Document:

Exhibit

EXHIBIT 10.51
 
AMENDED AND RESTATED EMPLOYMENT AGREEMENT
P R E A M B L E
This Amended and Restated Employment Agreement defines the essential terms and conditions of our employment relationship with you.  The subjects covered in the Agreement are vitally important to you and to the Company.  Thus, you should read the document carefully and ask any questions before signing the Agreement.
This AMENDED AND RESTATED EMPLOYMENT AGREEMENT (“Agreement”) is entered into as of November 16, 2018 between Hill-Rom Holdings, Inc., an Indiana corporation (the “Company”), and Ken Meyers (“Executive”), and supersedes and replaces in its entirety that certain employment agreement entered into between the Company and Executive, dated September 21, 2015, as amended April 24, 2018 by that certain First Amendment thereto, the “Prior Employment Agreement”).
W I T N E S S E T H:
WHEREAS, the Company and its affiliated entities are engaged in the healthcare industry throughout the United States and abroad including, but not limited to, the design, manufacture, sale, service and rental of hospital beds and stretchers, hospital furniture, medical‐related architectural products, specialty sleep surfaces (including therapeutic surfaces), air clearing devices, biomedical and asset management services, as well as other medical-related accessories, devices, products and services;
WHEREAS, the Company is willing to continue to employ Executive in an executive or managerial position and Executive desires to continue to be employed by the Company in such capacity based upon the terms and conditions set forth in this Agreement;
WHEREAS, in the course of the continued employment contemplated under this Agreement, Executive has acquired, and it will be necessary for Executive to continue to acquire and maintain knowledge of certain trade secrets and other confidential and proprietary information regarding the Company as well as any of its parent, subsidiary and/or affiliated entities (hereinafter jointly referred to as the “Companies”); and
WHEREAS, the Company and Executive (collectively referred to as the “Parties”) acknowledge and agree that the execution of this Agreement, as amended and restated, is necessary to memorialize the terms and conditions of their employment relationship as well as safeguard against the unauthorized disclosure or use of the Company’s confidential information and to otherwise preserve the goodwill and ongoing business value of the Company.
NOW THEREFORE, in consideration of Executive’s employment, the Company’s willingness to disclose certain confidential and proprietary information to Executive and the mutual covenants contained herein as well as other good and valuable consideration, the receipt of which is hereby acknowledged, the Parties agree as follows:

		
	1.
	Employment.  

		
	(a)
	Continuing on the date hereof and ending as provided in Paragraph 9 herein, the Executive agrees to continue to serve as Senior Vice President, Chief Human Resources Officer for the Company, reporting to the Chief Executive Officer of the Company (the “CEO”).  Executive agrees to perform all duties and responsibilities traditionally assigned to, or falling within the normal responsibilities of, an individual employed as Senior Vice President, Chief Human Resources Officer of the Company.  Executive also agrees to perform any and all additional duties or responsibilities consistent with such position as may be assigned by the Board of Directors of the Company (the “Board”) or the CEO in its or his or her sole discretion.

		
	(b)
	 The Company agrees to continue to employ the Executive pursuant to the terms of this Agreement, and the Executive agrees to continue be so employed, for a term of one (1) year (the “Initial Term”) commencing as of the date hereof.  On the first anniversary of the date hereof and, after the Initial Term, on such first anniversary and each annual anniversary of such date thereafter, the term of this Agreement shall be automatically extended for successive one-year periods, provided, however, that either party hereto may elect not to extend this Agreement by giving written notice to the other party at least one hundred and eighty (180) days prior to any such anniversary date.  Notwithstanding the foregoing, the Executive’s employment hereunder may be earlier terminated in accordance with Section 9 hereof.  The period of time between the date hereof and the termination of the Executive’s employment hereunder shall be referred to herein as the “Employment Term.”

		
	2.
	Efforts and Duty of Loyalty.  During the Employment Term, Executive covenants and agrees to exercise reasonable efforts to perform all assigned duties in a diligent and professional manner and in the best interest of the Company.  Executive agrees to devote Executive’s full working time, attention, talents, skills and efforts to further the Company’s business interests.  Executive agrees not to engage in any outside business activity, whether or not pursued for gain, profit or other pecuniary advantage, without the express written consent of the Company.  Executive shall act at all times in accordance with the Company’s code of ethical business conduct, and all other applicable policies which may exist or be adopted by the Company from time to time.  The Executive may serve on other boards of directors as long as such service shall not interfere with the proper performance of Executive’s duties and obligations hereunder consistent with the Company’s Corporate Governance Standards for Board of Directors and applicable laws, with the prior consent of the Company.  

		
	3.
	At-Will Employment.  Subject to the terms and conditions of the severance opportunity set forth below, Executive specifically acknowledges and accepts such employment on an “at-will” basis and agrees that both Executive and the Company retain the right to terminate this relationship at any time, with or without cause, for any reason not prohibited by applicable law upon notice as required by this Agreement.  

		
	4.
	Compensation.  For all services rendered by Executive on behalf of, or at the request of, the Company, in Executive’s capacity as Senior Vice President, Chief Human Resources Officer of the Company, Executive shall be compensated as follows during the Employment Term.

		
	(a)
	Base Salary.  For the services performed by Executive under this Agreement, the Company shall pay Executive a base salary of Four Hundred Sixty-Five Thousand Dollars ($465,000) per year (“Base Salary”).  The Base Salary shall be paid in the same increments as the Company’s normal payroll, but no less frequently than monthly, and prorated for any partial year of service during the Employment Term.  Executive’s Base Salary shall be reviewed at least annually.

		
	(b)
	Bonus.  The Executive shall participate in any short-term incentive compensation program as may be in effect from time to time, as determined solely at the discretion of the Board, or any other bonus program as the Company may establish from time to time in its sole discretion.  For each fiscal year, the annual performance bonus target will be not less than 60% of Base Salary earned during such fiscal year (the “Target Bonus”).  The Target Bonus will be based upon the performance measures and objectives established by the Board from time to time, but ultimately subject to the Compensation and Management Development Committee’s (“Committee”) discretion.  The minimum annual performance bonus will be 0% of the Target Bonus and the maximum annual performance bonus will be 200% of the Target Bonus.   Any bonus earned shall be paid no later than March 15th of the calendar year following the calendar year in which the applicable fiscal year ended, subject to the Executive remaining continuously employed with the Company through the date that such bonus is paid, except as otherwise expressly provided hereunder. 

		
	(c)
	Equity Awards.  The Executive shall be eligible to receive equity and other long-term incentive awards under the equity-based incentive compensation plans adopted by the Company during the Employment Term for which employees are generally eligible.  The level of the Executive’s participation in any such plan, if any, shall be determined in the sole discretion of the Committee from time to time.

		
	(d)
	Other Benefits.  During the Employment Term, Executive will be entitled to participate in and receive such additional benefits and perquisites, including retirement and health and welfare benefits (such as participation in the supplemental executive retirement plan (the “SERP”), supplemental long-term disability insurance coverage, a Company-paid Executive physical examination, reimbursement for a portion of tax preparation and estate and financial planning services and flexible paid time off in accordance with the Company’s policy on accrual and use applicable to employees as in effect from time to time, including, but not limited to, forty (40) hours of sick leave), in each case, as are available to other senior executives of the Company and as the Board may deem appropriate and as pre-approved by the Committee.  The Executive’s participation will be subject to the terms of the applicable plan documents and generally applicable Company policies. Notwithstanding the foregoing, the Company may modify or terminate any employee benefit plan at any time.

		
	5.
	Changes to Compensation.  Notwithstanding anything contained herein to the contrary, Executive acknowledges that the Company specifically reserves the right to make changes to Executive’s compensation in its sole discretion including, but not limited to, modifying or eliminating a compensation component.  The Parties agree that such changes shall be 

deemed effective immediately and an approved modification of this Agreement unless, within thirty (30) days after receiving notice of such change, Executive exercises Executive’s right to terminate this Agreement Without Cause or for Good Reason, as provided and defined below in Paragraph 9, as may be applicable. 
		
	6.
	Direct Deposit.  Within thirty (30) days of the date hereof, Executive agrees to make all necessary arrangements to have all sums paid pursuant to this Agreement direct deposited into one or more bank accounts as designated by Executive.

		
	7.
	Predecessor Employers.  Except as otherwise disclosed in writing to the Committee of the Board prior to the date hereof Executive warrants that Executive is not a party to any contract, restrictive covenant, or other agreement purporting to limit or otherwise adversely affecting Executive’s ability to secure employment with any third party.  Alternatively, should any such agreement exist, Executive warrants that the contemplated services to be performed hereunder will not violate the terms and conditions of any such agreement.

		
	8.
	Restricted Duties.  Executive agrees not to disclose, or use for the benefit of the Company, any confidential or proprietary information belonging to any predecessor employer(s) that otherwise has not been made public and further acknowledges that the Company has specifically instructed Executive not to disclose or use such confidential or proprietary information.  Based on Executive’s understanding of the anticipated duties and responsibilities hereunder, Executive acknowledges that such duties and responsibilities will not compel the disclosure or use of any such confidential and proprietary information.

		
	9.
	Termination.  The Executive’s employment with the Company and the Employment Term shall end early upon the first to occur of any of the following events:

		
	(a)
	Death. In the event Executive dies during the Employment Term, this Agreement shall automatically terminate upon the date of death of the Executive.

		
	(b)
	Disability.  In the event Executive suffers a Disability (as defined herein) during the term of employment, this Agreement shall automatically be terminated on the date of such Disability.  For purposes of this Agreement, Executive shall be considered to have suffered a “Disability”: (i) upon a good faith determination by Company that, as a result of any mental or physical impairment, Executive is and will likely remain unable to perform the essential functions of Executive’s duties or responsibilities hereunder on a full-time basis for one hundred eighty (180) days, with or without reasonable accommodation, or (ii) Executive becomes eligible for or receives any benefits pursuant to the Company’s long-term disability policy.  Notwithstanding anything expressed or implied above to the contrary, the Company agrees to fully comply with its obligations under the Family and Medical Leave Act of 1993 and the Americans with Disabilities Act as well as any other applicable federal, state, or local law, regulation, or ordinance governing the provision of leave to individuals with serious health conditions or the protection of individuals with disabilities as well as the Company’s obligation to provide reasonable accommodation thereunder.

		
	(c)
	Cause.  Executive’s employment may be terminated by the Company at any time for Cause without notice or prior warning.  For purposes of this Agreement, “Cause” shall mean the Company’s good faith determination that Executive has:

		
	(i)
	Acted with gross neglect or willful misconduct in the discharge of Executive’s duties and responsibilities, or refused to follow or comply with the lawful direction of the Board or the terms and conditions of this Agreement; provided, however, that such refusal is not based primarily on Executive’s good faith compliance with applicable legal or ethical standards.

		
	(ii)
	Acquiesced or participated in any conduct that is dishonest, fraudulent, illegal, unethical, involves moral turpitude or is otherwise illegal and involves conduct that has the potential, in the Board’s reasonable opinion, to cause the Company, its officers or its directors significant embarrassment or ridicule.

		
	(iii)
	Violated a material requirement of any Company policy or procedure, specifically including a violation of the Company’s code of ethics.

		
	(iv)
	Violated any provisions of the restrictive covenants listed in Paragraph 13.

		
	(v)
	Engaged in any act that, in the reasonable opinion of the Board, would hold the Company, its officers or directors up to probable civil or criminal liability, provided that, if Executive acts in good faith for compliance with applicable legal or ethical standards, such actions shall not be grounds for termination for Cause.

		
	(vi)
	Breached the warranties of Executive set forth in Paragraph 7 herein.

		
	(vii)
	Engaged in such other conduct recognized at law as constituting cause.

Upon the occurrence or discovery of any event specified above, the Company shall have the right to terminate Executive’s employment, effective immediately, by providing notice thereof to Executive.  Absent written mutual agreement otherwise, the Parties agree in advance that it is not possible for Executive to cure any violations of sub-paragraphs (ii), (iv) or (vi) and, therefore, no opportunity for cure need be provided in those circumstances.  Notwithstanding the foregoing, the Company may not terminate the Executive’s employment for Cause unless (A) a determination that cause exists is made and approved by a majority of the Board, (B) if the circumstance giving rise to the issue is one of the provisions enumerated above that are capable of being cured the Executive is given at least ten (10) days’ written notice of the Board meeting called to make such determination, and (C) the Executive is given the opportunity to address the Board at such meeting.
		
	(d)
	Without Cause.  The Parties agree that either party may terminate this employment relationship at any time, “Without Cause”, upon sixty (60) days’ advance written notice or, if terminated by the Company, pay in lieu of notice (hereinafter referred to as “Notice Pay”).  However, in no event shall Executive be entitled to Notice Pay 

if Executive is eligible for and accepts severance payments pursuant to the provisions of Paragraph 10(d) below.  Notice pay shall be paid as if the Executive remained on payroll, subject to Paragraph 10(d) hereof.
		
	(e)
	Good Reason.  Executive may terminate Executive’s employment and declare this Agreement to have been terminated for “Good Reason” upon the occurrence, without Executive’s consent, of any of the following circumstances:

		
	(i)
	the assignment to Executives of duties that are materially inconsistent with Executive’s position as Senior Vice President, Chief Human Resources Officer;

		
	(ii)
	the failure to elect or reelect Executive as Senior Vice President, Chief Human Resources Officer of the Company (unless such failure is related in any way to the Company’s decision to terminate Executive for Cause);

		
	(iii)
	a reduction by the Company in the amount of Executive’s Base Salary or the discontinuation or reduction by the Company of Executive’s participation at previously existing levels of eligibility in any incentive compensation, additional compensation or equity programs, benefits, policies or perquisites; provided, however, that the Company may make such changes and/or reductions without implicating the provisions of this subparagraph (iii) so long as Executive is treated in a manner that is commensurate with the treatment of other senior executives of the Company; 

		
	(iv)
	a failure by the Company to perform its obligations under this Employment Agreement; and

		
	(v)
	the relocation of the Company’s principal executive offices or Executive’s place of work to a location requiring a change of more than fifty (50) miles in Executive’s daily commute.

Notwithstanding the foregoing, no termination of employment by Executive shall constitute a termination for Good Reason unless (A) Executive gives the Company written notice of the existence of an event described in each of subparagraphs (i) through (v) above within ninety (90) days following the occurrence of such event, (B) the Company does not remedy such event described in each of subparagraphs (i) through (v) above, as applicable, within thirty (30) days of receiving the notice described in the preceding clause (A), and (C) Executive terminates employment within sixty (60) days of the end of the cure period specified in clause (B), above.
		
	(f)
	Voluntary Termination. Executive may voluntarily, and without Good Reason, terminate Executive’s employment for any reason.

		
	(g)
	Expiration of Employment Term; Non-Extension of Agreement.  This Agreement may be terminated upon the expiration of the Employment Term due to a non-extension of the Agreement by the Company or the Executive.

		
	10.
	Consequences of Termination.

		
	(a)
	Death. In the event that Executive’s employment and the Employment Term ends on account of the Executive’s death, the Executive or the Executive’s estate, as the case may be, shall be entitled to the following (with the amounts due hereunder to be paid in accordance with the Company’s past practice and applicable law):

		
	(i)
	immediate vesting in the SERP, which shall be paid in accordance with the award agreements, benefits plans, past practice and applicable law (the “SERP Benefit”);

		
	(ii)
	any Base Salary, earned but unpaid through the date of termination; and

		
	(iii)
	all other deferred compensation, payments, accrued benefits of employment or fringe benefits to which the Executive may be entitled pursuant to the express terms of (A) any applicable compensation arrangement, (B) any applicable benefit, equity or fringe benefit plan, program or grant or (C) this Agreement (collectively, Paragraphs 10(a)(ii) and ý10(a)(iii) hereof shall be hereafter referred to as the “Accrued Benefits”).

		
	(b)
	Disability.  In the event that the Executive’s employment and the Employment Term ends on account of the Executive’s Disability, the Company shall pay or provide to the Executive the Accrued Benefits and the SERP Benefit. 

		
	(c)
	Termination for Cause; Voluntary Termination; Non-Extension of Employment Term.  If the Executive’s employment is terminated (i) by the Company for Cause, (ii) by the Executive voluntarily and without Good Reason, or (iii) as a result of the non-extension of the Employment Term by either party as provided in Paragraph 9, the Company shall pay or provide to the Executive the Accrued Benefits.

