Document:

exhibit10-1.htm

    AMTECH SYSTEMS, INC.

     

    NON-EMPLOYEE DIRECTORS
STOCK OPTION PLAN
AS AMENDED EFFECTIVE JULY 8, 2005 AND
AS FURTHER AMENDED
EFFECTIVE MARCH 11, 2010 

     

    Purposes of the Plan

    The purposes of this
Plan are to attract and retain the best available individuals to serve as
non-employee members of the Board of Directors of Amtech Systems, Inc. (the
"Company"), to reward such directors for their contributions to the profitable
growth of the Company, and to maximize the identity of interest between such
directors and stockholders generally. The Plan is intended to fall within an
exception to coverage under Section 409A of the Internal Revenue
Code.

     

         1. Definitions. As used herein, the
following definitions shall apply:

     

         a. "Board" shall mean
the Board of Directors of the Company.

     

         b. "Company" shall mean
Amtech Systems, Inc., an Arizona corporation. 

     

         c. "Effective Date" shall be the date that the Board of Directors of the
Company adopts this Plan. 

     

         d. "Eligible Director" shall mean (i) those individuals who are serving
as non-employee members of the Board on the Effective Date, or (ii) those
individuals who are elected or appointed as non-employee members of the Board
after the Effective Date, whether through appointment by the Board or election
of the Company's stockholders. 

     

         e. "Exercise Price" shall mean, with respect to Shares of Optioned Stock,
the Fair Market Value of such Shares on the date of grant of the Option.

     

         f. "Fair Market Value" shall mean, with respect to the date a given
Option is granted or exercised, the value of the Common Stock determined by the
Board in such manner as it may deem equitable for Plan purposes in accordance
with applicable law, including Section 409A of the Internal Revenue Code;
provided, however, that where there is a public market for the Common Stock, the
Fair Market Value per Share shall be the closing price for a Share reported for
the last trading day prior to such date by the NASDAQ Stock Market (or such
other stock exchange or quotation system on which Shares are then listed or
quoted) or, if no Shares are traded on the NASDAQ Stock Market (or such other
stock exchange or quotation system) on the date in question, then for the next
preceding date for which Shares traded on the NASDAQ Stock Market (or such other
stock exchange or quotation system). 

     

         g. "Option" shall mean
a right to purchase Stock, granted pursuant to the Plan. 

     

         h. "Optioned Stock"
shall mean the Stock subject to an Option. 

     

         i. "Optionee" shall mean a non-employee director of the Company who has
been granted an Option. 

     

    

    
    

         j. "Plan" shall mean
this Non-Employee Directors Stock Option Plan. 

     

         k. "Share" shall mean a
share of the Stock. 

     

         l. "Stock" shall mean the Common Stock of the Company described in the
Certificate of Incorporation of the Company. 

     

         m. "Stock Option Agreement" shall mean the written agreement evidencing
the grant of an Option. 

     

         n. "Trading Day" shall mean a day on which the Fair Market Value of the
Stock can be determined. 

     

         2. Common Stock Subject to the Plan.
Subject to increases and adjustments pursuant to Section 9 of the Plan, the number of Shares
reserved and available for distribution under the Plan shall be Three Hundred
Fifty Thousand (350,000). If an Option shall expire or become unexercisable for
any reason without having been exercised in full, the unauthorized Shares
covered by the Option shall, unless the Plan shall have terminated, be available
for future grants of Options. The Company shall use its best efforts to provide
that any Stock subject to the Option constitutes, or is equivalent to, “service
recipient stock” within the meaning of Internal Revenue Code Section 409A.

     

         3. Option Grants. 

     

         a. Each individual who first becomes an Eligible Director after the
Effective Date, whether through election by the stockholders or appointment of
the Board, shall be granted at the time of such initial election or appointment,
or on such other date as may be determined by the Board, an Option to purchase
6,000 shares of Stock, or such other number of shares of Stock as may be
determined by the Board. 

     

         b. On the first business day following the Company’s Annual Meeting of
Shareholders each year (the “Annual Grant Date”), beginning with the first
business day following the 2005 Annual Meeting of Shareholders, or at such other
date as may be determined by the Board, each individual who is at that time an
Eligible Director shall be granted an Option under the Plan to purchase an
additional 5,000 shares of Stock, or such other number of shares of Stock may be
determined by the Board; provided such individual (i) has attended 75% of the
meetings of the Board held during the 12-month period immediately preceding the
Annual Grant Date, or (ii) if such individual was appointed or elected as a
director during such 12-month period, he or she has attended 75% of the meetings
of the Board held during his of her term as a director, and (iii) has attended
75% of the meetings of any Committee of the Board to which such individual has
been appointed as a member during such 12-month period. 

     

         c. The purchase price of Shares subject to an Option shall be the Fair
Market Value on the date of grant. Subject to Section 8, the Board shall not
permit the repricing of any Option by any method, including by cancellation and
reissuance. 

     

    

    
    

         d. Each Option granted pursuant to this Plan shall vest and become
exercisable according to the following schedule, provided that the Optionee
remains an Eligible Director at such vesting date: 

     

    
      	Vesting
      Date	Percentage of
      Shares Vesting
	First
      Anniversary of Grant	33-1/3%
	Second
      Anniversary of Grant	66-2/3%
	Third
      Anniversary of Grant	100%

    

         (e) Notwithstanding any other provision of this Plan to the contrary, in
the event of a departure of a director, due to resignation or otherwise, the
Board shall have discretion to grant to such departing director an Option or
Options to purchase such number of shares of Stock as the Board may determine
and to fix the vesting and exercisability dates with respect thereto in
recognition of such departing director’s service on the Board or any Committee
thereof. 

     

         (f) No Deferral Feature. No Option shall have any feature that would
allow for the deferral of compensation (within the meaning of Internal Revenue
Code Section 409A) other than the deferral of recognition of income until the
later of the exercise or disposition of the Option or the time the shares of
Stock acquired subject to the exercise of the Option first become substantially
vested (as defined in Treasury Regulation section 1.83-3(b)).

     

         4. Stockholder Approval. This Plan was adopted
by the Board of Directors of the Company on December 21, 1995 (the “Effective
Date”) and approved by the shareholders on February 29, 1996. The Board approved
certain amendments to the Plan on March 15, 2001 and April 21, 2005. The
shareholders approved certain amendments to the Plan on July 8, 2005. Options
may be granted under the Plan on and after the Effective Date. No Option may be
granted after March 11, 2020; provided, however, that the Plan and all
outstanding Options shall remain in effect until such Options shall have been
exercised, shall have expired or shall otherwise be terminated. 

