Document:

icon-ex1065_194.htm

 

Exhibit 10.65

ICONIX BRAND GROUP, INC.

 

EXECUTIVE Severance Plan

 

 

 

521949.01111/104255828v.10

 

Table of Contents

 

	
 
	
 
	
Page

	
 
	
 
	
 

	
1.
	
Establishment and Purpose of Plan
	
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2.
	
Definitions and Construction
	
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3.
	
Termination of Employment
	
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4.
	
Certain Restrictive Covenants
	
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5.
	
No Contract of Employment
	
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6.
	
Conflict in Benefits; Noncumulation of Benefits; Exclusive Remedy
	
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7.
	
Administration, Termination, and Amendment of Plan
	
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8.
	
Claims for Benefits
	
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9.
	
Notices
	
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10.
	
Certain Federal Tax Considerations
	
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11.
	
Additional Provisions
	
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Exhibit A – Form of Participation Agreement
	
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ICONIX BRAND GROUP, INC.

EXECUTIVE SEVERANCE PLAN

1. Establishment and Purpose of Plan

1.1 Establishment. The Iconix Brand Group, Inc. Executive Severance Plan (as amended from time to time, the “Plan”) is hereby established by the Compensation Committee of the Board of Directors of the Company.

1.2 Effective Date. The Plan is adopted on December 30, 2016 and shall become effective as of January 1, 2017.

1.3 Purpose. The purpose of the Plan is to provide certain key employees with specified levels of compensation and benefits in the event of a qualifying termination of employment subject to the satisfaction of certain terms and conditions.   

2. Definitions and Construction

2.1 Definitions. Whenever used in the Plan, the following terms shall have the meanings set forth below:

(a) “Accrued Obligations” means the following:

(i) any salary and accrued but unused vacation, in each case earned but unpaid, through the date of Participant’s termination of employment;

(ii) reimbursement, within ten (10) business days of submission of proper expense reports, which are submitted no later than thirty (30) days following Participant’s termination of employment, of all expenses reasonably and necessarily incurred by Participant in connection with the business of the Company Group prior to his or her termination of employment, to the extent such expenses are reimbursable under the Company’s expense reimbursement policy; and

(iii) vested benefits, if any, under any Company Group retirement plan, nonqualified deferred compensation plan, or any health or welfare benefit plan, to which Participant is entitled pursuant to the terms of such plans or related agreements.

(b) “Additional Severance Benefits” means, subject to a Participant’s (a) timely election of continuation coverage under the Consolidated Omnibus Budget Reconciliation Act of 1985, as amended (“COBRA”), with respect to the Company Group’s group health plans in which such Participant was participating on the date of such Participant’s termination of employment and (b) continued timely payment by such Participant of premiums for such COBRA coverage, the Company shall pay such Participant monthly, as an additional taxable severance benefit, an amount equal to the dollar amount of the premium cost for the group health coverage elected by such Participant under COBRA that the Company Group pays on behalf of similarly situated active executives of the Company Group until the earlier of (x) such Participant ceasing to be eligible for COBRA coverage, and (y) such Participant becoming 

 

	
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eligible for coverage under the health plan of a subsequent employer (and by accepting receipt of Additional Severance Benefits, a Participant agrees to notify the Company of eligibility for coverage under the health plan of a subsequent employer).

(c) “Base Salary” means the annual base salary in effect immediately prior to any termination of employment (without giving effect to any reduction forming the basis for a termination for Good Reason). For the avoidance of doubt, Base Salary does not include any bonuses, commissions, fringe benefits, car allowances, or other special or irregular payments.

(d) “Board” means the Board of Directors of the Company.

(e) “Cause” means any of the following: 

(i) A Participant’s willful and continued failure to substantially perform his or her obligations (other than any such failure resulting from such Participant’s incapacity due to any physical or mental illness); provided, however, that the Company shall have provided Participant with written notice of such failure and such Participant shall have been afforded at least thirty (30) days to cure such failure to the extent the failure is capable of cure;

(ii) A Participant’s conviction of or plea of guilty or nolo contendere to, a felony or any other crime involving moral turpitude or dishonesty;

(iii) A Participant’s willfully engaging in misconduct in the performance of his or her duties for the Company Group (including theft, fraud, embezzlement, and securities law violations or a violation of the Company’s Code of Conduct or other material written policies) that, in the good faith determination of the Board is injurious or potentially injurious to the Company Group, monetarily or otherwise; or

(iv) A Participant’s willfully engaging in misconduct other than in the performance of his duties for the Company Group (including theft, fraud, embezzlement, and securities law violations) that, in the good faith determination of the Board, is materially injurious to the Company Group or is potentially materially injurious to the Company Group, monetarily or otherwise.

For purposes of this Section 2.1(e), no act, or failure to act, on the part of a Participant shall be considered to have been “willfully” performed or omitted, unless done, or omitted to be done, by him or her in bad faith and without reasonable belief that his or her action or omission was in, or not opposed to, the best interest of the Company Group (including, without limitation, the best interest of the reputation of the Company Group).

(f) “Change in Control” shall have the meaning specified in the Company’s 2016 Omnibus Incentive Plan, as amended from time to time, or any successor plan thereto. 

 

	
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(g) “Change in Control Protection Period” means the period commencing on the date a Change in Control is consummated and ending 24 months following the date of such consummation.  There shall be only one Change in Control Protection Period in effect for each Participant.

(h) “Code” means the Internal Revenue Code of 1986, as amended, or any successor thereto and any applicable regulations promulgated thereunder.

(i) “Committee” means the Compensation Committee of the Board.

(j) “Company” means Iconix Brand Group, Inc., a Delaware corporation, or its successor.

(k) “Company Group” means the group consisting, from time to time, of the Company and each and subsidiary company, and their respective affiliates.

(l)  “Director” means a member of the Board.

(m) “Disability” shall mean a Participant’s inability to perform his or her essential duties and responsibilities for the Company Group, with or without reasonable accommodation, due to any physical or mental illness or incapacity, which condition either (i) has continued for a period of 180 days (including weekends and holidays) in any consecutive 365-day period, or (ii) is projected by the Board in good faith after consulting with a doctor selected by the Company Group and consented to by a Participant (or, in the event of a Participant’s incapacity, his legal representative), such consent not to be unreasonably withheld or delayed, that the condition is likely to continue for a period of at least six (6) consecutive months from its commencement.

(n) “Good Reason” shall mean with respect to a Participant that, without his or her prior consent, one or more of the following events has occurred:

(i) Either before or after a Change in Control Protection Period:

(1) a material reduction in a Participant’s Base Salary, other than as part of an across-the-board salary reduction applied to all similarly situated executives (but in any event not to exceed 10%);

(2) any reduction in a Participant’s target annual cash bonus opportunity as a percentage of his or her salary; or 

(3) relocation of the principal place of work of a Participant to a facility or location more than fifty (50) miles from his or her principal place of work, resulting in a material increase to his or her normal commute; 

 

	
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(ii) During a Change in Control Protection Period:

(1) any reduction in a Participant’s Base Salary;

(2) any reduction in a Participant’s target annual cash bonus opportunity as a percentage of his or her salary;  

(3) relocation of the principal place of work of a Participant to a facility or location more than fifty (50) miles from his or her principal place of work, resulting in a material increase to his or her normal commute;

(4) a material diminution of title, authorities, duties or responsibilities of a Participant from those in effect immediately prior to the Change in Control (other than temporarily while a Participant is physically or mentally incapacitated and unable to properly perform such duties, as determined by the Committee in good faith); 

(5) a change in the reporting structure as a result of which a Participant reports to someone other than the Chief Executive Officer of the Company; or

(6) the Company’s failure to obtain, within ten (10) days after the date of the Change in Control, the express assumption of the Plan by the successor entity;

provided, however, in all cases, that the Participant who is asserting that an event constituting Good Reason has occurred has provided the Company with written notice of the circumstances giving rise to the Good Reason event (a “Good Reason Notice”) within sixty (60) days after the initial existence of such circumstances.  An event constituting Good Reason shall no longer constitute Good Reason if the circumstances described in the Good Reason Notice are cured by the Company Group within thirty (30) days following receipt of the Good Reason Notice.  If the Company Group does not cure the circumstances giving rise to the Good Reason event described in the Good Reason Notice within thirty (30) days after receipt of the Good Reason Notice, the Participant who provided the Good Reason Notice may resign for Good Reason by terminating employment within thirty (30) days following the end of the Company Group’s thirty (30) day cure period.

(o) “Non-Compete Documents” has the meaning set forth in Section 6.1 hereof. 

(p) “Non-Compete Period” with respect to a Participant means the period beginning on the date of such Participant’s commencement of participation in the Plan and ending 18 months after such Participant’s termination of employment for any reason.

(q) “Participant” means each Company Group employee (i) who holds the title of Executive Vice-President, or an equivalent officer title, and who reports directly to the Company’s Chief Executive Officer and (ii) who has executed a Participation Agreement.

 

	
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(r) “Participation Agreement” means an agreement in the form attached hereto as Exhibit A or in such other form as the Committee may approve from time to time. The terms of such forms of Participation Agreement need not be identical with respect to each Participant. In addition, the compensation and benefits payable upon a Qualifying Termination, which are set forth in a Participation Agreement, may differ from Participant to Participant and from the default provisions set forth in the Plan.

(s) “Qualifying Termination” means the occurrence of either of the following events:

(i) involuntary termination by the Company Group of a Participant’s employment without Cause; or

(ii) a Participant’s resignation from employment with the Company Group for Good Reason;

provided, however, that Qualifying Termination shall not include any termination of a Participant’s employment which is (A) for Cause, (B) a result of Participant’s death or Disability, or (C) a result of a Participant’s resignation other than for Good Reason.

(t) “Release” means a full general release in favor of the Company Group and any of its affiliates, stockholders, Directors, officers, employees, agents, insurers, predecessors and successors and/or assigns, and other related parties (including, without limitation, fiduciaries of employee benefit plans) releasing all claims, known or unknown in a form acceptable to the Company Group.

(u) “Section 409A” means Section 409A of the Code and any applicable regulations (including proposed or temporary regulations) and other administrative guidance promulgated thereunder.

(v) “Specified Employee” means a specified employee within the meaning of Section 409A.

(w) “Target Bonus” means the target annual cash bonus opportunity as in effect immediately prior to any termination of employment (without giving effect to any reduction forming the basis, in whole or in part, for a termination for Good Reason).

2.2 Construction. Captions and titles contained herein are for convenience only and shall not affect the meaning or interpretation of any provision of the Plan. Except when otherwise indicated by the context, the singular shall include the plural and the plural shall include the singular. Use of the term “or” is not intended to be exclusive, unless the context clearly requires otherwise.

 

	
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3. Termination of Employment

3.1 Qualifying Termination Either Before or After a Change in Control Protection Period.  If a Participant incurs a Qualifying Termination either before or after a Change in Control Protection Period, such Participant shall be eligible to receive: 

(a) any Accrued Obligations, and

(b) provided that (x) such Participant has complied with and continues to comply with his or her obligations under Section 4 hereof and his or her obligations under any Non-Compete Documents and (y) within sixty (60) days following such Qualifying Termination, the Participant has delivered to the Company an executed Release and such Release has become effective, enforceable and irrevocable in accordance with its terms:

(i) any annual cash bonus that is earned but unpaid for the prior fiscal year, payable at such time as bonuses for such prior fiscal year are paid to the Company’s executives generally;

(ii) payments during 18 months of an amount equal to such Participant’s monthly Base Salary.  Such payments shall commence with the first payroll period after such Participant’s Release has become irrevocable and shall be made in accordance with the Company’s payroll practices and policies then in effect;

(iii) a pro-rata portion of the annual cash bonus for the fiscal year in which termination occurs based on actual results for such year (determined by multiplying the amount of such annual bonus which would be due for the full fiscal year by a fraction, the numerator of which is the number of days during the fiscal year of termination that the Participant is employed by the Company Group and the denominator of which is 365), payable at such time as bonuses for the fiscal year of termination are paid to the Company’s executives generally.  In the event that the Company has not established performance goals for the annual bonus plan with respect to the fiscal year during which the Participant’s employment terminates, the pro-rata portion of the bonus shall be based on the Participant’s target annual cash bonus opportunity and such amount shall be payable at such time as bonuses for the fiscal year of termination are paid to the Company’s executives generally (subject to the achievement of the applicable performance goals established in due course by the Committee for the Company’s executives generally); and

(iv) eligibility for Additional Severance Benefits.

