Document:

Exhibit 10.2

 

***
Indicates CONFIDENTIAL MATERIAL OMITTED AND
FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A
REQUEST FOR CONFIDENTIAL TREATMENT.

 

Amendment No. 4

 

To the A330 Purchase Agreement

 

Dated as of December 21, 2000

 

Between

 

AVSA, S.A.R.L.

 

And

 

NORTHWEST AIRLINES, INC.

 

 

This Amendment No. 4 (hereinafter referred to
as the “Amendment”) is entered into as of December _____, 2003, between AVSA,
S.A.R.L., a société à responsabilité limitée organized and existing under the
laws of the Republic of France, having its registered office located at 2,
Rond-Point Maurice Bellonte, 31700 Blagnac, France (hereinafter referred to as
the “Seller”), and NORTHWEST AIRLINES, INC., a corporation organized and
existing under the laws of the State of Minnesota, United States of America,
having its principal corporate offices located at 2700 Lone Oak Parkway, Eagan,
Minnesota 55121, USA (hereinafter referred to as the “Buyer”).

 

WITNESSETH

 

WHEREAS, the Buyer and the Seller entered into an A330
Purchase Agreement, dated as of December 21, 2000, relating to the sale by the
Seller and the purchase by the Buyer of certain Airbus Industrie A330-300
aircraft (the “Aircraft”) which, together with all Exhibits, Appendices and
Letter Agreements attached thereto, and as amended by Amendment No.1 dated as
of November 26, 2001, Amendment No. 2 dated as of December 20, 2002, and
Amendment No. 3 dated as of April 30, 2003, thereto is hereinafter called the
“Agreement.”

 

WHEREAS, the Seller and the Buyer have agreed to
certain changes in the delivery schedule of the Converted Firm A330-200
Aircraft.

 

WHEREAS,
capitalized terms used herein and not otherwise defined herein will have the
meanings assigned to them in the Agreement. The terms “herein,” “hereof” and
“hereunder” and words of similar import refer to this Amendment. Both parties
agree that this Amendment will constitute an integral, nonseverable part of the
Agreement and be governed by its provisions, except that if the Agreement and
this Amendment have specific provisions that are inconsistent, the specific
provisions contained in this Amendment will govern.

 

NOW, THEREFORE, IT IS
AGREED AS FOLLOWS:

 

 

1

 

1.                                   RESCHEDULING

 

The Buyer and the Seller have
agreed to reschedule certain Converted Firm A330-200 Aircraft as follows:

 

	
  ***Converted Firm Aircraft in Amendment No. 2
  to the Agreement

  	
   

  	
  ***Converted
  Firm Aircraft in this Amendment

  
	
  ***   2005 (No. 13)

  	
   

  	
  ***   2004 (No. 13)

  
	
  ***   2005 (No. 14)

  	
   

  	
  ***   2004 (No. 14)

  
	
  ***   2005 (No. 15)

  	
   

  	
  ***   2004 (No. 15)

  

 

2.                                     DELIVERY

 

                                                As
a consequence of Paragraph 1 above, the delivery schedule in Subclause 9.1 of
the Agreement, as amended, is hereby canceled and replaced by the following
quoted delivery schedule for Firm Aircraft and Converted Firm A330-200
Aircraft:

 

QUOTE

 

 

	
  Firmly Ordered Aircraft No./Type

  	
   

  	
   

  	
   

  	
  Month/Year of Delivery 

  
	
  1/

  	
  ***

  	
  03

  	
   

  	
  13/

  	
  ***

  	
  04

  
	
  2/

  	
  ***

  	
  03

  	
   

  	
  14/

  	
  ***

  	
  04

  
	
  3/

  	
  ***

  	
  03

  	
   

  	
  15/

  	
  ***

  	
  04

  
	
  4/

  	
  ***

  	
  03

  	
   

  	
  16/

  	
  ***

  	
  05

  
	
  5/

  	
  ***

  	
  03

  	
   

  	
  17/

  	
  ***

  	
  05

  
	
  6/

  	
  ***

  	
  04

  	
   

  	
  18/

  	
  ***

  	
  05

  
	
  7/

  	
  ***

  	
  04

  	
   

  	
  19/

  	
  ***

  	
  06

  
	
  8/

  	
  ***

  	
  04

  	
   

  	
  20/

  	
  ***

  	
  06

  
	
  9/

  	
  ***

  	
  04

  	
   

  	
  21/

  	
  ***

  	
  07

  
	
  10/

  	
  ***

  	
  04

  	
   

  	
  22/

  	
  ***

  	
  07

  
	
  11/

  	
  ***

  	
  04

  	
   

  	
  23/

  	
  ***

  	
  08

  
	
  12/

  	
  ***

  	
  04

  	
   

  	
  24/

  	
  ***

  	
  08

  

 

                                                UNQUOTE

 

3.                                      LETTER AGREEMENT NO. 8

 

                                                It is
understood and agreed that, with respect to Letter Agreement No. 8 to the
Agreement, as amended by Amendment No. 2 to the Agreement, (i) the signature of
this Amendment will occasion ***,
and (2) the *** referred to in
Paragraph 2.4.2.1 of such Letter Agreement No. 8, as amended by such Amendment
No. 2, will be *** in such Amendment
No. 2, *** in this Amendment.

 

 

4.                                     EFFECT OF THE AMENDMENT

 

The provisions of this
Amendment are binding on both parties upon execution hereof. The Agreement will
be deemed amended to the extent herein provided, and, except as specifically amended
hereby, will continue in full force and effect in accordance with its 

 

 

 

2

 

original terms. This
Amendment supersedes any previous understandings, commitments, or
representations whatsoever, whether oral or written, related to the subject
matter of this Amendment.

 

Both parties agree that this
Amendment will constitute an integral, nonseverable part of said Agreement,
that the provisions of said Agreement are hereby incorporated herein by
reference, and that this Amendment will be governed by the provisions of said
Agreement, except that if the Agreement and this Amendment have specific
provisions that are inconsistent, the specific provisions contained in this
Amendment will govern.

 

5.                                   CONFIDENTIALITY

 

This
Amendment is subject to the confidentiality provisions set forth in Subclause
22.4 of the Agreement.

