the Company shall hold such certificates for the Grantee’s benefit until such time as the shares of Restricted Stock are
forfeited to the Company or the restrictions applicable thereto lapse and such Grantee shall deliver a stock power to the Company
with respect to each certificate, or (ii) such certificates shall be delivered to the Grantee, provided, however, that such certificates
shall bear a legend or legends that comply with the applicable securities laws and regulations and make appropriate reference to
the restrictions imposed under the Plan and the Award Agreement.

 

10.4         Rights
of Holders of Restricted Stock.

 

Unless the Committee otherwise provides in an
Award Agreement, holders of Restricted Stock shall have the right to vote such Shares. Awards of Restricted Stock may provide for
the right to receive any dividends declared or paid with respect to such Shares; provided, however, that to the extent such dividend
rights are provided with respect to Restricted Stock that vests or is earned based upon the achievement of performance goals, dividends
shall not be paid currently, but shall, instead, be paid (or, to the extent deemed reinvested into additional Shares of Restricted
Stock, vest) only to the extent (and when) such Restricted Stock vests. The Award Agreement may provide that dividends are payable
in cash or deemed reinvested in additional Shares of Restricted Stock at a price per Share equal to the Fair Market Value of a
Share on the date that such dividend is paid. All distributions, if any, received by a Grantee with respect to Restricted Stock
as a result of any stock split, extraordinary dividend, share dividend, combination of shares, or other similar transaction shall
be subject to the restrictions applicable to the original Grant. Absent advance written consent by the Committee, holders of Restricted
Stock may not make an election under Code Section 83(b) with regard to the grant of Restricted Stock, and any holder who attempts
to make such an election without first obtaining such consent shall forfeit the Restricted Stock.

 

10.5         Rights
of Holders of Stock Units.

 

10.5.1           Voting
and Dividend Equivalent Rights.

 

Holders of Stock Units shall have no rights
as stockholders of the Company (for example, the right to receive cash or dividend payments or distributions attributable to the
Shares subject to such Stock Units, to direct the voting of the Shares subject to such Stock Units, or to receive notice of any
meeting of the Company’s stockholders); provided, however, that the Committee may provide in an Award Agreement evidencing
a grant of Stock Units that the holder of such Stock Units shall be entitled to receive Dividend Equivalent Rights.

 

10.5.2           Creditor’s
Rights.

 

A holder of Stock Units shall have no rights
other than those of a general creditor of the Company. Stock Units represent an unfunded and unsecured obligation of the Company,
subject to the terms and conditions of the applicable Award Agreement.

 

    	 	18	 

     

    

 

10.6         Termination
of Service.

 

Unless the Committee otherwise provides in an
Award Agreement or in writing after the Award Agreement is issued, upon the termination of a Grantee’s Service, any Restricted
Stock or Stock Units held by such Grantee that have not vested, or with respect to which all applicable restrictions and conditions
have not lapsed, shall immediately be deemed forfeited. Upon forfeiture of Restricted Stock or Stock Units, the Grantee shall have
no further rights with respect to such Award, including but not limited to any right to vote Restricted Stock or any right to receive
dividends with respect to Restricted Stock or Stock Units.

 

10.7         Delivery
of Shares.

 

Upon the expiration or termination of any restricted
period and the satisfaction of any other conditions prescribed by the Committee and set forth in the Award Agreement relating to
such Restricted Stock or Stock Units, the restrictions applicable to Restricted Stock or Stock Units settled in Shares shall lapse,
and, unless otherwise provided in the applicable Award Agreement, a book-entry or direct registration or a share certificate evidencing
ownership of such Shares shall, consistent with Section 3.7, be issued, free of all such restrictions, to the Grantee or
the Grantee’s beneficiary or estate, as the case may be. Neither the Grantee, nor the Grantee’s beneficiary or estate,
shall have any further rights with regard to a Stock Unit once the Shares represented by the Stock Unit has been delivered.

 

11.          TERMS
AND CONDITIONS OF UNRESTRICTED STOCK AWARDS AND OTHER EQUITY-BASED AWARDS

 

The Committee may, in its sole discretion, grant
(or sell) an Unrestricted Stock Award to any Grantee pursuant to which such Grantee may receive Shares free of any restrictions
(“Unrestricted Stock”) under the Plan. Unrestricted Stock Awards may be granted or sold to any Grantee as provided
in the immediately preceding sentence in respect of past or, if so provided in the related Award Agreement or a separate agreement,
the promise by the Grantee to perform future Service to the Company or an Affiliate or other valid consideration, or in lieu of,
or in addition to, any cash compensation due to such Grantee. To the extent required by Applicable Law, Grantees will be required
to pay the par value of any Shares received pursuant to an Award; provided, however, that, to the extent permitted by Applicable
Law, par value shall be deemed paid by past Service or, if so provided in the related Award Agreement or a separate agreement,
the promise by the Grantee to perform future Service to the Company or an Affiliate of the Company).

 

The Committee may, in its sole discretion, grant
Awards to Grantees in the form of Other Equity-Based Awards, as deemed by the Committee to be consistent with the purposes of the
Plan. Awards granted pursuant to this Section 11 may be granted with vesting, value and/or payment contingent upon the attainment
of one or more performance goals. The Committee shall determine the terms and conditions of such Awards at the date of grant or
thereafter. Unless the Committee otherwise provides in an Award Agreement or in writing after the Award Agreement is issued,
upon the termination of a Grantee’s Service, any Other Equity-Based Awards held by such Grantee that have not vested, or
with respect to which all applicable restrictions and conditions have not lapsed, shall immediately be deemed forfeited. Upon forfeiture
of Other Equity-Based Awards, the Grantee shall have no further rights with respect to such Award.

 

    	 	19	 

     

    

 

12.          FORM
OF PAYMENT FOR OPTIONS AND RESTRICTED STOCK

 

12.1         General
Rule.

 

Payment of the Option Price for the Shares purchased
pursuant to the exercise of an Option or the Purchase Price for Restricted Stock shall be made in cash or in cash equivalents acceptable
to the Company.

 

12.2         Surrender
of Shares.

 

To the extent the Award Agreement so provides,
payment of the Option Price for Shares purchased pursuant to the exercise of an Option or the Purchase Price for Restricted Stock
may be made all or in part through the tender or attestation to the Company of Shares, which shall be valued, for purposes of determining
the extent to which the Option Price or Purchase Price has been paid thereby, at their Fair Market Value on the date of exercise
or surrender, as applicable.

 

12.3         Cashless
Exercise.

 

With respect to an Option only (and not with
respect to Restricted Stock), to the extent permitted by law and to the extent the Award Agreement so provides, payment of the
Option Price for Shares purchased pursuant to the exercise of an Option may be made all or in part (i) by delivery (on a form acceptable
to the Committee) by the Grantee of an irrevocable direction to a licensed securities broker acceptable to the Company to sell
Shares and to deliver all or part of the sales proceeds to the Company in payment of the Option Price and any withholding taxes
described in Section 19.3, or, (ii) with the consent of the Company, by the Grantee electing to have the Company
issue to Grantee only that the number of Shares equal in value to the difference between the Option Price and the Fair Market Value
of the Shares subject to the portion of the Option being exercised.

 

12.4         Other
Forms of Payment.

 

To the extent the Award Agreement so provides
and/or unless otherwise specified in an Award Agreement, payment of the Option Price for Shares purchased pursuant to exercise
of an Option or the Purchase Price for Restricted Stock may be made in any other form that is consistent with Applicable Laws,
regulations and rules, including, without limitation, net exercise.

 

    	 	20	 

     

    

 

13.          TERMS
AND CONDITIONS OF DIVIDEND EQUIVALENT RIGHTS

 

13.1         Dividend
Equivalent Rights.

 

A Dividend Equivalent Right is an Award entitling
the recipient to receive credits based on cash distributions that would have been paid on the Shares specified in the Dividend
Equivalent Right (or other award to which it relates) if such Shares had been issued to and held by the recipient. A Dividend Equivalent
Right may be granted hereunder to any Grantee, provided that no Dividend Equivalent Rights may be granted in connection with, or
related to, an Award of Options or SARs, and, provided, further, that to the extent such Dividend Equivalent Rights are provided
with respect to an Award that vests or is earned based upon the achievement of performance goals, any dividend equivalent amounts
shall not be paid currently, but shall, instead, be paid (or, to the extent deemed reinvested into additional Shares or Share-based
Awards, issued) only to the extent such Award vest (with the Dividend Equivalent amount paid or issued, as the case may be, at
the same time the cash is paid or Shares are issued at or after vesting of the Award). The terms and conditions of Dividend Equivalent
Rights shall be specified in the Award Agreement. Dividend equivalents credited to the holder of a Dividend Equivalent Right may
be paid in cash or may be deemed to be reinvested in additional Shares or Share-based Awards, which may thereafter accrue additional
dividend equivalents. Any such reinvestment shall be based on the Fair Market Value of a Share on the date the dividend was paid.