3.2 Qualifying Termination During a Change in Control Protection Period. If a Participant incurs a Qualifying Termination during a Change in Control Protection Period, such Participant shall be eligible to receive: 

(a) any Accrued Obligations, and

 

	
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(b) provided that (x) such Participant complies with his or her obligations under Section 4 hereof and his or her obligations under any Non-Compete Documents and (y) within sixty (60) days following such Qualifying Termination, the Participant has delivered to the Company an executed Release and such Release has become effective, enforceable and irrevocable in accordance with its terms:

(i) any annual cash bonus that is earned but unpaid for the prior fiscal year, payable at such time as bonuses for such prior fiscal year are paid to the Company’s executives generally;

(ii) an amount equal to two (2) times the sum of such Participant’s Base Salary and Target Bonus, payable in a single lump sum as soon as administratively feasible after the 60th day following the termination date;

(iii) a pro-rata portion of the annual cash bonus for the fiscal year in which termination occurs based on actual results if determinable (or based on the target level of performance if not determinable) for such year (determined by multiplying the amount of such annual bonus which would be due for the full fiscal year by a fraction, the numerator of which is the number of days during the fiscal year of termination that the Participant is employed by the Company Group and the denominator of which is 365), payable in a single lump sum as soon as administratively practicable after the 60th day following the termination date; and

(iv) eligibility for Additional Severance Benefits.

3.3 Other Terminations. 

(a) If a Participant’s termination of employment results from any reason other than a Qualifying Termination, such Participant shall be eligible only to receive (i) his or her Accrued Obligations and (ii) for a termination other than by the Company for Cause or by the Participant without Good Reason, any annual cash bonus that is earned but unpaid for the prior fiscal year, payable at such time as bonuses for such prior fiscal year are paid to the Company’s executives generally.  

(b) Notwithstanding any other provision in the Plan to the contrary, if a Participant terminates his or her employment for Good Reason or a Participant’s employment is terminated by the Company without Cause, and it is subsequently determined that grounds for termination for Cause existed, then such Participant shall be deemed to not have had a Qualifying Termination, and such Participant (x) shall be eligible only to receive his or her Accrued Obligations, and (y) shall return to the Company, upon written demand, all amounts paid to such Participant pursuant to Section 3.1(b) or Section 3.2(b); provided, that if a Participant is required to repay amounts to the Company pursuant to this Section 3.3(b), such Participant shall indemnify the Company for all costs (including, without limitation, reasonable attorneys’ fees and expenses) that the Company incurs in collecting such repayment, should the Participant fail to timely make such repayment within 15 days of such written demand.

3.4 Treatment of Outstanding Equity Awards. Any unvested amounts subject to equity awards granted under the Company’s 2016 Omnibus Incentive Plan, as amended from 

 

	
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time to time, or under any other shareholder approved equity plan of the Company, shall vest if and to the extent provided for in the applicable equity award agreement and as otherwise provided in the applicable equity incentive plan.

4. Certain Restrictive Covenants

4.1 Except in the good faith performance of his or her duties to the Company Group, or where required by law, statute, regulation or rule of any governmental body or agency, or pursuant to a subpoena or court order, a Participant shall not divulge to anyone, either during or at any time after the termination of his or her employment for any reason, any information constituting a trade secret or other confidential information acquired by such Participant during  his or her employment by the Company Group concerning the Company Group or its licensees, including but not limited to the names and other identifying information of the Company Group’s licensees, or the revenues, pricing, business systems, business strategies and processes of the Company Group, to the extent such information (i) is not generally known by the public and (ii) is treated as confidential information by the Company (“Confidential Information”).   

4.2 During a Participant’s Non-Compete Period, he or she shall not, directly or indirectly, in any location in which the Company Group or any licensees of the Company Group operate or sell products, have an interest in or render any services (whether as an owner, manager, lender, partner, stockholder, joint venturer, employee, director, consultant, independent contractor or otherwise) for any Competitor of the Company Group.  Notwithstanding the foregoing, in the event that a Participant has a Qualifying Termination during a Change in Control Protection Period, such Participant’s Non-Compete Period for purposes of this Section 4.2 (but not for purposes of Section 4.3 or Section 4.4) shall end on the date of such Qualifying Termination.

(a) For purposes of this Section 4.2, a Competitor of the Company Group with respect to a Participant shall mean: 

(i) Any individual or entity that is in the business of buying and selling brands and licensing the intellectual property related to such brands to third parties (the “Company’s Primary Activity”), including by way of example as of the Effective Date, and not in limitation of the foregoing definition, Sequential Brands, Inc.; or 

(ii) Any individual or entity that during such Participant’s Non-Compete Period competes with any business activity, which does not constitute the Company’s Primary Activity, that during the period of such Participant’s employment with the Company Group the Company conducts or the Company, pursuant to Board approval, plans to conduct (such other business activity or planned business activity being an “Other Competitive Activity”); provided, that for purposes of this clause (ii), an individual or entity that engages in an Other Competitive Activity with respect to a Participant shall not be a Competitor of the Company unless the Participant has actual supervisory duties or authority over such Other Competitive Activity.  

 

	
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(b) Notwithstanding the foregoing provisions of this Section 4.2, nothing herein shall prevent Participant from passively owning stock in a publicly traded corporation whose activities compete with those of the Company Group, provided that such stock holdings are not greater than two percent (2%) of the issued and outstanding shares of such corporation.

4.3 Participant shall not, during the Non-Compete Period, directly or indirectly, take any action which intentionally interferes with or disrupts any of the Company Group’s business activities including, without limitation, the solicitation of the Company Group’s customers, suppliers, lessors, lessees, licensors, or licensees, to terminate or diminish their relationship with the Company Group; provided that the restrictions described in this Section 4.3 shall apply during a Participant’s Non-Compete Period only with respect to individuals or entities who are as of such Participant date of termination of employment, or who have been during the final two (2) years prior thereto, customers, suppliers, lessors, lessees, licensors or licensees.

4.4 During a Participant’s Non-Compete Period, such Participant shall not, without the prior written consent of the Company’s Chief Executive Officer, directly or indirectly, on behalf of such Participant or any third party, hire, offer to hire, entice, solicit or in any other manner persuade or attempt to persuade any employee of the Company Group to discontinue or alter his or her employment with the Company Group or hire or offer to hire any individual who was an employee of the Company Group within the six (6)-month period immediately prior to the date on which such Participant hired or offered to hire such individual.  The restrictions in this Section 4.4 shall not prohibit Participant from publishing or advertising any general solicitation for employment not specifically targeted at any Company Group employee.

4.5 At no time during or after the termination of a Participant’s employment, shall a Participant, directly or indirectly, disparage the Company Group or any of the Company Group’s past or present employees, directors, products or services; provided, however, nothing in the Plan shall restrict a Participant (i) from giving truthful testimony or statements in connection with any judicial proceeding or other governmental investigation or proceeding or (ii) from communicating in any way with any governmental entity regarding any incident that a Participant believes constitutes a possible violation of law.

4.6 In the event that a Participant’s receives reasonable notice from the Company Group (including the Company’s outside counsel), either while employed by the Company Group or at any time thereafter, such Participant shall respond and provide information with regard to matters of which the Participant has knowledge as a result of the Participant’s employment with the Company Group, and will provide reasonable assistance to the Company Group and its representatives in defense of any claims that may be made against the Company Group, and will provide reasonable assistance to the Company Group in the prosecution of any claims that may be made by the Company Group, to the extent that such claims may relate to matters related to the Participant’s employment with the Company Group.  Any request for such assistance by a Participant shall take into account such Participant’s other personal and business commitments. If a Participant is required to provide any services pursuant to this Section 4.6 following termination of employment, upon presentation of appropriate documentation, the 

 

	
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Company shall promptly reimburse the Participant for reasonable out-of-pocket expenses incurred by the Participant in connection with the performance of such services; provided, that any such reimbursements shall be subject to, and shall be made in accordance with, the Company’s expense reimbursement policy.

4.7 In the event that a Participant is requested to assist in any investigation of the Company Group, including without limitation any investigation of the actions or activities of the Company Group, the Board or any officer or employee of the Company Group, regardless of whether a lawsuit or other proceeding has then been filed with respect to such investigation, such Participant shall (i) promptly inform the Company Group (to the extent Participant is legally permitted to do so) of such request and (ii) shall not, without the prior consent of the Board, assist in such investigation, unless the Participant shall be legally required to assist in the investigation. 

4.8 In the event that a Participant breaches any of the covenants or obligations contained in this Section 4 or contained in any Non-Compete Documents, such Participant shall promptly repay any amounts previously paid to such Participant pursuant to Section 3.1(b) or Section 3.2(b) hereof upon demand by the Company.  Because the breach of any of the covenants contained in this Section 4 will result in irreparable damage and injury to the Company Group, the Company shall be entitled to seek a temporary restraining order and/or a preliminary or permanent injunction in any court of competent jurisdiction restraining Participant from engaging in activities prohibited by this Section 4 or such other relief as may be required specifically to enforce any of the covenants in this Section 4.  

4.9 If for any reason a court determines that the restrictions under this Section 4 are not reasonable or that consideration therefor is inadequate, to the maximum extent permitted by law, such restrictions shall be interpreted or modified to include as much of the duration and scope identified in this Section 4 as will render such restrictions valid and enforceable.

4.10 Nothing herein shall be interpreted or applied to prohibit a Participant from making any good faith report to any governmental agency or other governmental entity concerning any acts or omissions that he or she may believe to constitute a possible violation of federal or state law or making other disclosures that are protected under the whistleblower provisions of applicable federal or state law or regulation. In addition, for the avoidance of doubt, pursuant to the federal Defend Trade Secrets Act of 2016, a Participant shall not be held criminally or civilly liable under any federal or state trade secret law for the disclosure of a trade secret that (i) is made (A) in confidence to a federal, state, or local government official, either directly or indirectly, or to an attorney; and (B) solely for the purpose of reporting or investigating a suspected violation of law; or (ii) is made in a complaint or other document filed in a lawsuit or other proceeding, if such filing is made under seal.

4.11 To the extent applicable, the covenants set forth in this Section 4 shall be interpreted to comply with the applicable Rules of Professional Conduct governing attorneys, including but not limited to New York Rule of Professional Conduct 5.6.  

 

	
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5. No Contract of Employment

Neither the establishment of the Plan, nor any amendment thereto, nor the payment or provision of any benefits pursuant to the Plan shall be construed as giving any person the right to be employed by the Company Group. The employment relationship between each Participant and the Company Group is an “at-will” relationship. Accordingly, either the Participant or any member of the Company Group may terminate the relationship at any time. Following the termination of a Participant’s employment for any reason, the Participant shall hold no further office or position with the Company Group; provided, further, that upon notice by either the Company or a Participant terminating the Participant’s employment for any reason, the Company, in its sole discretion, may require the Participant to remain away from the Company Group’s offices. 

6. Conflict in Benefits; Noncumulation of Benefits; Exclusive Remedy

6.1 Effect of Plan. The terms of the Plan, when accepted by a Participant pursuant to an executed Participation Agreement, shall supersede all prior arrangements, whether written or oral, and understandings regarding the subject matter of the Plan (including, but not limited to any severance provisions under any employment agreement entered into prior to the  effective date of his or her Participation Agreement), and shall be the exclusive agreement for the determination of any severance payments and benefits due to such Participant. The foregoing notwithstanding, the terms of the Plan do not supersede or take priority over the terms or conditions of any agreement relating to maintaining the confidentiality of Company Group information, the assignment of inventions to Company, non-competition against the Company Group, and/or nonsolicitation of Company Group employees, or any other agreements containing restrictive covenants intended to protect the business and goodwill of the Company Group, between a Participant and the Company Group (any such agreements the “Non-Compete Documents”). This Plan and any Non-Compete Documents shall be treated and interpreted as complementary, and in the event of any conflict between certain provision(s) in the Plan and certain provision(s) in a Non-Compete Document, the provision(s) of the document which is regarded as most beneficial to the Company’s interests, as determined in the Committee’s sole discretion, is the provision(s) that shall be applicable and applied.

6.2 Noncumulation of Benefits. Except as expressly provided in a written agreement between a Participant and the Company entered into after the date of such Participant’s Participation Agreement and which and is approved by the Board or the Committee, the total amount of payments and benefits that may be received by such Participant as a result of the events described in Section 3 pursuant to (a) the Plan, (b) any agreement between such Participant and the Company, or (c) any other plan, practice, or statutory obligation of the Company, shall not exceed the amount of payments and benefits provided by the Plan upon such events, and the aggregate amounts payable under the Plan shall be reduced to the extent of any excess (but not below zero).

 

	
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6.3 Exclusive Remedy. The payments provided by Section 3 hereof shall constitute the sole and exclusive remedy of a Participant for any alleged injury or other damages arising out of the cessation of such Participant’s employment relationship with the Company, and a Participant shall not be entitled to any other payments or other benefits from the Company Group as compensation for any such alleged injuries or other damages.

7. Administration, Termination, and Amendment of Plan

7.1 Administration. The Committee shall act as the plan administrator of the Plan.  The Committee has the sole discretion and authority to administer the Plan, including the sole discretion and authority to:

(a) adopt such rules as it deems advisable in connection with the administration of the Plan, and to construe, interpret, apply and enforce the Plan and any such rules and to remedy ambiguities, errors or omissions in the Plan;

(b) determine questions of eligibility and entitlement to benefits and interpret the terms and provisions of the Plan;

(c) act under the Plan on a case-by-case basis; the Committee’s decisions under the Plan need not be uniform with respect to similarly situated Participants; and

(d) delegate its authority under the Plan to any director, officer, employee, or group of directors, officers and/or employees of the Company; provided that if any person with administrative authority becomes eligible or makes a claim for Plan benefits, that person will have no authority with respect to any matter specifically affecting his/her individual interest under the Plan, and the Committee will designate another person to exercise such authority.