 

 

 

If the foregoing correctly sets forth our
understanding, please indicate your acceptance by signing in the space provide
below.

 

	
  Accepted and Agreed,

  	
  Very
  truly yours,

  
	
  NORTHWEST AIRLINES, INC.

  	
  AVSA, S.A.R.L.

  
	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  
	
  Its:

  	
   

  	
   

  	
  Its:

  	
   

  	
   

  

 

 

3Use these links to rapidly review the document

  TABLE OF CONTENTS

 
EXHIBIT 4.1

2001 LONG TERM INCENTIVE PLAN  

 

TABLE OF CONTENTS    
    

 

	ARTICLE 1. PURPOSE OF PLAN
	

ARTICLE 2. EFFECTIVE DATE AND TERM OF PLAN
	

2.1 Term of Plan
	2.2 Effect on Awards
	2.3 Shareholder Approval
	

ARTICLE 3. SHARES SUBJECT TO PLAN
	

3.1 Reserved Number of Shares
	3.2 Source of Shares
	3.3 Availability of Unused Shares
	3.4 Adjustment Provisions
	3.5 Substitute Awards
	

ARTICLE 4. ADMINISTRATION OF PLAN
	

4.1 Administering Body
	4.2 Authority of Administering Body
	4.3 Eligibility
	4.4 No Liability
	4.5 Amendments
	4.6 Other Compensation Plans
	4.7 Plan Binding on Successors
	4.8 References to Successor Statutes, Regulations and Rules
	4.9 Issuances for Compensation Purposes Only
	4.10 Invalid Provisions
	4.11 Governing Law
	

ARTICLE 5. GENERAL AWARD PROVISIONS
	

5.1 Participation in the Plan
	5.2 Award Agreements
	5.3 Exercise of Awards
	5.4 Payment for Awards
	5.5 No Employment or Other Continuing Rights
	5.6 Restrictions Under Applicable Laws and Regulations
	5.7 Additional Conditions
	5.8 No Privileges of Stock Ownership
	5.9 Transferability of Awards
	5.10 Information to Recipients
	5.11 Withholding Taxes
	5.12 Legends on Common Stock Certificates
	5.13 Effect of Termination of Employment on Awards—Employees Only
	5.14 Effect of Termination of Engagement on Awards—Non-Employees Only
	5.15 Transfer; Leave of Absence
	5.16 Limits on Awards to Certain Eligible Persons
	5.17 Performance-Based Compensation
	 

	

ARTICLE 6. STOCK OPTIONS
	

6.1 Nature of Stock Options
	6.2 Option Exercise Price
	6.3 Option Period and Vesting
	6.4 Special Provisions Regarding Incentive Stock Options
	6.5 Restrictions
	

ARTICLE 7. REORGANIZATIONS
	

7.1 Corporate Transactions Not Involving a Change in Control
	7.2 Corporate Transactions Involving a Change in Control
	

ARTICLE 8. DEFINITIONS

  

 
 
	1.
	PURPOSE
OF PLAN 

The
Company adopted this Plan to promote the interests of the Company, its Affiliated Entities and their respective stockholders by using investment interests in the Company to attract, retain and
motivate management and other persons, including officers, directors, employees and certain consultants of the Company and the Affiliated Entities, to encourage and reward such persons' contributions
to the performance of the Company and to align their interests with the interests of the Company's stockholders. Capitalized terms not otherwise defined herein shall have the meanings ascribed to them
in Article 8. 

 
 
	2.
	EFFECTIVE
DATE AND TERM OF PLAN
 
 

        2.1   Term
of Plan. This Plan became effective as of the Effective Date and shall continue in effect until the Expiration Date, at which time this Plan shall automatically
terminate. 

 
 

        2.2   Effect
on Awards. Awards may be granted during the Plan Term, but no Awards may be granted after the Plan Term. Notwithstanding the foregoing, each Award properly
granted under this Plan during the Plan Term shall remain in effect after termination of this Plan until such Award has been exercised, terminated or expired, as applicable, in accordance with its
terms and the terms of this Plan. 

 
 

        2.3   Shareholder
Approval. This Plan must be approved by the Company's stockholders within twelve (12) months after the Effective Date. The effectiveness of any Awards
granted prior to such shareholder approval shall be specifically subject to, and conditioned upon, such shareholder approval. 

 
 
	3.
	SHARES
SUBJECT TO PLAN
 
 

        3.1   Reserved
Number of Shares. The maximum number of shares of Common Stock that may be issued pursuant to Awards granted under this Plan shall be Two Million Five Hundred
Thousand (2,500,000), subject in any case to adjustment as set forth in Section 3.4; and provided, further, that the maximum number of shares of Common Stock that may be issued pursuant to
Incentive Stock Options granted under this Plan shall be Two Million Five Hundred Thousand (2,500,000), subject in any case to adjustment as set forth in Section 3.4. 

 
 

        3.2   Source
of Shares. The Common Stock to be issued under this Plan will be made available, at the discretion of the Board, either from authorized but unissued shares of
Common Stock or from previously issued shares of Common Stock reacquired by the Company, including without limitation, shares purchased on the open market. 

 
 

        3.3   Availability
of Unused Shares. Shares of Common Stock subject to and/or underlying any unexercised, unearned or yet-to-be acquired portions of
any Award granted under this Plan that expire, terminate or are canceled, and shares of Common Stock issued pursuant to Awards under this Plan that are reacquired by the Company pursuant to the terms
under which such shares were issued, will again become available for the grant of further Awards under this Plan. Notwithstanding the provisions of this Section 3.3, no shares of Common Stock
may again be optioned, granted or awarded if such action would cause an Incentive Stock Option to fail to qualify as an incentive stock option under Section 422 of the IRC or any successor
statute thereto. 