     

         5. Term; Exercise; Rights as a
Stockholder. 

     

         a. The term of each Option shall be ten (10) years from the date of grant
thereof. To the extent vested the Option may be exercised in whole or in part at
any time and during the term of the Option. No fractional Shares will be issued
upon exercise of the Option and, if the exercise results in a fractional
interest, an amount will be paid in cash equal to the value of such fractional
interest based on the Fair Market Value of the Shares on the date of exercise.

     

         b. An Option shall be deemed to be exercised upon receipt by the Company
from the Optionee of written notice of such exercise. Such notice shall be
accompanied by full payment for the Shares subject to such exercise.

     

    

    
    

     

    
           6. Payment. The Exercise Price shall
be paid:

    

     

         a. In United States dollars in cash or by check payable to the order of
the Company; or

     

         b. Subject to the approval of the Board, by delivery of Shares with an
aggregate Fair Market Value equal to the Exercise Price; or 

     

         c. By any combination
of (a) and (b) above. 

     

         The Board shall determine acceptable methods for tendering Stock as
payment upon exercise of an Option and may impose such limitations and
prohibitions on the use of Stock to exercise an Option as it deems appropriate.

     

         7. Transferability of Options. The Option may
not be sold, pledged, assigned, hypothecated, transferred, or disposed of in any
manner other than by will or by the laws of descent and distribution to the
limited extent provided herein or pursuant to a "qualified domestic relations
order" as defined by the Internal Revenue Code or the Employee Retirement Income
Security Act or the rules thereunder. Except as permitted herein, an Option may
be exercised, during the lifetime of the Optionee, only by the Optionee or by
his guardian or legal representative. 

     

         In the event of the Optionee's death, his or
her Option shall be exercisable, prior to the expiration of the Option, by the
person or persons to whom his or her accrued and vested rights pass by will or
by the laws of descent and distribution. 

     

         8. Adjustments Upon Changes in Capitalization
or Merger. Subject to any required action by the stockholders of the Company,
the number of Shares covered by each outstanding Option, and the number of
Shares which have been authorized for issuance under the Plan but as to which no
Options have yet been granted or which have been returned to the Plan upon
cancellation or expiration of an Option, as well as the price per Share covered
by each such outstanding Option, shall be proportionately adjusted for any
increase or decrease in the number of issued Shares resulting from a stock
split, reverse stock split, consolidation, subdivision, stock dividend,
combination or reclassification of the Shares, or any other increase or decrease
in the number of issued Shares effected without receipt of consideration by the
Company; provided, however, that conversion of any convertible securities of the
Company shall not be deemed to have been "effected without receipt of
consideration." Such adjustment shall be made by the Board, whose determination
in that respect shall be final, binding and conclusive. Except as expressly
provided herein, no issuance by the Company of shares of stock of any class, or
securities convertible into shares of stock of any class, shall affect, and no
adjustment by reason thereof shall be made, with respect to the number or price
of Shares subject to an Option. 

     

         In the event of the proposed dissolution or
liquidation of the Company, all Options will terminate immediately prior to the
consummation of such proposed action, unless otherwise provided by the Board.
The Board may, in the exercise of its sole discretion in such instances, declare
that any Option shall terminate as of a date fixed by the Board and give each
holder the right to exercise the Option as to all or any part thereof, including
Shares as to which the Option would not otherwise be exercisable. In the event
of a proposed sale of all or substantially all of the assets of the Company, or
the merger of the Company with or into another corporation, the Option shall be
assumed or an equivalent Option shall be substituted by such successor
corporation or a parent or subsidiary of such successor corporation, unless the
Board determines, in the exercise of its sole discretion and in lieu of such
assumption or substitution, that the holder shall have the right to exercise the
Option as to all of the Shares, including Shares as to which the Option would
not otherwise be exercisable. If the Board makes an Option exercisable in lieu
of assumption or substitution in the event of a merger or sale of assets, the
Board shall notify the holder that the Option shall be fully exercisable for a
period of 30 days from the date of such notice (but not later than the
expiration of the term of the Option), and the Option will terminate upon the
expiration of such period.

     

    

    
    

         9. Amendment and Termination of the Plan. The
Board may amend the Plan from time to time in such respects as the Board may
deem advisable or terminate the Plan; provided, however, that amendments to the
Plan relating to the amount, price or timing of Option grants shall not be made
more than once in any six month period, other than amendments necessary to
comply with changes in the Internal Revenue Code of 1986, as amended, the
Employee Retirement Income Security Act, as amended, or the rules thereunder.
Any amendment or termination of the Plan shall not affect Options already
granted and such Options shall remain in full force and effect as if this Plan
had not been amended or terminated. 

     

         Notwithstanding the foregoing, revisions or
amendments that accomplish any of the following shall require approval of the
stockholders of the Company, to the extent required by law, rule or regulation:

     

         a. Materially increase
the benefits accruing to participants under the Plan;

     

         b. Materially increase
the number of Shares which may be issued under the Plan;

     

         c. Materially modify
the Plan as to eligibility for participation in the Plan; or 

     

         d. Otherwise cause the Plan to lose its exemption under Section 16(b) of
the Securities Exchange Act of 1934, as amended, and the rules and regulations
promulgated thereunder. 

     

         10. Conditions Upon Issuance of Shares. Shares
shall not be issued pursuant to the exercise of an Option unless the exercise of
such Option and the issuance and delivery of such Shares pursuant thereto shall
comply with all relevant provisions of law, including, without limitation the
Securities Act of 1933, as amended, the Securities Exchange Act of 1934, as
amended, the rules and regulations promulgated thereunder, and the requirements
of any stock exchange or market system upon which the Shares may be listed, and
shall be further subject to the approval of counsel for the Company with respect
to such compliance. 

     

         As a condition to the exercise of an Option,
the Company may require the Optionee to represent and warrant at the time of any
such exercise that the Shares are being purchased only for investment and
without any present intention to sell or distribute such Shares if, in the
opinion of counsel for the Company, such a representation is required or
advisable. 

     

         Inability of the Company to obtain authority
from a regulatory body having jurisdiction, which authority is deemed by the
Company's counsel to be necessary or advisable to the lawful issuance and sale
of any Shares hereunder, shall relieve the Company of any liability in respect
of the failure to issue or sell such Shares as to which such requisite authority
shall not have been obtained.

     

    

    
    

         11. Termination of Option.

     

         a. Termination as a Director. If an Optionee ceases to be a director,
unless such cessation occurs due to death or disability, then the Option shall
terminate on the date that is thirty (30) days from the date the Optionee ceases
to be a director, or such other date as may be determined by the Board.