		
	(d)
	Termination Without Cause or for Good Reason. In the event Executive’s employment is terminated by the Company Without Cause or by the Executive for Good Reason, the Company shall pay or provide the Executive with the following, (subject to the provisions of Paragraph 26):

		
	(i)
	the Accrued Benefits; 

		
	(ii)
	the SERP Benefit;

		
	(iii)
	one (1) times the sum of (A) Executive’s Base Salary for a period of twelve (12) months plus (B) the Executive’s Target Bonus for the year in which the Executive’s employment is terminated.  Except as required by Code Section 409A (as defined below), this total amount shall be paid in accordance with the Company’s standard payroll practices (e.g. bi-weekly) over the twelve (12) month period following Executive’s termination, except no payment shall be made until after the Release (as defined below) becomes effective and the first payment thereafter shall include any missed payment.  Notwithstanding the foregoing, if any execution and revocation period 

overlap two calendar years, the first payment will be paid in the second (2nd) calendar year and shall include any missed payment;
		
	(iv)
	If Executive elects continuation coverage under the Company’s medical plan pursuant to Part 6 of Subtitle B of title I of the Employee Retirement Income Security Act of 1974, as amended (“COBRA”), the Company shall reimburse Executive, on a monthly basis, for a portion of Executive’s COBRA payments  (provided such reimbursement does not result in any taxes or penalties for the Company) in an amount equal to the difference between (A) the amount the Company paid as a monthly premium for Executive’s participation in such plan immediately prior to Executive’s termination Without Cause or termination for Good Reason and (B) the amount Executive was required to pay as a monthly premium for participation in such plan immediately prior to such termination, until the earlier of (x) the end of the twelve (12) month period beginning on the effective date of termination of the Executive’s employment hereunder, or (y) such time as the Executive is eligible to be covered by comparable benefits of a subsequent employer.  The Executive agrees to notify the Company promptly if and when Executive begins employment with another employer and if and when Executive becomes eligible to participate in any health or welfare plans of another employer; and 

		
	(v)
	a lump sum payment in cash equal to the portion of the Target Bonus which would have been payable to the Executive for the fiscal year in which the termination occurred, based on the actual performance level during such fiscal year, but with such amount further prorated based on the number of days that elapsed between the start of such fiscal and the date of such termination of Executive’s employment.  This pro-rated bonus (if any) will be paid at such time as the bonus would have been paid had Executive remained employed with the Company through the end of the applicable bonus period.

Payments and benefits provided pursuant to this Paragraph 10(d) shall be paid in lieu of, and not in addition to, any other contractual, notice or statutory pay or other accrued compensation obligation (excluding accrued wages and deferred compensation).  
		
	11.
	Release.  Any payments made pursuant to Paragraph 10(d) are contingent upon Executive materially complying with the restrictive covenants contained herein and executing a separation and release agreement in a form not substantially different from the form attached as Exhibit A (the “Release”).  Further, the Company’s obligation to provide payments pursuant to Paragraph 10(d) shall be deemed null and void should Executive fail or refuse to execute and deliver to the Company the Company’s then standard Release (without modification) within any time period as may be prescribed by law or, in absence thereof, twenty-one (21) days after the Executive’s Effective Termination Date (as defined in the Release).  

		
	12.
	Reaffirmation.  Upon termination of Executive’s employment for any reason, Executive agrees, if requested to reaffirm in writing Executive’s post-employment obligation as set forth in this Agreement, that Executive will make such reaffirmation.

		
	13.
	Restrictive Covenants. The capitalized terms used, but not defined herein in Paragraphs 13(a) through 13(i), will have the meanings given to such terms in Paragraph 13(j).

		
	(a)
	Assignment of Rights.

		
	(i)
	Copyrights.  Executive agrees that all works of authorship fixed in any tangible medium of expression by Executive during the term of this Agreement relating to the Company’s business (“Works”), either solely or jointly with others, shall be and remain exclusively the property of the Company.  Each such Work created by Executive is a “work made for hire” under the copyright law and the Company may file applications to register copyright in such Works as author and copyright owner thereof.  If, for any reason, a Work created by Executive is excluded from the definition of a “work made for hire” under the copyright law, then Executive does hereby assign, sell, and convey to the Company the entire rights, title, and interests in and to such Work, including the copyright therein, to the Company.  Executive will execute any documents that the Company deems necessary in connection with the assignment of such Work and copyright therein.  Executive will take whatever steps and do whatever acts the Company requests, including, but not limited to, placement of the Company’s proper copyright notice on Works created by Executive to secure or aid in securing copyright protection in such Works and will assist the Company or its nominees in filing applications to register claims of copyright in such Works.  The Company shall have free and unlimited access at all times to all Works and all copies thereof and shall have the right to claim and take possession on demand of such Works and copies.

		
	(ii)
	Inventions.  Executive agrees that all discoveries, concepts, and ideas, whether patentable or not, including, but not limited to, apparatus, processes, methods, compositions of matter, techniques, and formulae, as well as improvements thereof or know-how related thereto, relating to any present or prospective product, process, or service of the Company (“Inventions”) that Executive conceives or makes during the term of this Agreement relating to the Company’s business, shall become and remain the exclusive property of the Company, whether patentable or not, and Executive will, without royalty or any other consideration:

		
	(A)
	Inform the Company promptly and fully of such Inventions by written reports, setting forth in detail the procedures employed and the results achieved;

		
	(B)
	Assign to the Company all of Executive’s rights, title, and interests in and to such Inventions, any applications for United States and 

foreign letters patent, any United States and foreign letters patent, and any renewals thereof granted upon such Inventions;
		
	(C)
	Assist the Company or its nominees, at the expense of the Company, to obtain such United States and foreign letters patent for such Inventions as the Company may elect; and

		
	(D)
	Execute, acknowledge, and deliver to the Company at the Company’s expense such written documents and instruments, and do such other acts, such as giving testimony in support of Executive’s inventorship, as may be necessary in the opinion of the Company, to obtain and maintain United States and foreign letters patent upon such Inventions and to vest the entire rights and title thereto in the Company and to confirm the complete ownership by the Company of such Inventions, patent applications, and patents.

		
	(b)
	Return of Company Property.  All records, files, drawings, documents, data in whatever form, business equipment (including computers, cell phones, etc.), and the like relating to, or provided by, the Company shall be and remain the sole property of the Company.  Upon termination of employment, Executive shall immediately return to the Company all such items without retention of any copies and without additional request by the Company.  De minimis items such as pay stubs, 401(k) plan summaries, employee bulletins, and the like are excluded from this requirement.  Executive may retain Executive’s address books to the extent they only contain contact information.

		
	(c)
	Confidential Information.  Executive acknowledges that the Companies possess certain trade secrets as well as other confidential and proprietary information which they have acquired or will acquire at great effort and expense.  Such information may include, without limitation, confidential information, whether in tangible or intangible form, regarding the Companies’ products and services, marketing strategies, business plans, operations, costs, current or prospective customer information (including customer identities, contacts, requirements, creditworthiness, preferences, and like matters), product concepts, designs, prototypes or specifications, research and development efforts, technical data and know‐how, sales information, including pricing and other terms and conditions of sale, financial information, internal procedures, techniques, forecasts, methods, trade information, trade secrets, software programs, project requirements, inventions, trademarks, trade names, and similar information regarding the Companies’ business(es) (collectively referred to herein as “Confidential Information”).  Executive further acknowledges that, as a result of Executive’s employment with the Company, Executive will have access to, will become acquainted with, and/or may help develop, such Confidential Information.  Confidential Information shall not include information readily available in the public so long as such information was not made available through fault of Executive or wrong doing by any other individual.

		
	(d)
	Restricted Use of Confidential Information.  Executive agrees that all Confidential Information is and shall remain the sole and exclusive property of the Company and/or its affiliated entities.  Except as may be expressly authorized by the Company in writing, or other than in the course of the Executive’s employment and for the benefit of the Company, Executive agrees not to disclose, or cause any other person or entity to disclose, any Confidential Information to any third party while employed by the Company and for as long thereafter as such information remains confidential (or as limited by applicable law).  Further, Executive agrees to use such Confidential Information only in the course of Executive’s duties in furtherance of the Company’s business and agrees not to make use of any such Confidential Information for Executive’s own purposes or for the benefit of any other entity or person.  The foregoing shall not apply to information that (i) was known to the public prior to its disclosure to the Executive; (ii) becomes generally known to the public subsequent  to disclosure to the Executive through no wrongful act of the Executive or any representative of the Executive; or (iii) the Executive is required to disclose by applicable law, regulation or legal process, or is requested by subpoena, court order or a governmental, regulatory or self-regulatory body with the apparent authority to disclose any Confidential Information (provided that in such case the Executive shall (A) provide the Company with prior notice of the contemplated disclosure, (B) cooperate with the Company at its expense in seeking a protective order or other appropriate protection of such information, and (C) disclose only that Confidential Information which Executive is legally required to disclose).

		
	(e)
	Non-Solicitation.  During Executive’s employment and for a period of twelve (12) months thereafter, Executive agrees not to directly or indirectly engage in the following prohibited conduct:

		
	(i)
	Solicit, offer products or services to, or accept orders for, any Competitive Products or otherwise transact any competitive business on behalf of any Competitor;

		
	(ii)
	Attempt on behalf of any Competitor to entice or otherwise cause any third party to withdraw, curtail or cease doing business with the Company (or any Affiliate thereof), specifically including customers, vendors, independent contractors and other third-party entities;

		
	(iii)
	Except in the course of the Executive’s employment and for the benefit of the Company, disclose to any person or entity the identities, contacts or preferences of any customers of the Company (or any Affiliate thereof), or the identity of any other persons or entities having business dealings with the Company (or any Affiliate thereof);

		
	(iv)
	Induce any individual who has been employed by or had provided services to the Company (or any Affiliate thereof) within the six (6) month period immediately preceding the effective date of Executive’s separation to terminate such relationship with the Company (or any Affiliate thereof);

		
	(v)
	Assist, coordinate or otherwise offer employment to, accept employment inquiries from, or employ any individual who is or had been employed by the Company (or any Affiliate thereof) at any time within the six (6) month period immediately preceding such offer, or inquiry;

		
	(vi)
	Communicate or indicate in any way to any customer of the Company (or any Affiliate thereof), prior to formal separation from the Company, any interest, desire, plan, or decision to separate from the Company; other than by way of long term retirement plans; or

		
	(vii)
	Otherwise attempt on behalf of any Competitor to directly or indirectly interfere with the Company’s business, the business of any of the Companies or their relationship with their employees, consultants, independent contractors or customers.

		
	(f)
	Limited Non-Compete.  For the above-stated reasons, and as a condition of employment to the fullest extent permitted by law, Executive agrees during the Relevant Non‐Compete Period not to directly or indirectly engage in the following competitive activities:

		
	(i)
	Executive shall not have any ownership interest in, work for, advise, consult, or have any business connection or business or employment relationship in any competitive capacity with any Competitor unless Executive provides written notice to the Company of such relationship prior to entering into such relationship and, further, provides sufficient written assurances to the Company’s satisfaction that such relationship will not jeopardize the Company’s legitimate interests or otherwise violate the terms of this Agreement;

		
	(ii)
	Executive shall not engage in any research, development, production, sale or distribution of any Competitive Products on behalf of a Competitor;

		
	(iii)
	Executive shall not market, sell, or otherwise offer or provide any Competitive Products within any Geographic Territory on behalf of a Competitor; or

		
	(iv)
	Executive shall not distribute, market, sell or otherwise offer or provide any Competitive Products to any customer of the Company on behalf of a Competitor.

		
	(g)
	Non-Disparagement.  Executive agrees not to make any written or oral statement that may defame, disparage or cast in a negative light so as to do harm to the personal or professional reputation of (i) the Company, (ii) its Executives, officers, directors or trustees or (iii) the services and/or products provided by the Company and its subsidiaries or affiliate entities.  Similarly, in response to any written inquiry from any prospective employer or in connection with a written inquiry in connection with any future business relationship involving Executive, the Company agrees not to provide any information, and the senior officers shall not make any written or oral 

statement, that may defame, disparage or cast in a negative light so as to do harm to the personal or professional reputation of Executive.  The Parties acknowledge, however, that nothing contained herein shall be construed to prevent or prohibit the Company or the Executive from providing truthful information in response to any court order, discovery request, subpoena or other lawful request, rebutting statements by others or making normal competitive-type statements.
		
	(h)
	Further Covenants.

		
	(i)
	The U.S. Defend Trade Secrets Act of 2016 (“DTSA”) provides that an individual shall not be held criminally or civilly liable under any federal or state trade secret law for the disclosure of a trade secret that (A) is made in confidence to a federal, state or local government official, either directly or indirectly, or to an attorney, and solely for the purpose of reporting or investigating a suspected violation of law; or (B) is made in a complaint or other document filed in a lawsuit or other proceeding, if such filing is made under seal.  In addition, the DTSA provides that an individual who files a lawsuit for retaliation by an employer for reporting a suspected violation of law may disclose the trade secret to the attorney of the individual and use the trade secret information in the court proceeding, if the individual files any document containing the trade secret under seal and does not disclose the trade secret, except pursuant to court order.  Accordingly, the Parties have the right to disclose in confidence trade secrets to federal, state, and local government officials, or to an attorney, for the sole purpose of reporting or investigating a suspected violation of law.  The parties also have the right to disclose trade secrets in a document filed in a lawsuit or other proceeding, but only if the filing is made under seal and protected from public disclosure.

		
	(ii)
	Nothing in this Agreement prevents Executive from providing, without prior notice to the Company, information to governmental authorities regarding possible legal violations or otherwise testifying or participating in any investigation or proceeding by any governmental authorities regarding possible legal violations, and for purpose of clarity Executive is not prohibited from providing information voluntarily to the United States Securities and Exchange Commission pursuant to Section 21F of the Exchange Act.

		
	(i)
	Acknowledged Need for Limited Restrictive Covenants.  Executive acknowledges that the Companies have spent and will continue to expend substantial amounts of time, money and effort to develop their business strategies, Confidential Information, customer identities and relationships, goodwill and Executive relationships, and that Executive will benefit from these efforts.  Further, Executive acknowledges the inevitable use of, or near-certain influence by Executive’s knowledge of, the Confidential Information disclosed to Executive during the course of employment if Executive is allowed to compete against the Company in an unrestricted manner and that such use would be unfair and extremely detrimental to the Company.  Accordingly, based on these legitimate business reasons, Executive acknowledges 

each of the Companies’ need to protect their legitimate business interests by reasonably restricting Executive’s ability to compete with the Company on a limited basis or solicit its employees or customers, in each case, as provided herein.
		
	(j)
	Non-Compete Definitions.  For purposes of this Agreement, the Parties agree that the following terms shall apply:

		
	(i)
	“Affiliate” includes any parent, subsidiary, joint venture, sister company, or other entity controlled, owned, managed or otherwise associated with the Company;

		
	(ii)
	“Assigned Customer Base” shall include all accounts or customers formally assigned to Executive within a given territory or geographical area or contacted by Executive at any time during the eighteen (18) month period preceding Executive’s date of separation;

		
	(iii)
	“Competitive Products” shall include any product or service that directly or indirectly competes with, is substantially similar to, or serves as a reasonable substitute for, any product or service in research, development or design, or manufactured, produced, sold or distributed by the Company;

		
	(iv)
	“Competitor” shall mean the list of companies on Exhibit B, which can be changed at any time prior to 90 days before termination of employment by or of Executive by written notice to Executive, so long as the list does not exceed fifteen (15) companies and each of which is a material competitor of the Company.

		
	(v)
	“Directly or indirectly” shall be construed such that the foregoing restrictions shall apply equally to Executive whether performed individually or as a partner, shareholder, officer, director, manager, Executive, salesperson, independent contractor, broker, agent, or consultant for any other individual, partnership, firm, corporation, company, or other entity engaged in such conduct.

		
	(vi)
	“Geographic Territory” shall include any territory in which the Company has provided any services or sold any products at any time during the twenty-four (24) month period preceding Executive’s date of separation;

		
	(vii)
	“Relevant Non-Compete Period” shall include the period of Executive’s employment with the Company as well as a period of twelve (12) months after such employment is terminated, regardless of the reason for such termination provided.

		
	(k)
	Consent to Reasonableness.  In light of the above-referenced concerns, including Executive’s knowledge of and access to the Companies’ Confidential Information, Executive acknowledges that the terms of such restrictive covenants are reasonable and necessary to protect the Company’s legitimate business interests and will not unreasonably interfere with Executive’s ability to obtain alternate employment.  As 

such, Executive hereby agrees that such restrictions are valid and enforceable, and affirmatively waives any argument or defense to the contrary.  Executive acknowledges that this limited noncompetition provision is not an attempt to prevent Executive from obtaining other employment in violation of IC § 22-5-3-1 or any other similar statute.  Executive further acknowledges that the Company may need to take action, including litigation, to enforce this limited non-competition provision, which efforts the Parties stipulate shall not be deemed an attempt to prevent Executive from obtaining other employment.
		
	(l)
	Survival of Restrictive Covenants.  Executive acknowledges that the above restrictive covenants shall survive the termination of this Agreement and the termination of Executive’s employment for any reason.  Executive further acknowledges that any alleged breach by the Company of any contractual, statutory or other obligation shall not excuse or terminate the obligations hereunder or otherwise preclude the Company from seeking injunctive or other relief.  Rather, Executive acknowledges that such obligations are independent and separate covenants undertaken by Executive for the benefit of the Company.