 
 

        3.4   Adjustment
Provisions. 

        (a)   If
(i) the outstanding shares of Common Stock are increased, decreased or exchanged for a different number or kind of shares or other securities, or if additional
shares or new or different shares or other securities are distributed in respect of such shares of Common Stock or any stock or securities received with respect to such Common Stock), through merger,
consolidation, sale or exchange of all or substantially all of the assets of the Company, reorganization, recapitalization, reclassification, stock dividend, stock split, reverse stock split,
spin-off, split-off or other distribution 

1

 

with
respect to such shares of Common Stock (or any stock or securities received with respect to such Common Stock), or (ii) the value of the outstanding shares of Common Stock is reduced by
reason of an extraordinary dividend payable in cash or property, an appropriate and proportionate adjustment may be made in (1) the maximum number and kind of shares or securities available for
issuance under this Plan, (2) the number and kind of shares or other securities that can be granted to any one individual Recipient under his or her Awards, (3) the number and kind of
shares or other securities subject to then outstanding Awards under this Plan, and/or (4) the price for each share or other unit of any other securities subject to then outstanding Awards under
this Plan. 

        (b)   No
fractional interests will be issued under this Plan resulting from any adjustments, but the Administering Body, in its sole discretion, may make a cash payment in
lieu of any fractional shares of Common Stock or other securities issuable as a result of such adjustments. 

        (c)   Any
adjustment pursuant to this Section 3.4 shall be made by the Administering Body, in its discretion, to preserve the benefits or potential benefits intended to
be made available under this Plan or with respect to any outstanding Awards or otherwise necessary to reflect any capital change or other event described in Section 3.4(a). The determination
made by the Administering Body with respect to the foregoing shall be final, binding and conclusive upon all persons and entities. 

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

        (e)   No
adjustment to the terms of an Incentive Stock Option shall be made if such adjustment would cause such Incentive Stock Option to lose its status as an incentive stock
option under the provisions of the IRC, unless the Administering Body determines otherwise. 

 
 

        3.5   Substitute
Awards. The Administering Body may grant Awards under this Plan in substitution for stock and stock-based awards held by employees of another corporation who
become employees of the Company or an Affiliated Entity as a result of a merger, consolidation or other business combination of the employing corporation with the Company or an Affiliated Entity or
the acquisition by the Company or an Affiliated Entity of property or stock of the employing corporation. The Administering Body may direct that the substitute Awards be granted on such terms and
conditions as the Administering Body considers appropriate in the circumstances. 

 
 
	4.
	ADMINISTRATION
OF PLAN
 
 

        4.1   Administering
Body. 

        (a)   This
Plan shall be administered by the Board; provided, however, that if the Board appoints a Stock Plan Committee pursuant to Section 4.1(b) herein, this Plan
shall be administered by the Stock Plan Committee, subject to the right of the Board to exercise, at any time and from time to time, any and all of the duties and responsibilities of the Stock Plan
Committee as the Administering Body, including, but not limited to, establishing procedures to be followed by the Stock Plan Committee; provided further, however, that the Board shall not exercise any
authority regarding matters which under applicable law, rule or regulation, including, without limitation, any exemptive rule under Section 16 of the Exchange Act (including
Rule 16b-3) or IRC Section 162(m), are required to be determined in the sole discretion of the Stock Plan Committee. 

        (b)   

        (i)    The
Board in its sole discretion may from time to time appoint a Stock Plan Committee of not less than two (2) Board members to administer this Plan. The Board
may from time to time increase or decrease (but not below two (2)) the number of members of the 

2

 

Stock
Plan Committee, remove from membership on the Stock Plan Committee all or any portion of its members, and/or appoint such person or persons as it desires to fill any vacancy existing on the
Stock Plan Committee, whether caused by removal, resignation or otherwise. The Board may disband the Stock Plan Committee at any time and thereby revest in the Board the administration of this Plan. 

        (ii)   Notwithstanding
the foregoing provisions of Section 4.1(b)(i) to the contrary, so long as the Company remains an Exchange Act Registered Company and if
the Company has not, by action of the Board, elected to opt out of the provisions of this Section 4.1(b)(ii), (1) the Board shall appoint the Stock Plan Committee, (2) this Plan
shall be administered by the Stock Plan Committee and (3) each member of the Stock Plan Committee shall be a Non-employee Director, and, in addition, if Awards are to be made to
persons subject to Section 162(m) of the IRC and such Awards are intended to constitute Performance-Based Compensation, then each member of the Stock Plan Committee shall, in addition to being
a Non-employee Director, be an Outside Director. 

        (iii)  The
Stock Plan Committee shall report to the Board the names of Eligible Persons granted Awards, the precise type of Award granted, the number of shares of Common
Stock issuable pursuant to such Award, if any, and the terms and conditions of each such Award. 

 
 

        4.2   Authority
of Administering Body. 

        (a)   Subject
to the express provisions of this Plan, the Administering Body shall have the power to interpret and construe this Plan and any agreements or other documents
defining the rights and obligations of the Company or any Affiliated Entity and such Eligible Persons who have been granted Awards hereunder and thereunder, to determine all questions arising
hereunder and thereunder, to adopt and amend such rules and regulations for the administration hereof and thereof as it may deem desirable to correct any errors, supply any omissions and reconcile any
inconsistencies in this Plan and/or any Award Agreement or any other instrument relating to any Award, and to otherwise carry out the terms of this Plan and such agreements and other documents. Such
interpretations and constructions by the Administering Body of any provisions of this Plan or of any Award, as well as any other decisions, actions or inactions of the Administering Body relating to
this Plan, any Award or any Award Agreement, shall be within the absolute discretion of the Administering Body (subject only to the express terms of this Plan and the Award Agreement and all
applicable laws, regulations and rules) shall be final, conclusive and binding upon all persons and entities. 

        (b)   Subject
to the express provisions of this Plan, the Administering Body may from time to time, in its discretion, select the Eligible Persons to whom, and the time or
times at which, such Awards shall be granted; the nature of each Award; the number of shares of Common Stock that comprise or underlie each Award; the period for the purchase or exercise of each
Award, as applicable, the Performance Criteria applicable to the Award, if any, and such other terms and conditions applicable to each individual Award as the Administering Body shall determine.
Subject to Section 5.16(a), the Administering Body may grant, at any time, new Awards to an Eligible Person who has previously received Awards whether such prior Awards are still outstanding,
have previously been canceled, disposed of or exercised as a whole or in part, as applicable, or are canceled in connection with the issuance of new Awards. The Administering Body may grant Awards
singly, in combination or in tandem with other Awards, as it determines in its discretion. Subject to Section 5.16(a), any and all terms and conditions of the Awards, including, without
limitation, the purchase or exercise price, may be established by the Administering Body without regard to existing Awards. 