     

         b. Disability. Unless otherwise provided in the Stock Option Agreement,
in the event an Optionee is unable to continue to be a member of the Board as a
result of his permanent and total disability (as defined in Section 22(e)(3) of
the Internal Revenue Code of 1986, as amended), he may exercise the Option at
any time within twelve (12) months following the date he ceased to be a
director, but only to the extent he was entitled to exercise it on the date he
ceased to be a director. To the extent that he was not entitled to exercise the
Option on the date he ceased to be a director, or if he does not exercise such
Option (which he was entitled to exercise) within the time specified herein, the
Option shall terminate. 

     

         c. Death. Unless otherwise provided in the Stock Option Agreement, if an
Optionee dies during the term of the Option, the Option may be exercised at any
time within twelve (12) months following the date of death, but only to the
extent that an Optionee was entitled to exercise the Option on the date of
death. To the extent that decedent was not entitled to exercise the Option on
the date of death, or if the Optionee's estate, or person who acquired the right
to exercise the Option by bequest or inheritance, does not exercise such Option
(which he was entitled to exercise) within the time specified herein, the Option
shall terminate. 

     

         12. Option Agreement. Options shall be
evidenced by Stock Option Agreements in such form as the Board shall approve.

     

         13. Miscellaneous Provisions.

     

         a. Plan Expense. Any expenses of administering this Plan shall be borne
by the Company. 

     

         b. Construction of Plan. The validity, construction, interpretation,
administration and effect of the Plan and of its rules and regulations, and
rights relating to the Plan, shall be determined by the Board in accordance with
the laws of the State of Arizona. 

     

    

    
    

         c. Taxes. The Company shall be entitled if necessary or desirable to pay
or withhold the amount of any tax attributable to the delivery of Common Shares
under the Plan after giving the person entitled to receive such Shares notice as
far in advance as practical, and the Company may defer making delivery of such
Shares if any such tax may be pending unless and until indemnified to its
satisfaction. Notwithstanding any other provision of the Plan, the tax treatment
of awards under the Plan shall not be, and is not, warranted or guaranteed.
Neither the Company, any subsidiary or affiliate, the Board, any committee
thereof, nor any of their delegatees shall be held liable for any taxes,
penalties, or other monetary amounts owed by an Optionee, his beneficiary, or
other person as a result of the grant, modification, or amendment of an award
hereunder or the adoption, modification, amendment, or administration of the
Plan. 

     

         d. Gender. For purposes of this Plan, words used in the masculine gender
shall include the female and neuter, and the singular shall include the plural
and vice versa, as appropriate. 

     

    

    
    

    NON-EMPLOYEE DIRECTORS
STOCK OPTION AGREEMENT 

     

    EXHIBIT A

     

    AMTECH SYSTEMS, INC.

     

    NON-EMPLOYEE DIRECTORS
STOCK OPTION AGREEMENT 

     

         BY THIS DIRECTORS STOCK OPTION AGREEMENT (the
"Agreement"), AMTECH SYSTEMS, INC., an Arizona corporation (the "Company"), and
the undersigned, a non-employee director of the Company (the "Optionee"), desire
to establish the terms and conditions upon which the Company is willing to grant
the Optionee, and upon which the Optionee is willing to accept from the Company,
an Option to purchase shares of Common Stock from the Company, pursuant to the
terms and conditions of the Company's Non-Employee Directors Stock Option Plan
(the "Plan"). 

     

    The Company and the
Optionee hereby agree as follows: 

     

         1. The Plan. All the terms, conditions and
definitions of the Plan are hereby incorporated by reference into this
Agreement, as if fully set forth herein. 

     

         2. Terms of Grant. 

     

         (a) Exercise Price:
$____________

     

         (b) Number of Shares
Subject to Option: __________ Shares of Common Stock

     

         (c) Grant Date:
______________, _____

     

         DATED: ________________,
_____

     

    
      	
            	
              AMTECH SYSTEMS,
      INC. 

               

              By
      ______________________________________

               

              Its ______________________________

               

              OPTIONEE: 

               

              _________________________________________exhibit10-2.htm

    2007 EMPLOYEE STOCK
INCENTIVE
PLAN
OF
AMTECH SYSTEMS, INC.

     

    As Amended Effective March 11,
2010 

     

    Section 1. Purpose of Plan 

     

         The purpose of this 2007 Employee Stock
Incentive Plan (this “Plan”) of Amtech Systems, Inc., an Arizona
corporation (the “Company”), is to enable the Company and any
subsidiary corporation (as the term is defined in Code Section 424(f),
hereinafter each a “Subsidiary” or the plural “Subsidiaries”) to attract, retain and motivate their
officers and other key employees, and to further align the interests of such
persons with those of the stockholders of the Company by providing for or
increasing the proprietary interest of such persons in the Company. The Plan is
intended to fall within an exception to coverage under Section 409A of the
Internal Revenue Code.

     

    Section 2. Administration of
Plan 

     

         2.1 Composition of Committee. This Plan shall be administered by the Compensation and Option Committee
of the Board of Directors (the “Committee”), as appointed from time to time by the
Board of Directors. The Committee shall act pursuant to a majority vote or
unanimous written consent. The Board of Directors, in its sole discretion, may
exercise any authority of the Committee under this Plan in lieu of the
Committee’s exercise thereof. Notwithstanding the foregoing, with respect to any
Award that is intended to satisfy the conditions of Rule 16b-3 under the
Securities Exchange Act of 1934, as amended (the “Exchange Act”) or Section 162(m)(4)(C) of the Internal
Revenue Code of 1986, as amended (the “Code”), the Committee may appoint one or more
separate committees (any such committee, a “Subcommittee”) composed of one or more directors of the
Company (who may but need not be members of the Committee) and may delegate to
any such Subcommittee(s) the authority to grant Awards, as defined in Section
5.1 hereof, under the Plan to Eligible Employees, to determine all terms of such
Awards, and/or to administer the Plan or any aspect of it. Any action by any
such Subcommittee within the scope of such delegation shall be deemed for all
purposes to have been taken by the Committee. The Committee may designate the
Secretary of the Company or other Company employees to assist the Committee in
the administration of the Plan, and may grant authority to such persons to
execute agreements or other documents evidencing Awards made under this Plan or
other documents entered into under this Plan on behalf of the Committee or the
Company. 