		
	(m)
	Post-Termination Notification.  For the duration of Executive’s Relevant Non-Compete Period or other restrictive covenant period, whichever is longer, Executive agrees to promptly notify the Company no later than five (5) business days of Executive’s acceptance of any employment or consulting engagement.  Such notice shall include sufficient information to ensure Executive compliance with Executive’s non-compete obligations and must include at a minimum the following information: (i) the name of the employer or entity for which Executive is providing any consulting services; (ii) a description of Executive’s intended duties; and (iii) the anticipated start date.  Such information is required to ensure Executive’s compliance with Executive’s non-compete obligations as well as all other applicable restrictive covenants.  Such notice shall be provided in writing to the Office of SVP, Corporate Secretary and Chief Legal Officer at 130 East Randolph Street, Suite 1000, Chicago, Illinois 60601.  Failure to timely provide such notice shall be deemed a material breach of this Agreement and entitle the Company to return of any Severance paid to Executive plus attorneys’ fees.  Executive further consents to the Company’s notification to any new employer of Executive’s rights and obligations under this Agreement.

		
	(n)
	Scope of Restrictions.  If the scope of any restriction contained in any preceding paragraphs of this Agreement is deemed too broad to permit enforcement of such restriction to its fullest extent, then such restriction shall be enforced to the maximum extent permitted by law, and Executive hereby consents and agrees that such scope may be judicially modified accordingly in any proceeding brought to enforce such restriction.

		
	(o)
	Specific Enforcement/Injunctive Relief.  Executive agrees that it would be difficult to measure any damages to the Company from a breach of the above-referenced restrictive covenants, but acknowledges that the potential for such damages would be great, incalculable and irremediable, and that monetary damages alone would be 

an inadequate remedy.  Accordingly, Executive agrees that the Company shall be entitled to immediate injunctive relief against such breach, or threatened breach, in any court having jurisdiction.  In addition, if Executive violates any such restrictive covenant, Executive agrees that the period of such violation shall be added to the term of the restriction.  In determining the period of any violation, the Parties stipulate that in any calendar month in which Executive engages in any activity in violation of such provisions, Executive shall be deemed to have violated such provision for the entire month, and that month shall be added to the duration of the non-competition provision.  Executive acknowledges that the remedies described above shall not be the exclusive remedies, and the Company may seek any other remedy available to it either in law or in equity, including, by way of example only, statutory remedies for misappropriation of trade secrets, and including the recovery of compensatory or punitive damages.  Executive further agrees that the Company shall be entitled to an award of all costs and attorneys’ fees incurred by it in any attempt to enforce the terms of this Agreement if the Company prevails.
		
	(p)
	Publicly Traded Stock.  The Parties agree that nothing contained in this Agreement shall be construed to prohibit Executive from investing Executive’s personal assets in any stock or corporate security traded or quoted on a national securities exchange or national market system provided, however, such investments do not require any services on the part of Executive in the operation or the affairs of the business or otherwise violate the Company’s code of ethics.

		
	14.
	Notice of Claim and Contractual Limitations Period.  Executive acknowledges the Company’s need for prompt notice, investigation, and resolution of any claims that may be filed against it due to the number of relationships it has with employees and others (and due to the turnover among such individuals with knowledge relevant to any underlying claim).  Accordingly, Executive agrees prior to initiating any litigation of any type (including, but not limited to, employment discrimination litigation, wage litigation, defamation, or any other claim) to notify the Company, within one hundred and eighty (180) days after the claim accrued, by sending a certified letter addressed to the Company’s General Counsel setting forth:  (a) claimant’s name, address, and phone; (b) the name of any attorney representing Executive; (c) the nature of the claim; (d) the date the claim arose; and (e) the relief requested.  This provision is in addition to any other notice and exhaustion requirements that might apply.  For any dispute or claim of any type against the Company (including but not limited to employment discrimination litigation, wage litigation, defamation, or any other claim), Executive must commence legal action within the shorter of one (1) year of accrual of the cause of action or such shorter period that may be specified by law.

		
	15.
	Non-Jury Trials.  Notwithstanding any right to a jury trial for any claims, Executive waives any such right to a jury trial, and agrees that any claim of any type (including but not limited to employment discrimination litigation, wage litigation, defamation, or any other claim) lodged in any court will be tried, if at all, without a jury.

		
	16.
	Choice of Forum.  Executive acknowledges that the Company is primarily based in Indiana, and Executive understands and acknowledges the Company’s desire and need to defend any litigation against it in Illinois.  Accordingly, the Parties agree that any claim of any type 

brought by Executive against the Company or any of its employees or agents must be maintained only in a court sitting in Cook County, Illinois, or, if a federal court, the Northern District of Illinois.  Executive further understands and acknowledges that in the event the Company initiates litigation against Executive, the Company may need to prosecute such litigation in such state where the Executive is subject to personal jurisdiction.  Accordingly, for purposes of enforcement of this Agreement, Executive specifically consents to personal jurisdiction in the State of Illinois.
		
	17.
	Choice of Law.  This Agreement shall be deemed to have been made within the County of Cook, State of Illinois and shall be interpreted and construed in accordance with the laws of the State of Illinois.  Any and all matters of dispute of any nature whatsoever arising out of, or in any way connected with the interpretation of this Agreement, any disputes arising out of the Agreement or the employment relationship between the Parties hereto, shall be governed by, construed by and enforced in accordance with the laws of the State of Illinois without regard to any applicable state’s choice of law provisions.

		
	18.
	Titles.  Titles are used for the purpose of convenience in this Agreement and shall be ignored in any construction of it.

		
	19.
	Severability.  The Parties agree that each and every paragraph, sentence, clause, term and provision of this Agreement is severable and that, in the event any portion of this Agreement is adjudged to be invalid or unenforceable, the remaining portions thereof shall remain in effect and be enforced to the fullest extent permitted by law.  Further, should any particular clause, covenant, or provision of this Agreement be held unreasonable or contrary to public policy for any reason, the Parties acknowledge and agree that such covenant, provision or clause shall automatically be deemed modified such that the contested covenant, provision or clause will have the closest effect permitted by applicable law to the original form and shall be given effect and enforced as so modified to whatever extent would be reasonable and enforceable under applicable law.

		
	20.
	Assignment-Notices.  The rights and obligations of the Company under this Agreement shall inure to its benefit, as well as the benefit of its parent, subsidiary, successor and affiliated entities, and shall be binding upon the successors and assigns of the Company.  This Agreement, being personal to Executive, cannot be assigned by Executive, but Executive’s personal representative shall be bound by all its terms and conditions.  Any notice required hereunder shall be sufficient if in writing and mailed to the last known residence of Executive or to the Company at its principal office with a copy mailed to the Office of the General Counsel.

		
	21.
	Amendments and Modifications.  Except as specifically provided herein, no modification, amendment, extension or waiver of this Agreement or any provision hereof shall be binding upon the Company or Executive unless in writing and signed by both Parties.  The waiver by the Company or Executive of a breach of any provision of this Agreement shall not be construed as a waiver of any subsequent breach.  Nothing in this Agreement shall be construed as a limitation upon the Company’s right to modify or amend any of its manuals or policies in its sole discretion and any such modification or amendment which pertains to matters addressed herein shall be deemed to be incorporated herein and made a part of this Agreement.

		
	22.
	Outside Representations.  Executive represents and acknowledges that in signing this Agreement Executive does not rely, and has not relied, upon any representation or statement made by the Company or by any of the Company’s employees, officers, agents, stockholders, directors or attorneys with regard to the subject matter, basis or effect of this Agreement other than those specifically contained herein.

		
	23.
	Other Remedies.  The Executive agrees to execute and be bound by the terms and conditions of the Company’s Limited Recapture Agreement, and any applicable laws, rules and regulations.

		
	24.
	Voluntary and Knowing Execution.  Executive acknowledges that Executive has been offered a reasonable amount of time within which to consider and review this Agreement; that Executive has carefully read and fully understands all of the provisions of this Agreement; and that Executive has entered into this Agreement knowingly and voluntarily, with the assistance of counsel.

		
	25.
	Liability Insurance.  The Company shall cover the Executive under directors and officers liability insurance both during and, while potential liability exists, after the term of this Agreement in the same amount and to the same extent as the Company covers its other officers and non-independent directors.

		
	26.
	Tax Matters.

		
	(a)
	Withholding.  The Company may withhold from any and all amounts payable under this Agreement or otherwise such federal, state and local taxes as may be required to be withheld pursuant to any applicable law or regulation.  

		
	(b)
	Code Section 409A Notification.  Executive acknowledges that Executive has been advised of the American Jobs Creation Act of 2004, which includes Internal Revenue Code Section 409A, and the regulations and guidance promulgated thereunder (collectively “Code Section 409A”), and which also significantly changed the taxation of nonqualified deferred compensation plans and arrangements.  

		
	(i)
	The intent of the parties is that payments and benefits under this Agreement comply with, or be exempt from, Code Section 409A and, accordingly, to the maximum extent permitted, this Agreement shall be interpreted to be in accordance therewith.  If any provision of this Agreement (or of any award of compensation, including equity compensation or benefits) would cause the Executive to incur any additional tax or interest under Code Section 409A, the Company shall, after consulting with the Executive, reform such provision to try to comply with Code Section 409A through good faith modifications to the minimum extent reasonably appropriate to conform with Code Section 409A.  To the extent that any provision hereof is modified in order to comply with Code Section 409A, such modification shall be made in good faith and shall, to the maximum extent reasonably possible, maintain the original intent and economic benefit to the Executive and the Company of the applicable provision without violating the provisions of Code Section 409A.

		
	(ii)
	A termination of employment shall not be deemed to have occurred for purposes of any provision of this Agreement providing for the payment of any amounts or benefits upon or following a termination of employment that are considered “nonqualified deferred compensation” under Code Section 409A unless such termination is also a “separation from service” within the meaning of Code Section 409A and, for purposes of any such provision of this Agreement, references to a “termination,” “termination of employment” or like terms shall mean “separation from service.”  If the Executive is deemed on the date of termination to be a “specified employee” within the meaning of that term under Code Section 409A(a)(2)(B), then with regard to any payment that is considered non-qualified deferred compensation under Code Section 409A payable on account of a “separation from service,” and with regard to which an exemption from such section does not apply, such payment or benefit shall be made or provided at the date which is the earlier of (A) the expiration of the six (6)-month period measured from the date of such “separation from service” of the Executive, and (B) the date of the Executive’s death (the “Delay Period”).  Upon the expiration of the Delay Period, all payments and benefits delayed pursuant to this Paragraph 26(b)(ii) (whether they would have otherwise been payable in a single sum or in installments in the absence of such delay) shall be paid or reimbursed to the Executive in a lump sum, and any remaining payments and benefits due under this Agreement shall be paid or provided in accordance with the normal payment dates specified for them herein.

		
	(iii)
	With regard to any provision herein that provides for reimbursement of costs and expenses or in-kind benefits, except as permitted by Code Section 409A, (A) the right to reimbursement or in-kind benefits shall not be subject to liquidation or exchange for another benefit, (B) the amount of expenses eligible for reimbursement, or in-kind benefits provided during any taxable year shall not affect the expenses eligible for reimbursement, or in-kind benefits to be provided in any other taxable year, and (C) such payments shall be made on or before the last day of Executive’s taxable year following the taxable year in which the expense occurred.  

		
	(iv)
	For purposes of Code Section 409A, the Executive’s right to receive any installment payments pursuant to this Agreement shall be treated as a right to receive a series of separate and distinct payments.  In no event may the Executive, directly or indirectly, designate the calendar year of any payment to be made under this Agreement that is considered nonqualified deferred compensation.  In no event shall the timing of Executive’s execution of a Release, directly or indirectly, result in the Executive designating the calendar year of payment, and if a payment that is subject to execution of the Release could be made in more than one taxable year, payment shall be made in the later taxable year.

		
	(v)
	Executive acknowledges that, notwithstanding anything contained herein to the contrary, both Parties shall be independently responsible for assessing 

their own risks and liabilities under Code Section 409A that may be associated with any payment made under the terms of this Agreement or any other arrangement which may be deemed to trigger Code Section 409A.  Further, the Parties agree that each shall independently bear responsibility for any and all taxes, penalties or other tax obligations as may be imposed upon them in their individual capacity as a matter of law.
		
	27.
	Entire Agreement.  This Agreement constitutes the entire employment agreement between the Parties hereto concerning the subject matter hereof and shall supersede all prior and contemporaneous agreements between the Parties in connection with the subject matter of this Agreement.  Nothing in this Agreement, however, shall affect any separately‐executed written agreement addressing any other issues.  For the avoidance of doubt, if the Executive receives any severance compensation pursuant to a change in control agreement or any other severance plan or program, such agreement’s terms regarding severance compensation will control and will be in place of any severance payments as may be provided under Paragraph 10(d) of this Agreement.

		
	28.
	Counterparts.  This Agreement may be executed in separate counterparts, each of which shall be deemed to be an original and both of which taken together shall constitute one and the same agreement.

 
IN WITNESS WHEREOF, the Parties have signed this Agreement effective as of the day and year first above written.

	
		
	EXECUTIVE
	HILL-ROM HOLDINGS, INC.

	Signed:  __________________________
Name:  Ken Meyers
Dated:  ___________________________
	By:  _____________________________
Title: Chief Legal Officer      
Dated: ___________________________   

CAUTION:  READ BEFORE SIGNING

Exhibit A
SAMPLE SEPARATION AND RELEASE AGREEMENT
THIS SEPARATION AND RELEASE AGREEMENT (“Agreement”) is entered into by and between ______________ (“Executive”) and Hill-Rom Holdings, Inc. (together with its subsidiaries and affiliates, the “Company”).  
WHEREAS, Executive’s amended and restated employment agreement with the Company, dated _____________, 2018 ([as amended from time to time], the “Employment Agreement”), provides for certain post-termination payments and benefits to Executive pursuant to Paragraph 10(d) (the “Severance Benefits”), subject to Executive executing and not revoking a release of claims against the Company.
NOW, THEREFORE, in consideration of the mutual promises and obligations set forth in the Employment Agreement and this Agreement, and in consideration for the Severance Benefits, and for other good and valuable consideration, the sufficiency of which is hereby recognized by the Company and Executive (collectively referred to as the “Parties”) agree as follows: 
		
	1.
	Executive’s active employment by the Company shall terminate effective ____________, 20__ (the “Effective Termination Date”).  Except as specifically provided by this Agreement, or in any other non-employment agreement that may exist between the Company and Executive, Executive agrees that the Company shall have no other obligations or liabilities to Executive following Executive’s Effective Termination Date and that Executive’s receipt of the Severance Benefits shall constitute a complete settlement, satisfaction and waiver of any and all claims Executive may have against the Company.

		
	2.
	Executive further submits, and the Company hereby accepts, Executive’s resignation as an Executive, officer and director, as of Executive’s Effective Termination Date for any position Executive may hold.  The Parties agree that this resignation shall apply to all such positions Executive may hold with the Company or any parent thereof.  Executive agrees to execute any documents needed to effectuate such resignation.  Executive further agrees to take whatever steps are necessary to facilitate and ensure the smooth transition of Executive’s duties and responsibilities to others.

		
	3.
	The Company agrees to provide Executive Severance Benefits on the termination of Executive’s employment, as provided for in Paragraph 10(d) of Executive’s Employment Agreement. 

		
	4.
	The Company further agrees to provide Executive with limited out-placement counseling with a company of its choice provided that Executive participates in such counseling immediately following termination of employment.  Notwithstanding anything in this Paragraph 4 to the contrary, the out-placement counseling shall not be provided after the last day of the second calendar year following the calendar year in which termination of employment occurs.

		
	5.
	In exchange for the Severance Benefits, Executive on behalf of [himself/herself], [his/her] heirs, representatives, agents and assigns, [and anyone acting or claiming on [his/her] or their joint or several behalf,] hereby RELEASES, INDEMNIFIES, HOLDS HARMLESS, 

and FOREVER DISCHARGES (a) Hill-Rom Holdings, Inc.,  (b) its parent, subsidiary or affiliated entities, (c) in such capacity, all of their present or former directors, officers, employees, shareholders, trustees and agents, as well as, (d) all predecessors, successors and assigns thereof from any and all actions, charges, claims, demands, damages or liabilities of any kind or character whatsoever, known or unknown, which Executive now has or may have had through the effective date of this Agreement.
		