        (c)   Any
action of the Administering Body with respect to the administration of this Plan shall be taken pursuant to a majority vote of the authorized number of members of
the Administering 

3

 

Body
or by the unanimous written consent of its members; provided, however, that (i) if the Administering Body is the Stock Plan Committee and consists of two (2) members, then actions
of the Administering Body must be unanimous and (ii) if the Administering Body is the Board, actions taken at a meeting of the Board shall be valid if approved by directors constituting a
majority of the required quorum for such meeting. 

        (d)   Except
to the extent prohibited by applicable law, including, without limitation, the requirements applicable under IRC Section 162(m) to any Award intended to be
Performance-Based Compensation, or the requirements for any Award granted to an officer of the Company or a Director to be covered by any exemptive rule under Section 16 of the Exchange Act
(including Rule 16b-3), or the rules of a stock exchange or automated quotation system then listing shares of Common Stock, the Administering Body may, in its discretion, allocate
all or any portion of its responsibilities and powers under this Plan to any one or more of its members and/or delegate all or any part of its responsibilities and powers under this Plan to any person
or persons selected by it; provided, however, that the Administering Body may not delegate its authority to correct errors, omissions or inconsistencies in this Plan. Any such authority delegated or
allocated by the Administering Body under this Section 4.2(d) shall be exercised in accordance with the terms and conditions of this Plan and any rules, regulations or administrative guidelines
that may from time to time be established by the Administering Body, and any such allocation or delegation may be revoked by the Administering Body at any time. 

 
 

        4.3   Eligibility.
Only Eligible Persons shall be eligible to receive Awards under this Plan. 

 
 

        4.4   No
Liability. No member of the Board or the Stock Plan Committee or any designee thereof will be liable for any action or inaction with respect to this Plan or any Award
or any transaction arising under this Plan or any Award, except in circumstances constituting bad faith or willful misconduct of such member. 

 
 

        4.5   Amendments.

        (a)   The
Administering Body may, insofar as permitted by applicable law, rule or regulation, from time to time suspend or discontinue this Plan or revise or amend it in any
respect whatsoever, and this Plan as so revised or amended will govern all Awards hereunder, including those granted before such revision or amendment; provided, however, that, except as otherwise
provided by this Plan, no such revision or amendment shall materially impair or diminish any rights or obligations under any Award previously granted under this Plan, without the written consent of
the Recipient. Without limiting the generality of the foregoing, the Administering Body is authorized to amend this Plan to comply with or take advantage of amendments to applicable laws, rules or
regulations, including amendments to the Securities Act, Exchange Act or the IRC or any rules or regulations promulgated thereunder. No such revision or amendment of this Plan shall be made without
first obtaining approval of the stockholders of the Company to the extent such approval is required by (i) applicable law, rule or regulation, or (ii) the requirements of any stock
exchange or automated quotation system then listing the shares of Common Stock or any applicable requirements related to Incentive Stock Options, for exemption from IRC Section 162(m) or the
applicable requirements of Rule 16b-3. 

        (b)   The
Administering Body may amend the terms and conditions of an Award previously granted under this Plan, including any Award Agreement, retroactively or prospectively,
provided that no such amendment shall materially impair or diminish any rights or obligations of a Recipient under such Award without such Recipient's written consent. Without limiting the generality
of the foregoing, the Administering Body may, in its discretion, at any time and from time to time after the grant of any Award (i) accelerate or extend the vesting or exercise period, or lapse
of restrictions, applicable to any Award in whole or in part, (ii) adjust or reduce the purchase or exercise price, as applicable, of Awards held by such Recipient by cancellation of such 

4

 

Awards
and granting of Awards at lower purchase or exercise prices or by modification, extension or renewal of such Awards, and (iii) reduce or otherwise modify the Performance Criteria
applicable to any Award. In the case of Incentive Stock Options, Recipients acknowledge that extensions of the exercise period and other modifications may result in the loss of the favorable tax
treatment afforded Incentive Stock Options under Section 422 of the IRC. 

 
 

        4.6   Other
Compensation Plans. The adoption of this Plan shall not affect any other stock option, securities purchase, incentive or other compensation plans in effect for the
Company or an Affiliated Entity, and this Plan shall not preclude the Company or an Affiliated Entity from establishing any other forms of incentive or other compensation for Employees, Directors,
Consultants or others, whether or not approved by stockholders of the Company. 

 
 

        4.7   Plan
Binding on Successors. This Plan shall be binding upon the successors and assigns of the Company. 

 
 

        4.8   References
to Successor Statutes, Regulations and Rules. Any reference in this Plan to a particular statute, regulation or rule shall also refer to any successor
provision of such statute, regulation or rule. 

 
 

        4.9   Issuances
for Compensation Purposes Only. This Plan constitutes an "employee benefit plan" as defined in Rule 405 promulgated under the Securities Act. Awards to
eligible Employees or Directors shall be granted for any lawful consideration, including compensation for services rendered, promissory notes or otherwise. Awards to eligible Consultants shall be
granted only in exchange for bona fide services rendered by such Consultants and such services must not be in connection with the offer and sale of securities in a capital-raising transaction. 

 
 

        4.10 Invalid
Provisions. In the event that any provision of this Plan is found to be invalid, illegal or otherwise unenforceable under any applicable law, such invalidity,
illegality or unenforceability shall not be construed as rendering any other provisions contained herein invalid, illegal or unenforceable, and all such other provisions shall be given full force and
effect to the same extent as though the invalid, illegal and unenforceable provision were not contained herein. 

 
 

        4.11 Governing
Law. This Plan and each Award Agreement shall be governed by and interpreted in accordance with the internal laws of the state of incorporation of the
Company, as it may be from time to time, without giving effect to the principles of the conflicts of laws thereof. 

 
 
	5.
	GENERAL
AWARD PROVISIONS
 
 

        5.1   Participation
in the Plan. 

        (a)   A
person shall be eligible to receive Award grants under this Plan if, at the time of the grant of such Award, such person is an Eligible Person. 

        (b)   Incentive
Stock Options may be granted only to Employees who, at the date of granting of such Incentive Stock Options, are Employees of the Company or a Parent
Corporation or a Subsidiary Corporation, and otherwise meet the employment requirements of Section 422 of the IRC, or a similar statute governing Incentive Stock Options. 