     

    

    
    

         2.2 Powers of the Committee. Subject to the express provisions of this Plan, the Committee shall be
authorized and empowered to do all things necessary or desirable, in its sole
discretion, in connection with the administration of this Plan, including,
without limitation, the following:

     

         (a) to prescribe, amend and rescind rules and
regulations relating to this Plan and to define terms not otherwise defined
herein; provided that, unless the Committee specifies otherwise, for purposes of
this Plan (i) the term “fair market value” shall mean, as of any date, the
closing price for a Share (as defined in Section 3.1) reported for the last
trading day prior to such date by the NASDAQ Stock Market (or such other stock
exchange or quotation system on which Shares are then listed or quoted) or, if
no Shares are traded on the NASDAQ Stock Market (or such other stock exchange or
quotation system) on the date in question, then for the next preceding date for
which Shares traded on the NASDAQ Stock Market (or such other stock exchange or
quotation system); and (ii) the term “Company” shall mean the Company and its
Subsidiaries, unless the context otherwise requires;

     

         (b) to determine which persons are Eligible
Employees (as defined in Section 4), to which of such Eligible Employees, if
any, Awards shall be granted hereunder and the timing of any such Awards, and to
grant Awards;

     

         (c) to grant Awards to Eligible Employees and
determine the terms and conditions thereof, including the number of Shares
subject to Awards and the exercise or purchase price of such Shares and the
circumstances under which Awards become exercisable or vested or are forfeited
or expire, which terms may but need not be conditioned upon the passage of time,
continued employment, the satisfaction of performance criteria, the occurrence
of certain events (including events which the Board or the Committee determine
constitute a change of control), whether such Award complies with Code Section
409A, Notice 2005-1, Proposed Treasury Regulations Sections 1.409-1 through
1.409-6, (and after December 31, 2007 (or sooner at the election of the
Committee), Treasury Regulations Sections 1.409A-1 through 1.409A-6) or other
factors;

     

         (d) to establish, verify the extent of
satisfaction of, adjust, reduce or waive any performance goals or other
conditions applicable to the grant, issuance, exercisability, vesting and/or
ability to retain any Award and to consider the effect of such actions on the
qualification of an Award as an ISO. 

     

         (e) to prescribe and amend the terms of the
agreements or other documents evidencing Awards made under this Plan (which need
not be identical);

     

         (f) to determine whether, and the extent to
which, adjustments are required pursuant to Section 9; 

     

         (g) to interpret and construe this Plan, any
rules and regulations under this Plan and the terms and conditions of any Award
granted hereunder, and to make exceptions to any such provisions in good faith
and for the benefit of the Company; and

     

         (h) to make all other determinations deemed
necessary or advisable for the administration of this Plan. 

     

    2 

     

    

    
    

         2.3 Determinations of the Committee. All decisions, determinations and
interpretations by the Committee regarding this Plan shall be final and binding
on all Eligible Employees. The Committee shall consider such factors as it deems
relevant to making such decisions, determinations and interpretations including,
without limitation, the recommendations or advice of any director, officer or
employee of the Company and such attorneys, consultants and accountants as it
may select.

     

    Section 3. Stock Subject to
Plan

     

         3.1 Aggregate Limits. The aggregate number of shares of the Company’s Common Stock, par value
$0.01 per share (“Shares”), issued pursuant to all Awards granted
under this Plan shall not exceed One Million Four Hundred Thousand (1,400,000).
The aggregate number of Shares available for issuance under this Plan and the
number of Shares subject to outstanding Awards shall be subject to adjustment as
provided in Section 9. The Shares issued pursuant to this Plan may be Shares
that either were reacquired by the Company, including Shares purchased in the
open market, or authorized but unissued Shares.

     

         3.2 Additional Limits. The aggregate number of Shares subject to Options granted under this Plan
during any calendar year to any one Eligible Employee shall not exceed 250,000
(taking into account the number of shares associated with an Option granted and
then cancelled during such calendar year). The aggregate number of Shares issued
or issuable under all Awards granted under this Plan, other than Options, during
any calendar year to any one Eligible Employee shall not exceed 250,000 (taking
into account the number of shares associated with the Awards other than Options
granted and then cancelled during such calendar year). The foregoing limitations
of this Section 3.2 shall not apply to the extent that they are no longer
required in order for compensation in connection with grants of Awards under
this Plan to be treated as “performance-based compensation” under Code Section
162(m) and, if no longer required, a change in such limitation shall not be
subject to stockholder approval as required under Section 12 hereof. The
aggregate number of Shares that may be issued pursuant to the exercise of ISOs
granted under this Plan shall not exceed 1,400,000, which number shall be
calculated and adjusted pursuant to Section 3.3 and Section 9 only to the extent
that such calculation or adjustment will not (i) require shareholder approval
under Reg. § 1.422-2(b)(3) or (ii) affect the status of any Option intended to
qualify as an ISO under Code Section 422, or whether this Plan meets the
requirements under Code Section 422(b)(1). 

     

         3.3 Issuance of Shares. For purposes of Section 3.1, the aggregate number of Shares issued under
this Plan at any time shall equal only the number of Shares actually issued upon
exercise or settlement of an Award and shall not include Shares subject to
Awards that have been canceled, expired or forfeited or Shares subject to Awards
that have been delivered (either actually or constructively by attestation) to
or retained by the Company in payment or satisfaction of the purchase price or
exercise price of an Award. 

     

    3 

     

    

    
    

    Section 4. Persons Eligible Under
Plan 

     

         Any person who is an employee or prospective
employee of the Company or any of its Subsidiaries shall be eligible to be
considered for the grant of Awards hereunder; provided that the Award to such
prospective employee is conditioned on the prospective employee’s commencement
of employment (an “Eligible Employee”); provided, however, with respect to ISOs
granted under this Plan, the aggregate fair market value (determined at the time
the ISO is granted) of the Shares with respect to which the ISOs are exercisable
for the first time by the optionee during any calendar year (under the plans of
the Company) shall not exceed $100,000.00. If any ISO is granted that exceeds
the limitations of this Section 4 at the first time it is exercisable, it shall
not be invalid, but shall constitute, and be treated as, a Nonqualified Option
to the extent of such excess. The status of the chairman of the Board of
Directors as an “employee” shall be determined by the Committee.

     

    Section 5. Plan Awards

     

         5.1 Award Types. The
Committee, on behalf of the Company, is authorized under this Plan to enter into
certain types of arrangements with Eligible Employees and to confer certain
benefits on them. The following arrangements or benefits are authorized under
this Plan if their terms and conditions are not inconsistent with the provisions
of this Plan: Options and Restricted Stock. Such arrangements and benefits are
sometimes referred to herein as “Awards.” The authorized types of arrangements
and benefits for which Awards may be granted are defined as
follows:

     

         (a) Options. An Option is a right granted
under Section 6 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 terms and conditions or other document evidencing the Award (the
“Option Document”). Options intended to qualify as Incentive
Stock Options (“ISOs”) pursuant to Code Section 422 and Options
not intended to qualify as ISOs (“Nonqualified Options”) may be granted under Section
6.

     

         (b) Restricted Stock. Restricted Stock is an
award or issuance of Shares under Section 7, subject to certain restrictions and
the risk of forfeiture and terms as are expressed in the agreement or other
document evidencing the Award. 