	6.
	Without limiting the generality of the foregoing release, it shall include:  (a) all claims or potential claims arising under any federal, state or local employment law or statute, including, but not limited to, Title VII of the Civil Rights Act(s) of 1964 and 1991, the Americans with Disabilities Act (ADA), the Age Discrimination in Employment Act (ADEA), the Older Workers Benefit Protection Act (OWBPA), the Family and Medical Leave Act (FMLA), the Worker Adjustment and Retraining Notification Act (WARN) or the Uniformed Services Employment and Reemployment Rights Act (USERRA), the Illinois Human Rights Act, as amended, applicable state civil rights law(s), or applicable state employment law(s); (b) any claims on account of, arising out of or in any way connected with Executive’s employment with the Company or leaving of that employment; (c) any claims alleged or which could have been alleged in any charge or complaint against the Company; (d) any claims relating to the conduct of any Executive, officer, director, agent or other representative of the Company; (e) any claims of discrimination, harassment or retaliation on any basis; (f) any claims arising from any legal restrictions on an employer’s right to separate its Executives; (g) any claims for personal injury, compensatory or punitive damages or other forms of relief; and (h) all other causes of action sounding in contract, tort or other common law basis, including (i) the breach of any alleged oral or written contract, (ii) negligent or intentional misrepresentations, (iii) wrongful discharge, (iv) just cause dismissal, (v) defamation, (vi) interference with contract or business relationship or (vii) negligent or intentional infliction of emotional distress.

		
	7.
	Executive further agrees and covenants not to sue the Company or any entity or individual subject to this Agreement with respect to any claims, demands, liabilities or obligations released by this Agreement provided, however, that nothing contained in this Agreement shall:

		
	a.
	prevent Executive from filing an administrative charge with the Equal Employment Opportunity Commission or any other federal state or local agency, or the United States Securities and Exchange Commission (“SEC”) Whistleblower unit or participating in investigations by those entities; or

		
	b.
	prevent employee from challenging, under the Older Worker’s Benefit Protection Act (29 U.S.C. § 626), the knowing and voluntary nature of Executive’s release of any age claims in this Agreement in court or before the Equal Employment Opportunity Commission.  

		
	8.
	Notwithstanding Executive’s right to file an administrative charge with the EEOC, the SEC’s Whistleblower unit, or any other federal, state, or local agency, Executive agrees that with Executive’s release of claims in this Agreement, Executive has waived any right Executive may have to recover monetary or other personal relief in any proceeding based in whole or in part on claims released by Executive in this Agreement.  For example, Executive waives 

any right to monetary damages or reinstatement if an administrative charge is brought against the Company whether by Executive, the EEOC, or any other person or entity, including but not limited to any federal, state, or local agency.  Further, with Executive’s release of claims in this Agreement, Executive specifically assigns to the Company Executive’s right to any recovery arising from any such proceeding.
		
	9.
	The U.S. Defend Trade Secrets Act of 2016 (“DTSA”) provides that an individual shall not be held criminally or civilly liable under any federal or state trade secret law for the disclosure of a trade secret that (a) is made in confidence to a federal, state or local government official, either directly or indirectly, or to an attorney, and solely for the purpose of reporting or investigating a suspected violation of law; or (b) is made in a complaint or other document filed in a lawsuit or other proceeding, if such filing is made under seal.  In addition, the DTSA provides that an individual who files a lawsuit for retaliation by an employer for reporting a suspected violation of law may disclose the trade secret to the attorney of the individual and use the trade secret information in the court proceeding, if the individual files any document containing the trade secret under seal and does not disclose the trade secret, except pursuant to court order.  Accordingly, the Parties have the right to disclose in confidence trade secrets to federal, state, and local government officials, or to an attorney, for the sole purpose of reporting or investigating a suspected violation of law. The parties also have the right to disclose trade secrets in a document filed in a lawsuit or other proceeding, but only if the filing is made under seal and protected from public disclosure.

		
	10.
	Insofar as this Agreement pertains to the release of Executive’s claims, if any, under the ADEA or other civil rights laws, the Parties acknowledge that it is their mutual and specific intent that the above waiver fully complies with the requirements of the OWBPA and any similar law governing release of claims.  Accordingly, Executive hereby acknowledges that:

		
	a.
	Executive has carefully read and fully understands all of the provisions of this Agreement and that Executive has entered into this Agreement knowingly and voluntarily;

		
	b.
	The Severance Benefits offered in exchange for Executive’s release of claims exceed in kind and scope that to which Executive would have otherwise been legally entitled absent the execution of this Agreement;

		
	c.
	Prior to signing this Agreement, Executive had been advised, and is being advised by this Agreement, to consult with an attorney of Executive’s choice concerning its terms and conditions; and

		
	d.
	Executive has been offered at least twenty-one (21) days within which to review and consider this Agreement.

		
	11.
	[ADD THIS LANGUAGE IF THE EMPLOYEE IS IN CALIFORNIA] Executive specifically acknowledges that, as a condition of this Agreement, Executive expressly releases all rights and claims that Executive knows about as well as those Executive may not know about.  Executive expressly waives all rights under Section 1542 of the Civil Code of the State of California, which reads as follows:

		
	a.
	“A general release does not extend to claims which the creditor does not know or suspect to exist in Executive’s favor at the time of executing the release which if known, must have materially affected Executive’s settlement with the debtor.”

		
	b.
	Notwithstanding the provision by Section 1542, and for the purpose of implementing a full and complete release and discharge of the Company as set forth above, Executive expressly acknowledges that this Agreement is intended to include and does in its effect, without limitation, include all claims which Executive does not know or suspect to exist in Executive’s favor at the time of signing this Agreement and that this Agreement expressly contemplates the extinguishment of all such claims.

		
	12.
	The Parties agree that this Agreement shall not become effective and enforceable until the date this Agreement is signed by both Parties or seven (7) calendar days after its execution by Executive, whichever is later.  Executive may revoke this Agreement for any reason by providing written notice of such intent to the Company within seven (7) days after Executive has signed this Agreement, thereby forfeiting Executive’s right to receive any Severance Benefits provided hereunder and rendering this Agreement null and void in its entirety.

		
	13.
	Executive affirms that, as of the date of execution of this Agreement, Executive has filed no lawsuit, charge, claim or complaint with any governmental agency or in any court against the Company or the releasees described in Paragraph 5 herein.

		
	14.
	The provisions of Paragraphs 13 (Restrictive Covenants); 15 (Non-Jury Trials); 16 (Choice of Forum); 17 (Choice of Law); and 26 (Tax Matters) of the Employment Agreement are hereby expressly incorporated by reference.

		
	15.
	The Parties agree that nothing contained herein shall purport to waive or otherwise affect any of Executive’s rights or claims that may arise after Executive signs this Agreement.  It is further understood by the Parties that nothing in this Agreement shall affect any rights Executive may have under any Company sponsored deferred compensation program, equity award agreement, and/or retirement plan provided by the Company as of the date of Executive’s termination, such items to be governed exclusively by the terms of the applicable agreements or plan documents.

		
	16.
	Similarly, notwithstanding any provision contained herein to the contrary, this Agreement shall not constitute a waiver or release or otherwise affect Executive’s rights with respect to any vested benefits, any rights Executive has to benefits which cannot be waived by law, any coverage provided under any Directors and Officers (“D&O”) policy, any rights Executive may have under any indemnification agreement Executive has with the Company prior to the date hereof, any rights Executive has as a shareholder, or any claim for breach of this Agreement, including, but not limited to the benefits promised by the terms of this Agreement.

		
	17.
	[Option A] Executive acknowledges that Executive’s termination and the Severance Benefits offered hereunder were based on an individual determination and were not offered in conjunction with any group termination or group severance program and waives any claim to the contrary.

[Option B] Executive represents and agrees that Executive has been provided relevant cohort information based on the information available to the Company as of the date this Agreement was tendered to Executive.  This information is attached hereto as Schedule A.  The Parties acknowledge that simply providing such information does not mean and should not be interpreted to mean that the Company was obligated to comply with 29 C.F.R. § 1625.22(f).
		
	18.
	Executive hereby affirms and acknowledges Executive’s continued obligations to comply with the post-termination covenants contained in Executive’s Employment Agreement, including but not limited to, the non-compete, trade secret and confidentiality provisions.  Executive acknowledges that a copy of the Employment Agreement has been provided to Executive and, to the extent not inconsistent with the terms of this Agreement or applicable law, the terms thereof shall be incorporated herein by reference.  Executive acknowledges that the restrictions contained therein are valid and reasonable in every respect and are necessary to protect the Company’s legitimate business interests.  Executive hereby affirmatively waives any claim or defense to the contrary.  

		
	19.
	Executive hereby consents and authorizes the Company to deduct as an offset from the Severance Benefits, so long as the deduction is not taken from nonqualified deferred compensation under the definition of Code Section 409A, the value of any Company property not returned or returned in a damaged condition as well as any monies paid by the Company on Executive’s behalf (e.g., payment of any outstanding credit card).

		
	20.
	Executive agrees to cooperate with the Company in connection with any pending or future litigation, proceeding or other matter which has been or may be brought against or by the Company before any agency, court, or other tribunal and concerning or relating in any way to any matter falling within Executive’s knowledge or former area of responsibility.  Executive agrees to immediately notify the Company, through the Office of the General Counsel, in the event Executive is contacted by any outside attorney (including paralegals or other affiliated parties) with regard to matters related to Executive’s employment with the Company unless (i) the Company is represented by the attorney, (ii) Executive is represented by the attorney for the purpose of protecting Executive’s personal interests or (iii) the Company has been advised of and has approved such contact.  Executive agrees to provide reasonable assistance and completely truthful testimony in such matters including, without limitation, facilitating and assisting in the preparation of any underlying defense, responding to discovery requests, preparing for and attending deposition(s) as well as appearing in court to provide truthful testimony.  The Company agrees to reimburse Executive for all reasonable out of pocket expenses incurred at the request of the Company associated with such assistance and testimony.

		
	21.
	EXECUTIVE SPECIFICALLY AGREES AND UNDERSTANDS THAT THE EXISTENCE AND TERMS OF THIS AGREEMENT ARE STRICTLY CONFIDENTIAL AND THAT SUCH CONFIDENTIALITY IS A MATERIAL TERM OF THIS AGREEMENT.  Accordingly, except as required by law or unless authorized to do so by the Company in writing, Executive agrees that Executive shall not communicate, display or otherwise reveal any of the contents of this Agreement to anyone other than Executive’s spouse, legal counsel or financial advisor provided, however, that they are first advised of the confidential nature of this Agreement and Executive obtains their agreement 

to be bound by the same.  The Company agrees that Executive may respond to legitimate inquiries regarding the termination of Executive’s employment by stating that the Parties have terminated their relationship on an amicable basis and that the Parties have entered into a confidential release agreement that prohibits Executive from further discussing the specifics of Executive’s separation.  Nothing contained herein shall be construed to prevent Executive from discussing or otherwise advising subsequent employers of the existence of any obligations as set forth in Executive’s Employment Agreement.  Further, nothing contained herein shall be construed to limit or otherwise restrict the Company’s ability to disclose the terms and conditions of this Agreement as may be required by business necessity.
		
	22.
	In the event that Executive breaches or threatens to breach any provision of this Agreement or the Employment Agreement, Executive agrees that the Company shall be entitled to seek any and all equitable and legal relief provided by law, specifically including immediate and permanent injunctive relief.  Executive hereby waives any claim that the Company has an adequate remedy at law.  In addition, and to the extent not prohibited by law, Executive agrees that the Company shall be entitled to discontinue providing any additional Severance Benefits upon such breach. Executive agrees that the foregoing relief shall not be construed to limit or otherwise restrict the Company’s ability to pursue any other remedy provided by law, including the recovery of any actual, compensatory or punitive damages.  Moreover, if Executive pursues any claims against the Company subject to the foregoing release provisions of this Agreement, Executive agrees to immediately reimburse the Company for the value of all benefits received under this Agreement to the fullest extent permitted by law.

		
	23.
	Similarly, in the event that the Company breaches or threatens to breach any provision of this Agreement, Executive shall be entitled to seek any and all equitable or other available relief provided by law, specifically including immediate and permanent injunctive relief.  In the event Executive is wholly unsuccessful, the Company shall be entitled to an award of its costs and attorneys’ fees.

		
	24.
	Both Parties acknowledge that this Agreement is entered into solely for the purpose of terminating Executive’s employment relationship with the Company on an amicable basis and shall not be construed as an admission of liability or wrongdoing by the Company or Executive, both Parties having expressly denied any such liability or wrongdoing.

		
	25.
	Each of the promises and obligations shall be binding upon and shall inure to the benefit of the heirs, executors, administrators, assigns and successors in interest of each of the Parties.

		
	26.
	Executive hereby represents and warrants that Executive has not previously assigned or purported to assign or transfer to any person or entity any of the claims or causes of action herein released.

		
	27.
	The Parties agree that each and every paragraph, sentence, clause, term and provision of this Agreement is severable and that, if any portion of this Agreement should be deemed not enforceable for any reason, such portion shall be stricken and the remaining portion or portions thereof should continue to be enforced to the fullest extent permitted by applicable law.

		
	28.
	This Agreement shall be governed by and interpreted in accordance with the laws of the State of Illinois without regard to any applicable state’s choice of law provisions.

		
	29.
	Executive represents and acknowledges that in signing this Agreement Executive does not rely, and has not relied, upon any representation or statement made by the Company or by any of the Company’s Executives, officers, agents, stockholders, directors or attorneys with regard to the subject matter, basis or effect of this Agreement other than those specifically contained herein.

		
	30.
	This Agreement represents the entire agreement between the Parties concerning the subject matter hereof, shall supersede any and all prior agreements which may otherwise exist between them concerning the subject matter hereof (specifically excluding, however, the post-termination obligations contained in an Executive’s Employment Agreement, any obligations contained in an existing and valid indemnity agreement of change in control or any obligation contained in any other legally-binding document), and shall not be altered, amended, modified or otherwise changed except by a writing executed by both Parties.

		
	31.
	This Agreement may be executed in separate counterparts, each of which shall be deemed to be an original and both of which taken together shall constitute one and the same agreement.

PLEASE READ CAREFULLY.  THIS RELEASE
AGREEMENT INCLUDES A COMPLETE RELEASE OF ALL
KNOWN AND UNKNOWN CLAIMS.

IN WITNESS WHEREOF, the Parties have themselves signed, or caused a duly authorized agent thereof to sign, this Agreement on their behalf and thereby acknowledge their intent to be bound by its terms and conditions.
	
		
	[EXECUTIVE]
	COMPANY NAME

	Signed:  _________________________
Printed:  _________________________
Dated:  __________________________
	By:  ____________________________
Title:  ___________________________
Dated:  __________________________

Exhibit B

LIST OF COMPETITORS

Getinge Group, Arjo Huntleigh (Getinge Spin-Off), Heine Optotechnik, Linet, Midmark, Mindray, Mizhuo/OSI, Omron Healthcare, Paramount Bed Company, Ltd., Riester, Schiller, Skytron, Steris Corporation, Stryker Corporation, Vocera, including, for the avoidance of doubt and in each case, parents, subsidiaries and affiliates.Blueprint

 

 

Exhibit 10.1

 

LIGHTPATH TECHNOLOGIES, INC.

2018 STOCK AND
INCENTIVE COMPENSATION PLAN

 

1.       Purpose
of the Plan.

 

The
purpose of this Plan is to enhance shareholder value by linking the
compensation of officers, directors, key employees and consultants
of the Company to increases in the price of LightPath Technologies,
Inc. common stock and the achievement of other performance
objectives, and to encourage ownership in the Company by key
personnel whose long-term employment is considered essential to the
Company’s continued progress and success. The Plan is also
intended to assist the Company in the recruitment of new employees
and to motivate, retain and encourage such employees and directors
to act in the shareholders’ interest and share in the
Company’s success.

 

2.       Definitions.

 

As used
herein, the following definitions shall apply:

 

(a)
“Administrator”
means the Board, any Committee or such delegates as shall be
administering the Plan in accordance with Section 4 of the
Plan.

 

(b)
“Affiliate”
means any Subsidiary or other entity that is directly or indirectly
controlled by the Company or any entity in which the Company has a
significant ownership interest as determined by the Administrator.
The Administrator shall, in its sole discretion, determine which
entities are classified as Affiliates and designated as eligible to
participate in this Plan.

 

(c)
“Applicable Law”
means the requirements relating to the administration of stock
option plans under U.S. federal and state laws, any stock exchange
or quotation system on which the Company has listed or submitted
for quotation the Common Shares to the extent provided under the
terms of the Company’s agreement with such exchange or
quotation system and, with respect to Awards subject to the laws of
any foreign jurisdiction where Awards are, or will be, granted
under the Plan, the laws of such jurisdiction.

 

(d)
“Award” means a
Stock Award, Option, Stock Appreciation Right, Stock Unit, or Other
Stock-Based Award granted in accordance with the terms of the Plan,
or any other property (including cash) granted pursuant to the
provisions of the Plan.