 

13.2         Termination
of Service.

 

Except as may otherwise be provided by the Committee
either in the Award Agreement or in writing after the Award Agreement is issued, a Grantee’s rights in all Dividend Equivalent
Rights or interest equivalents shall automatically terminate upon the Grantee’s termination of Service for any reason.

 

14.          TERMS
AND CONDITIONS OF PERFORMANCE AWARDS AND ANNUAL INCENTIVE AWARDS

 

14.1         Grant
of Performance Awards and Annual Incentive Awards.

 

Subject to the terms and provisions of the Plan,
the Committee, at any time and from time to time, may grant Performance Awards and/or Annual Incentive Awards to a Plan participant
in such amounts and upon such terms as the Committee shall determine.

 

14.2         Value
of Performance Awards and Annual Incentive Awards.

 

Each Performance Award and Annual Incentive
Award shall have an initial value that is established by the Committee at the time of grant. The Committee shall set performance
goals in its discretion which, depending on the extent to which they are met, will determine the value and/or number of Performance
Awards that will be paid out to the Plan participant.

 

14.3         Earning
of Performance Awards and Annual Incentive Awards.

 

Subject to the terms of the Plan, after the
applicable Performance Period has ended, the holder of Performance Awards or Annual Incentive Awards shall be entitled to receive
payout on the value and number of the Performance Awards or Annual Incentive Awards earned by the Plan participant over the Performance
Period, to be determined as a function of the extent to which the corresponding performance goals have been achieved.

 

    	 	21	 

     

    

 

14.4         Form
and Timing of Payment of Performance Awards and Annual Incentive Awards.

 

Payment of earned Performance Awards and Annual
Incentive Awards shall be as determined by the Committee and as evidenced in the Award Agreement. Subject to the terms of the Plan,
the Committee, in its sole discretion, may pay earned Performance Awards in the form of cash or in Shares (or in a combination
thereof) equal to the value of the earned Performance Awards at the close of the applicable Performance Period, or as soon as practicable
after the end of the Performance Period; provided that, unless specifically provided in the Award Agreement pertaining to the grant
of the Award, such payment shall occur no later than the 15th day of the third month following the end of the calendar year in
which the Performance Period ends. Any Shares may be granted subject to any restrictions deemed appropriate by the Committee. The
determination of the Committee with respect to the form of payout of such Awards shall be set forth in the Award Agreement pertaining
to the grant of the Award.

 

14.5         Performance
Conditions.

 

The right of a Grantee to exercise or receive
a grant or settlement of any Award, and the timing thereof, may be subject to such performance conditions as may be specified by
the Committee. The Committee may use such business criteria and other measures of performance as it may deem appropriate in establishing
any performance conditions.

 

14.6         Performance
Awards or Annual Incentive Awards Granted to Designated Covered Employees.

 

If and to the extent that the Committee determines
that a Performance or Annual Incentive Award to be granted to a Grantee who is designated by the Committee as likely to be a Covered
Employee should qualify as “qualified performance-based compensation” for purposes of Code Section 162(m), the grant,
exercise and/or settlement of such Award shall be contingent upon achievement of pre-established performance goals and other terms
set forth in this Section 14.6.

 

14.6.1           Performance
Goals Generally.

 

The performance goals for Performance or Annual
Incentive Awards shall consist of one or more business criteria and a targeted level or levels of performance with respect to each
of such criteria, as specified by the Committee consistent with this Section 14.6. Performance goals applicable to Awards
intended to qualify as Performance-Based Compensation shall be objective and shall otherwise meet the requirements of Code Section
162(m) and regulations thereunder including the requirement that the level or levels of performance targeted by the Committee result
in the achievement of performance goals being “substantially uncertain.” The Committee may determine that such Awards
shall be granted, exercised and/or settled upon achievement of any one performance goal or that two or more of the performance
goals must be achieved as a condition to the grant, exercise and/or settlement of such Awards. Performance goals may differ for
Awards granted to any one Grantee or to different Grantees.

 

    	 	22	 

     

    

 

14.6.2           Timing
For Establishing Performance Goals.

 

Performance goals applicable to Awards intended
to qualify as Performance-Based Compensation shall be established not later than the earlier of (i) 90 days after the beginning
of any performance period applicable to such Awards and (ii) the day on which twenty-five percent (25%) of any performance period
applicable to such Awards has expired, or at such other date as may be required or permitted for “qualified performance-based
compensation” under Code Section 162(m).

 

14.6.3           Settlement
of Awards; Other Terms.

 

Settlement of such Awards shall be in cash,
Shares, other Awards or other property, in the discretion of the Committee. The Committee may, in its discretion, reduce the amount
of a settlement otherwise to be made in connection with such Awards. The Committee shall specify the circumstances in which such
Performance or Annual Incentive Awards shall be paid or forfeited in the event of termination of Service by the Grantee prior to
the end of a performance period or settlement of Awards.

 

14.6.4           Performance
Measures. 

 

The performance goals upon which the payment
or vesting of a Performance or Annual Incentive Award to a Covered Employee that is intended to qualify as Performance-Based Compensation
shall be limited to the following Performance Measures, with or without adjustment:

 

(a)          funds
from operations;

 

(b)          adjusted
funds from operations;

 

(c)          earnings
before any one or more of the following: interest, taxes, depreciation, amortization and/or stock compensation;

 

(d)          operating
(or gross) income or profit;

 

(e)          pretax
income before allocation of corporate overhead and/or bonus;

 

(f)          operating
efficiencies;

 

(g)          operating
income as a percentage of net revenue;

 

(h)          return
on equity, assets, capital, capital employed or investment;

 

(i)          after
tax operating income;

 

(j)          net
income;

 

(k)          earnings
or book value per share;

 

    	 	23	 

     

    

 

(l)          financial
ratios;

 

(m)          cash
flow(s);

 

(n)          total
rental income or revenues;

 

(o)          capital
expenditures as a percentage of rental income;

 

(p)          total
operating expenses, or some component or combination of components of total operating expenses, as a percentage of rental income;

 

(q)          stock
price or total stockholder return, including any comparisons with stock market indices;

 

(r)          appreciation
in or maintenance of the price of the common stock or any of our publicly-traded securities;

 

(s)          dividends;

 

(t)          debt
or cost reduction;

 

(u)          comparisons
with performance metrics of peer companies;

 

(v)         comparisons
of our stock price performance to the stock price performance of peer companies;

 

(w)          strategic
business objectives, consisting of one or more objectives based on meeting specified cost, acquisition or loan origination targets,
meeting or reducing budgeted expenditures, attaining division, group or corporate financial goals, meeting business expansion goals
and meeting goals relating to loan origination, acquisitions, joint ventures or collaborations or dispositions;

 

(x)          economic
value-added models;

 

(y)          loan
portfolio performance measures; or

 

(z)          any
combination of any of the foregoing.

 

Business criteria may be (but are not required
to be) measured on a basis consistent with U.S. Generally Accepted Accounting Principles.

 

Any Performance Measure(s) may be expressed
on an absolute and/or relative basis, may be based on or otherwise employ comparisons based on internal targets, the performance
of the Company, Subsidiary, and/or Affiliate or past performance or the past performance of any of the Company, Subsidiary, and/or
Affiliate, operating units, business segments or divisions and/or the past or current performance of other companies, and in the
case of earnings based measures, may use or employ comparisons relating to capital, stockholders’ equity and/or shares outstanding,
or to assets or net assets, as the Committee may deem appropriate. The Committee also has the authority to provide for accelerated
vesting of any Award based on the achievement of performance goals pursuant to the Performance Measures specified in this Section
14.