Any determination of the Committee shall be final and conclusive, and shall bind and may be relied upon by the Company Group, each of the Participants and all other parties in interest.  

7.2 Amendment and Termination of the Plan. Subject to compliance with the requirements of Section 409A, the Committee may amend or terminate the Plan in any respect (including any change to the severance benefits) at any time; provided, however, that any amendment that would defer the payment or reduce the amount of severance benefits hereunder to any Participant, or any action that would remove a Participant from participation in the Plan, or any amendment that would revise the definition of Good Reason or Cause in a manner that adversely affects Participants, or any termination of the Plan (each an “Adverse Action”) shall be effective only with one (1) year’s prior written notice to affected Participant(s); provided further, however, that no Adverse Action may be adopted or become effective during a Change in Control Protection Period.  Notwithstanding the foregoing, the limitations on the timing of Adverse Actions may be waived in writing by any affected Participant.

 

	
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8. Claims for Benefits

8.1 ERISA Plan. This Plan is intended to be an employee welfare benefit plan as defined in Section 3(1) of Employee Retirement Income Security Act of 1974 (“ERISA”) that is maintained for the benefit of a select group of management or highly compensated employees of the Company Group. 

8.2 Claims for Benefits.  

(a)Any employee or other person who believes he or she is entitled to any payment under the Plan (a “Claimant”) may submit a claim in writing to the Company’s highest level officer in charge of Human Resources (the “Claims Administrator”), with a copy to the Company’s General Counsel; provided, that in the event that the Claimant seeking benefits would otherwise be the Claims Administrator, then the Company’s Chief Executive Officer shall act as the Claims Administrator.

(b) If a claim for benefits is denied, the Claims Administrator shall provide written notice to the Claimant of the denial within ninety (90) days after the claim’s submission.  The notice shall be written in a manner calculated to be understood by the Claimant and shall include:

(1) The specific reason or reasons for the denial;

(2) References to the specific Plan provisions on which the denial is based;

(3) A description of any additional material or information necessary for the applicant to perfect the claim and an explanation of why such material or information is necessary; and

(4) A description of the Plan’s claims review procedures and the time limits applicable to such procedures, and a statement of Claimant’s right to bring a civil action under ERISA Section 502(a) following an adverse benefit determination on review.

(c) If special circumstances require an extension of time for processing a claim, a written notice of the extension and the reason therefor shall be furnished to Claimant before the end of the initial ninety (90) day period. In no event shall such extension exceed ninety (90) days.

 

	
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521949.01111/104255828v.10

 

8.3 Appeal of Denial of Claim.

(a) If a claim is denied, Claimant, at Claimant’s sole expense, may appeal the denial to the Committee (the “Appeals Administrator”) within sixty (60) days of the receipt of written notice of the denial.  In pursuing such appeal Claimant or his or her duly authorized representative:

(1) may request in writing that the Appeals Administrator review the denial;

(2) may receive, upon request and free of charge, reasonable access to documents, records and other information relevant to the claim for benefits; and

(3) may submit documents, records and comments and other information in writing.

(b) Upon receipt of a request for review from a Claimant, the Appeals Administrator shall make a full and fair evaluation.  The decision on review shall be made by the Appeals Administrator within sixty (60) days of receipt of the request for review, unless special circumstances require an extension of time for processing, in which case a decision shall be rendered as soon as possible, but not later than one hundred twenty (120) days after receipt of the request for review.  If such an extension of time is required, written notice of the extension shall be furnished to Claimant before the end of the original sixty (60) day period.  The decision on review shall be made in writing, shall be written in a manner calculated to be understood by Claimant, and, if the decision on review is a denial of the claim for benefits, shall include:  

(1) The specific reason or reasons for the denial;

(2) References to the specific Plan provisions on which the denial is based;

(3) A statement that Claimant is entitled to receive, upon request and free of charge, reasonable access to, and copies of, all documents, records and other information relevant to Claimant's claim for benefits; and A statement of claimant’s right to bring a civil action under ERISA Section 502(a) following an adverse benefit determination.

 

	
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9. Notices

9.1 General. 

(a) For purposes of the Plan, notices and all other communications provided for herein shall be in writing and shall be deemed to have been duly given when personally delivered or when mailed by United States certified mail, return receipt requested, or by overnight courier, postage prepaid, as follows:

(1)     If to the Company or the Board:

Iconix Brand Group, Inc. 

1450 Broadway, 3rd Floor

New York, New York 10018

Attention: Corporate Secretary

(with a copy to General Counsel)

(2) If to a Participant, at the home address which such Participant most recently communicated to the Company in writing.

(b) The Company may provide Participants with notice of a change of address, and a Participant the Company with notice of a change of address, pursuant to Section 9.1(a) hereof.

9.2 Notice of Termination of Employment. Any termination by the Company of a Participant’s employment or any resignation of employment by a Participant shall be communicated by a notice of termination or resignation to the other party hereto given in accordance with Section 9.1. Such notice shall indicate the specific termination provision in the Plan relied upon, shall set forth in reasonable detail the facts and circumstances claimed to provide a basis for termination under the provision so indicated, and shall specify the termination date.

10. Certain Federal Tax Considerations

10.1 Internal Revenue Code Section 409A.

(a) The amounts payable under the Plan are intended to comply with or be exempt from Section 409A, and all provisions of the Plan shall be interpreted and construed in a manner that establishes an exemption from or compliance with the requirements for avoiding additional taxes or interest under Section 409A(a)(1)(B) of the Code.  In no event whatsoever will the Company Group, or any Board member, officer or employee of the Company Group acting on behalf of the Company Group, be liable for any additional tax, interest or penalties that may be imposed on a Participant under Section 409A or any damages for failing to comply with Section 409A.

 

	
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521949.01111/104255828v.10

 

(b) A termination of employment shall not be deemed to have occurred for purposes of any provision of the Plan providing for the payment of any amounts or benefits subject to Section 409A upon or following a termination of employment unless such termination is also a “separation from service” within the meaning of Section 409A and, for purposes of any such provision of the Plan, references to a “termination,” “termination of employment” or like terms shall mean “separation from service.”  If a Participant is deemed on the date of termination to be a “specified employee” within the meaning of that term under Section 409A(a)(2)(B)(i) of the Code, then with regard to any payment or the provision of any benefit that is considered deferred compensation under Section 409A payable on account of a “separation from service,” such payment or benefit shall be made or provided on the date which is the earlier of (i) the first day of the seventh (7th) month following the date of such “separation from service” of such Participant, and (ii) the date of such Participant’s death (the “Delay Period”).  Upon the expiration of the Delay Period, all of the payments of a Participant delayed pursuant to this Section 10.1(b) (whether they would have otherwise been payable in a single sum or in installments in the absence of such delay) shall be paid to such Participant in a lump sum, without interest, and any remaining payments and benefits due such Participant under the Plan shall be paid or provided in accordance with the payment dates specified herein for such payments or benefits. 

(c) (i) All reimbursements of expenses provided for herein shall be payable in accordance with the Company’s expense reimbursement policies in effect from time to time, but in any event shall be made on or prior to the last day of the taxable year following the taxable year in which such expenses were incurred by the Participant seeking reimbursement, (ii) no such reimbursement or expenses eligible for reimbursement in any taxable year shall in any way affect the expenses eligible for reimbursement in any other taxable year, and (iii) the right to reimbursement or in-kind benefits shall not be subject to liquidation or exchanged for another benefit.

(d) For purposes of Section 409A, a Participant’s right to receive any installment payments pursuant to the Plan shall be treated as a right to receive a series of separate and distinct payments.  Whenever a payment under the Plan specifies a payment period with reference to a number of days (e.g., “payment shall be made within sixty (60) days following the date of termination”), the actual date of payment within the specified period shall be within the sole discretion of Company. 

(e) To the extent any payment or benefit which constitutes Section 409A deferred compensation is contingent upon the execution and non-revocation of a Release, then such payment or benefit shall not commence until the later of (i) the first payroll date occurring on or after the sixtieth (60th) day following Participant’s “separation from service,” and (ii) the set payment date otherwise established for commencing the payments and/or benefits.

 

	
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521949.01111/104255828v.10

 

(f) Notwithstanding any provision of the Plan to the contrary, to the extent that any amount constituting Section 409A deferred compensation would become payable in a lump sum under the Plan by reason of a Change in Control, such amount shall become payable in a lump sum only if the event constituting a Change in Control would also constitute a change in ownership or effective control of the Company or a change in the ownership of a substantial portion of the assets of the Company within the meaning of Section 409A (a "409A Change in Control").  The portion of any payment or benefit which constitutes Section 409A deferred compensation and which would otherwise be payable in a lump sum pursuant to Section 3.2 hereof upon a Change in Control that does not qualify as a 409A Change in Control shall be paid based upon the time and form of payment set forth in Section 3.1 hereof, and with respect to other awards or programs in accordance with the plan or other documents governing such award.

10.2 Internal Revenue Code Section 280G Contingent Cutback. 

(a) If any payment(s) or benefit(s) that a Participant would receive pursuant to the Plan and/or pursuant to any other agreement, plan, policy or arrangement would (i) constitute a “parachute payment” within the meaning of Section 280G of the Code and the applicable regulations, and (ii) but for this Section 10.2 or any reduction provided by reason of Section 280G of the Code in any such other agreement, plan, policy or arrangement, would be subject to the excise tax imposed by Section 4999 of the Code (the “Excise Tax”), then such Participant shall be entitled to receive either (A) the full amount of the parachute payments, or (B) the maximum amount that may be provided to such Participant without resulting in any portion of such parachute payments being subject to the Excise Tax, whichever of clauses (A) and (B), after taking into account applicable federal, state, and local taxes and the Excise Tax, results in the receipt by such Participant, on an after-tax basis, of the greatest portion of the parachute payments.  To the extent any of such payments or benefits are Section 409A deferred compensation, any reduction for purposes of clause (B) shall be made in the following order:  (i) cash severance payments that are exempt from Section 409A shall be reduced; (ii) other cash payments and benefits that are exempt from Section 409A, but excluding any payments attributable to an acceleration of vesting or payments with respect to equity-based compensation that are exempt from Section 409A, shall be reduced; (iii) any other payments or benefits, but excluding any payments attributable to an acceleration of vesting and payments with respect to equity-based compensation that are exempt from Section 409A, shall be reduced on a pro-rata basis or in such other manner that complies with Section 409A; and (iv) any payments attributable to an acceleration of vesting or payments with respect to equity-based compensation that are exempt from Section 409A shall be reduced, in each case beginning with payments that would otherwise be made last in time.

 

	
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521949.01111/104255828v.10

 

(b) Unless the Company and a Participant otherwise agree in writing, any determination required under Section 10.2(a) hereof shall be made in writing by the Company’s independent public accountants (the “Accountants”), whose determination shall be conclusive and binding upon such Participant and the Company for all purposes.  For purposes of making the calculations required by Section 10.2(a) hereof, the Accountants may make reasonable assumptions and approximations concerning applicable taxes and may rely on reasonable, good faith interpretations concerning the application of Sections 280G and 4999 of the Code. The Company and such Participant shall furnish to the Accountants such information and documents as the Accountants may reasonably request in order to make a determination under Section 10.2(a) hereof.  The Company shall bear all costs the Accountants may reasonably incur in connection with any calculations contemplated by this provision.

11. Additional Provisions

11.1 Choice of Law. Except to the extent pre-empted by ERISA or other Federal law, the Plan shall be governed by and construed in accordance with the laws of the State of New York, without regard to its conflict of law provisions.

11.2 Arbitration. Except as set forth in Section 4.8 hereof, the Company and each Participant, by executing a Participation Agreement, agree that any dispute or controversy arising under or in connection with the Plan or a Participant’s employment with the Company Group, including without limitation the denial of any claim pursuant to Section 8.2 hereof, shall be settled exclusively by arbitration, conducted before a single arbitrator in New York, New York in accordance with the Commercial Arbitration Rules and Procedures of the American Arbitration Association then in effect.  The decision of the arbitrator will be final and binding upon the parties hereto. Judgment may be entered on the arbitrator’s award in any court having jurisdiction.  The arbitrator shall have the authority to make an award of monetary damages and interest thereon.  The arbitrator shall have no authority to award specific performance or an injunction, or punitive or exemplary damages.  The arbitrator will have no authority to order a modification or amendment of the Plan or any Participation Agreement. 

11.3  Attorneys’ fees and Costs of Arbitration.  In connection with any court proceeding or arbitration commenced in connection with the Plan or a Participant’s employment with the Company Group and regardless of the outcome of such court proceeding or arbitration (a) each party to such proceeding or arbitration shall pay all its own costs and expenses, including without limitation its own legal fees and expenses, and (b) any joint expenses shall be borne equally among the parties.  Notwithstanding the preceding sentence, in the event that a Participant commences arbitration to enforce the provisions of the Plan, and (i) such Participant prevails in at least one material issue in controversy in such arbitration, and (ii) the Company does not prevail in any claim brought by the Company (either in such arbitration or in a court proceeding) that such Participant has breached such Participant’s covenants and obligations under Section 4 hereof or in any Non-Compete Documents, then all expenses (including reasonable attorneys’ fees and expenses) of such Participant in such arbitration shall be paid by the Company.