        (c)   Notwithstanding
anything to the contrary herein, the Administering Body may, in its discretion, in order to fulfill the purposes of this Plan, modify grants of Awards to
Recipients who are foreign nationals or employed outside of the United States to recognize differences in applicable law, tax policy or local custom. 

 
 

        5.2   Award
Agreements. 

        (a)   Each
Award granted under this Plan shall be evidenced by an Award Agreement duly executed on behalf of the Company and by the Recipient or, in the Administering Body's 

5

 

discretion,
a confirming memorandum issued by the Company to the Recipient, setting forth such terms and conditions applicable to such Award as the Administering Body may in its discretion determine.
Award Agreements may but need not be identical and shall comply with and be subject to the terms and conditions of this Plan, a copy of which shall be provided to each Recipient and incorporated by
reference into each Award Agreement. Any Award Agreement may contain such other terms, provisions and conditions not inconsistent with this Plan as may be determined by the Administering Body. 

        (b)   In
case of any conflict between this Plan and any Award Agreement, this Plan shall control except as specifically provided in the Award Agreement. 

        (c)   In
case of any conflict between this Plan and any Award Agreement, on the one hand, and any Employment Agreement between a Recipient and either the Company and/or an
Affiliated Entity, on the other hand, the terms and conditions of the Employment Agreement with such Recipient shall apply with respect to those items specifically addressed in the Employment
Agreement. 

        (d)   In
consideration of the granting of an Award under this Plan and if requested by the Company, the Recipient shall agree, in the Award Agreement, to remain in the employ
of (or to consult for or to serve as a Director of, as applicable) the Company or any Affiliated Entity for a period of at least one (1) year (or such shorter period as may be fixed in the
Award Agreement or by action of the Administering Body following grant of the Award) after the Award is granted (or, in the case of a Director, until the next annual meeting of stockholders of the
Company). 

 
 

        5.3   Exercise
of Awards. No Award granted hereunder shall be issuable or exercisable, except in respect of whole shares, and fractional share interests shall be disregarded.
Not less than 100 shares of Common Stock (or such other amount as is set forth in the applicable Award Agreement) may be purchased or issued at one time upon exercise of an Award, and Awards must be
exercised, issued or purchased, as applicable, in multiples of 100 shares, unless the number of shares purchased is the total number of shares at the time available under the terms of the Award. An
Award shall be deemed to be claimed or exercised when the Secretary or other official of the Company designated by the Administering Body receives appropriate written notice, on such form acceptable
to the Administering Body, from the Recipient, together with payment of the applicable purchase or exercise price made in accordance with the Award Agreement and any amounts required under
Section 5.11 of this Plan. Notwithstanding any other provision of this Plan, the Administering Body may impose, by rule and/or in Award Agreements, such conditions upon the exercise of Awards
(including, without limitation, conditions limiting the time of exercise to specified periods) as may be required to satisfy applicable regulatory requirements, including, without limitation,
Rule 16b-3 and Rule 10b-5 under the Exchange Act or any other applicable law, regulation or rule, including, without limitation, any other applicable requirements
under the IRC, or the regulations or rules promulgated thereunder. 

 
 

        5.4   Payment
for Awards. 

        (a)   Awards
requiring payment of a purchase or exercise price shall be payable upon the exercise or purchase of such Award by delivery of legal tender of the United States or
payment of such other consideration as the Administering Body may from time to time deem acceptable in any particular instance, including consideration pursuant to subparagraphs (b) and
(c) of this Section 5.4. 

        (b)   The
Company may, in the discretion of the Administering Body, assist any Recipient (including, without limitation, any Employee, Director or Consultant) in the payment
of the exercise price or other amounts payable in connection with the receipt or exercise of such Award, by lending such amounts to such person on such terms and at such rates of interest and upon
such security (if any) as shall be approved by the Administering Body. 

6

 

        (c)   In
the discretion of the Administering Body, and subject to such limitations or conditions as it may prescribe, if permitted by applicable law, (i) payments for
purchase or exercise of Awards may be by matured capital stock of the Company (i.e., capital stock owned longer than six (6) months by the person delivering such capital stock or by such person
and his or her spouse jointly) delivered in transfer to the Company by or on behalf of the person exercising or purchasing the Award and duly endorsed in blank or accompanied by stock powers duly
endorsed in blank, with signatures guaranteed in accordance with the Exchange Act if required by the Administering Body (valued at Fair Market Value as of the exercise or purchase date), or such other
consideration as the Administering Body may from time to time in the exercise of its discretion deem acceptable in any particular instance; (ii) the Administering Body may allow the exercise of
Stock Options in a broker-assisted or similar transaction in which the exercise price is not received by the Company until promptly after exercise, and/or (iii) the Administering Body may allow
the Company to loan the applicable purchase or exercise price to the Recipient, if the purchase or exercise will be followed by a prompt sale of some or all of the underlying shares and a portion of
the sale proceeds is dedicated to full payment of the purchase or exercise price and amounts required pursuant to Section 5.11 of this Plan. 

 
 

        5.5   No
Employment or Other Continuing Rights. Nothing contained in this Plan (or in any Award Agreement or in any other agreement or document related to this Plan or to
Awards granted hereunder) shall confer upon (a) any Eligible Person or Recipient any right to continue in the employ (or other business relationship) of the Company or any Affiliated Entity or
constitute any contract or agreement of employment or engagement, or interfere in any way with the right of the Company or any Affiliated Entity to reduce such person's compensation or other benefits
or to terminate the employment or engagement of such Eligible Person or Recipient, with or without cause; or (b) any Recipient any right to exercise or claim his or her Award otherwise than in
accordance with the express terms and conditions of his or her Award Agreement and this Plan. Except as expressly provided in this Plan or in any Award Agreement pursuant to this Plan, the Company and
any Affiliated Entity, as applicable, shall have the right to deal with each Recipient in the same manner as if this Plan and any such Award Agreement did not exist, including, without limitation,
with respect to all matters related to the hiring, retention, discharge, compensation and conditions of the employment or engagement of the Recipient. Any questions as to whether and when there has
been a termination of a Recipient's employment or engagement, the reason (if any) for such termination, and/or the consequences thereof under the terms of this Plan or any statement evidencing the
grant of Awards pursuant to this Plan shall be determined by the Administering Body, and the Administering Body's determination thereof shall be final, conclusive and binding upon all persons and
entities. 