 

    	 	24	 

     

    

 

14.6.5           Evaluation
of Performance.

 

The Committee may provide in any such Award
that any evaluation of performance may include or exclude any of the following events that occur during a Performance Period: (a)
asset impairments or write-downs; (b) litigation or claim judgments or settlements; (c) the effect of changes in tax laws, accounting
principles, or other laws or provisions affecting reported results; (d) accruals for reorganization and restructuring programs;
(e) any item that is either unusual or infrequent in nature, as determined in accordance with Accounting Standards Codification
Topic 225-20 “Extraordinary and Unusual Items,” and/or as described in “Management’s Discussion and Analysis
of Financial Condition and Results of Operations” appearing in the Company’s annual report to stockholders for the
applicable year; (f) foreign exchange gains and losses, (g) the effect of adverse federal, governmental or regulatory action, or
delays in federal, governmental or regulatory action; and (h) any other event either not directly related to operations or not
within the reasonable control of management. To the extent such inclusions or exclusions affect Awards to Covered Employees that
are intended to qualify as Performance-Based Compensation, they shall be prescribed in a form that meets the requirements of Code
Section 162(m) for deductibility.

 

14.6.6           Adjustment
of Performance-Based Compensation.

 

Awards that are intended to qualify as Performance-Based
Compensation may not be adjusted upward. The Committee shall retain the discretion to adjust such Awards downward, either on a
formula or discretionary basis, or any combination as the Committee determines.

 

14.6.7           Board
Discretion.

 

In the event that applicable tax and/or securities
laws change to permit Board discretion to alter the governing Performance Measures without obtaining stockholder approval of such
changes, the Committee shall have sole discretion to make such changes without obtaining stockholder approval provided the exercise
of such discretion does not violate Code Sections 162(m) or 409A. In addition, in the event that the Committee determines that
it is advisable to grant Awards that shall not qualify as Performance-Based Compensation, the Committee may make such grants without
satisfying the requirements of Code Section 162(m) and base vesting on Performance Measures other than those set forth in Section
14.6.4.

 

14.7         Status
of Awards Under Code Section 162(m).

 

It is the intent of the Company that Awards
under Section 14.6 granted to persons who are designated by the Committee as likely to be Covered Employees within the meaning
of Code Section 162(m) and regulations thereunder shall, if so designated by the Committee, constitute “qualified performance-based
compensation” within the meaning of Code Section 162(m) and regulations thereunder. Accordingly, the terms of Section
14.6, including the definitions of Covered Employee and other terms used therein, shall be interpreted in a manner consistent
with Code Section 162(m) and regulations thereunder. If any provision of the Plan or any agreement relating to such Awards does
not comply or is inconsistent with the requirements of Code Section 162(m) or regulations thereunder, such provision shall be construed
or deemed amended to the extent necessary to conform to such requirements.

 

    	 	25	 

     

    

 

15.          TERMS
AND CONDITIONS OF LONG-TERM INCENTIVE UNITS

 

LTIP Units are intended to be profits interests
in the operating partnership affiliated with the Company, if any (such operating partnership, if any, the “Operating
Partnership”), the rights and features of which, if applicable, will be set forth in the agreement of limited partnership
for the Operating Partnership (the “Operating Partnership Agreement”). Subject to the terms and provisions of the Plan
and the Operating Partnership Agreement, the Committee, at any time and from time to time, may grant LTIP Units to Plan participants
in such amounts and upon such terms as the Committee shall determine. LTIP Units must be granted for service to the Operating Partnership.
Each LTIP Unit awarded will be equivalent to an award of one Share for purposes of reducing the number of Shares available under
the Plan on a one-for-one basis pursuant to Section 4.3.

 

15.1         Vesting.

 

Subject to Section 18, each LTIP Unit
granted under the Plan shall vest at such times and under such conditions as shall be determined by the Committee and stated in
the Award Agreement.

 

16.          PARACHUTE
LIMITATIONS

 

Unless the Grantee is party to a written agreement
or other legally enforceable contract that expressly addresses Code Section 280G or Code Section 4999 (in which case, the provisions
in such agreement or contract relating to Code Section 280G and Code Section 4999 shall control and the provisions in this Section
16 shall not be applicable to the Grantee), if the Grantee is a “disqualified individual,” as defined in Code Section
280G(c), then, notwithstanding any other provision of the Plan or of any other agreement, contract, or understanding heretofore
or hereafter entered into by a Grantee with the Company or an Affiliate (an “Other Agreement”) providing any right
to exercise, vesting, payment or benefit, and notwithstanding any formal or informal plan or other arrangement for the direct or
indirect provision of compensation to the Grantee (including groups or classes of Grantees or beneficiaries of which the Grantee
is a member), whether or not such compensation is deferred, is in cash, or is in the form of a benefit to or for the Grantee (a
“Benefit Arrangement”), any right to exercise, vesting, payment or benefit to the Grantee under the Plan shall be reduced
or eliminated:

 

(i)          to
the extent that such right to exercise, vesting, payment, or benefit, taking into account all other rights, payments, or benefits
to or for the Grantee under the Plan, all Other Agreements, and all Benefit Arrangements, would cause any exercise, vesting, payment
or benefit to the Grantee under the Plan to be considered a “parachute payment” within the meaning of Code Section
280G(b)(2) as then in effect (a “Parachute Payment”) and

 

(ii)         if,
as a result of receiving such Parachute Payment, the aggregate after-tax amounts received by the Grantee from the Company under
the Plan, all Other Agreements, and all Benefit Arrangements would be less than the maximum after-tax amount that could be received
by the Grantee without causing any such payment or benefit to be considered a Parachute Payment.

 

    	 	26	 

     

    

 

The Company shall accomplish such reduction
by first reducing or eliminating any cash payments (with the payments to be made furthest in the future being reduced first), then
by reducing or eliminating any accelerated vesting of Performance Awards, then by reducing or eliminating any accelerated vesting
of Options or SARs, then by reducing or eliminating any accelerated vesting of Restricted Stock or Stock Units, then by reducing
or eliminating any other remaining Parachute Payments.

 

17.          REQUIREMENTS
OF LAW

 

17.1         General.

 

No participant in the Plan will be permitted
to acquire, or will have any right to acquire, Shares thereunder if such acquisition would be prohibited by any share ownership
limits contained in charter or bylaws or would impair the Company’s status as a REIT. The Company shall not be required to
offer, sell or issue any Shares under any Award if the offer, sale or issuance of such Shares would constitute a violation by the
Grantee, any other individual or entity exercising an Option, or the Company or an Affiliate of any provision of any law or regulation
of any governmental authority, including without limitation any federal or state securities laws or regulations. If at any time
the Company shall determine, in its discretion, that the offering, listing, registration or qualification of any Shares subject
to an Award upon any securities exchange or under any governmental regulatory body is necessary or desirable as a condition of,
or in connection with, the issuance or purchase of Shares hereunder, no Shares may be offered, issued or sold to the Grantee or
any other individual or entity exercising an Option pursuant to such Award unless such offering, listing, registration, qualification,
consent or approval shall have been effected or obtained free of any conditions not acceptable to the Company, and any delay caused
thereby shall in no way affect the date of termination of the Award. Without limiting the generality of the foregoing, in connection
with the Securities Act, upon the exercise of any Option or any SAR that may be settled in Shares or the delivery of any Shares
underlying an Award, unless a registration statement under such Act is in effect with respect to the Shares covered by such Award,
the Company shall not be required to offer, sell or issue such Shares unless the Committee has received evidence satisfactory to
it that the Grantee or any other individual or entity exercising an Option or SAR or accepting delivery of such Shares may acquire
such Shares pursuant to an exemption from registration under the Securities Act. Any determination in this connection by the Committee
shall be final, binding, and conclusive. The Company may, but shall in no event be obligated to, register any securities covered
hereby pursuant to the Securities Act. The Company shall not be obligated to take any affirmative action in order to cause the
exercise of an Option or a SAR or the issuance of Shares pursuant to the Plan to comply with any Applicable Laws. As to any jurisdiction
that expressly imposes the requirement that an Option (or SAR that may be settled in Shares) shall not be exercisable until the
Shares covered by such Option (or SAR) are registered under the securities laws thereof or are exempt from such registration, the
exercise of such Option (or SAR) under circumstances in which the laws of such jurisdiction apply shall be deemed conditioned upon
the effectiveness of such registration or the availability of such an exemption.