 

	
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11.4 Unfunded Obligation.  All amounts payable to Participants pursuant to the Plan are unfunded obligations of the Company. The Company shall not be required to segregate any monies from its general funds, or to create any trusts, or establish any special accounts with respect to such obligations.  Payments under the Plan shall be made, as due, from the general funds of the Company.  The Plan shall constitute solely an unsecured promise by the Company to make such payments to the extent provided herein.  

11.5 Recoupment and Offset. The Company has the unilateral right, in its sole discretion, to offset the payment of benefits under the Plan against amounts due from a Participant under the Company’s clawback/recoupment policy as in effect from time to time and against any other amounts owed to the Company Group by a Participant.

11.6 No Representations. By executing a Participation Agreement, a Participant acknowledges that in becoming a “Participant” in the Plan, such Participant is not relying and has not relied on any promise, representation or statement made by or on behalf of the Company Group which is not set forth explicitly in the Plan.

11.7 Waiver. No waiver by a Participant or the Company Group of any breach of, or of any lack of compliance with, any condition or provision of the Plan by the other party shall be considered a waiver of any other condition or provision or of the same condition or provision at another time.

11.8 Validity and Severability. The invalidity or unenforceability of any provision of the Plan shall not affect the validity or enforceability of any other provision of the Plan, which shall remain in full force and effect, and any prohibition or unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction.

11.9 Benefits Not Assignable. Except as otherwise required by law, no right or interest of any Participant under the Plan shall be assignable or transferable, in whole or in part, either directly or otherwise, including, without limitation, by execution, levy, garnishment, attachment, pledge or in any other manner, and no attempted transfer or assignment thereof shall be effective.  Except as set forth in the Plan, no right or interest of any Participant under the Plan shall be liable for, or subject to, any obligation or liability of such Participant.

11.10 Tax Withholding. All payments made pursuant to the Plan will be subject to withholding of applicable income and employment taxes.

11.11 Further Assurances. From time to time, at the Company’s request and without further consideration, a Participant shall execute and deliver such additional documents and take all such further action as reasonably requested by the Company to be necessary or desirable to make effective, in the most expeditious manner possible, the terms of the Plan, such Participant’s Participation Agreement, and/or such Participant’s Release.

 

 

	
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521949.01111/104255828v.10

 

EXHIBIT A

FORM OF

 

AGREEMENT TO PARTICIPATE IN THE

 

ICONIX BRAND GROUP, INC.

 

EXECUTIVE SEVERANCE PLAN

 

 

 

 

	
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521949.01111/104255828v.10

 

[ICONIX LETTERHEAD]

 

[DATE], 2016

 

EXECUTIVE SEVERANCE PLAN 

PARTICIPATION AGREEMENT

 

Dear [INSERT PARTICIPANT NAME],

 

As you are aware, Iconix Brand Group, Inc. (the “Company” and, together with its subsidiaries and affiliates, the “Company Group”) is in the process of phasing out the historical practice of individualized employment agreements and replacing these agreements with a comprehensive severance protection plan that addresses severance in Change in Control and non-Change in Control scenarios. As a key employee of the Company you are eligible to participate in Company’s newly adopted Executive Severance Plan (as amended from time to time, the “Plan”).  A copy of the Plan is enclosed with this Participation Agreement.  Capitalized terms used in this Participation Agreement shall have the meanings ascribed to them in the Plan.

 

The Company considers the severance benefits offered under the Plan to be an important part of our overall executive compensation program and consistent with competitive market practice. We believe that providing appropriate severance benefits helps to attract and retain highly-qualified executives by providing income continuity in the event of an involuntary termination of employment. These arrangements also allow the Company Group to protect its interests through corresponding confidentiality, noncompetition and other restrictive covenants.

 

For your reference, attached to this Participation Agreement are two schedules that summarize the key elements of your participation. The schedules are subject in their entirety to the terms of the Plan.

 

By accepting this Participation Agreement, you hereby acknowledge, agree and confirm that:

1. You have received a copy of the Plan and have read, understand and are familiar with the terms and provisions of the Plan and that by executing this Participation Agreement, the Plan shall constitute an agreement between you and the Company Group;

2. The Plan supersedes any existing employment agreement or severance arrangement, whether written or unwritten, to which you are a party; and

3. The employment relationship between yourself and the Company Group is an “at-will” relationship.

 

	
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521949.01111/104255828v.10

 

By accepting this Participation Agreement, you hereby acknowledge that Section 4 of the Plan contains restrictive covenants to which you will be subject, and you hereby further agree as follows:

1. You acknowledge that any Confidential Information is of great value to the Company Group, and upon the termination of your employment for any reason, or at such earlier date as may be requested by the Company, you shall redeliver to the Company all Confidential Information and other related data in your possession. You agree that you will not retain any copies of any Confidential Information in hard copy, electronic or any other form.

2. You acknowledge that you will be materially involved with the Company Group’s activities throughout the world and that your competition with the Company Group anywhere worldwide during the Non-Compete Period would cause substantial damages to the Company Group.

3. In the event you breach any of the covenants or obligations contained in Section 4 of the Plan or contained in any Non-Compete Documents to which you are a party, the post-termination restrictions contained in Section 4 shall be extended by a period of time equal to the period of such breach, it being the intention you and the Company that the running of the applicable post-termination restriction period shall be tolled during any period of such violation.

4. Without intending to limit the remedies available to the Company Group, you acknowledge that a breach by you of any of the covenants contained in Section 4 of the Plan may result in material and irreparable injury to the Company Group, for which there is no adequate remedy at law, that it will not be possible to measure damages for such injuries precisely and that, in the event of such a breach or threat the Company shall be entitled to a temporary restraining order and/or a preliminary or permanent injunction restraining you from engaging in activities prohibited by Section 4 or such other relief as may be required specifically to enforce any of the covenants in Section 4.

By accepting this Participation Agreement, you hereby acknowledge that disputes and disagreements regarding your right to severance benefits under the Plan are governed by a Claims Procedure set forth in the Plan, which you must follow.  In addition, by executing this Participation Agreement, you are acknowledging that:

YOU HAVE READ AND UNDERSTAND SECTION 11.2 OF THE PLAN, WHICH DISCUSSES ARBITRATION. 

YOU UNDERSTAND THAT YOU ARE AGREEING TO SUBMIT ANY AND ALL CLAIMS ARISING OUT OF, RELATING TO, OR IN CONNECTION WITH THE PLAN, OR THE INTERPRETATION, VALIDITY, CONSTRUCTION, PERFORMANCE, BREACH OR TERMINATION OF THE PLAN, TO BINDING ARBITRATION, AND THAT THIS ARBITRATION CLAUSE CONSTITUTES A WAIVER OF YOUR RIGHT TO A JURY TRIAL AND ALSO REQUIRES THE RESOLUTION BY ARBITRATION OF ALL DISPUTES RELATING TO ALL ASPECTS OF THE EMPLOYER/EMPLOYEE RELATIONSHIP INCLUDING, BUT NOT LIMITED TO, STATUTORY DISCRIMINATION CLAIMS.

 

	
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Finally, by accepting this Participation Agreement, you hereby confirm and agree that the Company has the unilateral right, in its sole discretion, to offset the payment of benefits to you under the Plan against amounts due from you under the Company’s clawback/recoupment policy as in effect from time to time and against any other amounts that you owe to the Company Group.

The Company hereby reaffirms that you shall be entitled to all rights of indemnification, including rights of advancement, set forth in the Company’s Bylaws.  The Company shall include you in the directors and officers liability insurance policy provided for other directors and officers of the Company, at the Company’s expense. Notwithstanding the foregoing, nothing contained in this Participation Agreement shall constitute an indemnification by the Company for any liability to third parties arising from your allegedly not being permitted to be employed by the Company, contractually or otherwise, and you hereby represent to the Company that no such prohibition exists.

You acknowledge that the Plan confers significant legal rights and obligations; that the Company has encouraged you to consult with legal and financial advisors as appropriate; and that you have had adequate time to consult with such advisors before executing this Participant Agreement.

Please indicate your acceptance and agreement to the Plan and this Participation Agreement by signing in the space indicated below and returning the agreement to the Company [by no later than [DATE], 2016]. Upon your acceptance, you shall be deemed a “Participant” of the Executive Severance Plan as of the effective date indicated in the attached Schedule.

Sincerely, 

 

	
ICONIX BRAND GROUP, INC.

	
 
	
 

	
By: 
	
 

	
Name:
	
 

	
Title:
	
 

 

 

	
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521949.01111/104255828v.10

 

AGREED AND ACCEPTED BY THE UNDERSIGNED ON THIS ___ DAY OF _______________, 201__.

 

	
	
PARTICIPANT

	
[INSERT PARTICIPANT NAME]

	
 

	
 

	
Signature

	
 

	
 

	
Name Printed

	
 

	
 

	
Address

 

 

	
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521949.01111/104255828v.10

 

[SCHEDULE TO PARTICIPATION AGREEMENT FOLLOWS]

 

 

	
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521949.01111/104255828v.10

 

SCHEDULE 1 TO PARTICIPATION AGREEMENT

For Qualifying Terminations Either Before or After a Change in Control Protection Period 

(See Executive Severance Plan for complete terms and conditions)

 

	
Participant

 
	
[INSERT PARTICIPANT NAME]

	
Participation Effective Date 

 
	
[INSERT DATE]

	
Position

 
	
[Executive Vice-President (EVP)]

	
Annual Base Salary

 
	
$__________________, subject to annual review as part of Participant’s annual performance review

	
Target Annual Cash Bonus Opportunity [and Automobile Allowance]
	
_____% of annual base salary

(For the avoidance of doubt, payment may be above or below the target opportunity specified herein based on actual performance as determined in the sole discretion of the Committee.)

[Automobile Allowance:  __________________]

 

	
Qualifying Termination
	
Participant’s employment is involuntarily terminated by the Company Group without “Cause” or Participant resigns for “Good Reason”

 

	
Severance Benefit
	
1.  Accrued obligations (if any) that remain unpaid as of the termination date, including earned but unpaid annual cash bonus (if any) for the immediately preceding fiscal year

2.  Continuation of annual base salary for 18 months, paid in normal payroll installments

3.  Prorated annual cash bonus for the year of termination based on actual performance

4.  Eligibility for an additional severance benefit, if Participant elects COBRA health benefit continuation, at the active employee rate, subject to early termination in accordance with the terms of the Plan

5.  Outstanding equity awards will be treated in accordance with the terms of such awards 

 

	
Restrictive Covenant Period
	
18 months following termination of employment for any reason

 

	
Conditions to Severance
	
Participant must execute release and waiver of claims and comply with restrictive covenants

 

 

	
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521949.01111/104255828v.10

 

	
Reimbursement of Enforcement Costs
	
In the event that arbitration is commenced by Participant to enforce the provisions of the Plan, and Participant prevails in at least one material issue in controversy in such arbitration, and the Company does not prevail in any claim brought by the Company (either in such arbitration or in a court proceeding) that Participant has breached Participant’s covenants and obligations under Section 4 of the Plan or under any other restrictive covenants to which Participant is subject, all expenses (including reasonable attorneys’ fees and expenses) of Participant in such arbitration shall be paid by the Company Group

 

 

 

	
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521949.01111/104255828v.10

 

SCHEDULE 2 TO PARTICIPATION AGREEMENT

For Qualifying Terminations During the Change in Control Protection Period 

(See Executive Severance Plan for complete terms and conditions)

 

		
	
Participant
	
[INSERT PARTICIPANT NAME]

 

	
Participation Effective Date 

 
	
[INSERT DATE]

	
Position

 
	
[Executive Vice-President (EVP)]

	
Annual Base Salary [and Automobile Allowance]
	
$__________________, subject to annual review as part of Participant’s annual performance review

[Automobile Allowance:  __________________]

 

	
Target Annual Cash Bonus Opportunity
	
_____% of annual base salary

(For the avoidance of doubt, payment may be above or below the target opportunity specified herein based on actual performance as determined in the sole discretion of the Committee.)