 

(e)
“Awardee” means
an Employee, Director or Consultant who has been granted an Award
under the Plan.

 

(f)
“Award
Agreement” means a Stock Award Agreement, Option
Agreement, Stock Appreciation Right Agreement, Restricted Stock
Unit Agreement or Other Stock-Based Award Agreement, which may be
in written or electronic format, in such form and with such terms
as may be specified by the Administrator, evidencing the terms and
conditions of an individual Award. Each Award Agreement is subject
to the terms and conditions of the Plan. The Award Agreement shall
be delivered to the Participant receiving such Award upon, or as
promptly as is reasonably practicable following, the grant of such
Award. The effectiveness of an Award shall not be subject to the
Award Agreement’s being signed by the Company and/or the
Participant receiving the Award unless specifically so provided in
the Award Agreement.

 

 

 

 

 

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

 

(h)
“Change of
Control” shall mean, except as otherwise provided in
an Award Agreement, one of the following shall have taken place
after the date of this Agreement:

 

(i) any
one person, or group of owners of another corporation who, acting
together through a merger, consolidation, purchase, acquisition of
stock or the like (a "Group"), acquires ownership of Shares of the
Company that, together with the Shares held by such person or
Group, constitutes more than fifty percent (50%) of the total fair
market value or total voting power of the Shares of the Company (or
other voting securities of the Company then outstanding). However,
if such person or Group is considered to own more than fifty
percent (50%) of the total fair market value or total voting power
of the Shares (or other voting securities of the Company then
outstanding) before this transfer of the Company's Shares (or other
voting securities of the Company then outstanding), the acquisition
of additional Shares (or other voting securities of the Company
then outstanding) by the same person or Group shall not be
considered to cause a Change of Control of the Company;
or

 

(ii)
any one person or Group acquires (or has acquired during the twelve
(12) month period ending on the date of the most recent acquisition
by such person or persons) ownership of Shares (or other voting
securities of the Company then outstanding) of the Company
possessing thirty percent (30%) or more of the total voting power
of the Shares (or other voting securities then outstanding) of the
Company where such person or Group is not merely acquiring
additional control of the Company; or

 

(iii) a
majority of members of the Company's Board is replaced during any
twelve (12) month period by directors whose appointment or election
is not endorsed by a majority of the members of the Company's Board
prior to the date of the appointment or election (the
“Incumbent Board”), but excluding, for purposes of
determining whether a majority of the Incumbent Board has endorsed
any candidate for election to the Board, any individual whose
initial assumption of office occurs as a result of an actual or
threatened election contest with respect to the election or removal
of directors or other actual or threatened solicitation of proxies
or consents by or on behalf of a person or Group other than the
Company’s Board; or

 

(iv)
any one person or Group acquires (or has acquired during the twelve
(12) month period ending on the date of the most recent acquisition
by such person or Group) all or substantially all of the assets
from the Company that have a total gross fair market value equal to
or more than forty percent (40%) of the total fair market value of
all assets of the Company immediately prior to such acquisition or
acquisitions. For this purpose, gross fair market value means the
value of the assets of the Company, or the value of the assets
being disposed of, determined without regard to any liabilities
associated with such assets. A transfer of assets by the Company
will not result in a Change of Control if the assets are
transferred to:

 

(1) 

a stockholder of
the Company (immediately before the asset transfer) in exchange for
or with respect to its stock;

 

(2) 

an entity, fifty
percent (50%) or more of the total value or voting power of which
is owned, directly or indirectly, by the Company immediately after
the transfer of assets;

 

 

2

 

 

 

(3) 

a person or Group
that owns, directly or indirectly, fifty percent (50%) or more of
the total value or voting power of all the outstanding stock of the
Company; or

 

(4) 

an entity, at least
fifty percent (50%) of the total value or voting power of which is
owned directly or indirectly, by a person described in subparagraph
(h)(i), above; or

 

(v)
Shareholders of the Company approve a plan of complete liquidation
or dissolution of the Company.

 

Notwithstanding the
foregoing, if any payment or distribution event applicable to an
Award is subject to the requirements of Section 409A(a)(2)(A) of
the Code, the determination of the occurrence of a Change of
Control shall be governed by applicable provisions of Section
409A(a)(2)(A) of the Code and regulations and rulings issued
thereunder for purposes of determining whether such payment or
distribution may then occur.

 

(i)
“Code” means the
United States Internal Revenue Code of 1986, as amended, and any
successor thereto, the Treasury Regulations thereunder and other
relevant interpretive guidance issued by the Internal Revenue
Service or the Treasury Department. Reference to any specific
section of the Code shall be deemed to include such regulations and
guidance, as well as any successor provision of the
Code.

 

(j)
“Committee”
means a committee of Directors appointed by the Board in accordance
with Section 4 of the Plan or, in the absence of any such special
appointment, the Compensation Committee of the Board.

 

(k)
“Common Shares”
means the Class A Common Stock of the Company, or any security of
the Company issued in substitution, exchange or lieu
thereof.

 

(l)
“Company” means
LightPath Technologies, Inc., a Delaware corporation, or, except as
utilized in the definition of Change of Control, its
successor.

 

(m)
“Consultant”
means an individual providing services to the Company or any of its
Affiliates as an independent contractor, and includes prospective
consultants who have accepted offers of consultancy for the Company
or any of its Affiliates, so long as such person (i) renders bona
fide services that are not in connection with the offer and sale of
the Company’s securities in a capital-raising transaction,
(ii) does not directly or indirectly promote or maintain a market
for the Company’s securities, and (iii) otherwise qualifies
as a consultant under the applicable rules of the SEC for
registration of shares of stock on a Form S-8 registration
statement.

 

(n)
“Conversion
Award” has the meaning set forth in Section 4(b)(xii)
of the Plan.

 

(o)
“Director” means
a member of the Board. Any Director who does not serve as an
employee of the Company is referred to herein as a
“Non-employee
Director.”

 

 

3

 

 

 

(p)
“Disability”
means (i) “Disability” as defined in any employment,
consulting or similar agreement to which the Participant is a
party, or (ii) if there is no such agreement or it does not define
“Disability,” (A) permanent and total disability as
determined under the Company’s long-term disability plan
applicable to the Participant, or (B) if there is no such plan
applicable to the Participant or the Committee determines otherwise
in an applicable Award Agreement, “Disability” shall
mean the Participant is unable to engage in any substantial gainful
activity by reason of any medically determinable physical or mental
impairment which can be expected to result in death or which has
lasted or can be expected to last for a continuous period of not
less than 12 months, as determined by the Committee.
Notwithstanding the above, with respect to an Incentive Stock
Option, Disability shall mean permanent and total disability as
defined in Section 22(e)(3) of the Code and, with respect to any
Award that constitutes “nonqualified deferred
compensation” within the meaning of Section 409A of the Code,
the foregoing definition shall apply for purposes of vesting of
such Award, provided that such Award shall not be settled until the
earliest of: (x) the Participant’s “disability”
within the meaning of Section 409A of the Code, (y) the
Participant’s “separation from service” within
the meaning of Section 409A of the Code and (z) the date such Award
would otherwise be settled pursuant to the terms of the Award
Agreement.

 

(q)
“Disaffiliation”
means a Subsidiary’s or Affiliate’s ceasing to be a
Subsidiary or Affiliate for any reason (including, without
limitation, as a result of a public offering, or a spin-off or sale
by the Company, of the stock of the Subsidiary or Affiliate) or a
sale of a division of the Company and its Affiliates.

 

(r)
“Employee” means
a regular, active employee of the Company or any Affiliate,
including an Officer or Director who is also a regular, active
employee of the Company or any Affiliate. The Administrator shall
determine whether the Chairman of the Board qualifies as an
“Employee.” For any and all purposes under the Plan,
the term “Employee” shall not include a person hired as
a leased employee, Consultant or a person otherwise designated by
the Administrator, the Company or an Affiliate at the time of hire
as not eligible to participate in or receive benefits under the
Plan or not on the payroll, even if such ineligible person is
subsequently determined to be a common law employee of the Company
or an Affiliate or otherwise an employee by any governmental or
judicial authority. Unless otherwise determined by the
Administrator in its sole discretion, for purposes of the Plan, an
Employee shall be considered to have terminated employment and to
have ceased to be an Employee if his or her employer ceases to be
an Affiliate, even if he or she continues to be employed by such
employer.

 

(s)
“Exchange Act”
means the United States Securities Exchange Act of 1934, as amended
and any successor thereto.

 

(t)
“Fair Market
Value” means the closing price for the Common Shares
reported on a consolidated basis on the primary national securities
exchange on which such Common Shares are traded on the date of
measurement, or if the Common Shares were not traded on such
measurement date, then on the next preceding date on which Common
Shares were traded, all as reported by such source as the Committee
may select. If the Common Shares are not listed on a national
securities exchange, Fair Market Value shall be determined by the
Committee in its good faith discretion, taking into account, to the
extent appropriate, the requirements of Section 409A of the
Code.

 

(u)
“Grant Date”
means, with respect to each Award, the date upon which the Award is
granted to an Awardee pursuant to this Plan, which may be a
designated future date as of which such Award will be effective, as
determined by the Committee.

 

(v)
“Incentive Stock
Option” means an Option that is identified in the
Option Agreement as intended to qualify as an incentive stock
option within the meaning of Section 422 of the Code and the
regulations promulgated thereunder, and that actually does so
qualify.

 

 

4

 

 

 

(w)
“Nonqualified Stock
Option” means an Option that is not an Incentive Stock
Option.

 

(x)
“Officer” means
a person who is an officer of the Company within the meaning of
Section 16 of the Exchange Act and the rules and regulations
promulgated thereunder.

 

(y)
“Option” means a
right granted under Section 8 of the Plan to purchase a number of
Shares at such exercise price, at such times, and on such other
terms and conditions as are specified in the agreement or other
documents evidencing the Award (the “Option
Agreement”). Both Incentive Stock Options and Nonqualified
Stock Options may be granted under the Plan.

 

(z)
“Other Stock-Based
Award” means an Award granted pursuant to Section 12
of the Plan on such terms and conditions as are specified in the
agreement or other documents evidencing the Award (the “Other
Stock-Based Award Agreement”).

 

(aa)
“Participant”
means the Awardee or any person (including any estate) to whom an
Award has been assigned or transferred as permitted
hereunder.

 

(bb)
“Performance
Criteria” shall have the meaning set forth in Section
13(b) of the Plan.

 

(cc)
“Plan” means
this 2018 Stock and Incentive Compensation Plan, as set forth
herein and as hereafter amended from time to time.

 

(dd)
“Retirement”
means, unless the Administrator determines otherwise, voluntary
Termination of Employment by a Participant from the Company and its
Affiliates after attaining age 60 and having completed at least 10
years of service for the Company and its Affiliates, excluding
service with an Affiliate of the Company prior to the time that
such Affiliate became an Affiliate of the Company.

 

(ee)
“Securities Act”
means the United States Securities Act of 1933, as
amended.

 

(ff)
“Share” means a
Common Share, as adjusted in accordance with Section 15 of the
Plan.

 

(gg)
“Stock Appreciation
Right” means a right granted under Section 10 of the
Plan on such terms and conditions as are specified in the agreement
or other documents evidencing the Award (the “Stock
Appreciation Right Agreement”).

 

(hh)
“Stock Award”
means an award or issuance of Shares made under Section 11 of the
Plan, the grant, issuance, retention, vesting and/or
transferability of which is subject during specified periods of
time to such conditions (including, without limitation, continued
employment or performance conditions) and terms as are expressed in
the agreement or other documents evidencing the Award (the
“Stock Award Agreement”).

 

(ii)
“Stock Unit”
means a bookkeeping entry representing an amount equivalent to the
Fair Market Value of one Share, payable in cash, property or
Shares. Stock Units represent an unfunded and unsecured obligation
of the Company, except as otherwise provided for by the
Administrator.

 

(jj)
“Stock Unit
Award” means an award or issuance of Stock Units made
under Section 12 of the Plan, the grant, issuance, retention,
vesting and/or transferability of which is subject during specified
periods of time to such conditions (including, without limitation,
continued employment or performance conditions) and terms as are
expressed in the agreement or other documents evidencing the Award
(the “Stock Unit Award Agreement”).

 

 

5

 

 

 

(kk)
“Subsidiary”
means any corporation (other than the Company) in an unbroken chain
of corporations beginning with the Company, provided each company
in the unbroken chain (other than the Company) owns, at the time of
determination, stock possessing 50% or more of the total combined
voting power of all classes of stock, in one of the other
corporations in such chain.

 

(ll)
“Termination for
Cause” means, unless otherwise provided in an Award
Agreement, Termination of Employment on account of any act of fraud
or intentional misrepresentation or embezzlement, misappropriation
or conversion of assets of the Company or any Affiliate, or the
intentional and repeated violation of the written policies or
procedures of the Company, provided that, for an Employee who is
party to an individual severance or employment agreement defining
Cause, “Cause” shall have the meaning set forth in such
agreement except as may be otherwise provided in such agreement.
For purposes of this Plan, a Participant’s Termination of
Employment shall be deemed to be a Termination for Cause if, after
the Participant’s employment has terminated, facts and
circumstances are discovered that would have justified, in the
opinion of the Committee, a Termination for Cause.

 

(mm)
“Termination of
Employment” means, for purposes of this Plan, unless
otherwise determined by the Administrator, ceasing to be an
Employee (as determined in accordance with Section 3401(c) of the
Code and the regulations promulgated thereunder) of the Company and
any of its Subsidiaries or Affiliates. Unless otherwise determined
by the Committee in the terms of an Award Agreement or otherwise,
if a Participant’s employment with the Company and its
Affiliates terminates but such Participant continues to provide
services to the Company and its Affiliates in a Non-employee
Director capacity, such change in status shall not be deemed a
Termination of Employment. A Participant employed by, or performing
services for, a Subsidiary or an Affiliate or a division of the
Company and its Affiliates shall be deemed to incur a Termination
of Employment if, as a result of a Disaffiliation, such Subsidiary,
Affiliate, or division ceases to be a Subsidiary, Affiliate or
division, as the case may be, and the Participant does not
immediately thereafter become an Employee of (or service provider
for), or member of the board of directors of, the Company or
another Subsidiary or Affiliate. Temporary absences from employment
because of illness, vacation or leave of absence and transfers
among the Company and its Subsidiaries and Affiliates shall not be
considered Terminations of Employment. In addition, Termination of
Employment shall mean a “separation from service” as
defined in regulations issued under Code Section 409A whenever
necessary to ensure compliance therewith for any payment or
settlement of a benefit conferred under this Plan that is subject
to such Code section, and, for such purposes, shall be determined
based upon a reduction in the bona fide level of services performed
to a level equal to twenty percent (20%) or less of the average
level of services performed by the Employee during the immediately
preceding 36-month period.

 

3.       Stock
Subject to the Plan.

 

(a)
Aggregate Limit. Subject to
the provisions of Section 15(a) of the Plan, the maximum aggregate
number of Shares which may be subject to or delivered under Awards
granted under the Plan is 1,650,870 Shares, less one Share for
every one Share granted under any prior plan after June 30, 2018.
After the Effective Date of the Plan (as provided in Section 6), no
awards may be granted under any prior plan. Shares subject to or
delivered under Conversion Awards shall not reduce the aggregate
number of Shares which may be subject to or delivered under Awards
granted under this Plan. The Shares issued under the Plan may be
either Shares reacquired by the Company, including Shares purchased
in the open market, or authorized but unissued Shares. Prior plans
include the Amended and Restated LightPath Technologies, Inc.
Omnibus Incentive Plan.

 

 

6

 

 

 

(b)
Code Section 422
Limits; Limit on Awards to
Directors. Subject to the provisions of Section 15(a) of the
Plan, the aggregate number of Shares that may be subject to all
Incentive Stock Options granted under the Plan shall not exceed the
total aggregate number of Shares that may be subject to or
delivered under Awards under the Plan, as the same may be amended
from time to time. Notwithstanding any other provision of the Plan
to the contrary, the aggregate grant date fair value (computed as
of the date of grant in accordance with applicable financial
accounting rules) of all Awards granted to any Non-employee
Director during any single calendar year shall not exceed one
hundred thousand (100,000) Shares.

 

(c)
Share Counting
Rules.

 

(i) For
purposes of this Section 3 of the Plan, Shares subject to Awards
that have been canceled, expired, settled in cash, or not issued or
forfeited for any reason (in whole or in part) shall not reduce the
aggregate number of Shares which may be subject to or delivered
under Awards granted under this Plan and shall be available for
future Awards granted under this Plan. In addition, if any Shares
subject to an award under any prior plan are canceled, expired,
settled in cash, or not issued or forfeited for any reason (in
whole or in part) after June 30, 2018, then such Shares subject to
an award under any prior plan shall, to the extent of such
cancellation, expiration, settlement in cash, non-issuance or
forfeiture, again be available for grant under this Plan on a
one-for-one basis.