 
 

        5.6   Restrictions
Under Applicable Laws and Regulations. 

        (a)   All
Awards granted under this Plan shall be subject to the requirement that, if at any time the Company shall determine, in its discretion, that the listing,
registration or qualification of the shares subject to any such Award granted under this Plan upon any securities exchange or under any federal, state or foreign law, or the consent or approval of any
government regulatory body, is necessary or desirable as a condition of, or in connection with, the granting of such Awards or the issuance, if any, or purchase of shares in connection therewith, such
Awards may not be granted or exercised as a whole or in part unless and until such listing, registration, qualification, consent or approval shall have been effected or obtained free of any conditions
not acceptable to the Administering Body. During the term of this Plan, the Company will use reasonable efforts to seek to obtain from the appropriate regulatory agencies any requisite qualifications,
consents, approvals or authorizations in order to issue and sell such number of shares of its Common Stock as shall be sufficient to satisfy the requirements of this    Plan. The inability
of the Company to obtain from any such regulatory agency having jurisdiction thereof the qualifications, consents, approvals or authorizations deemed by the Company to be necessary for 

7

 

the
lawful issuance and sale of any shares of its Common Stock hereunder shall relieve the Company of any liability in respect of the nonissuance or sale of such stock as to which such requisite
qualification, consent, approval or authorization shall not have been obtained. 

        (b)   The
Company shall be under no obligation to register or qualify the issuance of Awards or underlying shares of Common Stock under the Securities Act or applicable state
securities laws. Unless the shares of Common Stock applicable to any such Award have been registered under the Securities Act and qualified or registered under applicable state securities laws, the
Company shall be under no obligation to issue any shares of Common Stock covered by any Award unless the Award and underlying shares of Common Stock, as applicable, may be issued pursuant to
applicable exemptions from such registration or qualification requirements. In connection with any such exempt issuance, the Administering Body may require the Recipient to provide a written
representation and undertaking to the Company, satisfactory in form and scope to the Administering Body and upon which the Company may reasonably rely, that such Recipient is acquiring such shares of
Common Stock for his or her own account, as an investment and not with a view to, or for sale in connection with, the distribution of any such shares of Common Stock, and that such person will make no
transfer of the same except in compliance with any rules and regulations in force at the time of such transfer under the Securities Act and other applicable law, and that if shares of Common Stock are
issued under this Plan without such registration, a legend to this effect (together with any other legends deemed appropriate by the Administering Body) may be endorsed upon the certificates
evidencing the shares of Common Stock so issued. The Administering Body may also order its transfer agent to stop transfers of such shares. The Administering Body may also require the Recipient to
provide the Company such information and other documents as the Administering Body may request in order to satisfy the Administering Body as to the investment sophistication and experience of the
Recipient and as to any other conditions for compliance with any such exemptions from registration or qualification. 

 
 

        5.7   Additional
Conditions. The grant and/or exercise of an Award and the issuance of shares in connection with the exercise of an Award may also be conditioned upon or
subject to such other provisions (whether or not applicable to any other Award or Eligible Person) as the Administering Body, in its sole discretion, determines appropriate, in accordance with this
Plan and the Award Agreement, including, without limitation, (a) provisions to assist the Recipient in financing the purchase of Common Stock issuable as a result of such Award,
(b) provisions for the forfeiture of or restrictions on resale or other disposition of shares of Common Stock acquired under any Award, (c) provisions giving the Company the right to
repurchase shares of Common Stock acquired under any Award in the event the Recipient elects to dispose of such shares, (d) provisions to comply with federal and state securities laws and
federal, state or foreign income or employment tax withholding requirements, (e) provisions conditioned upon the declaration of effectiveness by the SEC of a registration statement relating to
a primary offering of the Common Stock, filed by the Company with the SEC under the Securities Act, (f) provisions conditioned upon the satisfaction of withholding tax or other withholding
liabilities, (g) provisions conditioned upon the listing, registration or qualification of any to-be-issued shares upon any securities exchange, any NASDAQ or other
trading or quotation system or under any state or federal law, (h) provisions conditioned upon the consent or approval of any regulatory body, (i) provisions conditions upon the
execution of a lock-up agreement with one or more prospective underwriters, or (j) provisions conditioned upon the execution of a buy-sell or stockholders agreement with
other stockholders of the Company. The Administering Body shall, in its sole discretion, determine whether any one or more of these conditions is necessary or desirable to be satisfied in connection
with the exercise of an Award or the delivery or purchase of shares pursuant to the exercise of an Award. If the Administering Body determines that any one or more of the foregoing conditions must be
satisfied, the exercise of an Award shall not be effective unless and until such condition shall have been satisfied free of any conditions not acceptable to the Administering Body in its sole
discretion. 

 
 
8

 

        5.8   No
Privileges of Stock Ownership. Except as otherwise set forth herein, a Recipient shall have no rights as a shareholder with respect to any shares issuable or issued
in connection with an Award until the date of the exercise of the Award in accordance with the Award Agreement and this Plan, and the receipt by the Company of all amounts payable in connection with
the purchase or exercise, as applicable, of the Award, the satisfaction or waiver of all applicable performance goals and performance by the Recipient of all conditions and obligations applicable to
the Award, in accordance with this Plan and the applicable Award Agreement. Status as an Eligible Person shall not be construed as a commitment that any Award will be granted under this Plan to an
Eligible Person or to Eligible Persons generally. No person shall have any right, title or interest in any fund or in any specific asset (including shares of capital stock) of the Company by reason of
any Award granted hereunder. Neither this Plan (nor any documents related hereto) nor any action taken pursuant hereto (or thereto) shall be construed to create a trust of any kind or a fiduciary
relationship between the Company and any Person. To the extent that any Person acquires any right with respect to Awards hereunder, such right shall be no greater than the right of any unsecured
general creditor of the Company. 