 

    	 	27	 

     

    

 

17.2         Rule
16b-3.

 

During any time when the Company has a class
of equity security registered under Section 12 of the Exchange Act, it is the intent of the Company that Awards pursuant to the
Plan and the exercise of Options and SARs granted hereunder that would otherwise be subject to Section 16(b) of the Exchange Act
will qualify for the exemption provided by Rule 16b-3 under the Exchange Act. To the extent that any provision of the Plan or action
by the Committee does not comply with the requirements of Rule 16b-3, it shall be deemed inoperative with respect to such Awards
to the extent permitted by Applicable Law and deemed advisable by the Committee, and shall not affect the validity of the Plan.
In the event that Rule 16b-3 is revised or replaced, the Board may exercise its discretion to modify the Plan in any respect necessary
to satisfy the requirements of, or to take advantage of any features of, the revised exemption or its replacement.

 

18.          EFFECT
OF CHANGES IN CAPITALIZATION

 

18.1         Changes
in Shares.

 

If the number of outstanding Shares is increased
or decreased or the Shares are changed into or exchanged for a different number or kind of Shares or other securities of the Company
on account of any recapitalization, reclassification, stock split, reverse stock split, spin-off, combination of share, exchange
of shares, share dividend or other distribution payable in capital shares, or other increase or decrease in such shares effected
without receipt of consideration by the Company occurring after the Effective Date, the number and kinds of shares for which grants
of Options and other Awards may be made under the Plan, including, without limitation, the limits set forth in Section 6.2,
shall be adjusted proportionately and accordingly by the Company in a manner deemed equitable by the Committee. In addition, the
number and kind of shares for which Awards are outstanding shall be adjusted proportionately and accordingly so that the proportionate
interest of the Grantee immediately following such event shall, to the extent practicable, be the same as immediately before such
event. Any such adjustment in outstanding Options or SARs shall not change the aggregate Option Price or SAR Exercise Price payable
with respect to shares that are subject to the unexercised portion of an outstanding Option or SAR, as applicable, but shall include
a corresponding proportionate adjustment in the Option Price or SAR Exercise Price per share. The conversion of any convertible
securities of the Company shall not be treated as an increase in shares effected without receipt of consideration. Notwithstanding
the foregoing, in the event of any distribution to the Company’s stockholders of securities of any other entity or other
assets (including an extraordinary dividend but excluding a non-extraordinary dividend of the Company) without receipt of consideration
by the Company, the Company shall, in such manner as the Company deems appropriate, adjust (i) the number and kind of shares subject
to outstanding Awards and/or (ii) the exercise price of outstanding Options and Stock Appreciation Rights to reflect such distribution.

 

    	 	28	 

     

    

 

18.2         Reorganization
in Which the Company Is the Surviving Entity Which Does not Constitute a Change in Control.

 

Subject to Section 18.3, if the Company
shall be the surviving entity in any reorganization, merger, or consolidation of the Company with one or more other entities which
does not constitute a Change in Control, any Option or SAR theretofore granted pursuant to the Plan shall pertain to and apply
to the securities to which a holder of the number of Shares subject to such Option or SAR would have been entitled immediately
following such reorganization, merger, or consolidation, with a corresponding proportionate adjustment of the Option Price or SAR
Exercise Price per share so that the aggregate Option Price or SAR Exercise Price thereafter shall be the same as the aggregate
Option Price or SAR Exercise Price of the Shares remaining subject to the Option or SAR immediately prior to such reorganization,
merger, or consolidation. Subject to any contrary language in an Award Agreement evidencing an Award, or in another agreement with
the Grantee, or otherwise set forth in writing, any restrictions applicable to such Award shall apply as well to any replacement
shares received by the Grantee as a result of the reorganization, merger or consolidation. In the event of a transaction described
in this Section 18.2, Performance Awards shall be adjusted (including any adjustment to the Performance Measures applicable
to such Awards deemed appropriate by the Committee) so as to apply to the securities that a holder of the number of Shares subject
to the Performance Awards would have been entitled to receive immediately following such transaction.

 

18.3         Change
in Control in which Awards are not Assumed.

 

Except as otherwise provided in the applicable
Award Agreement or in another agreement with the Grantee, or as otherwise set forth in writing, upon the occurrence of a Change
in Control in which outstanding Options, SARs, Stock Units, Dividend Equivalent Rights, Restricted Stock, LTIP Units or other Equity-Based
Awards are not being assumed or continued:

 

(i)          in
each case with the exception of any Performance Award, all outstanding Restricted Stock and LTIP Units shall be deemed to have
vested, all Stock Units shall be deemed to have vested and the Shares subject thereto shall be delivered, and all Dividend Equivalent
Rights shall be deemed to have vested and the Shares subject thereto shall be delivered, immediately prior to the occurrence of
such Change in Control, and

 

(ii)         either
of the following two actions shall be taken:

 

(A)         fifteen
(15) days prior to the scheduled consummation of a Change in Control, all Options and SARs outstanding hereunder shall become immediately
exercisable and shall remain exercisable for a period of fifteen (15) days, or

 

(B)         the
Committee may elect, in its sole discretion, to cancel any outstanding Awards of Options, Restricted Stock, Stock Units, and/or
SARs and pay or deliver, or cause to be paid or delivered, to the holder thereof an amount in cash or securities having a value
(as determined by the Committee acting in good faith), in the case of Restricted Stock or Stock Units, equal to the formula or
fixed price per share paid to holders of Shares and, in the case of Options or SARs, equal to the product of the number of Shares
subject to the Option or SAR (the “Award Shares”) multiplied by the amount, if any, by which (I) the formula or fixed
price per share paid to holders of Shares pursuant to such transaction exceeds (II) the Option Price or SAR Exercise Price applicable
to such Award Shares.

 

    	 	29	 

     

    

 

(iii)        for
Performance Awards denominated in Shares, Stock Units or LTIP Units, if less than half of the Performance Period has lapsed, the
Awards shall be converted into Restricted Stock or Stock Units assuming target performance has been achieved (or Unrestricted Stock
if no further restrictions apply). If more than half the Performance Period has lapsed, the Awards shall be converted into Restricted
Stock or Stock Units based on actual performance to date (or Unrestricted Stock if no further restrictions apply). If actual performance
is not determinable, then Performance Awards shall be converted into Restricted Stock or Stock Units assuming target performance
has been achieved, based on the discretion of the Committee (or Unrestricted Stock if no further restrictions apply).

 

(iv)        Other
Equity Based Awards shall be governed by the terms of the applicable Award Agreement.

 

With respect to the Company’s establishment
of an exercise window, (i) any exercise of an Option or SAR during such fifteen (15)-day period shall be conditioned upon the consummation
of the event and shall be effective only immediately before the consummation of the event, and (ii) upon consummation of any Change
in Control, the Plan and all outstanding but unexercised Options and SARs shall terminate. The Committee shall send notice of an
event that will result in such a termination to all individuals and entities that hold Options and SARs not later than the time
at which the Company gives notice thereof to its stockholders.

 

18.4         Change
in Control in which Awards are Assumed.

 

Except as otherwise provided in the applicable
Award Agreement or in another agreement with the Grantee, or as otherwise set forth in writing, upon the occurrence of a Change
in Control in which outstanding Awards are being assumed or continued, the following provisions shall apply to such Award, to the
extent assumed or continued:

 

The Plan, Options, SARs, Stock Units, Restricted
Stock and Other Equity-Based Awards theretofore granted shall continue in the manner and under the terms so provided in the event
of any Change in Control to the extent that provision is made in writing in connection with such Change in Control for the assumption
or continuation of the Options, SARs, Stock Units, Restricted Stock and Other Equity-Based Awards theretofore granted, or for the
substitution for such Options, SARs, Stock Units, Restricted Stock and Other Equity-Based Awards for new common stock options and
stock appreciation rights and new common stock units, restricted stock and other equity-based awards relating to the stock of a
successor entity, or a parent or subsidiary thereof, with appropriate adjustments as to the number of shares (disregarding any
consideration that is not common stock) and option and stock appreciation rights exercise prices.