 

	
Change in Control Protection Period

 
	
24 months following the Change in Control date

	
Qualifying Termination
	
Participant’s employment is involuntarily terminated by the Company Group without “Cause” or Participant resigns for “Good Reason”

 

	
Severance Benefit
	
1.  Accrued obligations (if any) that remain unpaid as of the termination date, including earned but unpaid annual cash bonus (if any) for the immediately preceding fiscal year

2.  Base salary plus target bonus multiplied by 2, payable in a lump sum

3.  Prorated annual cash bonus for the year of termination based on actual performance if determinable (or target level of performance if not determinable)

4.  Eligibility for an additional severance benefit, if Participant elects COBRA health benefit continuation, at the active employee rate, subject to early termination in accordance with the terms of the Plan

5.  Outstanding equity awards will be treated in accordance with the terms of such awards 

 

 

	
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521949.01111/104255828v.10

 

		
	
Restrictive Covenants Period 
	
18 months following termination of employment for any reason (but noncompetition restriction ends on date of Qualifying Termination)

 

	
Conditions to Severance
	
Participant must execute release and waiver of claims and comply with restrictive covenants

 

	
Reimbursement of Enforcement Costs
	
In the event that arbitration is commenced by Participant to enforce the provisions of the Plan, and Participant prevails in at least one material issue in controversy in such arbitration, and the Company does not prevail in any claim brought by the Company (either in such arbitration or in a court proceeding) that Participant has breached Participant’s covenants and obligations under Section 4 of the Plan or under any other restrictive covenants to which Participant is subject, all expenses (including reasonable attorneys’ fees and expenses) of Participant in such arbitration shall be paid by the Company Group

 

 

 

	
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521949.01111/104255828v.10KIWA
BIOTECH PRODUCTS GROUP CORPORATION 

2016
EMPLOYEE, DIRECTOR AND CONSULTANT STOCK PLAN 

 

PREAMBLE

 

This
Plan replaces the 2004 Stock Incentive Plan previously adopted by the Company, which has now expired.

 

1.
DEFINITIONS. 

 

Unless
otherwise specified or unless the context otherwise requires, the following terms, as used in this Kiwa BioTech Products Group
Corporation 2016 Employee, Director and Consultant Stock Plan, have the following meanings:

 

	(a)	“Administrator”
    means the Board, unless it has delegated power to act on its behalf to the Committee, in which case the Administrator
    means the Committee. 

 

	(b)	“Affiliate”
    means a corporation or other entity controlled by the Company and designated by the Administrator as such. 

 

	(c)	“Award”
    means a Stock Appreciation Right, Stock Option or Stock Award. 

 

	(d)	“Board”
    means the Board of Directors of the Company. 

 

	(e)	“Cause”
    shall include (and is not limited to) dishonesty with respect to the Company or any Affiliate, insubordination, substantial
    malfeasance or non-feasance of duty, unauthorized disclosure of confidential information, breach by the Participant of any
    provision of any employment, consulting, advisory, nondisclosure, non-competition or similar agreement between the Participant
    and the Company or any Affiliate, and conduct substantially prejudicial to the business of the Company or any Affiliate. The
    determination of Cause shall be made by the Administrator in its sole discretion. Cause is not limited to events which have
    occurred prior to a Participant’s termination of employment or services, nor is it necessary that the Administrator’s
    finding of Cause occur prior to the termination of employment or services. If the Administrator determines, subsequent to
    a Participant’s termination of employment or services but prior to the vesting of a Stock Option, Stock Appreciation
    Right or Stock Award or exercise of a Stock Option or Stock Appreciation Right, that either prior or subsequent to the Participant’s
    termination of employment or services the Participant engaged in conduct which would constitute Cause, then the unvested Stock
    Option, Stock Appreciation Right or Stock Award, as applicable, is immediately cancelled and any vested Stock Options or Stock
    Appreciation Rights cease to be exercisable. Notwithstanding the foregoing, if the Participant and the Company or an Affiliate
    have entered into an employment or services agreement which defines the term “Cause” (or a similar term) which
    is in effect at the time of termination, such definition shall govern for purposes of determining whether such Participant
    has been terminated for Cause for purposes of this Plan. 

 

	(f)	“Code”
    means the Internal Revenue Code of 1986, as amended from time to time, and any successor thereto. 

 

	(g)	“Commission”
    means the Securities and Exchange Commission or any successor agency. 

 

	(h)	“Committee”
    means a committee of Directors appointed by the Board to administer this Plan. With respect to Stock Options granted at
    the time the Company is publicly held, if any, insofar as the Committee is responsible for granting Stock Options to Participants
    hereunder, it shall consist solely of two or more directors, each of whom is a “Non-Employee Director” within
    the meaning of Rule 16b-3 and each of whom is also an “outside director” under Section 162(m) of the Code. 

 

	(i)	“Company”
    means Kiwa BioTech Products Group Corporation, a Delaware corporation. 

 

	(j)	“Director”
    means a member of the Company’s Board of Directors. 

 

	(k)	“Disability”
    or “Disabled” means mental or physical illness that entitles the Participant to receive benefits under
    the long-term disability plan of the Company or an Affiliate, or if the Participant is not covered by such a plan or the Participant
    is not an employee of the Company or an Affiliate, 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 twelve months,
    and which renders the Participant unable to engage in any substantial gainful activity; provided, however, that a Disability
    shall not qualify under this Plan if it is the result of (i) a willfully self-inflicted injury or willfully self-induced sickness;
    or (ii) an injury or disease contracted, suffered or incurred while participating in a criminal offense.

 

    	 	 	 

    	 		 

    

 

	 	Notwithstanding
    the foregoing, if the Participant and the Company or an Affiliate have entered into an employment or services agreement which
    defines the term “Disability” (or a similar term), such definition shall govern for purposes of determining whether
    such Participant suffers a Disability for purposes of this Plan. The Administrator shall make the determination both of whether
    Disability has occurred and the date of its occurrence (unless a procedure for such determination is set forth in another
    agreement between the Company and such Participant, in which case such procedure shall be used for such determination). If
    requested, the Participant shall be examined by a physician selected or approved by the Administrator, the cost of which examination
    shall be paid for by the Company. The determination of Disability for purposes of this Plan shall not be construed to be an
    admission of disability for any other purpose. 

 

	(l)	“Effective
    Time” means the date of adoption of the Plan by the Company’s Board, September 7, 2016. 

 

	(m)	“Eligible
    Individual” means any officer, employee or director of the Company or an Affiliate, or any consultant or advisor
    providing services to the Company or an Affiliate. 

 

	(n)	“Exchange
    Act” means the Securities Exchange Act of 1934, as amended from time to time, and any successor thereto. 

 

	(o)	“Fair
    Market Value” means, as of any given date, the fair market value of the Stock as determined by the Administrator
    or under procedures established by the Administrator and in accordance with Section 409A of the Code. 

 

	(p)	“Family
    Member” means any child, stepchild, grandchild, parent, stepparent, grandparent, spouse, former spouse, sibling,
    niece, nephew, mother-in-law, father-in-law, son-in-law, daughter-in-law, brother-in-law or sister-in-law of a Participant
    (including adoptive relationships); any person sharing the Participant’s household (other than a tenant or employee);
    any trust in which the Participant and any of these persons have substantially all of the beneficial interest; any foundation
    in which the Participant and any of these persons control the management of the assets; any corporation, partnership, limited
    liability company or other entity in which the Participant and any of these other persons are the direct and beneficial owners
    of substantially all of the equity interests (provided the Participant and these other persons agree in writing to remain
    the direct and beneficial owners of all such equity interests); and any personal representative of the Participant upon the
    Participant’s death for purposes of administration of the Participant’s estate or upon the Participant’s
    incompetency for purposes of the protection and management of the assets of the Participant. 

 

	(q)	“Incentive
    Stock Option” means any Stock Option intended to be and designated as an “incentive stock option” within
    the meaning of Section 422 of the Code. 

 

	(r)	“Non-Employee
    Director” means a Director who is not an officer or employee of the Company or any Affiliate. 

 

	(s)	“Non-Qualified
    Stock Option” means any Stock Option that is not an Incentive Stock Option. 

 

	(t)	“Optionee”
    means a person who holds a Stock Option. 

 

	(u)	“Participant”
    means a person granted an Award. 

 

	(v)	“Plan”
    means this Kiwa BioTech Products Group Corporation 2016 Employee, Director and Consultant Stock Plan. 

 

	(w)	“Representative”
    means (i) the person or entity acting as the executor or administrator of a Participant’s estate pursuant to the
    last will and testament of a Participant or pursuant to the laws of the jurisdiction in which the Participant had his or her
    primary residence at the date of the Participant’s death; (ii) the person or entity acting as the guardian or temporary
    guardian of a Participant; (iii) the person or entity which is the beneficiary of the Participant upon or following the Participant’s
    death; or (iv) any person to whom a Stock Option has been transferred with the permission of the Administrator or by operation
    of law; provided that only one of the foregoing shall be the Representative at any point in time as determined under applicable
    law and recognized by the Administrator. 

 

    	 	 	 

    	 		 

    

 

	(x)	“Stock”
    means shares of the Company’s common stock, par value $.001 per share. 

 

	(y)	“Stock
    Appreciation Right” means a right granted under Section 6. 

 

	(z)	“Stock
    Award” means an Award, other than a Stock Option or Stock Appreciation Right, made in Stock or denominated in shares
    of Stock. A Stock Award may be settled in Stock or cash, as determined in the discretion of the Administrator. 

 

	(aa)	“Stock
    Option” means an option granted under Section 5. 

 

	(bb)	“Subsidiary”
    means any company during any period in which it is a “subsidiary corporation” (as such term is defined in
    Section 424(f) of the Code) with respect to the Company. 

 

	(cc)	“Ten
    Percent Holder” means an individual who owns, or is deemed to own, stock possessing more than 10% of the total combined
    voting power of all classes of Stock of the Company or of any parent or subsidiary corporation of the Company determined pursuant
    to the rules applicable to Section 422(b)(6) of the Code. 

 

2.
ESTABLISHMENT AND PURPOSE. 

 

The
Plan is established by the Company to attract and retain persons eligible to participate in the Plan, motivate Participants to
achieve long-term Company goals, and further align Participants’ interests with those of the Company’s other stockholders.
The Plan is adopted as of the Effective Time, subject to approval by the Company’s stockholders within 12 months before
or after such adoption date. Unless the Plan is discontinued earlier by the Board as provided herein, no Award shall be granted
hereunder on or after the date 10 years after the effective date.

 

3.
ADMINISTRATION; ELIGIBILITY. 

 

The
Plan shall be administered by the Administrator; provided, however, that, if at any time no Committee shall be in office, the
Plan shall be administered by the Board. The Plan may be administered by different Committees with respect to different groups
of Eligible Individuals.

 

The
Administrator shall have plenary authority to grant Awards pursuant to the terms of the Plan to Eligible Individuals; provided,
however, that each Eligible Individual must be an officer, employee, director or consultant of the Company or of an Affiliate
at the time the Award is granted. Notwithstanding the foregoing, the Administrator may authorize the grant of an Award to a person
not then an officer, employee, director or consultant of the Company or of an Affiliate; provided, however, that the actual grant
of such Award shall be conditioned upon such person becoming an Eligible Individual at or prior to the time the Award is granted.
Participation shall be limited to such persons as are selected by the Administrator. The granting of any Award to any individual
shall neither entitle that individual to, nor disqualify such individual from, participation in any other Awards.

 

Awards
may be granted as alternatives to, in exchange or substitution for, or replacement of, awards outstanding under the Plan or any
other plan or arrangement of the Company or an Affiliate (including a plan or arrangement of a business or entity, all or a portion
of which is acquired by the Company or an Affiliate). The provisions of Awards need not be the same with respect to each Participant.

 

Among
other things, the Administrator shall have the authority, subject to the terms of the Plan:

 

	(a)	to
    select the Eligible Individuals to whom Awards may from time to time be granted; 

 

	(b)	to
    determine whether and to what extent Stock Options, Stock Appreciation Rights, Stock Awards or any combination thereof are
    to be granted hereunder; 

 

	(c)	to
    determine the number of shares of Stock to be covered by each Award granted hereunder; 

 

	(d)	to
    approve forms of agreement for use under the Plan; 

 

    	 	 	 

    	 		 

    

 

	(e)	to
    determine the terms and conditions, not inconsistent with the terms of this Plan, of any Award granted hereunder (including,
    but not limited to, the option price, any vesting restriction or limitation, any vesting acceleration or forfeiture waiver
    and any right of repurchase, right of first refusal or other transfer restriction regarding any Award and the shares of Stock
    relating thereto, based on such factors or criteria as the Administrator shall determine); 

 

	(f)	subject
    to Section 8(a), to modify, amend or adjust the terms and conditions of any Award, at any time or from time to time, including,
    but not limited to, with respect to (i) performance goals and targets applicable to performance-based Awards pursuant to the
    terms of the Plan and (ii) extension of the post-termination exercisability period of Stock Options; 

 

	(g)	to
    determine to what extent and under what circumstances Stock and other amounts payable with respect to an Award shall be deferred;
    

 

	(h)	to
    adopt any sub-plans applicable to residents of any specified jurisdiction as it deems necessary or appropriate in order to
    comply with or take advantage of any tax laws applicable to the Company or to Participants or to otherwise facilitate the
    administration of the Plan, which sub-plans may include additional restrictions or conditions applicable to Stock Options
    or Shares acquired upon the exercise of Stock Options; 

 

	(i)	to
    determine the Fair Market Value; and 

 

	(j)	to
    determine the type and amount of consideration to be received by the Company for any Stock Award issued under Section 7. 

 

The
Administrator shall have the authority to adopt, alter and repeal such administrative rules, guidelines and practices governing
the Plan as it shall, from time to time, deem advisable, to interpret the terms and provisions of the Plan and any Award issued
under the Plan (and any agreement relating thereto) and to otherwise supervise the administration of the Plan.