 

(ii)
Shares subject to Awards that have been retained by the Company in
payment or satisfaction of the purchase price of an Award or the
tax withholding obligation of an Awardee, and Shares that have been
delivered (either actually or constructively by attestation) to the
Company in payment or satisfaction of the purchase price of an
Award or the tax withholding obligation of an Awardee, shall be
available for grant under the Plan on a one-for-one basis.
Similarly, if any Shares subject to an award under any prior plan
are, after December 31, 2017, either retained by the Company in
payment or satisfaction of the purchase price of an award or the
tax withholding obligation of an awardee, or if Shares are
delivered (either actually or constructively by attestation) to the
Company in payment or satisfaction of the purchase price of an
award or the tax withholding obligation of an awardee under a prior
plan, then such Shares subject to an award under any prior plan
shall, to the extent of such tendering or withholding, again be
available for grant under this Plan on a one-for-one
basis.

 

(iii)
Conversion Awards shall not reduce the Shares authorized for grant
under the Plan or the limitations on Awards to a Participant under
subsection (b), above, nor shall Shares subject to a Conversion
Award again be available for an Award under the Plan as provided in
this subsection (c).

 

4.       Administration
of the Plan.

 

(a)
Procedure.

 

(i)
Multiple Administrative
Bodies. The Plan shall be administered by the Board, a
Committee designated by the Board to so administer this Plan and/or
their respective delegates.

 

 

7

 

 

 

(ii)
Rule 16b-3. To the extent
desirable to qualify transactions hereunder as exempt under Rule
16b-3 promulgated under the Exchange Act (“Rule
16b-3”), Awards to Officers and Directors shall be made by
the entire Board or a Committee of two or more “non-employee
directors” within the meaning of Rule 16b-3.

 

(iii)
Other Administration. To
the extent required by the rules of the principal U.S. national
securities exchange on which the Shares are traded, the members of
the Committee shall also qualify as “independent
directors” as set forth in such rules. Except to the extent
prohibited by Applicable Law, the Board or a Committee may delegate
to a Committee of one or more Directors or to authorized officers
of the Company the power to approve Awards to persons eligible to
receive Awards under the Plan who are not subject to Section 16 of
the Exchange Act.

 

(iv)
Awards to Directors. The
Board shall have the power and authority to grant Awards to
Non-employee Directors, including the authority to determine the
number and type of awards to be granted; determine the terms and
conditions, not inconsistent with the terms of this Plan, of any
award; and to take any other actions the Board considers
appropriate in connection with the administration of the
Plan.

 

(v)
Delegation of Authority for the
Day-to-Day Administration of the Plan. Except to the extent
prohibited by Applicable Law, the Administrator may delegate to one
or more individuals the day-to-day administration of the Plan and
any of the functions assigned to it in this Plan. Such delegation
may be revoked at any time.

 

(b)
Powers of the
Administrator. Subject to the provisions of the Plan and, in
the case of a Committee or delegates acting as the Administrator,
subject to the specific duties delegated to such Committee or
delegates, the Administrator shall have the authority, in its
discretion:

 

(i) to
select the Non-employee Directors, Consultants and Employees of the
Company or its Affiliates to whom Awards are to be granted
hereunder;

 

(ii) to
determine the number of Common Shares to be covered by each Award
granted hereunder;

 

(iii)
to determine the type of Award to be granted to the selected
Employees,

 

Consultants
and Non-employee Directors;

 

(iv) to
approve forms of Award Agreements;

 

(v) to
determine the terms and conditions, not inconsistent with the terms
of the Plan, of any Award granted hereunder. Such terms and
conditions include, but are not limited to, the exercise and/or
purchase price, the time or times when an Award may be exercised
(which may or may not be based on Performance Criteria), the
vesting schedule, any vesting and/or exercisability provisions,
terms regarding acceleration of Awards or waiver of forfeiture
restrictions, the acceptable forms of consideration for payment for
an Award, the term, and any restriction or limitation regarding any
Award or the Shares relating thereto, based in each case on such
factors as the Administrator, in its sole discretion, shall
determine and may be established at the time an Award is granted or
thereafter;

 

 

8

 

 

 

(vi) to
correct administrative errors;

 

(vii)
to construe and interpret the terms of the Plan (including
sub-plans and Plan addenda) and Awards granted pursuant to the
Plan;

 

(viii)
to adopt rules and procedures relating to the operation and
administration of the Plan to accommodate the specific requirements
of local laws and procedures. Without limiting the generality of
the foregoing, the Administrator is specifically authorized (A) to
adopt rules and procedures regarding the conversion of local
currency, the shift of tax liability from employer to employee
(where legally permitted) and withholding procedures and handling
of stock certificates which vary with local requirements, and (B)
to adopt sub-plans and Plan addenda as the Administrator deems
desirable, to accommodate foreign laws, regulations and
practice;

 

(ix) to
prescribe, amend and rescind rules and regulations relating to the
Plan, including rules and regulations relating to sub-plans and
Plan addenda;

 

(x) to
modify or amend each Award, including, but not limited to, the
acceleration of vesting and/or exercisability, provided, however,
that any such modification or amendment (A) is subject to the
minimum vesting provisions under the Plan, if any, and the plan
amendment provisions set forth in Section 16 of the Plan, and (B)
may not materially impair any outstanding Award unless agreed to in
writing by the Participant, except that such agreement shall not be
required if the Administrator determines in its sole discretion
that such modification or amendment either (Y) is required or
advisable in order for the Company, the Plan or the Award to
satisfy any Applicable Law or to meet the requirements of any
accounting standard, or (Z) is not reasonably likely to
significantly diminish the benefits provided under such Award, or
that adequate compensation has been provided for any such
diminishment, except following a Change of Control;

 

(xi) to
allow or require Participants to satisfy withholding tax amounts by
electing to have the Company withhold from the Shares to be issued
upon exercise of a Nonqualified Stock Option or vesting of a Stock
Award or Stock Unit Award that number of Shares having a Fair
Market Value equal to the amount required to be withheld. The Fair
Market Value of the Shares to be withheld shall be determined in
such manner and on such date that the Administrator shall determine
or, in the absence of provision otherwise, on the date that the
amount of tax to be withheld is to be determined. All elections by
a Participant to have Shares withheld for this purpose shall be
made in such form and under such conditions as the Administrator
may provide;

 

(xii)
to authorize conversion or substitution under the Plan of any or
all stock options, stock appreciation rights or other stock awards
held by awardees of an entity acquired by the Company (the
“Conversion Awards”). Any conversion or substitution
shall be effective as of the close of the merger or acquisition.
The Conversion Awards may be Nonqualified Stock Options or
Incentive Stock Options, as determined by the Administrator, with
respect to options granted by the acquired entity;

 

(xiii)
to authorize any person to execute on behalf of the Company any
instrument required to effect the grant of an Award previously
granted by the Administrator;

 

(xiv)
to impose such restrictions, conditions or limitations as it
determines appropriate as to the timing and manner of any resale by
a Participant or of other subsequent transfers by the Participant
of any Shares issued as a result of or under an Award or upon the
exercise of an Award, including, without limitation, (A)
restrictions under an insider trading policy, (B) restrictions as
to the use of a specified brokerage firm for such resale or other
transfers, and (C) institution of “blackout” periods on
exercises of Awards;

 

 

9

 

 

 

(xv) to
provide, either at the time an Award is granted or by subsequent
action, that an Award shall contain as a term thereof, a right,
either in tandem with the other rights under the Award or as an
alternative thereto, of the Participant to receive, without payment
to the Company, a number of Shares, cash or a combination thereof,
the amount of which is determined by reference to the value of the
Award; and

 

(xvi)
to make all other determinations deemed necessary or advisable for
administering the Plan and any Award granted
hereunder.

 

(c)
Effect of Administrator’s
Decision. All questions arising under the Plan or under any
Award shall be decided by the Administrator in its total and
absolute discretion. All decisions, determinations and
interpretations by the Administrator regarding the Plan, any rules
and regulations under the Plan and the terms and conditions of any
Award granted hereunder, shall be final and binding on all
Participants. The Administrator shall consider such factors as it
deems relevant, in its sole and absolute discretion, to making such
decisions, determinations and interpretations, including, without
limitation, the recommendations or advice of any officer or other
employee of the Company and such attorneys, consultants and
accountants as it may select.

 

(d)
Indemnity. To the extent
allowable under Applicable Law, each member of the Committee or of
the Board and any person to whom the Committee has delegated any of
its authority under the Plan shall be indemnified and held harmless
by the Company from any loss, cost, liability, or expense that may
be imposed upon or reasonably incurred by such person in connection
with or resulting from any claim, action, suit, or proceeding to
which he or she may be a party or in which he or she may be
involved by reason of any action or failure to act pursuant to the
Plan, and against and from any and all amounts paid by him or her
in satisfaction of judgment in such action, suit, or proceeding
against him or her; provided he or she gives the Company an
opportunity, at its own expense, to handle and defend the same
before he or she undertakes to handle and defend it on his or her
own behalf. The foregoing right of indemnification shall not be
exclusive of any other rights of indemnification to which such
persons may be entitled pursuant to the Company’s Articles of
Incorporation or By-laws, as a matter of law, or otherwise, or any
power that the Company may have to indemnify them or hold them
harmless.

 

5.       Eligibility.

 

Awards
may be granted only to Directors, Employees and Consultants of the
Company or any of its Affiliates; provided, however, that Incentive
Stock Options may be granted only to Employees of the Company and
its Subsidiaries (within the meaning of Section 424(f) of the
Code).

 

6.       Term
of Plan.

 

The
Plan shall become effective upon its approval by shareholders of
the Company. It shall continue in effect from the date the Plan is
approved by the shareholders of the Company (the “Effective
Date”) until terminated under Section 16 of the
Plan.

 

7.       Term
of Award.

 

Subject
to the provisions of the Plan, the term of each Award shall be
determined by the Administrator and stated in the Award Agreement,
and may extend beyond the termination of the Plan. In the case of
an Option or a Stock Appreciation Right, the term shall be ten (10)
years from the Grant Date or such shorter term as may be provided
in the Award Agreement. Notwithstanding the foregoing, the term of
Awards other than Awards that are structured to qualify as
Incentive Stock Options under Section 9 shall be extended
automatically if the Award would expire at a time when trading in
Common Shares is prohibited by law or the Company’s insider
trading policy to the 30th day after the
expiration of the prohibition.

 

 

10

 

 

 

8.       Options.

 

The
Administrator may grant an Option or provide for the grant of an
Option, either from time to time in the discretion of the
Administrator or automatically upon the occurrence of specified
events, including, without limitation, the achievement of
performance goals.

 

(a)
Option Agreement. Each
Option Agreement shall contain provisions regarding (i) the number
of Shares that may be issued upon exercise of the Option, (ii) the
type of Option, (iii) the exercise price of the Option and the
means of payment of such exercise price, (iv) the term of the
Option, (v) such terms and conditions regarding the vesting and/or
exercisability of an Option as may be determined from time to time
by the Administrator, (vi) restrictions on the transfer of the
Option and forfeiture provisions, and (vii) such further terms and
conditions, in each case not inconsistent with this Plan, as may be
determined from time to time by the Administrator.

 

(b)
Exercise Price. The per
share exercise price for the Shares to be issued upon exercise of
an Option shall be determined by the Administrator, except that the
per Share exercise price shall be no less than 100% of the Fair
Market Value per Share on the Grant Date, except with respect to
Conversion Awards.

 

(c)
No Option Repricings.
Subject to Section 15(a) of the Plan, the exercise price of an
Option may not be reduced without shareholder approval, nor may
outstanding Options be cancelled in exchange for cash, other Awards
or Options with an exercise price that is less than the exercise
price of the original Option without shareholder
approval.

 

(d)
No Reload Grants. Options
shall not be granted under the Plan in consideration for and shall
not be conditioned upon the delivery of Shares to the Company in
payment of the exercise price and/or tax withholding obligation
under any other employee stock option.

 

(e)
Vesting Period and Exercise
Dates. Options granted under this Plan shall vest and/or be
exercisable at such time and in such installments during the period
prior to the expiration of the Option’s term as determined by
the Administrator and as specified in the Option Agreement. The
Administrator shall have the right to make the timing of the
ability to exercise any Option granted under this Plan subject to
continued active employment, the passage of time and/or such
performance requirements as deemed appropriate by the
Administrator. Unless otherwise provided in the Award Agreement, no
Option shall vest and be exercisable sooner than one year after its
Grant Date. At any time after the grant of an Option, the
Administrator may reduce or eliminate any restrictions surrounding
any Participant’s right to exercise all or part of the
Option.

 

(f)
Form of Consideration. The
Administrator shall determine the acceptable form of consideration
for exercising an Option, including the method of payment, either
through the terms of the Option Agreement or at the time of
exercise of an Option. Acceptable forms of consideration may
include:

 

 

11

 

 

 

(i)
cash;

 

(ii)
check or wire transfer (denominated in U.S. Dollars);

 

(iii)
subject to any conditions or limitations established by the
Administrator, other Shares which were held for a period of more
than six (6) months on the date of surrender and which have a Fair
Market Value on the date of surrender equal to or greater than the
aggregate exercise price of the Shares as to which said Option
shall be exercised (it being agreed that the excess of the Fair
Market Value over the aggregate exercise price, if any, shall be
refunded to the Awardee in cash);

 

(iv)
subject to any conditions or limitations established by the
Administrator, the Company withholding Shares otherwise issuable
upon exercise of an Option;

 

(v)
consideration received by the Company under a broker-assisted sale
and remittance program acceptable to the Administrator and in
compliance with Applicable Law;

 

(vi)
such other consideration and method of payment for the issuance of
Shares to the extent permitted by Applicable Law; or

 

(vii)
any combination of the foregoing
methods of payment.

 

(g)
Procedure for Exercise; Rights as
a Shareholder.

 

(i) Any
Option granted hereunder shall be exercisable according to the
terms of the Plan and at such times and under such conditions as
determined by the Administrator and set forth in the applicable
Option Agreement.

 

(ii) An
Option shall be deemed exercised when (A) the Company receives (1)
written or electronic notice of exercise (in accordance with the
Option Agreement or procedures established by the Administrator)
from the person entitled to exercise the Option and (2) full
payment for the Shares with respect to which the related Option is
exercised, and (B) with respect to Nonqualified Stock Options,
provisions acceptable to the Administrator have been made for
payment of all applicable withholding taxes.

 

(iii)
Unless provided otherwise by the Administrator or pursuant to this
Plan, until the Shares are issued (as evidenced by the appropriate
entry on the books of the Company or of a duly authorized transfer
agent of the Company), no right to vote or receive dividends or any
other rights as a shareholder shall exist with respect to the
Shares subject to an Option, notwithstanding the exercise of the
Option.

 

(iv)
The Company shall issue (or cause to be issued) such Shares as soon
as administratively practicable after the Option is exercised. An
Option may not be exercised for a fraction of a Share.

 

 

12

 

 

 

9.       Incentive
Stock Option Limitations/Terms.

 

(a)
Eligibility. Only Employees
(who qualify as employees under Section 3401(c) of the Code and the
regulations promulgated thereunder) of the Company or any of its
Subsidiaries may be granted Incentive Stock Options. No Incentive
Stock Option shall be granted to any such Employee who as of the
Grant Date owns stock possessing more than 10% of the total
combined voting power of the Company.

 

(b)
$100,000 Limitation.
Notwithstanding the designation “Incentive Stock
Option” in an Option Agreement, if and to the extent that the
aggregate Fair Market Value of the Shares with respect to which
Incentive Stock Options are exercisable for the first time by the
Awardee during any calendar year (under all plans of the Company
and any of its Subsidiaries) exceeds U.S. $100,000, such Options
shall be treated as Nonqualified Stock Options. For purposes of
this Section 9(b) of the Plan, Incentive Stock Options shall be
taken into account in the order in which they were granted. The
Fair Market Value of the Shares shall be determined as of the Grant
Date.

 

(c)
Transferability. The Option
Agreement must provide that an Incentive Stock Option is not
transferable by the Awardee otherwise than by will or the laws of
descent and distribution, and, during the lifetime of such Awardee,
must not be exercisable by any other person. If the terms of an
Incentive Stock Option are amended to permit transferability, the
Option will be treated for tax purposes as a Nonqualified Stock
Option.

 

(d)
Exercise Price. The per
Share exercise price of an Incentive Stock Option shall in no event
be inconsistent with the requirements for qualification of the
Incentive Stock Option under Section 422 of the Code.

 

(e)
Other Terms. Option
Agreements evidencing Incentive Stock Options shall contain such
other terms and conditions as may be necessary to qualify, to the
extent determined desirable by the Administrator, with the
applicable provisions of Section 422 of the Code. If any such terms
and conditions, as of the Grant Date or any later date, do not so
comply, the Option will be treated thereafter for tax purposes as a
Nonqualified Stock Option.