 

18.5         Adjustments

 

Adjustments under this Section 18 related
to Shares or securities of the Company shall be made by the Committee, whose determination in that respect shall be final, binding
and conclusive. No fractional shares or other securities shall be issued pursuant to any such adjustment, and any fractions resulting
from any such adjustment shall be eliminated in each case by rounding downward to the nearest whole share. The Committee shall
determine the effect of a Change in Control upon Awards other than Options, SARs, Stock Units and Restricted Stock, and such effect
shall be set forth in the appropriate Award Agreement. The Committee may provide in the Award Agreements at the time of grant,
or any time thereafter with the consent of the Grantee, for different provisions to apply to an Award in place of those described
in Sections 18.1, 18.2, 18.3 and 18.4. This Section 18 does not limit the Company’s ability to
provide for alternative treatment of Awards outstanding under the Plan in the event of change in control events that do not constitute
a Change in Control.

 

    	 	30	 

     

    

 

18.6         No
Limitations on Company.

 

The making of Awards pursuant to the Plan shall
not affect or limit in any way the right or power of the Company to make adjustments, reclassifications, reorganizations, or changes
of its capital or business structure or to merge, consolidate, dissolve, or liquidate, or to sell or transfer all or any part of
its business or assets (including all or any part of the business or assets of any Subsidiary or other Affiliate) or engage in
any other transaction or activity.

 

19.          GENERAL
PROVISIONS

 

19.1         Disclaimer
of Rights.

 

No provision in the Plan or in any Award or
Award Agreement shall be construed to confer upon any individual or entity the right to remain in the employ or Service of the
Company or an Affiliate, or to interfere in any way with any contractual or other right or authority of the Company or an Affiliate
either to increase or decrease the compensation or other payments to any individual or entity at any time, or to terminate any
employment or other relationship between any individual or entity and the Company or an Affiliate. In addition, notwithstanding
anything contained in the Plan to the contrary, unless otherwise stated in the applicable Award Agreement, in another agreement
with the Grantee, or otherwise in writing, no Award granted under the Plan shall be affected by any change of duties or position
of the Grantee, so long as such Grantee continues to provide Service. The obligation of the Company to pay any benefits pursuant
to the Plan shall be interpreted as a contractual obligation to pay only those amounts described herein, in the manner and under
the conditions prescribed herein. The Plan and Awards shall in no way be interpreted to require the Company to transfer any amounts
to a third party trustee or otherwise hold any amounts in trust or escrow for payment to any Grantee or beneficiary under the terms
of the Plan.

 

19.2         Nonexclusivity
of the Plan.

 

Neither the adoption of the Plan nor the submission
of the Plan to the stockholders of the Company for approval shall be construed as creating any limitations upon the right and authority
of the Company to adopt such other incentive compensation arrangements (which arrangements may be applicable either generally to
a class or classes of individuals or specifically to a particular individual or particular individuals) as it may determine to
be desirable.

 

    	 	31	 

     

    

 

19.3         Withholding
Taxes.

 

The Company or an Affiliate, as the case may
be, shall have the right to deduct from payments of any kind otherwise due to a Grantee any federal, state, or local taxes of any
kind required by law to be withheld with respect to the vesting of or other lapse of restrictions applicable to an Award or upon
the issuance of any Shares upon the exercise of an Option or pursuant to an Award. At the time of such vesting, lapse, or exercise,
the Grantee shall pay in cash to the Company or an Affiliate, as the case may be, any amount that the Company or an Affiliate may
reasonably determine to be necessary to satisfy such withholding obligation; provided, that if there is a same-day sale of Shares
subject to an Award, the Grantee shall pay such withholding obligation on the day on which such same-day sale is completed. Subject
to the prior approval of the Company or an Affiliate, which may be withheld by the Company or an Affiliate, as the case may be,
in its sole discretion, the Grantee may elect to satisfy such obligations, in whole or in part, (i) by causing the Company or an
Affiliate to withhold Shares otherwise issuable to the Grantee or (ii) by delivering to the Company or an Affiliate Shares already
owned by the Grantee. The Shares so delivered or withheld shall have an aggregate Fair Market Value equal to such withholding obligations.
The Fair Market Value of the Shares used to satisfy such withholding obligation shall be determined by the Company or an Affiliate
as of the date that the amount of tax to be withheld is to be determined. A Grantee who has made an election pursuant to this Section
19.3 may satisfy his or her withholding obligation only with Shares that are not subject to any repurchase, forfeiture, unfulfilled
vesting, or other similar requirements. The maximum number of Shares that may be withheld from any Award to satisfy any federal,
state or local tax withholding requirements upon the exercise, vesting, lapse of restrictions applicable to such Award or payment
of Shares pursuant to such Award, as applicable, cannot exceed such number of Shares having a Fair Market Value equal to the maximum
statutory amount required by the Company or an Affiliate to be withheld and paid to any such federal, state or local taxing authority
with respect to such exercise, vesting, lapse of restrictions or payment of Shares, or such lesser amount as the Company may specify
or as may be necessary to avoid adverse accounting treatment. Notwithstanding Section 2.20 or this Section 19.3,
for purposes of determining taxable income and the amount of the related tax withholding obligation pursuant to this Section
19.3, for any Shares subject to an Award that are sold by or on behalf of a Grantee on the same date on which such shares may
first be sold pursuant to the terms of the related Award Agreement, the Fair Market Value of such shares shall be the sale price
of such shares on such date (or if sales of such shares are effectuated at more than one sale price, the weighted average sale
price of such shares on such date), so long as such Grantee has provided the Company or an Affiliate, or its designee or agent,
with advance written notice of such sale.

 

19.4         Captions.

 

The use of captions in the Plan or any Award
Agreement is for the convenience of reference only and shall not affect the meaning of any provision of the Plan or such Award
Agreement.

 

19.5         Other
Provisions.

 

Each Award granted under the Plan may contain
such other terms and conditions not inconsistent with the Plan as may be determined by the Committee, in its sole discretion.

 

    	 	32	 

     

    

 

19.6         Number
and Gender.

 

With respect to words used in the Plan, the
singular form shall include the plural form, the masculine gender shall include the feminine gender, etc., as the context requires.

 

19.7         Severability.

 

If any provision of the Plan or any Award Agreement
shall be determined to be illegal or unenforceable by any court of law in any jurisdiction, the remaining provisions hereof and
thereof shall be severable and enforceable in accordance with their terms, and all provisions shall remain enforceable in any other
jurisdiction.

 

19.8         Governing
Law.

 

The validity and construction of the Plan and
the instruments evidencing the Awards hereunder shall be governed by, and construed and interpreted in accordance with, the laws
of the State of Maryland, other than any conflicts or choice of law rule or principle that might otherwise refer construction or
interpretation of the Plan and the instruments evidencing the Awards granted hereunder to the substantive laws of any other jurisdiction.

 

19.9         Code
Section 409A.

 

The Company intends to comply with Code Section
409A, or an exemption to Code Section 409A, with regard to Awards hereunder that constitute deferred compensation within the meaning
of Code Section 409A, and the Plan and all Award Agreements shall be interpreted accordingly. To the extent that the Company determines
that a Grantee would be subject to the additional twenty percent (20%) tax imposed on certain nonqualified deferred compensation
plans pursuant to Code Section 409A as a result of any provision of any Award granted under the Plan, such provision shall be deemed
amended to the minimum extent necessary to avoid application of such additional tax. The nature of any such amendment shall be
determined by the Board. Notwithstanding anything to the contrary in this Plan or any Award Agreement, if a Grantee is deemed on
the date of the Grantee’s termination of employment to be a “specified employee” within the meaning of Code Section
409A(a)(2)(B), then, to the extent required by Code Section 409A, any payment or the provision of any benefit pursuant to an Award
that is considered deferred compensation under Code Section 409A and that is payable on account of such Grantee’s “separation
from service” shall not be made or provided until the date which is the earlier of (i) the expiration of the six (6)-month
period measured from the date of such “separation from service,” and (ii) the date of the Grantee’s death. Upon
the expiration of the foregoing delay period, all payments and benefits delayed pursuant to this Section 19.9 (whether they
would have otherwise been payable in a single sum or in installments in the absence of such delay) shall be paid or reimbursed
to the Grantee in a lump sum, and any remaining payments and benefits due under this this Plan and any Award Agreement shall be
paid or provided in accordance with the normal payment dates specified for them therein.