     

         5.2 Grants of Awards. An Award may consist of one such arrangement or benefit or two or more of
them in tandem, and the terms as established by the Committee for all Awards
granted hereunder may include performance standards derived from the Qualifying
Performance Criteria (as defined in Section 8.2 hereof), and the receipt of any
Award may be contingent on performance standards derived from the Qualifying
Performance Criteria.

     

    Section 6. Options

     

         The Committee may grant an Option or provide
for the grant of an Option, either from time to time in the discretion of the
Committee or automatically upon the occurrence of specified events, including,
without limitation, the achievement of performance goals, the satisfaction of an
event or condition within the control of the recipient of the Award or within
the control of others.

     

    4 

     

    

    
    

         6.1 Option Document. Each Option Document shall contain provisions regarding (a) the number of
Shares that may be issued upon exercise of the Option, (b) the purchase price of
the Shares and the means of payment for the Shares, (c) the term of the Option,
(d) such terms and conditions on the vesting and/or exercisability of an Option
as may be determined from time to time by the Committee, (e) restrictions on the
transfer of the Option and forfeiture provisions and (f) such further terms and
conditions, in each case not inconsistent with this Plan as may be determined
from time to time by the Committee. Option Documents evidencing ISOs shall
contain such terms and conditions as may be necessary to qualify, to the extent
determined desirable by the Committee, with the applicable provisions of Section
422 of the Code.

     

         6.2 Option Price. Subject to the restriction set forth in the following sentence, the
purchase price per share of the Shares subject to each Option granted under this
Plan shall equal or exceed 100% of the fair market value of a Share on the date
the Option is granted. The previous sentence notwithstanding, if, immediately
before an Award intended to qualify as an ISO, an individual owns (or is treated
as owning under the Code) stock possessing more than ten percent (10%) of the
total combined voting power of all classes of stock of the Company (or any
related corporation within the meaning of Reg. § 1.421-1(i)(2)) employing the
optionee, the purchase price shall be in no event less than one hundred ten
percent (110%) of the stock’s fair market value on the date of
grant.

     

         6.3 Option Term. The
“Term” of each Option granted under this Plan, including any ISOs, shall be ten
(10) years from the date of its grant, unless (i) the Company makes an Award
intended to qualify as an ISO to an individual who owns (or is treated as owning
under the Code) stock possessing more than ten percent (10%) of the total
combined voting power of all classes of stock of the Company (or any related
corporation within the meaning of Reg. § 1.421-1(i)(2)) employing the optionee,
in which case, the term shall be five (5) years from the date of its grant or
(ii) the Committee provides for a lesser term.

     

         6.4 Option Vesting.
Options granted under this Plan shall 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 Committee. The Committee shall have the right to make the
timing of the ability to exercise any Option granted under this Plan subject to
continued employment, the passage of time and/or such performance requirements
as deemed appropriate by the Committee.

     

    5 

     

    

    
    

         6.5 Termination of Status as and Employee. 

     

         (a) Termination of Employment. Unless otherwise provided in an Award
Agreement relating to an Option, if the employment of an Eligible Employee by
the Company is terminated, whether voluntary or for cause, except if such
termination occurs due to retirement, death or disability, the Option, to the
extent not exercised, shall cease on the date on which Eligible Employee’s
employment by the Company is terminated. For purposes of this Section 6.5, an
Eligible Employee who leaves the employ of the Company to become an employee of
a subsidiary or parent corporation of the Company or a corporation which has
assumed the Option of the Company as a result of a corporate reorganization,
etc., shall not be considered to have terminated his employment. For purposes of
this Section 6.5, the employment relationship of an employee of the Company or
of a subsidiary corporation of the Company will be treated as continuing intact
while he is on military or sick leave or other bona fide leave of absence (such
as temporary employment by the government) if such leave does not exceed ninety
(90) days, or, if longer, so long as his right to reemployment is guaranteed
either by statute or by contract.

     

         (b) Retirement. For purposes of the Plan, the retirement of
an individual either pursuant to a pension or retirement plan adopted by the
Company or at the normal retirement date prescribed from time to time by the
Company, shall be deemed to be a termination of such individual's employment
other than voluntary or for cause. If an Eligible Employee’s termination is due
to retirement, then the Eligible Employee may, but only within ninety (90) days
after the date he ceases to be an employee of the Company, exercise his Option
to the extent that he was entitled to exercise it at the date of such
termination. To the extent that he was not entitled to exercise the Option at
the date of such termination, or if he does not exercise such Option (which he
was entitled to exercise) within the time specified herein, the Option shall
terminate.

     

         (c) Disability. Unless otherwise provided in an Award
Agreement relating to an Option, in the event an Eligible Employee is unable to
continue his employment with the Company as a result of his permanent and total
disability (as defined in Section 22(e)(3) of the Code), he may, but only within
one (1) year from the date of termination, exercise his Option to the extent he
was entitled to exercise it at the date of such termination. To the extent that
he was not entitled to exercise the Option at the date of termination, or if he
does not exercise such Option (which he was entitled to exercise) within the
time specified herein, the Option shall terminate.

     

         (d) Death of Eligible Employee. Unless otherwise provided in an Award
Agreement relating to an Option, if an Eligible Employee dies during the term of
the Option and is at the time of his death an employee of the Company who shall
have been in continuous status as an employee since the date of grant of the
Option, the Option may be exercised at any time within one (1) year following
the date of death (or such other period of time as is determined by the
Committee), by the Eligible Employee’s estate or by a person who acquired the
right to exercise the Option by bequest or inheritance, but only to the extent
that Eligible Employee was entitled to exercise the Option on the date of death.
To the extent that decedent was not entitled to exercise the Option on the date
of death, or if the Eligible Employee’s estate, or person who acquired the right
to exercise the Option by bequest or inheritance, does not exercise such Option
(which he was entitled to exercise) within the time specified herein, the Option
shall terminate.

     

    6 

     

    

    
    

         6.6 Payment of Exercise Price. The exercise price of an Option shall be paid in the form of one of more
of the following, as the Committee shall specify, either through the terms of
the Option Document or at the time of exercise of an Option: (a) cash or
certified or cashiers’ check, (b) payment under an arrangement with a broker
selected or approved by the Company where payment is made pursuant to an
irrevocable commitment by the broker to deliver to the Company proceeds from the
sale of the Shares issuable upon exercise of the Option, or (c) a combination of
(a) and (b).

     

         6.7 No Deferral Feature. No Option shall have any feature that would allow for the deferral of
compensation (within the meaning of Internal Revenue Code Section 409A) other
than the deferral of recognition of income until the later of the exercise or
disposition of the Option or the time the shares of Stock acquired subject to
the exercise of the Option first become substantially vested (as defined in
Treasury Regulation section 1.83-3(b)). 