 
 

        5.9   Transferability
of Awards. 

        (a)   Except
as otherwise provided by this Section 5.9 or by the Administering Body, no Award under this Plan may be sold, pledged, assigned, transferred, encumbered,
alienated, hypothecated or otherwise disposed of (whether voluntarily or involuntarily or by operation of law by judgment, levy,    attachment, garnishment or any other legal or equitable
proceedings (including bankruptcy)) in any manner other than by will or the laws of descent and distribution or, subject to the consent of the Administering Body, pursuant to a DRO, unless and until
such Award has been exercised, if applicable, and the shares of Common Stock underlying such Award have been issued, and all restrictions applicable to such shares have lapsed, and no Award or
interest or right therein shall be liable for the debts, contracts, liabilities or contractual obligations of the Recipient thereof. Any attempted disposition of an Award or any interest therein shall
be null and void and of no effect, except to the extent that such disposition is permitted by the preceding sentence. 

        (b)   Except
as otherwise provided by the Administering Body, during the lifetime of a Recipient, only he or his court appointed guardian may exercise an Award (or any portion
thereof) granted to him under this Plan, unless it has been transferred in accordance with paragraph (c) of this Section 5.9 or, with the consent of the Administering Body, pursuant to a
DRO. After the death of a Recipient, any exercisable or vested but unpaid portion of an Award may, prior to the time when such portion becomes unexercisable or is terminated or expires under this Plan
or the applicable Award Agreement, be exercised by or paid to the beneficiary most recently named by such Recipient in a written designation thereof filed with the Company, to the extent permitted by
the Recipient's Award Agreement, or, in the absence of a validly designated beneficiary, his or her personal representative or by any person empowered to do so under the deceased Recipient's will or
under the then applicable laws of descent and distribution. In the event any Award is to be exercised by, or paid to, the executors, administrators, heirs or distributees of the estate of a deceased
Recipient, or such Recipient's beneficiary, or an incapacitated Recipient's guardian, or the transferee of such Award, in any case pursuant to the terms and conditions of this Plan and the applicable
Award Agreement, and in accordance with such terms and conditions as may be specified from time to time by the Administering Body, the Company shall be under no obligation to issue shares of Common
Stock or make any payment under such Award unless and until the Administering Body is satisfied that the person or persons exercising or to receive payment under such Award is the duly appointed legal
representative of the deceased Recipient's estate or the proper legatee or distributees thereof. 

        (c)   The
Administering Body may, in its discretion, permit the transfer of an Award to, exercise of an Award by, or payment of an Award to, a person other than the Recipient
who 

9

 

received
the grant of such Award in accordance with and/or under the Award Agreement and such terms and conditions as the Administering Body may specify from time to time. 

        (d)   Notwithstanding
the foregoing, no Stock Option owned by a Recipient subject to Section 16 of the Exchange Act may be assigned or transferred in any manner
inconsistent with
Rule 16b-3, and Incentive Stock Options (or other Stock Options subject to transfer restrictions under the IRC) may not be assigned or transferred if such assignment or transfer
would cause such an Incentive Stock Option to fail to qualify under Section 422 of the IRC (or any comparable or successor provision) or the regulations thereunder. 

 
 

        5.10 Information
to Recipients. 

        (a)   The
Administering Body in its sole discretion shall determine what, if any, financial and other information shall be provided to Recipients and when such financial and
other information shall be provided after giving consideration to applicable federal, state and foreign laws, rules and regulations, including, without limitation, applicable federal, state and
foreign securities laws, rules and regulations. 

        (b)   The
furnishing of financial and other information that is confidential to the Company shall be subject to the Recipient's agreement that the Recipient shall maintain the
confidentiality of such financial and other information, shall not disclose such information to third parties, and shall not use the information for any purpose other than evaluating an investment in
the Company's securities under this Plan. The Administering Body may impose other restrictions on the access to and use of such confidential information and may require a Recipient to acknowledge the
Recipient's obligations under this Section 5.10(b) (which acknowledgment shall not be a condition to the Recipient's obligations under this Section 5.10(b)). 

 
 

        5.11 Withholding
Taxes. Whenever the granting, vesting, exercise or payment of any Award granted under this Plan, or the transfer of any shares issued upon exercise of any
Award, gives rise to tax or tax withholding liabilities or obligations, the Administering Body shall have the right, as a condition to the issuance of any shares of Common Stock under, or other
payment of, such Award, to require the Recipient to remit to the Company an amount sufficient to satisfy such federal, state, local and foreign tax requirements, and the Company or any Affiliated
Entity shall, to the extent permitted by applicable law, have the right to deduct any such taxes from any payment of any kind otherwise due to such Recipient. The Administering Body may, in the
exercise of its discretion, permit a Recipient to satisfy such tax withholding requirements by (a) delivery to the Company of Common Stock owned by such Recipient (or by such Recipient and his
or her spouse jointly) or (b) electing withholding by the Company of a portion of the Common Stock otherwise issuable in connection with such Recipient's Award (provided, however, that the
amount of any Common Stock so withheld shall not exceed the amount necessary to satisfy required federal, state, local and foreign withholding obligations using the minimum statutory rate), to the
extent permitted by applicable law and pursuant to procedures approved by the Administering Body. 

 
 

        5.12 Legends
on Common Stock Certificates. Each certificate representing shares acquired as a result of any Award granted hereunder shall be endorsed with all legends, if
any, required by applicable federal and state securities or other laws or agreements or the Administering Body to be placed on the certificate. The determination of which legends, if any, shall be
placed upon such certificates shall be made by the Administering Body in its sole discretion and such decision shall be final and binding. 

 
 

        5.13 Effect
of Termination of Employment on Awards—Employees Only. 

        (a)   Termination
for Just Cause Dismissal. Subject to Section 5.13(c), and except as otherwise provided in a written agreement (including, without limitation, any
Award Agreement) between the Company and/or an Affiliated Entity and the Recipient, which may be entered into at any time before or after termination of employment of the Recipient, in the event of a
Just Cause Dismissal 

10

 

of
an Employee Recipient from employment with the Company or any Affiliated Entity, all of the Recipient's unvested Awards shall be terminated and become void, and all of the Recipient's unexercised
Awards (whether or not vested) shall be orfeited, expire and become void, as of the date of such Just Cause Dismissal. 