 

Except
to the extent prohibited by applicable law, the Administrator may allocate all or any portion of its responsibilities and powers
to any one or more of its members and may delegate all or any portion of its responsibilities and powers to any other person or
persons selected by it. Any such allocation or delegation may be revoked by the Administrator at any time. The Administrator may
authorize any one or more of their members or any officer of the Company to execute and deliver documents on behalf of the Administrator.

 

Any
determination made by the Administrator or pursuant to delegated authority pursuant to the provisions of the Plan with respect
to any Award shall be made in the sole discretion of the Administrator or such delegate at the time of the grant of the Award
or, unless in contravention of any express term of the Plan, at any time thereafter. All decisions made by the Administrator or
any appropriately delegated officer pursuant to the provisions of the Plan shall be final and binding on all persons, including
the Company and Participants, unless otherwise determined by the Board if the Administrator is the Committee.

 

No
member of the Administrator, and no officer of the Company, shall be liable for any action taken or omitted to be taken by such
individual or by any other member of the Administrator or officer of the Company in connection with the performance of duties
under this Plan, except for such individual’s own willful misconduct or as expressly provided by law.

 

4.
STOCK SUBJECT TO PLAN. 

 

Subject
to adjustment as provided in this Section 4, the aggregate number of shares of Stock which may be delivered under the Plan shall
not exceed a number equal to 15% of the total number of shares of Stock outstanding immediately following the Effective Time,
assuming for this purpose the conversion into Stock of all outstanding securities that are convertible by their terms (directly
or indirectly) into Stock; provided, however, that, as of January 1 of each calendar year, commencing with the year 2017,
the maximum number of shares of Stock which may be delivered under the Plan shall automatically increase by a number sufficient
to cause the number of shares of Stock covered by the Plan to equal 15% of the total number of shares of Stock then outstanding,
assuming for this purpose the conversion into Stock of all outstanding securities that are convertible by their terms (directly
or indirectly) into Stock.

 

    	 	 	 

    	 		 

    

 

To
the extent any shares of Stock covered by an Award are not delivered to a Participant or beneficiary thereof because the Award
expires, is forfeited, canceled or otherwise terminated, or the shares of Stock are not delivered because the Award is settled
in cash or used to satisfy the applicable tax withholding obligation, such shares shall not be deemed to have been delivered for
purposes of determining the maximum number of shares of Stock available for delivery under the Plan.

 

In
the event of any Company stock dividend, stock split, combination or exchange of shares, recapitalization or other change in the
capital structure of the Company, corporate separation or division of the Company (including, but not limited to, a split-up,
spin-off, split-off or distribution to Company stockholders other than a normal cash dividend), sale by the Company of all or
a substantial portion of its assets (measured on either a stand-alone or consolidated basis), reorganization, rights offering,
partial or complete liquidation, or any other corporate transaction, Company share offering or other event involving the Company
and having an effect similar to any of the foregoing, the Administrator may make such substitution or adjustments in the (A) number
and kind of shares that may be delivered under the Plan, (B) additional maximums imposed in the immediately preceding paragraph,
(C) number and kind of shares subject to outstanding Awards, (D) exercise price of outstanding Stock Options and Stock Appreciation
Rights and (E) other characteristics or terms of the Awards as it may determine appropriate in its sole discretion to equitably
reflect such corporate transaction, share offering or other event; provided, however, that the number of shares subject to any
Award shall always be a whole number.

 

5.
STOCK OPTIONS. 

 

Stock
Options may be granted alone or in addition to other Awards granted under the Plan and may be of two types: Incentive Stock Options
and Non-Qualified Stock Options. Any Stock Option granted under the Plan shall be in such form as the Administrator may from time
to time approve.

 

The
Administrator shall have the authority to grant any Participant Incentive Stock Options, Non-Qualified Stock Options or both types
of Stock Options (in each case with or without Stock Appreciation Rights). Incentive Stock Options may be granted only to employees
of the Company and its Subsidiaries. To the extent that any Stock Option is not designated as an Incentive Stock Option or, even
if so designated, does not qualify as an Incentive Stock Option, it shall constitute a Non-Qualified Stock Option. Incentive Stock
Options may be granted only within 10 years from the date the Plan is adopted, or the date the Plan is approved by the Company’s
stockholders, whichever is earlier.

 

Stock
Options shall be evidenced by option agreements, each in a form approved by the Administrator. An option agreement shall indicate
on its face whether it is intended to be an agreement for an Incentive Stock Option or a Non-Qualified Stock Option. The grant
of a Stock Option shall occur as of the date the Administrator determines.

 

Anything
in the Plan to the contrary notwithstanding, no term of the Plan relating to Incentive Stock Options shall be interpreted, amended
or altered, nor shall any discretion or authority granted under the Plan be exercised, so as to disqualify the Plan under Section
422 of the Code or, without the consent of the Optionee affected, to disqualify any Incentive Stock Option under Section 422 of
the Code.

 

Stock
Options granted under this Section 5 shall be subject to the following terms and conditions and shall contain such additional
terms and conditions as the Administrator shall deem desirable.

 

	(a)	Exercise
    Price. The exercise price per share of Stock purchasable under a Stock Option shall be determined by the Administrator;
    provided, however, that the exercise price per share shall be not less than the Fair Market Value per share on the date the
    Stock Option is granted, or if the Stock Option is intended to qualify as an Incentive Stock Option and is granted to an individual
    who is a Ten Percent Holder, not less than 110% of such Fair Market Value per share. 

 

	(b)	Shares.
    Each option agreement shall state the number of shares to which it pertains. 

 

	(c)	Option
    Term. The term of each Stock Option shall be fixed by the Administrator, but no Incentive Stock Option shall be exercisable
    more than 10 years (or five years in the case of an individual who is a Ten Percent Holder) after the date the Incentive Stock
    Option is granted. 

 

	(d)	Exercisability.
    Except as otherwise provided herein, Stock Options shall be exercisable at such time or times, and subject to such terms and
    conditions, as shall be determined by the Administrator. If the Administrator provides that any Stock Option is exercisable
    only in installments, the Administrator may at any time waive such installment exercise provisions, in whole or in part, based
    on such factors as the Administrator may determine. In addition, the Administrator may at any time, in whole or in part, accelerate
    the exercisability of any Stock Option, provided that the Administrator shall not accelerate the exercise date of any
    installment of any Incentive Stock Option (and not previously converted into a Non-Qualified Stock Option pursuant to Section
    9(g)) if such acceleration would violate the annual exercisability limitation contained in Section 422(d) of the Code, as
    described in subsection (f) below. 

 

    	 	 	 

    	 		 

    

 

	(e)	Method
    of Exercise. Subject to the provisions of this Section 4, Stock Options may be exercised, in whole or in part, at any
    time during the option term by giving written notice of exercise to the Company or its designee specifying the number of shares
    of Stock subject to the Stock Option to be purchased and by complying with any other condition(s) set forth in the option
    agreement. 

 

The
option price of any Stock Option shall be paid in full in cash (by certified or bank check or such other instrument as the Company
may accept) or, unless otherwise provided in the applicable option agreement, by one or more of the following: (i) in the form
of unrestricted Stock already owned by the Optionee (or, in the case of the exercise of a Non-Qualified Stock Option, Restricted
Stock subject to a Stock Award hereunder) held for at least 6 months based in any such instance on the Fair Market Value of the
Stock on the date the Stock Option is exercised; (ii) by certifying ownership of shares of Stock owned by the Optionee to the
satisfaction of the Administrator for later delivery to the Company as specified by the Company; (iii) unless otherwise prohibited
by law for either the Company or the Optionee, by irrevocably authorizing a third party to sell shares of Stock (or a sufficient
portion of the shares) acquired upon exercise of the Stock Option and remit to the Company a sufficient portion of the sale proceeds
to pay the entire exercise price and any tax withholding resulting from such exercise; or (iv) by any combination of cash and/or
any one or more of the methods specified in clauses (i), (ii) and (iii). Notwithstanding the foregoing, the Administrator shall
accept only such payment on exercise of an Incentive Stock Option as is permitted by Section 422 of the Code, and a form of payment
shall not be permitted to the extent it would cause the Company to recognize a compensation expense (or additional compensation
expense) with respect to the Stock Option for financial reporting purposes.

 

If
payment of the option exercise price of a Non-Qualified Stock Option is made in whole or in part in the form of Restricted Stock,
the number of shares of Stock to be received upon such exercise equal to the number of shares of Restricted Stock used for payment
of the option exercise price shall be subject to the same forfeiture restrictions to which such Restricted Stock was subject,
unless otherwise determined by the Administrator.

 

No
shares of Stock shall be issued upon exercise of a Stock Option until full payment therefor has been made. Upon exercise of a
Stock Option (or a portion thereof), the Company shall have a reasonable time to issue the Stock for which the Stock Option has
been exercised, and the Optionee shall not be treated as a stockholder for any purposes whatsoever prior to such issuance. No
adjustment shall be made for cash dividends or other rights for which the record date is prior to the date such Stock is recorded
as issued and transferred in the Company’s official stockholder records, except as otherwise provided herein or in the applicable
option agreement.

 

	(f)	Limitation
    on Yearly Exercise for Incentive Stock Options. The option agreements shall restrict the amount of Incentive Stock Options
    which may become exercisable in any calendar year (under this or any other Incentive Stock Option plan of the Company or an
    Affiliate) so that the aggregate Fair Market Value (determined at the time each Incentive Stock Option is granted) of the
    Stock with respect to which Incentive Stock Options are exercisable for the first time by the Optionee in any calendar year
    does not exceed $500,000. 

 

	(g)	Transferability
    of Stock Options. Except as otherwise provided in the applicable option agreement, a Non-Qualified Stock Option (i) shall
    be transferable by the Optionee to a Family Member of the Optionee, provided that (A) any such transfer shall be by gift with
    no consideration and (B) no subsequent transfer of such Stock Option shall be permitted other than by will or the laws of
    descent and distribution, and (ii) shall not otherwise be transferable except by will or the laws of descent and distribution.
    An Incentive Stock Option shall not be transferable except by will or the laws of descent and distribution. A Stock Option
    shall be exercisable, during the Optionee’s lifetime, only by the Optionee or by the guardian or legal representative
    of the Optionee, it being understood that the terms “holder” and “Optionee” include the guardian and
    legal representative of the Optionee named in the applicable option agreement and any person to whom the Stock Option is transferred
    (X) pursuant to the first sentence of this Section 4(e) or pursuant to the applicable option agreement or (Y) by will or the
    laws of descent and distribution. Notwithstanding the foregoing, references herein to the termination of an Optionee’s
    employment or provision of services shall mean the termination of employment or provision of services of the person to whom
    the Stock Option was originally granted. 

 

    	 	 	 

    	 		 

    

 

	(h)	Termination
    by Death. Unless otherwise provided in the applicable option agreement, if an Optionee’s employment or provision
    of services terminates by reason of death, any Stock Option held by such Optionee may thereafter be exercised by the Participant’s
    Representative (i) to the extent that the Stock Option has become exercisable but has not been exercised on the date of death
    and (ii) in the event rights to exercise the Stock Option accrue periodically, to the extent of a pro-rata portion through
    the date of death of any additional vesting rights that would have accrued on the next vesting date had the Participant not
    died. The proration shall be based upon the number of days accrued in the current vesting period prior to the Participant’s
    date of death. If the Participant’s Representative wishes to exercise the Stock Option, the Representative must take
    all necessary steps to exercise the Option within one year after the date of death of such Participant, notwithstanding that
    the Participant might have been able to exercise the Option as to some or all of the shares on a later date if the Participant
    had not died and had continued to be an officer, employee, director or consultant or, if earlier, within the originally prescribed
    term of the Stock Option. In the event of termination of employment or provision of services due to death, if an Incentive
    Stock Option is exercised after the expiration of the exercise periods that apply for purposes of Section 422 of the Code,
    such Stock Option will thereafter be treated as a Non-Qualified Stock Option. 

 

	(i)	Termination
    by Reason of Disability. Unless otherwise provided in the applicable option agreement, if an Optionee’s employment
    or provision of services terminates by reason of Disability, any Stock Option held by such Optionee may thereafter be exercised
    by the Optionee (i) to the extent that the Stock Option has become exercisable but has not been exercised on the date of Disability;
    and (ii) in the event rights to exercise the Stock Option accrue periodically, to the extent of a pro rata portion through
    the date of Disability of any additional vesting rights that would have accrued on the next vesting date had the Participant
    not become Disabled. The proration shall be based upon the number of days accrued in the current vesting period prior to the
    date of Disability. A Disabled Participant may exercise such rights only within the period ending one year after the date
    of the Participant’s termination of employment, directorship or consultancy, as the case may be, notwithstanding that
    the Participant might have been able to exercise the Option as to some or all of the shares on a later date if the Participant
    has not become Disabled and had continued to be an officer, employee, director or consultant or, if earlier, within the originally
    prescribed term of the Stock Option. In the event of termination of employment or provision of services by reason of Disability,
    if an Incentive Stock Option is exercised after the expiration of the exercise periods that apply for purposes of Section
    422 of the Code, such Stock Option will thereafter be treated as a Non-Qualified Stock Option. 