 

10.           Stock
Appreciation Rights.

 

A
“Stock Appreciation Right” or “SAR” is a
right that entitles the Awardee to receive, in cash or Shares (as
determined by the Administrator), value equal to or otherwise based
on the excess of (i) the Fair Market Value of a specified number of
Shares at the time of exercise over (ii) the aggregate exercise
price of the right, as established by the Administrator on the
Grant Date. All Stock Appreciation Rights under the Plan shall be
granted subject to the same terms and conditions applicable to
Options as set forth in Section 8 of the Plan. Stock Appreciation
Rights may be granted to Awardees either alone
(“freestanding”) or in addition to or in tandem with
other Awards granted under the Plan and may, but need not, relate
to a specific Option granted under Section 8 of the Plan. However,
any Stock Appreciation Right granted in tandem with an Option may
be granted at the same time such Option is granted or at any time
thereafter before exercise or expiration of such Option, and shall
be based on the Fair Market Value of one Share on the Grant Date
or, if applicable, on the Grant Date of the Option with respect to
a Stock Appreciation Right granted in exchange for or in tandem
with, but subsequent to, the Option (subject to the requirements of
Section 409A of the Code). Subject to the provisions of Section 8
of the Plan, the Administrator may impose such other conditions or
restrictions on any Stock Appreciation Right as it shall deem
appropriate.

 

 

13

 

 

 

11.           Stock
Awards.

 

(a)
Stock Award Agreement. Each
Stock Award Agreement shall contain provisions regarding (i) the
number of Shares subject to such Stock Award or a formula for
determining such number, (ii) the purchase price of the Shares, if
any, and the means of payment for the Shares, (iii) the Performance
Criteria, if any, and level of achievement versus these criteria
that shall determine the number of Shares granted, issued,
retainable and/or vested, (iv) such terms and conditions on the
grant, issuance, vesting and/or forfeiture of the Shares as may be
determined from time to time by the Administrator, (v) restrictions
on the transferability of the Stock Award, and (vi) such further
terms and conditions, in each case not inconsistent with this Plan,
as may be determined from time to time by the Administrator. Unless
otherwise provided in the Award Agreement, no Stock Award shall
vest sooner than one year after its Grant Date. The Committee may,
in its sole discretion, waive the vesting restrictions and any
other conditions set forth in any Award Agreement under such terms
and conditions as the Committee shall deem
appropriate.

 

(b)
Restrictions and Performance
Criteria. The grant, issuance, retention and/or vesting of
Stock Awards issued to Employees may be subject to such Performance
Criteria and level of achievement versus these criteria as the
Administrator shall determine, which criteria may be based on
financial performance, personal performance evaluations and/or
completion of service by the Awardee. Awards with vesting
conditions that are based upon Performance Criteria and level of
achievement versus such criteria are referred to as
“Performance Stock Awards” and Awards with vesting
conditions that are based upon continued employment or the passage
of time are referred to as “Restricted Stock
Awards.”

 

(c)
Rights as a Shareholder.
Unless otherwise provided for by the Administrator, the Participant
shall have the rights equivalent to those of a shareholder and
shall be a shareholder only after Shares are issued (as evidenced
by the appropriate entry on the books of the Company or of a duly
authorized transfer agent of the Company) to the Participant. Any
certificate issued in respect of a Restricted Stock Award shall be
registered in the name of the applicable Participant and shall bear
an appropriate legend referring to the terms, conditions, and
restrictions applicable to such Award. The Committee may require
that the certificates evidencing such Shares be held in custody by
the Company until the restrictions thereon shall have lapsed and
that, as a condition of any Award of Restricted Stock, the
applicable Participant shall have delivered a stock power, endorsed
in blank, relating to the Common Shares covered by such Award. The
Participant shall not be permitted to sell, assign, transfer,
pledge or otherwise encumber a Stock Award.

 

12.           Stock
Unit Awards and Other Stock-Based Awards.

 

(a)
Stock Unit Awards. Each
Stock Unit Award Agreement shall contain provisions regarding (i)
the number of Shares subject to such Stock Unit Award or a formula
for determining such number, (ii) the Performance Criteria, if any,
and level of achievement versus these criteria that shall determine
the number of Shares granted, issued, and/or vested, (iii) such
terms and conditions on the grant, issuance, vesting and/or
forfeiture of the Shares as may be determined from time to time by
the Administrator, (iv) restrictions on the transferability of the
Stock Unit Award, and (v) such further terms and conditions, in
each case not inconsistent with this Plan, as may be determined
from time to time by the Administrator. Unless otherwise provided
in the Award Agreement, no Stock Unit Award shall vest sooner than
one year after its Grant Date. The Committee may, in its sole
discretion, waive the vesting restrictions and any other conditions
set forth in any Award Agreement under such terms and conditions as
the Committee shall deem appropriate.

 

(b)
Restrictions and Performance
Criteria. The grant, issuance, retention and/or vesting of
Stock Unit Awards issued to Employees may be subject to such
Performance Criteria and level of achievement versus these criteria
as the Administrator shall determine, which criteria may be based
on financial performance, personal performance evaluations and/or
completion of service by the Awardee. Awards with vesting
conditions that are based upon Performance Criteria and level of
achievement versus such criteria are referred to as
“Performance Stock Unit Awards” and Awards with vesting
conditions that are based upon continued employment or the passage
of time are referred to as “Restricted Stock Unit
Awards.”

 

 

14

 

 

 

(c)
Rights as a Shareholder.
Unless otherwise provided for by the Administrator, the Participant
shall have the rights equivalent to those of a shareholder and
shall be a shareholder only after Shares are issued (as evidenced
by the appropriate entry on the books of the Company or of a duly
authorized transfer agent of the Company) to the
Participant.

 

(d)
Other Stock-Based Award. An
“Other Stock-Based Award” means any other type of
equity-based or equity-related Award not otherwise described by the
terms of this Plan (including the grant or offer for sale of
unrestricted Shares), as well as any cash based bonus based on the
attainment of Performance Criteria as described in Section 13(b),
in such amount and subject to such terms and conditions as the
Administrator shall determine. Such Awards may involve the transfer
of actual Shares to Participants, or payment in cash or otherwise
of amounts based on the value of Shares or pursuant to attainment
of a performance goal. Each Other Stock-Based Award will be
evidenced by an Award Agreement containing such terms and
conditions as may be determined by the Administrator.

 

(e)
Value of Other Stock-Based
Awards. Each Other Stock-Based Award shall be expressed in
terms of Shares or units based on Shares or a target amount of
cash, as determined by the Administrator. The Administrator may
establish Performance Criteria in its discretion. If the
Administrator exercises its discretion to establish Performance
Criteria, the number and/or value of Other Stock-Based Awards that
will be paid out to the Participant will depend on the extent to
which the performance goals are met.

 

(f)
Payment of Other Stock-Based
Awards. Payment, if any, with respect to Other Stock-Based
Awards shall be made in accordance with the terms of the Award, in
cash or Shares as the Administrator determines.

 

13.           Other
Provisions Applicable to Awards.

 

(a)
Non-Transferability of
Awards. Unless determined otherwise by the Administrator, an
Award may not be sold, pledged, assigned, hypothecated, transferred
or disposed of in any manner other than by beneficiary designation,
will or by the laws of descent or distribution, including but not
limited to any attempted assignment or transfer in connection with
the settlement of marital property or other rights incident to a
divorce or dissolution, and any such attempted sale, assignment or
transfer shall be of no effect prior to the date an Award is vested
and settled. The Administrator may only make an Award transferable
to an Awardee’s family member or any other person or entity
provided the Awardee does not receive consideration for such
transfer. If the Administrator makes an Award transferable, either
as of the Grant Date or thereafter, such Award shall contain such
additional terms and conditions as the Administrator deems
appropriate, and any transferee shall be deemed to be bound by such
terms upon acceptance of such transfer.

 

(b)
Performance Criteria. For
purposes of this Plan, the term “Performance Criteria”
shall mean any one or more criteria based on financial performance,
personal performance evaluations and/or completion of service,
either individually, alternatively or in any combination, applied,
as applicable, to either the Company as a whole or to a Subsidiary,
business unit, Affiliate or business segment, either individually,
alternatively or in any combination, and measured either annually
or cumulatively over a period of years, on an absolute basis or
relative to a pre-established target, to previous years’
results or to a designated comparison group, in each case as
specified by the Committee in the Award or by duly adopted
resolution. The Administrator may establish specific performance
targets (including thresholds and whether to exclude certain
extraordinary, non-recurring, or similar items) and Award amounts,
subject to the right of the Administrator to exercise discretion to
adjust payment amounts, either up or down, following the conclusion
of the performance period on the basis of such further
considerations as the Administrator in its sole discretion shall
determine. Extraordinary, non-recurring items that may be the basis
of adjustment include, but are not limited to, acquisitions or
divestitures, restructurings, discontinued operations,
extraordinary items, and other unusual or non-recurring charges, an
event either not directly related to the operations of the Company,
Subsidiary, division, business segment or business unit or not
within the reasonable control of management, the cumulative effects
of tax or accounting changes in accordance with U.S. generally
accepted accounting principles, and foreign exchange gains or
losses.

 

(c)
Termination of Employment or Board
Membership. The Administrator shall determine as of the
Grant Date (subject to modification subsequent to the Grant Date)
the effect a termination from membership on the Board by a
Non-employee Director for any reason or a Termination of Employment
due to Disability, Retirement, death, or otherwise (including
Termination for Cause) shall have on any Award. Unless otherwise
provided in the Award Agreement:

 

 

15

 

(i)
Upon termination from membership on the Board by a Non-employee
Director for any reason other than Disability or death, any Option
or SAR held by such Director that (1) has not vested and is not
exercisable as of the effective date of such termination from
membership on the Board shall be subject to immediate cancellation
and forfeiture, or (2) is vested and exercisable as of the
effective date of such termination shall remain exercisable for one
year thereafter, or the remaining term of the Option or SAR, if
less. Any unvested Stock Award, Stock Unit Award or Other Stock
Based Award held by a Non-employee Director at the time of
termination from membership on the Board for a reason other than
Disability or death shall be immediately cancelled and
forfeited.

 

(ii)
Termination from membership on the Board by a Non-employee Director
due to Disability or death shall result in full vesting of any
outstanding Options or SARs and vesting of a prorated portion of
any Stock Award, Stock Unit Award or Other Stock Based Award based
upon the full months of the applicable performance period, vesting
period or other period of restriction elapsed as of the end of the
month in which the termination from membership on the Board by a
Non-employee Director due to Disability or death occurs over the
total number of months in such period. Any Options or SARs that
vest upon Disability or death shall remain exercisable for one year
thereafter, or the remaining term of the Option or SAR, if less. In
the case of any Stock Award, Stock Unit Award or Other Stock Based
Award that vests on the basis of attainment of Performance
Criteria, the pro-rata vested amount shall be based upon the target
award.

 

(iii)
Upon Termination of Employment due to Disability or death, any
Option or SAR held by an Employee shall, if not already fully
vested, become fully vested and exercisable as of the effective
date of such Termination of Employment and shall remain exercisable
for one year after such Termination of Employment due to Disability
or death, or, in either case, the remaining term of the Option or
SAR, if less. Termination of Employment due to Disability or death
shall result in vesting of a prorated portion of any Stock Award,
Stock Unit Award or Other Stock Based Award based upon the full
months of the applicable performance period, vesting period or
other period of restriction elapsed as of the end of the month in
which the Termination of Employment due to Disability or death
occurs over the total number of months in such period. In the case
of any Stock Award, Stock Unit Award or Other Stock Based Award
that vests on the basis of attainment of Performance Criteria, the
pro-rata vested amount shall be based upon the target
award.

 

(iv)
Any Option or SAR held by an Awardee at Retirement that occurs at
least one year after the Grant Date of the Option or SAR will
remain outstanding for the remaining term of the Option or SAR and
continue to vest; any Stock Award, Stock Unit Award or Other Stock
Based Award held by an Awardee at Retirement that occurs at least
one year after the Grant Date of the Award shall also continue to
vest and remain outstanding for the remainder of the term of the
Award.

 

(v) Any
other Termination of Employment shall result in immediate
cancellation and forfeiture of all outstanding Awards that have not
vested as of the effective date of such Termination of Employment,
and any vested and exercisable Options and SARs held at the time of
such Termination of Employment shall remain exercisable for ninety
(90) days thereafter, or the remaining term of the Option or SAR,
if less. Notwithstanding the foregoing, all outstanding and
unexercised Options and SARs shall be immediately cancelled in the
event of a Termination for Cause.

 

14.           
Dividends and Dividend Equivalents.

 

Awards
other than Options and Stock Appreciation Rights may provide the
Awardee with the right to receive dividend payments or dividend
equivalent payments on the Shares subject to the Award, whether or
not such Award is vested. Notwithstanding the foregoing, dividends
or dividend equivalents shall not be paid with respect to Stock
Awards, Stock Unit Awards or Other Stock-Based Awards that vest
based on the achievement of performance goals prior to the date the
performance goals are satisfied and the Award is earned, and then
shall be payable only with respect to the number of Shares or Stock
Units actually earned under the Award. Such payments may be made in
cash, Shares or Stock Units or may be credited as cash or Stock
Units to an Awardee’s account and later settled in cash or
Shares or a combination thereof, as determined by the
Administrator. Such payments and credits may be subject to such
conditions and contingencies as the Administrator may
establish.

 

 

16

 

 

 

15.           Adjustments
upon Changes in Capitalization, Organic Change or Change of
Control.

 

(a)
Adjustment Clause. In the
event of (i) a stock dividend, extraordinary cash dividend, stock
split, reverse stock split, share combination, or recapitalization
or similar event affecting the capital structure of the Company
(each, a “Share Change”), or (ii) a merger,
consolidation, acquisition of property or shares, separation,
spin-off, reorganization, stock rights offering, liquidation,
Disaffiliation, or similar event affecting the Company or any of
its Subsidiaries (each, an “Organic Change”), the
Administrator or the Board shall make such substitutions or
adjustments as it deems appropriate and equitable to (i) the Share
limitations set forth in Section 3 of the Plan, (ii) the number and
kind of Shares covered by each outstanding Award, and (iii) the
price per Share subject to each such outstanding Award. In the case
of Organic Changes, such adjustments may include, without
limitation, (x) the cancellation of outstanding Awards in exchange
for payments of cash, property or a combination thereof having an
aggregate value equal to the value of such Awards, as determined by
the Administrator or the Board in its sole discretion (it being
understood that in the case of an Organic Change with respect to
which shareholders receive consideration other than publicly traded
equity securities of the ultimate surviving entity, any such
determination by the Administrator that the value of an Option or
Stock Appreciation Right shall for this purpose be deemed to equal
the excess, if any, of the value of the consideration being paid
for each Share pursuant to such Organic Change over the exercise
price of such Option or Stock Appreciation Right shall conclusively
be deemed valid); (y) the substitution of other property
(including, without limitation, cash or other securities of the
Company and securities of entities other than the Company) for the
Shares subject to outstanding Awards; and (z) in connection with
any Disaffiliation, arranging for the assumption of Awards, or
replacement of Awards with new awards based on other property or
other securities (including, without limitation, other securities
of the Company and securities of entities other than the Company),
by the affected Subsidiary, Affiliate, or division or by the entity
that controls such Subsidiary, Affiliate, or division following
such Disaffiliation (as well as any corresponding adjustments to
Awards that remain based upon Company securities). The Committee
may adjust in its sole discretion the Performance Criteria
applicable to any Awards to reflect any Share Change and any
Organic Change and any unusual or non-recurring events and other
extraordinary items, impact of charges for restructurings,
discontinued operations, and the cumulative effects of accounting
or tax changes, each as defined by generally accepted accounting
principles or as identified in the Company’s financial
statements, notes to the financial statements, management’s
discussion and analysis or the Company’s other SEC filings.
Any adjustment under this Section 15(a) need not be the same for
all Participants.

 

(b)
Change of Control. In the
event of a Change of Control, unless otherwise determined by the
Administrator as of the Grant Date of a particular Award (or
subsequent to the Grant Date), the following acceleration,
exercisability and valuation provisions shall apply:

 

(i) On
the date that such Change of Control occurs, any or all Options and
Stock Appreciation Rights awarded under this Plan not previously
exercisable and vested shall, if not assumed, or substituted with a
new award, by the successor to the Company, become fully
exercisable and vested, and if the successor to the Company assumes
such Options or Stock Appreciation Rights or substitutes other
awards for such Awards, such Awards (or their substitutes) shall
become fully exercisable and vested if the Participant’s
employment is terminated (other than a Termination for Cause)
within two years following the Change of Control.