     

         6.8 No Option Repricing. Without the approval of stockholders, the Company shall not reprice any
Options. For purposes of this Plan, the term “reprice” shall mean lowering the
exercise price of previously awarded Options within the meaning of Item 402(i)
under Securities and Exchange Commission Regulation S-K (including canceling
previously awarded Options and regranting them with a lower exercise
price).

     

    Section 7. Restricted Stock
Awards

     

         The Committee is authorized to make Awards of
Restricted Stock to Eligible Employees in such amounts and subject to such terms
and conditions as may be determined by the Committee. All Awards of Restricted
Stock shall be evidenced by a Restricted Stock Award Agreement.

     

         7.1 Issuance and Restrictions. Restricted Stock shall be subject to such restrictions on transferability
and other restrictions as the Committee may impose (including, without
limitation, limitations on the right to vote Restricted Stock or the right to
receive dividends on the Restricted Stock). These restrictions may lapse
separately or in combination of such times, under such circumstances, in such
installments, upon the satisfaction of continued employment, standards derived
from the Qualifying Performance Criteria, lapse of time, certain acceleration
events like death or disability or otherwise, as the Committee determines at the
time of the grant of the Award or thereafter.

     

         7.2 Forfeiture. Except
as otherwise determined by the Committee at the time of the grant of the Award
or thereafter, upon termination of employment during the applicable restriction
period or upon failure to satisfy a standard derived from the Qualifying
Performance Criteria during the applicable restriction period, Restricted Stock
that is at that time subject to restrictions shall be forfeited and re-acquired
by the Company; provided, however, that the Committee may provide in any Award
Agreement that restrictions or forfeiture conditions relating to Restricted
Stock will be waived in whole or in part in the event of terminations resulting
from specified causes, and the Committee may in other cases waive in whole or in
part restrictions or forfeiture conditions relating to Restricted
Stock.

     

    7 

     

    

    
    

         7.3 Certificates for Restricted Stock. Restricted Stock granted under the Plan may be
evidenced in such manner as the Committee shall determine. If certificates
representing shares of Restricted Stock are registered in the name of the
Eligible Employee, certificates must bear an appropriate legend referring to the
terms, conditions, and restrictions applicable to such Restricted
Stock.

     

    Section 8. Other Provisions Applicable to
Awards

     

         8.1 Transferability. Unless the agreement or other document evidencing an Award (or an
amendment thereto authorized by the Committee) expressly states that the Award
is transferable as provided hereunder and the transferability of such Award
complies with Reg. § 1.422-2(a)(2)(v), no Award granted under this Plan, nor any
interest in such Award, may be sold, assigned, conveyed, gifted, pledged,
hypothecated or otherwise transferred in any manner prior to the vesting or
lapse of any and all restrictions applicable thereto. 

     

         8.2 Qualifying Performance Criteria. For purposes of this Plan, the term
“Qualifying Performance Criteria” shall mean any one or more of the following
performance criteria, either individually, alternatively or in any combination,
applied to either the Company as a whole, to a business unit or subsidiary, or
based on comparisons of any of the performance measures relative to other
companies, 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: (a) cash flow, (b) earnings per share or increases of same, (c) earnings
before interest, taxes and amortization, (d) return on equity, (e) total
stockholder return, (f) share price performance, (g) return on capital or
investment, (h) return on assets or net assets, (i) revenue, (j) income or net
income, (k) operating income or net operating income, (l) operating profit or
net operating profit, (m) operating margin or profit margin, (n) return on
operating revenue, (o) pre-tax or after-tax profit levels expressed in either
absolute dollars, (p) revenues or revenue growth, (q) economic or cash value
added, (r) results of customer satisfaction surveys, (s) other measures of
performance, quality, safety, productivity or process improvement, (t) market
share and (u) overhead or other expense reduction. These factors may have a
minimum performance standard, a target performance standard and a maximum
performance standard. The Committee shall appropriately adjust any evaluation of
performance under a Qualifying Performance Criteria to exclude any of the
following events that occurs during a performance period: (i) asset write-downs,
(ii) litigation or claim judgments or settlements, (iii) the effect of changes
in tax law, accounting principles or other such laws or provisions affecting
reported results, (iv) accruals for reorganization and restructuring programs
and (v) any extraordinary non-recurring items as described in Accounting
Principles Board Opinion No. 30 and/or in management’s discussion and analysis
of financial condition and results of operations appearing in the Company’s
annual report to stockholders for the applicable year.

     

    8 

     

    

    
    

         8.3 Dividends. Unless
otherwise provided by the Committee, no adjustment shall be made in Shares
issuable under Awards on account of cash dividends that may be paid or other
rights that may be issued to the holders of Shares prior to their issuance under
any Award. The Committee shall specify whether dividends or dividend equivalent
amounts shall be paid to any Eligible Employee with respect to the Shares
subject to any Award that have not vested or been issued or that are subject to
any restrictions or conditions on the record date for dividends. 

     

         8.4 Documents Evidencing Awards. The Committee shall, subject to applicable
law, determine the date an Award is deemed to be granted, which for purposes of
this Plan shall not be affected by the fact that an Award is contingent on
subsequent stockholder approval of this Plan. The Committee or, except to the
extent prohibited under applicable law, its delegate(s) may establish the terms
of agreements or other documents evidencing Awards under this Plan and may, but
need not, require as a condition to any such agreement’s or document’s
effectiveness that such agreement or document be executed by the Eligible
Employee and that such Eligible Employee agrees to such further terms and
conditions as specified in such agreement or document. The grant of an Award
under this Plan shall not confer any rights upon the Eligible Employee holding
such Award other than such terms, and subject to such conditions, as are
specified in this Plan as being applicable to such type of Award (or to all
Awards) or as are expressly set forth in the agreement or other document
evidencing such Award. 

     

         8.5 Financing. Unless
prohibited by federal and state law, or the rules or regulations thereunder, the
Committee may in its discretion provide financing to an Eligible Employee in a
principal amount sufficient to pay the purchase price of any Award and/or to pay
the amount of taxes required by law to be withheld with respect to any Award.
Any such loan shall be subject to all applicable legal requirements and
restrictions pertinent thereto, including Regulation U promulgated by the
Federal Reserve Board. The grant of an Award shall in no way obligate the
Company or the Committee to provide any financing whatsoever in connection
therewith. 

     

         8.6 Compliance with Code Section 409A. Notwithstanding any language to the contrary
in this Plan, the Committee will ensure that the terms and conditions of any
Awards issued will comply with the applicable provision of Code Section 409A or
the regulations or other pronouncements thereunder. 