 

	(j)	Termination
    for Cause. Unless otherwise provided in the applicable option agreement, if an Optionee’s employment or services
    terminate for Cause, all outstanding and unexercised Stock Options as of the time the Optionee is notified that such Optionee’s
    employment or services are terminated for Cause will immediately be cancelled. 

 

	(k)	Other
    Termination. Unless otherwise provided in the applicable option agreement, if an Optionee’s employment or provision
    of services terminates for any reason other than death, Disability or Cause, the Optionee may exercise any Stock Option granted
    to the Optionee to the extent that the Stock Option is exercisable on the date of such termination, but only within such term
    as the Administrator has designated in the Optionee’s option agreement. The provisions of this Section 5(k), and not
    the provisions of Sections 5(h) and 5(i), shall apply to an Optionee who subsequently becomes Disabled or dies after the termination
    of employment or service; provided, however, that in the case of an Optionee’s Disability or death within three months
    after the termination of service, the Optionee or the Optionee’s survivors may exercise the Stock Option within one
    year after the date of the Optionee’s termination of service, but in no event after the date of expiration of the term
    of the Stock Option. Notwithstanding anything in this Section 5(k) to the contrary, if subsequent to an Optionee’s termination
    of employment or services, but prior to the exercise of a Stock Option, the Administrator determines that, either prior to
    subsequent to the Optionee’s termination of employment or services, the Optionee engaged in conduct that would constitute
    Cause, then such Optionee shall cease to have any right to exercise such Stock Option. An Optionee who is absent from work
    with the Company or an Affiliate because of temporary disability (any disability other than a permanent and total Disability),
    or who is on leave of absence for any purpose, shall not, during the period of any such absence, be deemed, by virtue of such
    absence alone, to have terminated such Optionee’s service with the Company or with an Affiliate, except as the Administrator
    may otherwise expressly provide. Except as required by law or as set forth in the Optionee’s option agreement, Stock
    Options granted under the Plan shall not be affected by any change of an Optionee’s status within or among the Company
    and any Affiliates, so long as the Optionee continues to be an officer, employee, director or consultant of the Company or
    any Affiliate. In the event of termination of services for any reason other than death, Disability or Cause, if an Incentive
    Stock Option is exercised after the expiration of the exercise periods that apply for purposes of Section 422 of the Code,
    such Stock Option will thereafter be treated as a Non-Qualified Stock Option. 

 

    	 	 	 

    	 		 

    

 

	(l)	Participant
    Loans. Unless otherwise prohibited by law for either the Company or the Optionee, the Administrator may in its discretion
    authorize the Company to. 

 

	 	(i)	lend
    to an Optionee an amount equal to such portion of the exercise price of a Stock Option as the Administrator may determine;
    or 

 

	 	(ii)	guarantee
    a loan obtained by an Optionee from a third-party for the purpose of tendering such exercise price. 

 

The
terms and conditions of any loan or guarantee, including the term, interest rate, whether the loan is with recourse against the
Optionee and any security interest thereunder, shall be determined by the Administrator, except that no extension of credit or
guarantee shall obligate the Company for an amount to exceed the lesser of (i) the aggregate Fair Market Value on the date of
exercise, less the par value, of the shares of Stock to be purchased upon the exercise of the Stock Option, and (ii) the amount
permitted under applicable laws or the regulations and rules of the Federal Reserve Board and any other governmental agency having
jurisdiction.

 

6.
STOCK APPRECIATION RIGHTS. 

 

Stock
Appreciation Rights may be granted either on a stand-alone basis or in conjunction with all or part of any Stock Option granted
under the Plan. In the case of a Non-Qualified Stock Option, such rights may be granted either at or after the time of grant of
such Stock Option. In the case of an Incentive Stock Option, such rights may be granted only at the time of grant of such Stock
Option. A Stock Appreciation Right shall terminate and no longer be exercisable as determined by the Administrator, or, if granted
in conjunction with all or part of any Stock Option, upon the termination or exercise of the related Stock Option.

 

A
Stock Appreciation Right may be exercised by a Participant as determined by the Administrator in accordance with this Section
6, and, if granted in conjunction with all or part of any Stock Option, by surrendering the applicable portion of the related
Stock Option in accordance with procedures established by the Administrator. Upon such exercise and surrender, the Participant
shall be entitled to receive an amount determined in the manner prescribed in this Section 6. Stock Options which have been so
surrendered, if any, shall no longer be exercisable to the extent the related Stock Appreciation Rights have been exercised.

 

Stock
Appreciation Rights shall be subject to such terms and conditions as shall be determined by the Administrator, including the following:

 

	(a)	Stock
    Appreciation Rights granted on a stand-alone basis shall be exercisable only at such time or times and to such extent as determined
    by the Administrator. Stock Appreciation Rights granted in conjunction with all or part of any Stock Option shall be exercisable
    only at the time or times and to the extent that the Stock Options to which they relate are exercisable in accordance with
    the provisions of Section 5 and this Section 6. 

 

    	 	 	 

    	 		 

    

 

	(b)	Upon
    the exercise of a Stock Appreciation Right, a Participant shall be entitled to receive an amount in cash, shares of Stock
    or both, which in the aggregate are equal in value to the excess of the Fair Market Value of one share of Stock over (i) such
    Fair Market Value per share of Stock as shall be determined by the Administrator at the time of grant (if the Stock Appreciation
    Right is granted on a stand-alone basis), or (ii) the exercise price per share specified in the related Stock Option (if the
    Stock Appreciation Right is granted in conjunction with all or part of any Stock Option), multiplied by the number of shares
    in respect of which the Stock Appreciation Right shall have been exercised, with the Administrator having the right to determine
    the form of payment. 

 

	(c)	A
    Stock Appreciation Right shall be transferable only to, and shall be exercisable only by, such persons permitted in accordance
    with Section 5(g). 

 

7.
STOCK AWARDS OTHER THAN OPTIONS. 

 

Stock
Awards may be directly issued under the Plan (without any intervening options), subject to such terms, conditions, performance
requirements, restrictions, forfeiture provisions, contingencies and limitations as the Administrator shall determine. Stock Awards
may be issued which are fully and immediately vested upon issuance or which vest in one or more installments over the Participant’s
period of employment or other service to the Company or upon the attainment of specified performance objectives, or the Company
may issue Stock Awards which entitle the Participant to receive a specified number of vested shares of Stock or cash, as determined
by the Administrator, upon the attainment of one or more performance goals or service requirements established by the Administrator.

 

The
principal terms of each Stock Award shall be set forth in a stock grant agreement, which shall be in a form approved by the Administrator
and shall contain the terms and conditions which the Administrator determines to be appropriate and in the best interests of the
Company, including the number of shares to which the Stock Award relates.

 

Shares
representing a Stock Award shall be evidenced in such manner as the Administrator may deem appropriate, including book-entry registration
or issuance of one or more certificates (which may bear appropriate legends referring to the terms, conditions and restrictions
applicable to such Award). The Administrator may require that any such certificates be held in custody by the Company until any
restrictions thereon shall have lapsed and that the Participant deliver a stock power, endorsed in blank, relating to the Stock
covered by such Award.

 

A
Stock Award may be issued in exchange for any consideration which the Administrator may deem appropriate in each individual instance,
including, without limitation:

 

	(a)	cash
    or cash equivalents; 

 

	(b)	past
    services rendered to the Company or any Affiliate; or 

 

	(c)	future
    services to be rendered to the Company or any Affiliate (provided that, in such case, the par value of the Stock subject to
    such Stock Award shall be paid in cash or cash equivalents, unless the Administrator provides otherwise). 

 

A
Stock Award that is subject to restrictions on transfer and/or forfeiture provisions may be referred to as an award of “Restricted
Stock” or “Restricted Stock Units.”

 

8.
CHANGE IN CONTROL PROVISIONS. 

 

	(a)	Impact
    of Event. Notwithstanding any other provision of the Plan to the contrary, in the event of a Change in Control: 

 

	 	(i)	Any
    Stock Options and Stock Appreciation Rights outstanding as of the date such Change in Control is determined to have occurred
    and not then exercisable and vested shall become fully exercisable and vested to the full extent of the original grant; 

 

    	 	 	 

    	 		 

    

 

	 	(ii)	The
    restrictions applicable to any outstanding Stock Award shall lapse, and the Stock relating to such Award shall become free
    of all restrictions and become fully vested and transferable to the full extent of the original grant; 

 

	 	(iii)	All
    outstanding repurchase rights of the Company with respect to any outstanding Awards shall terminate; and 

 

	 	(iv)	Outstanding
    Awards shall be subject to any agreement of merger or reorganization that effects such Change in Control, which agreement
    shall provide for: 

 

	 	(A)	The
    continuation of the outstanding Awards by the Company, if the Company is a surviving corporation, 

 

	 	(B)	The
    assumption of the outstanding awards by the surviving corporation or its parent or subsidiary; 

 

	 	(C)	The
    substitution by the surviving corporation or its parent or subsidiary of equivalent awards for the outstanding Awards; or
    

 

	 	(D)	Settlement
    of each share of Stock subject to an outstanding Award for the Change in Control Price (less, to the extent applicable, the
    per share exercise price). 

 

	 	(v)	In
    the absence of any agreement of merger or reorganization effecting such Change in Control, each share of Stock subject to
    an outstanding Award shall be settled for the Change in Control Price (less, to the extent applicable, the per share exercise
    price), or, if the per share exercise price equals or exceeds the Change in Control Price, the outstanding Award shall terminate
    and be canceled. 

 

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

 

	 	(i)	An
    acquisition by any individual, entity or group (within the meaning of Section 13(d)(3) or 14(d)(2) of the Exchange Act) (a
    “Person”) of beneficial ownership (within the meaning of Rule 13d-3 promulgated under the Exchange Act) of 50%
    or more of either (1) the then outstanding shares of common stock of the Company (the “Outstanding Company Common Stock”)
    or (2) the combined voting power of the then outstanding voting securities of the Company entitled to vote generally in the
    election of directors (the “Outstanding Company Voting Securities”); excluding, however, the following: (1) any
    acquisition directly from the Company, other than an acquisition by virtue of the exercise of a conversion privilege unless
    the security being so converted was itself acquired directly from the Company, (2) any acquisition by the Company; (3) any
    acquisition by any employee benefit plan (or related trust) sponsored or maintained by the Company or any corporation controlled
    by the Company; or (4) any acquisition by any Person pursuant to a transaction which complies with clauses (1), (2) and (3)
    of subsection (iii) of this Section 8(b); or 

 

	 	(ii)	Within
    any period of 24 consecutive months, a change in the composition of the Board such that the individuals who, immediately prior
    to such period, constituted the Board (such Board shall be hereinafter referred to as the “Incumbent Board”) cease
    for any reason to constitute at least a majority of the Board; provided, however, for purposes of this Section 8(b), that
    any individual who becomes a member of the Board during such period, whose election, or nomination for election by the Company’s
    stockholders, was approved by a vote of at least a majority of those individuals who are members of the Board and who were
    also members of the Incumbent Board (or deemed to be such pursuant to this proviso) shall be considered as though such individual
    were a member of the Incumbent Board; but, provided further, that any such individual whose initial assumption of office occurs
    as a result of either an actual or threatened election contest (as such terms are used in Rule 14a-11 of Regulation 14A promulgated
    under the Exchange Act) or other actual or threatened solicitation of proxies or consents by or on behalf of a Person other
    than the Board shall not be so considered as a member of the Incumbent Board; or 

 

    	 	 	 

    	 		 

    

 

	 	(iii)	The
    consummation by the Company of a reorganization, merger or consolidation or sale or other disposition of all or substantially
    all of the assets of the Company (“Corporate Transaction”); excluding, however, such a Corporate Transaction pursuant
    to which (1) all or substantially all of the individuals and entities who are the beneficial owners, respectively, of the
    outstanding Company Common Stock and Outstanding Company Voting Securities immediately prior to such Corporate Transaction
    will beneficially own, directly or indirectly, more than 50% of, respectively, the outstanding shares of common stock, and
    the combined voting power of the then outstanding voting securities entitled to vote generally in the election of directors,
    as the case may be, of the corporation resulting from such Corporate Transaction (including, without limitation, a corporation
    which as a result of such transaction owns the Company or all or substantially all of the Company’s assets, either directly
    or through one or more subsidiaries) in substantially the same proportions as their ownership, immediately prior to such Corporate
    Transaction, of the outstanding Company Common Stock and Outstanding Company Voting Securities, as the case may be, (2) no
    Person (other than the Company; any employee benefit plan (or related trust) sponsored or maintained by the Company, by any
    corporation controlled by the Company, or by such corporation resulting from such Corporate Transaction) will beneficially
    own, directly or indirectly, more than 50% of, respectively, the outstanding shares of common stock of the corporation resulting
    from such Corporate Transaction or the combined voting power of the outstanding voting securities of such corporation entitled
    to vote generally in the election of directors, except to the extent that such ownership existed with respect to the Company
    prior to the Corporate Transaction, and (3) individuals who were members of the Board immediately prior to the approval by
    the stockholders of the Corporation of such Corporate Transaction will constitute at least a majority of the members of the
    board of directors of the corporation resulting from such Corporate Transaction; or 

 

	 	(iv)	The
    approval by the stockholders of the Company of a complete liquidation or dissolution of the Company, other than to a corporation
    pursuant to a transaction which would comply with clauses (1), (2) and (3) of subsection (iii) of this Section 8(b), assuming
    for this purpose that such transaction were a Corporate Transaction. 