 

(ii)
Except as may be provided in an individual severance or employment
agreement (or severance plan) to which an Awardee is a party, in
the event of an Awardee’s Termination of Employment within
two years after a Change of Control for any reason other than
because of the Awardee’s death, Retirement, Disability or
Termination for Cause, each Option and Stock Appreciation Right
held by the Awardee (or a transferee) that is vested following such
Termination of Employment shall remain exercisable until the
earlier of the third anniversary of such Termination of Employment
(or any later date until which it would remain exercisable under
such circumstances by its terms) or the expiration of its original
term. In the event of an Awardee’s Termination of Employment
more than two years after a Change of Control, or within two years
after a Change of Control because of the Awardee’s death,
Retirement, Disability or Termination for Cause, the provisions of
Section 13(c) of the Plan shall govern (as
applicable).

 

 

 

17

 

 

 

(iii)
On the date that such Change of Control occurs, the restrictions
and conditions applicable to any or all Stock Awards, Stock Unit
Awards and Other Stock-Based Awards that are not assumed, or
substituted with a new award, by the successor to the Company shall
lapse and such Awards shall be fully vested. Unless otherwise
provided in an Award Agreement at the Grant Date, upon the
occurrence of a Change of Control without assumption or
substitution of the Awards by the successor, any performance based
Award shall be deemed fully earned at the target amount as of the
date on which the Change of Control occurs. All Stock Awards, Stock
Unit Awards and Other Stock-Based Awards shall be settled or paid
within thirty (30) days of vesting hereunder. Notwithstanding the
foregoing, if the Change of Control would not qualify as a
permissible date of distribution under Section 409A(a)(2)(A) of the
Code, and the regulations thereunder, the Awardee shall be entitled
to receive the Award from the Company on the date that would have
applied absent this provision. If the successor to the Company does
assume (or substitute with a new award) any Stock Awards, Stock
Unit Awards and Other Stock-Based Awards, all such Awards shall
become fully vested if the Participant’s employment is
terminated (other than a Termination for Cause) within two years
following the Change of Control, and any performance based Award
shall be deemed fully earned at the target amount effective as of
such Termination of Employment.

 

(iv)
The Committee, in its discretion, may determine that, upon the
occurrence of a Change of Control of the Company, each Option and
Stock Appreciation Right outstanding shall terminate within a
specified number of days after notice to the Participant, and/or
that each Participant shall receive, with respect to each Share
subject to such Option or Stock Appreciation Right, an amount equal
to the excess of the Fair Market Value of such Share immediately
prior to the occurrence of such Change of Control over the exercise
price per Share of such Option and/or Stock Appreciation Right;
such amount to be payable in cash, in one or more kinds of stock or
property (including the stock or property, if any, payable in the
transaction) or in a combination thereof, as the Committee, in its
discretion, shall determine, and if there is no excess value, the
Committee may, in its discretion, cancel such Awards.

 

(v) An
Option, Stock Appreciation Right, Stock Award, Stock Unit Award or
Other Stock-Based Award shall be considered assumed or substituted
for if following the Change of Control the Award confers the right
to purchase or receive, for each Share subject to the Option, Stock
Appreciation Right, Stock Award, Stock Unit Award or Other
Stock-Based Award immediately prior to the Change of Control, the
consideration (whether stock, cash or other securities or property)
received in the transaction constituting a Change of Control by
holders of Shares for each Share held on the effective date of such
transaction (and if holders were offered a choice of consideration,
the type of consideration chosen by the holders of a majority of
the outstanding Shares); provided, however, that if such
consideration received in the transaction constituting a Change of
Control is not solely common stock of the successor company, the
Committee may, with the consent of the successor company, provide
that the consideration to be received upon the exercise or vesting
of an Option, Stock Appreciation Right, Stock Award, Stock Unit
Award or Other Stock-Based Award, for each Share subject thereto,
will be solely common stock of the successor company with a fair
market value substantially equal to the per Share consideration
received by holders of Shares in the transaction constituting a
Change of Control. The determination of whether fair market value
is substantially equal shall be made by the Committee in its sole
discretion and its determination shall be conclusive and
binding.

 

(c)
Section 409A.
Notwithstanding the foregoing: (i) any adjustments made pursuant to
Section 15(a) of the Plan to Awards that are considered
“deferred compensation” within the meaning of Section
409A of the Code shall be made in compliance with the requirements
of Section 409A of the Code; (ii) any adjustments made pursuant to
Section 15(a) of the Plan to Awards that are not considered
“deferred compensation” subject to Section 409A of the
Code shall be made in such a manner as to ensure that, after such
adjustment, the Awards either continue not to be subject to Section
409A of the Code or comply with the requirements of Section 409A of
the Code; (iii) the Administrator shall not have the authority to
make any adjustments pursuant to Section 15(a) of the Plan to the
extent that the existence of such authority would cause an Award
that is not intended to be subject to Section 409A of the Code to
be subject thereto; and (iv) if any Award is subject to Section
409A of the Code, Section 15(b) of the Plan shall be applicable
only to the extent specifically provided in the Award Agreement and
permitted pursuant to Section 24 of the Plan in order to ensure
that such Award complies with Code Section 409A.

 

 

18

 

 

 

16.           Amendment
and Termination of the Plan.

 

(a)
Amendment and Termination.
The Administrator may amend, alter or discontinue the Plan or any
Award Agreement, but any such amendment shall be subject to
approval of the shareholders of the Company in the manner and to
the extent required by Applicable Law. In addition, without
limiting the foregoing, unless approved by the shareholders of the
Company and subject to Section 16(b), no such amendment shall be
made that would:

 

(i)
increase the maximum aggregate number of Shares which may be
subject to Awards granted under the Plan;

 

(ii)
reduce the minimum exercise price for Options or Stock Appreciation
Rights granted under the Plan; or

 

(iii)
reduce the exercise price of outstanding Options or Stock
Appreciation Rights, as prohibited by Section 8(c) without
shareholder approval.

 

(b)
Effect of Amendment or
Termination. No amendment, suspension or termination of the
Plan shall impair the rights of any Participant with respect to an
outstanding Award, unless mutually agreed otherwise between the
Participant and the Administrator, which agreement must be in
writing and signed by the Participant and the Company, except that
no such agreement shall be required if the Administrator determines
in its sole discretion that such amendment either (i) is required
or advisable in order for the Company, the Plan or the Award to
satisfy any Applicable Law or to meet the requirements of any
accounting standard, or (ii) is not reasonably likely to
significantly diminish the benefits provided under such Award, or
that any such diminishment has been adequately compensated, except
that this exception shall not apply following a Change of Control.
Termination of the Plan shall not affect the Administrator’s
ability to exercise the powers granted to it hereunder with respect
to Awards granted under the Plan prior to the date of such
termination.

 

(c)
Effect of the Plan on Other
Arrangements. Neither the adoption of the Plan by the Board
or a Committee nor the submission of the Plan to the shareholders
of the Company for approval shall be construed as creating any
limitations on the power of the Board or any Committee to adopt
such other incentive arrangements as it or they may deem desirable,
including without limitation, the granting of restricted shares or
restricted share units or stock options otherwise than under the
Plan, and such arrangements may be either generally applicable or
applicable only in specific cases.

 

17.           Designation
of Beneficiary.

 

(a) An
Awardee may file a written designation of a beneficiary who is to
receive the Awardee’s rights pursuant to Awardee’s
Awards or the Awardee may include his or her Awards in an omnibus
beneficiary designation for all benefits under the Plan. To the
extent that Awardee has completed a designation of beneficiary
while employed with the Company or an Affiliate, such beneficiary
designation shall remain in effect with respect to any Award
hereunder until changed by the Awardee to the extent enforceable
under Applicable Law.

 

(b)
Such designation of beneficiary may be changed by the Awardee at
any time by written notice. In the event of the death of an Awardee
and in the absence of a beneficiary validly designated under the
Plan who is living at the time of such Awardee’s death, the
Company shall allow the legal representative of the Awardee’s
estate to exercise the Award.

 

 

19

 

 

 

18.           No
Right to Awards or to Employment.

 

No
person shall have any claim or right to be granted an Award and the
grant of any Award shall not be construed as giving an Awardee the
right to continue in the employ of the Company or its Affiliates.
Further, the Company and its Affiliates expressly reserve the
right, at any time, to dismiss any Employee or Awardee at any time
without liability or any claim under the Plan, except as provided
herein or in any Award Agreement entered into
hereunder.

 

19.           Legal
Compliance.

 

Shares
shall not be issued pursuant to an Option, Stock Appreciation
Right, Stock Award, Stock Unit Award or Other Stock-Based Award
unless such Option, Stock Appreciation Right, Stock Award or Other
Stock-Based Award and the issuance and delivery of such Shares
shall comply with Applicable Law and shall be further subject to
the approval of counsel for the Company with respect to such
compliance. Unless the Awards and Shares covered by this Plan have
been registered under the Securities Act or the Company has
determined that such registration is unnecessary, each person
receiving an Award and/or Shares pursuant to any Award may be
required by the Company to give a representation in writing that
such person is acquiring such Shares for his or her own account for
investment and not with a view to, or for sale in connection with,
the distribution of any part thereof.

 

20.           Inability
to Obtain Authority.

 

To the
extent the Company is unable to or the Administrator deems it
unfeasible to obtain authority from any regulatory body having
jurisdiction, which authority is deemed by the Company’s
counsel to be advisable or necessary to the lawful issuance and
sale of any Shares hereunder, the Company shall be relieved of any
liability with respect to the failure to issue or sell such Shares
as to which such requisite authority shall not have been
obtained.

 

21.           Reservation
of Shares.

 

The
Company, during the term of this Plan, will at all times reserve
and keep available such number of Shares as shall be sufficient to
satisfy the requirements of the Plan.

 

22.           Notice.

 

Any
written notice to the Company required by any provisions of this
Plan shall be addressed to the Secretary of the Company and shall
be effective when received. Any notice to a Participant hereunder
shall be addressed to the last address of record with the Company
and shall be effective when sent via first class mail, courier
service, or electronic mail to such last address of
record.

 

23.           Governing
Law; Interpretation of Plan and Awards.

 

(a)
This Plan and all determinations made and actions taken pursuant
hereto shall be governed by the substantive laws, but not the
choice of law rules, of the state of Delaware, except as to matters
governed by U.S. federal law.

 

(b) In
the event that any provision of the Plan or any Award granted under
the Plan is declared to be illegal, invalid or otherwise
unenforceable by a court of competent jurisdiction, such provision
shall be reformed, if possible, to the extent necessary to render
it legal, valid and enforceable, or otherwise deleted, and the
remainder of the terms of the Plan and/or Award shall not be
affected except to the extent necessary to reform or delete such
illegal, invalid or unenforceable provision.

 

 

20

 

 

 

(c) The
headings preceding the text of each section hereof are inserted
solely for convenience of reference, and shall not constitute a
part of the Plan, nor shall they affect its meaning, construction
or effect.

 

(d) The
terms of the Plan and any Award shall inure to the benefit of and
be binding upon the parties hereto and their respective permitted
heirs, beneficiaries, successors and assigns.

 

24.           Section
409A.

 

It is
the intention of the Company that no Award shall be “deferred
compensation” subject to Section 409A of the Code, unless and
to the extent that the Administrator specifically determines
otherwise, and the Plan and the terms and conditions of all Awards
shall be interpreted accordingly. The terms and conditions
governing any Awards that the Administrator determines will be
subject to Section 409A of the Code, including any rules for
elective or mandatory deferral of the delivery of cash or Shares
pursuant thereto and any rules regarding treatment of such Awards
in the event of a Change of Control, shall be set forth in the
applicable Award Agreement, deferral election forms and procedures,
and rules established by the Administrator, and shall comply in all
respects with Section 409A of the Code. The following rules will
apply to Awards intended to be subject to Section 409A of the Code
(“409A Awards”):

 

(a) If
a Participant is permitted to elect to defer an Award or any
payment under an Award, such election will be permitted only at
times in compliance with Code Section 409A.

 

(b) The
Company shall have no authority to accelerate distributions
relating to 409A Awards in excess of the authority permitted under
Section 409A.

 

(c) Any
distribution of a 409A Award following a Termination of Employment
that would be subject to Code Section 409A(a)(2)(A)(i) as a
distribution following a separation from service of a
“specified employee” as defined under Code Section
409A(a)(2)(B)(i), shall occur no earlier than the expiration of the
six-month period following such Termination of
Employment.

 

(d) In
the case of any distribution of a 409A Award, if the timing of such
distribution is not otherwise specified in the Plan or an Award
Agreement or other governing document, the distribution shall be
made not later than the end of the calendar year during which the
settlement of the 409A Award is specified to occur.

 

(e) In
the case of an Award providing for distribution or settlement upon
vesting or the lapse of a risk of forfeiture, if the time of such
distribution or settlement is not otherwise specified in the Plan
or an Award Agreement or other governing document, the distribution
or settlement shall be made not later than March 15 of the year
following the year in which the Award vested or the risk of
forfeiture lapsed.

 

(f)
Notwithstanding anything herein to the contrary, neither the
Company nor the Administrator makes any representation or guarantee
that the Plan or its administration shall comply with Code Section
409A, and in no event shall the Company or the Administrator be
liable for the payment of, or any gross up payment in connection
with, any taxes or penalties owed by the Participant pursuant to
Code Section 409A.

 

 

21

 

 

 

25.           Limitation
on Liability.

 

The
Company and any Affiliate which is in existence or hereafter comes
into existence shall not be liable to a Participant, an Employee,
an Awardee or any other persons as to:

 

(a)
The Non-Issuance of Shares.
The non-issuance or sale of Shares as to which the Company has been
unable to obtain from any regulatory body having jurisdiction the
authority deemed by the Company’s counsel to be necessary to
the lawful issuance and sale of any shares hereunder;
and

 

(b)
Tax or Exchange Control
Consequences. Any tax consequence expected, but not
realized, or any exchange control obligation owed, by any
Participant, Employee, Awardee or other person due to the receipt,
exercise or settlement of any Option or other Award granted
hereunder.

 

26.           Unfunded
Plan.

 

Insofar
as it provides for Awards, the Plan shall be unfunded. Although
bookkeeping accounts may be established with respect to Awardees
who are granted Stock Awards, Stock Unit Awards or Other
Stock-Based Awards under this Plan, any such accounts will be used
merely as a bookkeeping convenience. The Company shall not be
required to segregate any assets which may at any time be
represented by Awards, nor shall this Plan be construed as
providing for such segregation. Neither the Company nor the
Administrator shall be deemed to be a trustee of Shares or cash to
be awarded under the Plan. Any liability of the Company to any
Participant with respect to an Award shall be based solely upon any
contractual obligations which may be created by the Plan; no such
obligation of the Company shall be deemed to be secured by any
pledge or other encumbrance on any property of the Company. Neither
the Company nor the Administrator shall be required to give any
security or bond for the performance of any obligation which may be
created by this Plan.

 

27.           Foreign
Employees and Consultants.

 

Awards
may be granted hereunder to Employees and Consultants who are
foreign nationals, who are located outside the United
States or who are not
compensated from a payroll maintained in the United States, or who
are otherwise subject to (or could cause the Company to be subject
to) legal or regulatory provisions of countries or jurisdictions
outside the United States, on such terms and conditions different
from those specified in the Plan as may, in the judgment of the
Administrator, be necessary or desirable to foster and promote
achievement of the purposes of the Plan, and, in furtherance of
such purposes, the Administrator may make such modifications,
amendments, procedures, or subplans as may be necessary or
advisable to comply with such legal or regulatory
provisions.

 

28.           Tax
Withholding.

 

Each
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 any Award under the Plan no later than the
date as of which any amount under such Award first becomes
includible in the gross income of the Participant for any tax
purposes with respect to which the Company has a tax withholding
obligation. Unless otherwise determined by the Company, withholding
obligations may be settled with Shares, including Shares that are
part of the Award that gives rise to the withholding requirement;
provided, however, that not more than the maximum statutory
withholding requirement may be settled with Shares that are part of
the Award. The obligations of the Company under the Plan shall be
conditional on such payment or arrangements, and the Company and
its Affiliates shall, to the extent permitted by law, have the
right to deduct any such taxes from any vested Shares or any other
payment due to the Participant at that time or at any future time.
The Administrator may establish such procedures as it deems
appropriate, including making irrevocable elections, for the
settlement of withholding obligations with Shares.

 

29. Cancellation of Award; Forfeiture of
Gain.

 

Notwithstanding
anything to the contrary contained herein, an Award Agreement may
provide that the Award will be cancelled and the Participant will
forfeit the Shares or cash received or payable on the vesting or
exercise of the Award, and that the amount of any proceeds of the
sale or gain realized on the vesting or exercise of the Award must
be repaid to the Company, under such conditions as may be required
by Applicable Law or established by the Committee in its sole
discretion.

 

 

 

 

 

 

 

Approved
by LightPath shareholders on November 15, 2018.

 

 

 

 

 

 

22

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