 

* * *

 

    	 	33Exhibit

LONG-TERM PERFORMANCE AWARD AGREEMENT
Payable in Cash 
(Under the Kaman Corporation
2013 Management Incentive Plan)

THIS LONG-TERM PERFORMANCE AWARD AGREEMENT (this “Agreement”), is made and entered into as of the ____ day of _____, 20__, by and between KAMAN CORPORATION, a Connecticut corporation with its principal office in Bloomfield, Connecticut (the “Company”), and ________________________ (the “Participant”);
Recitals:
A.    The Participant has been designated a Covered Employee under the Kaman Corporation 2013 Management Incentive Plan (the “Plan”), and the Committee wishes to grant the Participant a Performance-Based Award under Section 14 of the Plan (such Performance-Based Award being sometimes hereinafter referred to as the “Long-Term Performance Award”).  
B.    The Committee intends the Long-Term Performance Award to be qualified “performance-based compensation,” meeting the requirements of Section 162(m) of the Code.
C.    All capitalized terms used but not otherwise defined in this Agreement shall have the meanings ascribed to them in the Plan, except as provided in Section 10.
NOW, THEREFORE, in consideration of the premises, and of the mutual covenants and agreements herein contained, the parties hereto hereby agree as follows:
1.Long-Term Performance Award.

(a)Subject to the terms and conditions of this Agreement, the Participant is hereby awarded a Performance-Based Award under Section 14 of the Plan, which shall entitle the Participant to a payment in cash to the extent that the Company attains the specified Performance Goal established by the Committee on the terms and conditions set forth below.  The Performance Goal and the Performance Cycle to which the Performance Goal relates are set forth in Exhibit A to this Agreement, which is hereby incorporated herein by reference.  The Long-Term Performance Award is subject to forfeiture as more particularly described in Section 2 of this Agreement.

(b)In order for the Participant to be eligible to receive the payment which the Participant may otherwise earn pursuant to the Long-Term Performance Award, the Participant must execute and deliver a copy of this Agreement to the President of the Company at its offices in Bloomfield, Connecticut, within sixty (60) days of the date on which the Participant receives this Agreement.  The Participant must execute the signature page of this Agreement and a copy of Exhibit A to this Agreement.  In the event that this Agreement is executed by the Company and the Participant prior to the completion of Exhibit A, the Company shall complete Exhibit A within a reasonable time.  The Participant shall not be entitled to any payment under this Agreement except in accordance with the Performance Goal and other factors with respect to such payment as shall have been set forth on a copy of Exhibit A that shall have been executed by both the Company and the Participant and attached to this Agreement.  Except as provided under Section 2(b) (in the case of death or Disability) or Section 6 (in the case of a Change in Control), no amounts shall be paid 

under this Agreement except to the extent that the Performance Goal set forth in Exhibit A has been achieved.

2.Vesting, Termination and Forfeiture.

(a)Except as otherwise provided in this Section 2 and Section 6 below, a Participant must be employed with the Company on the last day of the Performance Cycle in order to have a vested right to receive payment of earned amounts based on the Company’s attainment of the Performance Goal specified in Exhibit A to this Agreement.

(b)If the employment of the Participant terminates during the Performance Cycle relating to the Long-Term Performance Award because of death or Disability, then a pro rata portion of the Long-Term Performance Award shall be deemed fully vested and fully earned by such Participant (or his estate), such portion to be determined by multiplying 100% of Target (as set forth in Exhibit A) by a fraction the numerator of which shall be the number of days from the beginning of the Performance Cycle to the date of such termination and the denominator of which shall be the total number of days during the Performance Cycle.  Such earned portion shall be paid as soon as reasonably practicable following the date of such termination.  

(c)If the employment of the Participant terminates during the Performance Cycle relating to the Long-Term Performance Award because of Retirement, then the Participant shall be deemed to be vested in a pro rata portion of any payment with respect to the Long-Term Performance Award subject to such Performance Cycle, determined by multiplying such payment, calculated as if the Participant's employment or consultancy had not been terminated, by a fraction the numerator of which shall be the number of days from the beginning of the Performance Cycle to the date of such termination and the denominator of which shall be the total number of days during the Performance Cycle.

(d)If the employment of the Participant terminates during the Performance Cycle relating to the Long-Term Performance Award for any reason other than death, Disability or Retirement, then the Participant shall not be entitled to any payment with respect to the Long-Term Performance Award subject to such Performance Cycle, unless the Committee shall otherwise determine in its discretion to waive the continuing employment requirement under Section 2(a) above.
(e)As used in this Agreement, the term “Retirement” means the termination of a Participant’s employment with the Company or a Subsidiary other than for Cause (a) after attaining age 62 with at least five years of employment service or (b) after attaining age 65, the term “Disability” or “Disabled” means permanent and total disability as defined by Code Section 22(e)(3), and the term “Code” means the Internal Revenue Code of 1986, as amended from time to time, and any successor Code, and related rules, regulations and interpretations.

3.Payment.  Except as provided under Section 2(b) (in the case of death or Disability) or Section 6 (in the case of Change in Control), the vested and earned portion of the Long-Term Performance Award shall be paid in cash as soon as practicable after the end of the applicable Performance Cycle, but in no event after the September 30th immediately following such Performance Cycle, provided that the Committee may elect to pay up to one-third (1/3) of such amount in whole Shares or, at the discretion of the Committee, up to the entire amount of such earned portion may be paid in whole Shares to the extent requested by the Participant.  Any such Shares shall be valued at their Fair Market Value at the close of business on the most recent trading 

day preceding the date of such payment and shall be issued in uncertificated form and recorded on the shareholder records maintained by the Transfer Agent and Registrar of the Shares (the “Transfer Agent”).

4.No Employment Rights.  No provision of this Agreement shall:
(a)confer or be deemed to confer upon the Participant any right to continue in the employ of the Company or any Subsidiary or shall in any way affect the right of the Company or any Subsidiary to dismiss or otherwise terminate the Participant’s employment at any time for any reason with or without cause, or

(b)be construed to impose upon the Company or any Subsidiary any liability for any forfeiture of the Long-Term Performance Award which may result under this Agreement if the Participant’s employment is so terminated, or

(c)affect the Company’s right to terminate or modify any contractual relationship with the Participant if the Participant is not an employee of the Company or a Subsidiary.

5.No Liability for Business Acts or Omissions.  The Participant recognizes and agrees that the Board or the officers, agents or employees of the Company in their conduct of the business and affairs of the Company, may cause the Company to act, or to omit to act, in a manner that may, directly or indirectly, affect the amount of or the ability of the Participant to earn the Long-Term Performance Award under this Agreement.  No provision of this Agreement shall be interpreted or construed to impose any liability upon the Company, the Board or any officer, agent or employee of the Company for any effect on the Participant’s entitlement under the Long-Term Performance Award that may result, directly or indirectly, from any such action or omission.

6.Change in Control.  The Long-Term Performance Award shall be settled upon a Change in Control as provided in Section 13 of the Plan provided that the transaction or event triggering a Change in Control constitutes a “change in control event” as defined in Treasury Regulation § 1.409A-3(i)(5) .

7.Committee’s Discretion.  The Committee may exercise its discretion to reduce the amount of an award otherwise payable under this Agreement as permitted under Section 14.5 of the Plan.

8.Changes in Capitalization.

(a)Neither this Agreement nor the issuance of any Shares in payment or partial payment of the Long-Term Performance Award shall affect in any way the right or power of the Company or its shareholders to make or authorize any or 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 Shares or the rights thereof, or the transfer of all or any part of its assets or business, or any other corporate act or proceedings, whether of a similar character or otherwise.
(b)In the event of a recapitalization, stock split, stock dividend, divisive reorganization or other change in capitalization affecting the Shares, an appropriate adjustment will be made in respect of any Shares issued to the Participant in payment of any or all of Participant’s entitlement under the Long-Term Performance Award.

9.Tax Withholding.  The settlement of this Award is conditioned on the Participant making arrangements reasonably satisfactory to the Company for the withholding of all applicable federal, state, local or foreign taxes as may be required under applicable law.