     

         8.7 Additional Restrictions on Awards. Either at the time an Award is granted or by
subsequent action, the Committee may, but need not, impose such restrictions,
conditions or limitations as it determines appropriate as to the timing and
manner of any resales by an Eligible Employee or other subsequent transfers by
an Eligible Employee of any Shares issued under an Award, including without
limitation (a) restrictions under an insider trading policy, (b) restrictions
designed to delay and/or coordinate the timing and manner of sales by Eligible
Employees, and (c) restrictions as to the use of a specified brokerage firm for
such resales or other transfers. 

     

    9 

     

    

    
    

    Section 9. Changes in Capital Structure

     

         9.1 Corporate Actions Unimpaired. The existence of outstanding Awards shall not
affect in any way the right or power of the Company or its stockholders to make
or authorize any or all adjustments, recapitalizations, reorganizations,
exchanges, or other changes in the Company’s capital structure or its business,
or any merger or consolidation of the Company, or any issuance of Shares or
other securities or subscription rights thereto, or any issuance of bonds,
debentures, preferred or prior preference stock ahead of or affecting the Shares
or other securities of the Company or the rights thereof, or the dissolution or
liquidation of the Company, or any sale or transfer of all or any part of its
assets or business, or any other corporate act or proceeding, whether of a
similar character or otherwise. Further, except as expressly provided herein or
by the Committee, (a) the issuance by the Company of shares of stock of any
class of securities convertible into shares of stock of any class, for cash,
property, labor or services, upon direct sale, upon the exercise of rights or
warrants to subscribe therefor, or upon conversion of shares or obligations of
the Company convertible into such shares or other securities, (b) the payment of
a dividend in property other than Shares, or (c) the occurrence of any similar
transaction, and in any case whether or not for fair value, shall not affect,
and no adjustment by reason thereof shall be made with respect to, the number of
Shares subject to Awards theretofore granted or the purchase price per Share,
unless the Committee shall determine in its sole discretion that an adjustment
is necessary to provide equitable treatment to an Eligible Employee.

     

         9.2 Adjustments Upon Certain Events. If the outstanding Shares or other securities
of the Company, or both, for which the Award is to be settled shall at any time
be changed or exchanged by declaration of a stock dividend, stock split,
combination of shares, recapitalization, or reorganization, the Committee may
appropriately and equitably adjust the number and kind of Shares or other
securities which are subject to the Plan or subject to any Awards theretofore
granted, and the exercise or settlement prices of such Awards, so as to maintain
the proportionate number of Shares or other securities without changing the
aggregate exercise or settlement price, provided, however, that such adjustment
shall be made so as not to affect the status of any Award intended to qualify as
an ISO or as “performance based compensation” under Section 162(m) of the Code.

     

    Section 10. Mergers and
Liquidation

     

         Except as limited by the provisions of Code
Section 422 of the Code and the terms of any individual Award, if the company is
the surviving corporation in any merger or consolidation, all Awards shall
remain in force, and any: (1) Option granted under the Plan shall remain
outstanding pursuant to the terms of the Plan and the Award; and (2) Restricted
Stock granted under the Plan shall continue to be outstanding pursuant to the
terms of the Award and this Plan. Except to the extent otherwise provided in an
Award document, by the Board, or as limited by Code Section 422, dissolution or
liquidation of the Company shall cause every unvested Option, Restricted Stock
or other Award for which there remains contingencies, conditions and unmet
performance standards to terminate. Except as limited by Code Section 422, a
merger or consolidation in which the Company is not the surviving corporation
shall also cause every unvested Option or Restricted Stock for which there
remains contingencies, conditions and unmet performance standards to terminate
unless specifically provided otherwise in an Award document or by the
Board.

     

    10 

     

    

    
    

    Section 11. Taxes

     

         11.1 Withholding Requirements. The Committee may make such provisions or impose such conditions as it
may deem appropriate for the withholding or payment by an Eligible Employee of
any taxes that the Committee determines are required in connection with any
Award granted under this Plan, and an Eligible Employee’s rights in any Award
are subject to satisfaction of such conditions.

     

         11.2 Payment of Withholding Taxes. Notwithstanding the terms of Section 11.1, the
Committee may provide in the agreement or other document evidencing an Award or
otherwise that all or any portion of the taxes required to be withheld by the
Company or, if permitted by the Committee, desired to be paid by the Eligible
Employee, in connection with the exercise, vesting, settlement or transfer of
any Award shall be paid or, at the election of the Eligible Employee, may be
paid by the Company by withholding shares of the Company’s capital stock
otherwise issuable or subject to such Award, or by the Eligible Employee
delivering previously owned shares of the Company’s capital stock, in each case
having a fair market value equal to the amount required or elected to be
withheld or paid, or by a broker selected or approved by the Company paying such
amount pursuant to an irrevocable commitment by the broker to deliver to the
Company proceeds from the sale of the Shares issuable under the Award. Any such
election is subject to such conditions or procedures as may be established by
the Committee and may be subject to approval by the Committee. 

     

    Section 12. Amendments or
Termination

     

         The Board may amend, alter or discontinue this
Plan or any agreement or other document evidencing an Award made under this Plan
but, except as provided pursuant to the anti-dilution adjustment provisions of
Section 9.2, no such amendment shall, without the approval of the stockholders
of the Company:

     

         (a) change the maximum number of shares of
Common Stock for which Awards may be granted under this Plan;

     

         (b) extend the term of this Plan;
or

     

         (c) change the class of persons
eligible to be Eligible Employees. 

     

    11 

     

    

    
    

         The Board may amend, alter or discontinue the
Plan or any agreement evidencing an Award made under the Plan, but no amendment
or alteration shall be made which would impair the rights of any Award holder,
without such holder’s consent, under any Award theretofore granted; provided
that no such consent shall be required if the Committee determines in its sole
discretion and prior to the date of any change in control, recapitalization,
stock dividend, stock split, reorganization, merger, consolidation or similar
type transaction that such amendment or alteration either is required or
advisable in order for the Company, the Plan, or any Award granted, to satisfy
any law or regulation or to meet the requirements of any accounting
standard.

     

    Section 13. Compliance with Other Laws and
Regulations

     

         This Plan, the grant and exercise of Awards
thereunder, and the obligation of the Company to sell, issue or deliver Shares
under such Awards, shall be subject to all applicable federal, state and foreign
laws, rules and regulations and to such approvals by any governmental or
regulatory agency as may be required. The Company shall not be required to
register in an Eligible Employee’s name or deliver any Shares prior to the
completion of any registration or qualification of such Shares under any
federal, state or foreign law or any ruling or regulation of any government body
which the Committee shall determine to be necessary or advisable. This Plan is
intended to constitute an unfunded arrangement for the Eligible
Employees.