 

	(c)	Change
    in Control Price. For purposes of the Plan, “Change in Control Price” means the higher of (i) the highest
    reported sales price, regular way, of a share of Stock in any transaction reported on a national securities exchange on which
    such shares are listed or listing service (such as an OTC market), as applicable, during the 60-day period prior to and including
    the date of a Change in Control, or if the Stock is not publicly quoted, the Fair Market Value determined by the Administrator
    and (ii) if the Change in Control is the result of a tender or exchange offer or a Corporate Transaction, the highest price
    per share of Stock paid in such tender or exchange offer or Corporate Transaction. To the extent that the consideration paid
    in any such transaction described above consists all or in part of securities or other non-cash consideration, the value of
    such securities or other non-cash consideration shall be determined in the sole discretion of the Board. 

 

9.
MISCELLANEOUS. 

 

	(a)	Amendment.
    The Board may amend or alter the Plan or any Award, but no amendment or alteration shall be made which would adversely affect
    the rights of a Participant under an Award theretofore granted without the Participant’s consent, except such an amendment
    (i) made to avoid an expense charge to the Company or an Affiliate, or (ii) made to permit the Company or an Affiliate to
    claim a deduction under, or otherwise comply with, the Code (including, but not limited to, Section 409A of the Code). No
    such amendment shall be made without the approval of the Company’s stockholders to the extent such approval is required
    by law, agreement or the rules of any stock exchange or market on which the Stock is listed. 

 

The
Administrator may amend the terms of any Stock Option or other Award theretofore granted, prospectively or retroactively, but
no such amendment shall adversely affect the rights of the holder thereof without the holder’s consent.

 

Notwithstanding
anything in the Plan to the contrary, neither the Board nor a Committee may (i) amend a Stock Option to reduce its option price,
(ii) cancel a stock option and re-grant a Stock Option with a lower option price that the option price of the cancelled Stock
option or (iii) take any other action (whether in the form of an amendment, cancellation or replacement grant) that has the effect
of repricing a Stock Option.

 

    	 	 	 

    	 		 

    

 

	(b)	Termination
    of the Plan. The Plan will terminate on the date which is 10 years from the earlier of the date of its adoption by the
    Board and the date of its approval by the stockholders. The Plan may be terminated at an earlier date by vote of the stockholders
    or the Board; provided, however, that any such earlier termination shall not affect any option agreements, Stock Appreciation
    Right agreements or Stock Award agreements executed prior to the effective date of such termination. 

 

	(c)	Unfunded
    Status of Plan. It is intended that this Plan be an “unfunded” plan for incentive and deferred compensation.
    The Administrator may authorize the creation of trusts or other arrangements to meet the obligations created under this Plan
    to deliver Common Stock or make payments, provided that, unless the Administrator otherwise determines, the existence of such
    trusts or other arrangements is consistent with the “unfunded” status of this Plan. 

 

	(d)	Rights
    as a Shareholder: No Participant to whom an Award has been granted shall have rights as a shareholder with respect to
    any shares covered by such Award, except after due exercise of the Stock Option or Stock Appreciation Right or vesting of
    the Stock Award and tender of the full purchase price, if any, for the shares being purchased pursuant to such exercise or
    award and registration of the shares in the Company’s share register in the name of the Participant. 

 

	(e)	Issuance
    of Securities: Except as expressly provided herein, no issuance by the Company of shares of Stock of any class, or securities
    convertible into shares of stock of any class, shall affect, and no adjustment by reason thereof shall be made with respect
    to, the number or price of shares subject to Awards. Except as expressly provided herein, no adjustments shall be made for
    dividends paid in cash or in property (including without limitation, securities) of the Company prior to any issuance of shares
    pursuant to an Award.

 

	(f)	Fractional
    Shares: No fractional shares shall be issued under the Plan and the Company shall pay cash in lieu of fractional shares
    equal to the Fair Market Value of such fractional shares. 

 

	(g)	Conversion
    of Incentive Stock Options into Non-Qualified Stock Options; Termination of Incentive Stock Options: The Administrator,
    at the written request of any Participant, may in its discretion take such actions as may be necessary to convert such Participant’s
    Incentive Stock Options (or any portions thereof) that have not been exercised on the date of conversion into Non-Qualified
    Stock Options at any time prior to the expiration of such Incentive Stock Options, regardless of whether the Participant is
    an employee of the Company or a Subsidiary at the time of such conversion. At the time of such conversion, the Administrator
    (with the consent of the Participant) may impose such conditions on the exercise of the resulting Non-Qualified Stock Options
    as the Administrator, in its discretion may determine, provided that such conditions shall not be inconsistent with this Plan.
    Nothing in the Plan shall be deemed to give any Participant the right to have such Participant’s Incentive Stock Options
    converted into Non-Qualified Stock Options, and no such conversion shall occur until and unless the Administrator takes appropriate
    action. The Administrator, with the consent of the Participant, may also terminate any portion of any Incentive Stock Option
    that has not been exercised at the time of such conversion. 

 

	(h)	Notice
    to Company of Disqualifying Disposition: Each employee who receives an Incentive Stock Option must agree to notify the
    Company in writing immediately after the employee makes a “Disqualifying Disposition” of any shares acquired pursuant
    to the exercise of an Incentive Stock Option. A “Disqualifying Disposition” is defined in Section 424(c) of the
    Code and includes any disposition (including any sale or gift) of such shares before the later of (i) two years after the
    date the employee was granted the Incentive Stock Option, or (ii) one year after the date the employee acquired shares by
    exercising the Incentive Stock Option, except as otherwise provided in Section 424(c) of the Code. If the employee has died
    before such stock is sold, these holding period requirements do not apply and no Disqualifying Disposition can occur thereafter.
    

 

	(i)	General
    Provisions. 

 

	 	(i)	The
    Administrator may require each person purchasing or receiving shares pursuant to an Award to represent to and agree with the
    Company in writing that such person is acquiring the shares without a view to the distribution thereof. The certificates for
    such shares may include any legend which the Administrator deems appropriate to reflect any restrictions on transfer. 

 

    	 	 	 

    	 		 

    

 

All
certificates for shares of Stock or other securities delivered under the Plan shall be subject to such stock transfer orders and
other restrictions as the Administrator may deem advisable under the rules, regulations and other requirements of the Commission,
any stock exchange or market on which the Stock is then listed and any applicable Federal or state securities law, and the Administrator
may cause a legend or legends to be put on any such certificates to make appropriate reference to such restrictions.

 

	 

         
	(ii)	Nothing
    contained in the Plan shall prevent the Company or any Affiliate from adopting other or additional compensation arrangements
    for its employees. 

 

	 	(iii)	The
    adoption of the Plan shall not confer upon any employee, director consultant or advisor any right to continued employment,
    directorship or service, nor shall it interfere in any way with the right of the Company or any Affiliate to terminate the
    employment or service of any employee, consultant or advisor at any time. 

 

	 	(iv)	No
    later than the date as of which an amount first becomes includible in the gross income of the Participant for Federal income
    tax purposes with respect to any Award under the Plan, the Participant shall pay to the Company, or make arrangements satisfactory
    to the Company regarding the payment of, any Federal, state, local or foreign taxes of any kind required by law to be withheld
    with respect to such amount. Unless otherwise determined by the Administrator, withholding obligations may be settled with
    Stock, including Stock that is part of the Award that gives rise to the withholding requirement. The obligations of the Company
    under the Plan shall be conditional on such payment or arrangements, and the Company, its Subsidiaries and its Affiliates
    shall, to the extent permitted by law, have the right to deduct any such taxes from any payment otherwise due to the Participant.
    The Administrator may establish such procedures as it deems appropriate for the settlement of withholding obligations with
    Stock.

 

	 	(v)	The
    Administrator shall establish such procedures as it deems appropriate for a Participant to designate a beneficiary to whom
    any amounts payable in the event of the Participant’s death are to be paid. 

 

	 	(vi)	Any
    amounts owed to the Company or an Affiliate by the Participant of whatever nature may be offset by the Company from the value
    of any shares of Common Stock, cash or other thing of value under this Plan or an agreement to be transferred to the Participant,
    and no shares of Common Stock, cash or other thing of value under this Plan or an agreement shall be transferred unless and
    until all disputes between the Company and the Participant have been fully and finally resolved and the Participant has waived
    all claims to such against the Company or an Affiliate. 

 

	 	(vii)	The
    grant of an Award shall in no way affect the right of the Company to adjust, reclassify, reorganize or otherwise change its
    capital or business structure or to merge, consolidate, dissolve, liquidate or sell or transfer all or any part of its business
    or assets. 

 

	 	(viii)	If
    any payment or right accruing to a Participant under this Plan (without the application of this Section (9)(c)(viii)), either
    alone or together with other payments or rights accruing to the Participant from the Company or an Affiliate (“Total
    Payments”) would constitute a “parachute payment” (as defined in Section 280G of the Code and regulations
    thereunder), such payment or right shall be reduced to the largest amount or greatest right that will result in no portion
    of the amount payable or right accruing under this Plan being subject to an excise tax under Section 4999 of the Code or being
    disallowed as a deduction under Section 280G of the Code; provided, however, that the foregoing shall not apply to the extent
    provided otherwise in an Award or in the event the Participant is party to an agreement with the Company or an Affiliate that
    explicitly provides for an alternate treatment of payments or rights that would constitute “parachute payments.”
    The determination of whether any reduction in the rights or payments under this Plan is to apply shall be made by the Administrator
    in good faith after consultation with the Participant, and such determination shall be conclusive and binding on the Participant.
    The Participant shall cooperate in good faith with the Administrator in making such determination and providing the necessary
    information for this purpose. The foregoing provisions of this Section 9(c)(viii) shall apply with respect to any person only
    if, after reduction for any applicable Federal excise tax imposed by Section 4999 of the Code and Federal income tax imposed
    by the Code, the Total Payments accruing to such person would be less than the amount of the Total Payments as reduced, if
    applicable, under the foregoing provisions of this Plan and after reduction for only Federal income taxes.

 

    	 	 	 

    	 		 

    

 

	 	(ix)	To
    the extent that the Administrator determines that the restrictions imposed by the Plan preclude the achievement of the material
    purposes of the Awards in jurisdictions outside the United States, the Administrator in its discretion may modify those restrictions
    as it determines to be necessary or appropriate to conform to applicable requirements or practices of jurisdictions outside
    of the United States. 

 

	 	(x)	The
    headings contained in this Plan are for reference purposes only and shall not affect the meaning or interpretation of this
    Plan. 

 

	 	(xi)	If
    any provision of this Plan shall for any reason be held to be invalid or unenforceable, such invalidity or unenforceability
    shall not effect any other provision hereby, and this Plan shall be construed as if such invalid or unenforceable provision
    were omitted. 

 

	 	(xii)	This
    Plan shall inure to the benefit of and be binding upon each successor and assign of the Company. All obligations imposed upon
    a Participant, and all rights granted to the Company hereunder, shall be binding upon the Participant’s heirs, legal
    representatives and successors 

 

	 	(xiii)	This
    Plan and each agreement granting an Award constitute the entire agreement with respect to the subject matter hereof and thereof,
    provided that in the event of any inconsistency between this Plan and such agreement, the terms and conditions of the Plan
    shall control 

 

	 	(xiv)	In
    the event there is an effective registration statement under the Securities Act pursuant to which shares of Stock shall be
    offered for sale in an underwritten offering, a Participant shall not, during the period requested by the underwriters managing
    the registered public offering, effect any public sale or distribution of shares of Stock received, directly or indirectly,
    as an Award or pursuant to the exercise or settlement of an Award. 

 

	 	(xv)	None
    of the Company, an Affiliate or the Administrator shall have any duty or obligation to disclose affirmatively to a record
    or beneficial holder of Stock or an Award, and such holder shall have no right to be advised of, any material information
    regarding the Company or any Affiliate at any time prior to, upon or in connection with receipt or the exercise of an Award
    or the Company’s purchase of Stock or an Award from such holder in accordance with the terms hereof. 

 

	 	(xvi)	This
    Plan, and all Awards, agreements and actions hereunder, shall be governed by, and construed in accordance with, the laws of
    the state of Delaware (other than its law respecting choice of law). 

 

	(j)	Compliance
    with Section 409A of the Code. The Plan is intended to comply with Section 409A of the Code, and official guidance issued
    thereunder, to the extent applicable. Notwithstanding any provision of the Plan to the contrary, the Plan shall be interpreted,
    operated, and administered consistently with this intent.

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