10.Interpretation.  This Agreement shall at all times be interpreted, administered and applied in a manner consistent with the provisions of the Plan.  In the event of any inconsistency between the terms of this Agreement and the terms of the Plan, the terms of the Plan shall control and the Plan is incorporated herein by reference; provided, however, that, in the event of any inconsistency between an employment agreement (an “Employment Agreement”) between the Participant and the Company, its Subsidiaries or Affiliates, the terms of such agreement shall control.  For the avoidance of doubt, any capitalized terms used in either this Agreement or the Plan and an Employment Agreement shall have the meanings set forth in the Employment Agreement.  

11.Amendment; Modification; Waiver.  No provision of this Agreement may be amended, modified or waived unless such amendment, modification or waiver shall be authorized by the Committee and shall be agreed to in writing by the Participant.

12.Complete Agreement.  This Agreement contains the entire Agreement of the parties relating to the subject matter of this Agreement and supersedes any prior agreements or understandings with respect thereto.

13.Agreement Binding.  This Agreement shall be binding upon and inure to the benefit of the Company, its successors and assigns and the Participant, his heirs, devisees and legal representatives.

14.Legal Representative.  In the event of the Participant’s death or a judicial determination of his incompetence, reference in this Agreement to the Participant shall be deemed to refer to his legal representative, heirs or devisees, as the case may be.

15.Business Day.  If any event provided for in this Agreement is scheduled to take place on a day on which the Company’s corporate offices are not open for business, such event shall take place on the next succeeding day on which the Company’s corporate offices are open for business.

16.Titles.  The titles to sections or paragraphs of this Agreement are intended solely for convenience and no provision of this Agreement is to be construed by reference to the title of any section or paragraph.

17.Notices.
(a)Any notice to the Company pursuant to any provision of this Agreement will be deemed to have been delivered when delivered in person to the President or Secretary of the Company, when deposited in the United States mail, addressed to the President or Secretary of the Company, at the Company’s corporate offices, when delivered to the President or Secretary of the Company by electronic mail, or when delivered to such other address as the Company may from time to time designate in writing.

(b)Any notice to the Participant pursuant to any provision of this Agreement will be deemed to have been delivered when delivered to the Participant in person, when deposited in the United States mail, addressed to the Participant at the address on the shareholder records of 

the Company, when delivered to the Participant by electronic mail, or when delivered to such other address as the Participant may from time to time designate in writing.

18.Counterparts.  This Agreement may be executed in counterparts, each of which shall be deemed an original but all of which together will constitute one and the same instrument.  Counterpart signature pages to this Agreement transmitted by facsimile transmission, by electronic mail in portable document format (.pdf), or by any other electronic means intended to preserve the original graphic and pictorial appearance of a document, will have the same effect as physical delivery of the paper document bearing an original signature.

19.Electronic Delivery.  In lieu of receiving documents in paper format, the Participant agrees, to the fullest extent permitted by law, to accept electronic delivery of any documents that the Company may be required to deliver (including, but not limited to, prospectuses, prospectus supplements, grant or award notifications and agreements, account statements, annual and quarterly reports, and all other agreements, forms and communications) in connection with this and any other prior or future incentive award or program made or offered by the Company or its predecessors or successors.  Electronic delivery of a document to the Participant may be via a Company e-mail system or by reference to a location on a Company intranet site to which the Participant has access.

20.Compensation Recovery.  The Company may cancel, forfeit or recoup any rights or benefits of, or payments to, the Participant hereunder, including but not limited to any cash payments made, or Shares issued by, the Company following vesting of the Long-Term Performance Award under this Agreement or the proceeds from the sale of any such Shares, under any future compensation recovery policy that it may establish and maintain from time to time, to meet listing requirements that may be imposed in connection with the Dodd-Frank Wall Street Reform and Consumer Protection Act or otherwise.  The Company shall delay the exercise of its rights under this Section for the period as may be required to preserve equity accounting treatment.

21.Limitation on Excess Parachute Payments.  The settlement of this Award is conditioned on the Participant making arrangements reasonably satisfactory to the Company for the withholding of all applicable federal, state, local or foreign taxes as may be required under applicable law.  The Participant shall bear all expense of, and be solely responsible for, all federal, state, local or foreign taxes due with respect to any payment received under this Agreement.  Notwithstanding any other provision in this Agreement to the contrary, any payment or benefit received or to be received by the Participant in connection with a Change in Control or the termination of employment (whether payable under the terms of this Agreement or any other plan, arrangement or agreement with the Company or one of its Subsidiaries  (collectively, the “Payments”) that would constitute a “parachute payment” within the meaning of Section 280G of the Code, shall be reduced to the extent necessary so that no portion thereof shall be subject to the excise tax imposed by Section 4999 of the Code (the “Excise Tax”), but only if, by reason of such reduction, the net after-tax benefit received by the Participant shall exceed the net after-tax benefit that would be received by the Participant if no such reduction was made.  Whether and how the limitation under this Section 21 is applicable shall be determined under the Section 280G Rules set forth in Exhibit B, which shall be enforceable as if set forth in this Agreement.

22.Section 162(m).  The Committee has granted this Long-Term Performance Award with the intention that it qualifies as a Performance-Based Award under Section 14.1 of the Plan and this Agreement (including the Exhibits) shall be interpreted consistent with this intention.

23.Section 409A.  To the extent required by Section 409A of the Code, all references to “termination of employment” and similar phrases for purposes of this Agreement shall be construed to require a “separation from service” (as defined in Section 1.409A-1(h) of the Treasury regulations after giving effect to the presumptions contained therein).  To the extent that any payment to which the Participant becomes entitled under this Agreement due to termination of employment constitutes “nonqualified deferred compensation” subject to Section 409A of the Code and the Participant is deemed at the time of such termination of  employment to be a “specified employee” under Section 409A of the Code, then such payment shall not be made or commence until the earliest of (A) the expiration of the six (6) month and one day period measured from the date of the Participant’s termination of employment from the Company or, if earlier, the date of the Participant’s death following such termination; provided, however, that such deferral shall only be effected to the extent required to avoid adverse tax treatment to the Participant, including (without limitation) the additional twenty-percent (20% tax for which the Participant would otherwise be liable under Section 409A(a)(1)(b) of the Code in absence of such deferral.  Upon the expiration of the applicable deferral period, any payment that would have otherwise been made during that period in the absence of this Section shall be paid to the Participant or the Participant’s beneficiary in one lump sum.  For purposes of this Section 14, the term “specified employee” means an individual determined by the Company to be a specified employee under Treasury regulation Section 1.409A-1(i) in accordance with the Company’s policy.

IN WITNESS WHEREOF, the parties have caused this Agreement to be executed as of the date first written above.
	
				
	PARTICIPANT
	 
	KAMAN CORPORATION
 

	 
	 
	By: 
	 

	[Name]
	 
	[Name]

	 
	 
	[Title]

Exhibit A  

LONG-TERM PERFORMANCE PROGRAM
20__ - 20__ PERFORMANCE CYCLE
SUMMARY OF TERMS

Performance Cycle

January 1, 20__ to December 31, 20__.

Performance Goal

Attaining positive Adjusted Consolidated EBITDA in any fiscal year within the Performance Cycle.  No amount will be paid under this Long-Term Performance Award if this Performance Goal is not achieved by the Company.

“Adjusted Consolidated EBITDA” means, for a fiscal year during the Performance Cycle, the Company’s earnings before income taxes, depreciation and amortization on a consolidated basis as determined under generally accepted accounting principles (“GAAP”) excluding: (i) the effect of changes in GAAP after _____ __, 20__ that adversely affect the Company’s reporting results and (ii) to the extent reported in the Company’s financial statements and notes thereto or disclosed in Management’s Discussion & Analysis of Financial Condition and Results of Operation for such year:  (A) costs and expenses incurred due to acquisitions and divestitures, including spin-offs, (B) losses associated with the operation or sale of discontinued operations, and (C) costs and expenses incurred due to reorganizations, restructurings (as determined in accordance with ASC 420 or ASC Topic 712) and any item of an unusual nature or of a type that indicates infrequency of occurrence, or both, determined in accordance with Financial Accounting Standards Board’s guidance.

Maximum Payment Amount

The maximum payment amount to the Participant due to achieving the Performance Goal shall be ______.