     

         Unless the Awards and Shares covered by this
Plan have been registered under the Securities Act of 1933, as amended, 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.

     

    Section 14. No Right to Company
Employment

     

         Nothing in this Plan or as a result of any
Award granted pursuant to this Plan shall confer on any individual any right to
continue in the employ of the Company or interfere in any way with the right of
the Company to terminate an individual’s employment at any time. The agreements
or other documents evidencing Awards may contain such provisions as the
Committee may approve with reference to the effect of approved leaves of
absence.

     

    Section 15. Liability of
Company

     

         The Company and any Affiliate which is in
existence or hereafter comes into existence shall not be liable to an Eligible
Employee or 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 Consequences. Any tax consequence expected, but not realized, by any
Eligible Employee or other person due to the receipt, exercise or settlement of
any Award granted hereunder. 

     

    12 

     

    

    
    

    Section 16. Effectiveness and Expiration of
Plan

     

         This Plan shall be effective on the date the
Company’s Board of Directors adopts this Plan, and no ISOs shall be granted
prior to such date. All Awards granted under this Plan are subject to, and may
not be exercised before the approval of this Plan by the stockholders. If such
approval by the stockholders of the Company is not forthcoming, all Awards
previously granted under this Plan shall be void. No Awards shall be granted
pursuant to this Plan after March 11, 2020. 

     

    Section 17. Incentive Stock
Options

     

         Notwithstanding anything in the Plan to the
contrary, it is the intention of the Company and the Committee that all terms
and provisions relating to ISOs of this Plan shall be consistent with the
requirements of Code Section 422 and the applicable regulations thereunder, as
of the effective date of this plan, and to the extent any term or provision of
this Plan relating to ISOs is inconsistent with Code Section 422 and the
applicable regulations thereunder at that date, the term or provision shall be
read, interpreted or substituted so as to be consistent with the applicable
provision of Code Section 422 or the regulations thereunder. 

     

    Section 18. Non-Exclusivity of
Plan

     

         Neither the adoption of this Plan by the Board
nor the submission of this Plan to the stockholders of the Company for approval
shall be construed as creating any limitations on the power of the Board or the
Committee to adopt such other incentive arrangements as either may deem
desirable, including without limitation, the granting of restricted stock or
stock options otherwise than under this Plan, and such arrangements may be
either generally applicable or applicable only in specific cases.

     

    Section 19. Governing Law

     

         This Plan and any agreements or other
documents hereunder shall be interpreted and construed in accordance with the
laws of the State of Arizona and applicable federal law. The Committee may
provide that any dispute as to any Award shall be presented and determined in
such forum as the Committee may specify, including through binding arbitration.
Any reference in this Plan or in the agreement or other document evidencing any
Award to a provision of law or to a rule or regulation shall be deemed to
include any successor law, rule or regulation of similar effect or
applicability.

     

    13 

     

    

    
    

    Section 20. Miscellaneous Matters

     

         20.1 Annulment of Awards. The grant of any Award payable in Shares is provisional until the
Eligible Employee becomes entitled to the certificates in settlement thereof. In
the event the employment of an Eligible Employee is terminated for cause (as
defined below), any Award which is provisional shall be annulled as of the date
of such termination for cause. For the purpose of this Section 21.1, the term
“terminated for cause” means any discharge for violation of the policies and
procedures of the Company or any Subsidiary or for other job performance or
conduct which is detrimental to the best interests of the Company or a
Subsidiary. 

     

         20.2 Securities Law Restrictions. No Shares shall be issued under the Plan
unless counsel for the Company shall be satisfied that such issuance will be in
compliance with applicable Federal and state securities laws. Certificates for
Shares delivered under the Plan may be subject to such stock-transfer orders and
other restrictions as the Committee may deem advisable under the rules,
regulations, and other requirements of the Securities and Exchange Commission,
any stock exchange upon which the Shares is then listed, and any applicable
Federal or state securities law. The Committee may cause a legend or legends to
be put on any such certificates to refer to those restrictions. Further, without
limiting the foregoing, each person exercising an Option or receiving Restricted
Stock may be required by the Company to give a representation in writing that he
or she is acquiring 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 (regardless of whether such option and Shares covered by the Plan are
registered under the Securities Act of 1933, as amended). As a condition of
transfer of the certificate evidencing Shares, the Committee may obtain such
other agreements or undertakings, if any, that it may deem necessary or
appropriate to assume compliance with any provisions of the Plan or any law or
regulation. Certificates for Shares delivered under the Plan may be subject to
such stock transfer orders and other restrictions as the Board may deem
advisable under the rules, regulations, and other requirements of the Securities
and Exchange Commission, any stock exchange upon which the Shares are then
listed, and any applicable Federal or state securities laws. The Board may cause
a legend or legends to be put on any such certificate to refer to those
restrictions. 

     

         20.3 Award Agreement. Each Eligible Employee receiving an Award under the Plan shall enter into
an, Award Agreement (“Award Agreement”) with the Company in a form specified by the
Committee agreeing to the terms and conditions of the Award and such related
matters as the Committee, in its sole discretion, shall determine. 

     

         20.4 Costs of Plan. The
costs and expenses of administering the Plan shall be borne by the Company.

     

    14 

     

    

    
    

         20.5 Tax Reimbursement Payments to Eligible Employees. Unless prohibited by federal and state law, or
the rules and regulations thereunder, the Committee, pursuant to the terms of
the agreements or other documents pursuant to which specific Awards are made
under the Plan, may agree to reimburse Eligible Employees for some or all of the
federal, state and local income taxes associated with the grant or exercise of
an Award or the receipt of the cash or Shares from an Award (including any
additional tax imposed due to Code Section 409A), or the 20% excise tax on any
“excess parachute payments” under Code Sections 280G and Code Section 4999, and
may agree to reimburse such Eligible Employees for some or all the additional
federal, state and local income tax associated with the payments made under this
Section 20.5.

     

         20.6 Government Regulations. The Plan and the granting and exercise of Options and Shares hereunder,
and the obligations of the Company to sell and deliver Shares under Options,
shall be subject to all applicable laws, rules and regulations, and to such
approvals by any governmental agencies or national securities exchanges as may
be required. 

     

         20.7 Interpretation. If
any provision of the Plan is held invalid for any reason, such holding shall not
affect the remaining provisions of the Plan, but instead the Plan shall be
construed and enforced as if such provisions had never been included in the
Plan. Headings contained in the Plan are for convenience only and shall in no
manner be construed as part of this Plan. Any reference to the masculine,
feminine or neuter gender shall be a reference to such other gender as is
appropriate. 

     

    *** 

     

    15

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