Financial Measures Used to Determine Payment Amount

If the Performance Goal has been met, the Committee will consider the Company’s performance on a relative basis against the performance of the Russell 2000 index companies during the Performance Cycle using:

Average return on total capital
Growth in earnings per share
Total return to shareholders

in determining the amount to be paid to the Participant on the terms and conditions set forth below. 

Definitions of Financial Measures for the Company

The following definitions will be used in determining the Company’s performance for the financial measures.

Average return on total capital will be the simple average of total return on capital achieved in each of the three (3) years of the Performance Cycle.

Growth in earnings per share will be calculated by taking the simple average of the Company’s diluted net earnings per share (“EPS”) for each of the three (3) years of the Performance Cycle and computing the compound annual growth rate of that average over the base period EPS.  The base period EPS is the simple average of the Company’s diluted EPS from continuing operations for the three years preceding the commencement of the Performance Cycle.

Total return to shareholders will be calculated on a dividends reinvested basis and will measure the change in value of an investment in the Company’s Shares during the Performance Cycle.

The Committee will determine the Company’s performance with respect to each of these financial measures after adjusting for the following items:

		
	-
	the effects of changes in tax law or accounting principles;

		
	-
	the dilutive effect on earnings per share that results from any increase in the number of shares used in the calculation of diluted earnings per share attributable to any outstanding convertible debt securities and any related bond hedge and warrant transactions;

		
	-
	the effects of changes in applicable foreign currency exchange rates relating to non-U.S. denominated financial performance;

		
	-
	costs and losses associated with restructurings, business consolidations, severance, management realignments or closures of the Company or any of its subsidiaries, affiliates or product lines;

		
	-
	acquisition and divestiture due diligence and integration costs and the adverse effects of acquisitions and divestitures, including spin-offs;

		
	-
	effects of losses generated by divested operations and losses associated with discontinued business operations or product lines;

		
	-
	the impact of any transaction costs and accounting charges incurred in connection with the issuance of equity or the issuance or refinancing of new or existing debt securities and facilities, including but not limited to the settlement or unwinding of existing convertible bond hedge instruments and warrants;

		
	-
	the impact of any costs and accounting charges in respect of pension curtailment adjustments attributable to pension expense charged to company contracts with the U.S. Government, as determined under U.S. Cost Accounting Standard 418, following the freeze of future benefit accruals under the Kaman Corporation Employees’ Pension Plan;

		
	-
	unplanned charges associated with environmental matters;

		
	-
	asset write-downs or impairments, including, but not limited to, goodwill;

		
	-
	ERP depreciation and related expense and capital investments;

		
	-
	litigation or claim judgments or settlements including contract claim settlements with customers and suppliers; 

		
	-
	the impact of unplanned charges in connection with contract terminations, including but not limited to, write-off of inventory, tooling, equipment and non-recurring costs; and

		
	-
	any item of an unusual nature or of a type that indicates infrequency of occurrence, or both.

Measuring Performance of Russell 2000 Companies

In measuring the performance of the Russell 2000 companies, average return on total capital and total return to shareholders will be measured using such Russell 2000 companies data as reported in Compustat Financials published by S&P Capital IQ, or a similar external reporting source in the event that Compustat Financials should cease to be published by S&P Capital IQ.
 
Growth in earnings per share for the Russell 2000 index companies shall be based on the compounded annual growth rate of earnings per share for the fiscal year immediately preceding the commencement of the Performance Cycle to earnings per share for the last fiscal year of the Performance Cycle.  Such earnings per share data for the Russell 2000 index companies shall be measured as reported in Compustat Financials published by S&P Capital IQ, or a similar external reporting source in the event that Compustat Financials should cease to be published by S&P Capital IQ.

Determination of Payment Amount

Except as set forth below, the payment amount shall be determined as follows:

		
	-
	The “Target” payment is _____% (the “Target Payment Percentage) of the Participant’s base salary as of the date of this Agreement.

		
	-
	Each of the financial measures will be measured separately and given the following weighting (expressed as a percentage of the Target payment):

		
	Average return on total capital
	33%

		
	Growth in earnings per share
	33%

		
	Total return to shareholders
	34%

		
	-
	The amount payable with respect to a financial measure is based on comparing the Company’s performance to the corresponding performance of the Russell 2000 index companies, calculated as described above, as follows.

Kaman vs. Russell 2000 Companies                 % of Target Payable    
Below 25th percentile        0%

25th percentile      25%
50th percentile    100%
75th percentile & above    200%

The percent of the Target award earned for actual performance between the 25th and the 50th percentile and between the 50th and 75th percentile will be determined on a straight-line interpolation.

Notwithstanding the foregoing, the percentage of Target payable with respect to any particular financial measure calculated above shall be capped at 150% if the Company’s performance with respect to that particular financial measure is less than zero.

Nothing in this Exhibit A shall preclude the Committee from eliminating or reducing the payment that would otherwise be payable as permitted under the Plan due to attaining the Performance Goal. 

[Signature Page Follows]

IN WITNESS WHEREOF, the parties have caused this Exhibit A to the Agreement to be executed as of _____ __, 20__.

	
				
	PARTICIPANT
	 
	KAMAN CORPORATION
 

	 
	 
	By: 
	 

	[Name]
	 
	[Name]

	 
	 
	[Title]

Exhibit B -Section 280G Rules

The following rules shall apply for purposes of determining whether and how the limitations provided under Section 21 are applicable to the Participant.  

1.  The “net after-tax benefit” shall mean (i) the Payments (as defined in Section 21) which the Participant receives or is then entitled to receive from the Company or a Subsidiary or Affiliate that would constitute “parachute payments” within the meaning of Section 280G of the Code, less (ii) the amount of all federal, state and local income and employment taxes payable by the Participant with respect to the foregoing calculated at the highest marginal income tax rate for each year in which the foregoing shall be paid to the Participant (based on the rate in effect for such year as set forth in the Code as in effect at the time of the first payment of the foregoing), less (iii) the amount of Excise Tax imposed with respect to the payments and benefits described in (i) above.  

2.  All determinations under Section 21 of this Agreement and this Exhibit B will be made by an accounting firm or law firm that is selected for this purpose by the Company’s Chief Executive Officer prior to a Change in Control (the “280G Firm”).  All fees and expenses of the 280G Firm shall be borne by the Company.  The Company will direct the 280G Firm to submit any determination it makes under Section 21 of this Agreement and this Exhibit B and detailed supporting calculations to both the Participant and the Company as soon as reasonably practicable.  

3.  If the 280G Firm determines that one or more reductions are required under Section 21 of this Agreement, the 280G Firm shall also determine which Payments shall be reduced (first from cash payments and then from non-cash benefits, in each such case first from amounts not subject to Section 409A of the Code and then from amounts subject to Section 409A of the Code, with the Payments that otherwise would be made last in time reduced first)  to the extent necessary so that no portion thereof shall be subject to the excise tax imposed by Section 4999 of the Code, and the Company shall pay such reduced amount to the Participant.  

4.  As a result of the uncertainty in the application of Section 280G at the time that the 280G Firm makes its determinations under this Section, it is possible that amounts will have been paid or distributed to the Participant that should not have been paid or distributed (collectively, the “Overpayments”), or that additional amounts should be paid or distributed to the Participant (collectively, the “Underpayments”).  If the 280G Firm determines, based on either the assertion of a deficiency by the Internal Revenue Service against the Company or the Participant, which assertion the 280G Firm believes has a high probability of success or controlling precedent or substantial authority, that an Overpayment has been made, the Participant must repay to the Company, without interest; provided, however, that no loan will be deemed to have been made and no amount will be payable by the Participant to the Company unless, and then only to the extent that, the deemed loan and payment would either reduce the amount on which the Participant is subject to tax under Section 4999 of the Code or generate a refund of tax imposed under Section 4999 of the Code.  If the 280G Firm determines, based upon controlling precedent or substantial authority, that an Underpayment has occurred, the 280G Firm will notify the Participant and the Company of that determination and the amount of that Underpayment will be paid to the Participant promptly by the Company.  

5.  The Participant will provide the 280G Firm access to, and copies of, any books, records, and documents in the Participant’s possession as reasonably requested by the 280G Firm, and otherwise cooperate with the 280G Firm in connection with the preparation and issuance of the determinations and calculations contemplated by Section 21 of this Agreement and this Exhibit B.

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