        (b)   Termination
Other than for Just Cause Dismissal. Subject to Section 5.13(c), and except as otherwise provided in a written agreement (including, without
limitation, any Award Agreement) between the Company and/or an Affiliated Entity and the Recipient, which may be entered into at any time before or after termination of employment, in the event of an
Employee Recipient's termination of employment with the Company or any Affiliated Entity for: 

        (i)    any
reason other than for Just Cause Dismissal, death, Permanent Disability or Retirement, the Recipient's unvested and/or unexercised Awards, whether or not vested,
shall expire and become void as of the earlier of (A) the date such Awards would have expired in accordance with their terms had the Recipient remained employed and (B) three
(3) months after the date of such termination; or 

        (ii)   death,
Permanent Disability or Retirement, the Recipient's unvested and/or unexercised, whether or not vested, Awards shall expire and become void as of the earlier of
(A) the date such Awards would have expired in accordance with their terms had the Recipient remained employed and (B) one (1) year after the date of such termination; provided,
however, that the one-year period provided in (B) shall be three (3) months for Incentive Stock Options following termination of employment for Retirement. 

        (c)   Alteration
of Vesting and Exercise Periods. Notwithstanding anything to the contrary in Section 5.13(a) or Section 5.13(b), the Administering Body may in
its discretion designate shorter or longer periods to claim or otherwise exercise Awards following a Recipient's termination of employment with the Company or any Affiliated Entity; provided, however,
that any shorter periods determined by the Administering Body shall be effective only if provided for in the Award Agreement that evidences the Recipient's Award or if such shorter period is agreed to
in writing between the Recipient and the Company. Notwithstanding anything to the contrary herein, Awards shall be claimed, paid or exercisable by a Recipient following such Recipient's termination of
employment with the Company or any Affiliated Entity only to the extent that installments thereof had become exercisable or vested on or prior to the date of such termination; and provided further
that the Administering Body may, in its discretion, elect to accelerate the vesting or exercisability of, or lapse of restrictions applicable to, all or any portion of any Awards that had not become
vested or exercisable on or prior to the date of such termination, in the event of a termination of employment due to the Recipient's death or Permanent Disability, or, except with respect to any
Award intended to qualify as Performance-Based Compensation, in the event of Retirement or otherwise. Furthermore, at any time prior to a Recipient's termination of employment with the Company or any
Affiliated Entity, the Administering Body may, in its discretion, accelerate the vesting or exercisability, or waive or, subject to the other provisions of this Plan, amend any and all of the goals,
restrictions or conditions imposed under any Award; provided, however, no such acceleration, waiver or amendment shall cause any Award otherwise intended to qualify as Performance-Based Compensation
to fail to so qualify. 

 
 

        5.14 Effect
of Termination of Engagement on Awards—Non-Employees Only. 

        (a)   Termination
of Engagement. Subject to Section 5.14(b), and except as otherwise provided in a written agreement between the Company and/or an Affiliated Entity and
the Recipient, which may be entered into at any time before or after termination of engagement of the Recipient, in the event of the termination of any non-Employee Recipient's engagement
with the Company or any Affiliated Entity (including any such Recipient who is a Director, but not also an Employee or a Consultant), all of the Recipient's unvested Awards shall be terminated and
become void, and all 

11

 

of
the Recipient's unexercised Awards (whether or not vested) shall be forfeited, expire and become void as of the earlier of (i) the date such Awards would expire in accordance with their
terms had the Recipient remained engaged by the Company or such Affiliated Entity and (ii)(A) three (3) months after such termination as a result of death or Permanent Disability and
(B) thirty (30) days after such termination for any other reason. 

        (b)   Alteration
of Vesting and Exercise Periods. Notwithstanding anything to the contrary in Section 5.14(a), the Administering Body may, in its discretion, designate
shorter or longer periods to claim or otherwise exercise Awards following a non-Employee Recipient's termination of engagement with the Company or any Affiliated Entity; provided, however,
that any shorter periods
determined by the Administering Body shall be effective only if provided for in the Award Agreement that evidences the Recipient's Award or if such shorter period is agreed to in writing by the
Recipient. Notwithstanding anything to the contrary herein, Awards shall be claimed, paid or exercisable by a Recipient following such Recipient's termination of engagement with the Company or any
Affiliated Entity only to the extent that the installments thereof had become exercisable or vested on or prior to the date of such termination; and provided further that the Administering Body may,
in its discretion, elect to accelerate the vesting or exercisability of, or lapse of restrictions applicable to, all or any portion of any Awards that had not become vested or exercisable on or prior
to the date of such termination. Furthermore, at any time prior to a Recipient's termination of engagement with the Company or any Affiliated Entity, the Administering Body may, in its discretion,
accelerate the vesting or exercisability, or waive or, subject to the other provisions of this Plan, amend any and all of the goals, restrictions or conditions imposed under any Award. 

 
 

        5.15 Transfer;
Leave of Absence. For purposes of this Plan, the transfer by a Recipient to the employment or engagement of (i) the Company from an Affiliated Entity,
(ii) from the Company to an Affiliated Entity or (iii) from one Affiliated Entity to another Affiliated Entity (including, with respect to Consultants, the assignment between the Company
and an Affiliated Entity or between two Affiliated Entities, as applicable, of an agreement pursuant to which such services are rendered) or, with respect solely to Employees, an approved leave of
absence for military service, sickness, or for any other purpose approved by the Company, shall not be deemed a termination of employment or engagement of such Recipient, as the case may be; provided,
however, that a change in status of a Recipient from an Employee to a Consultant, or to a Director who is not an Employee, shall be considered a termination of such Recipient's employment with the
Company or an Affiliated Entity for purposes of this Plan and such Recipient's Awards, except to the extent that the Administering Body determines, in its discretion, otherwise with respect to any
Award that is not an Incentive Stock Option. In no event, however, shall an Award be exercisable after the date such Award would expire in accordance with its terms had the Recipient remained
continuously employed or engaged in the service of the Company or an Affiliated Entity. Whether a Recipient's employment or service with the Company or any Affiliated Entity has terminated, and, if
so, whether such termination constituted Just Cause Dismissal, shall be determined by the Administering Body, in its good faith discretion, in accordance with this Plan, and any such determination
shall be final, binding and conclusive upon all persons and entities. 

 
 

        5.16 Limits
on Awards to Certain Eligible Persons. 

        (a)   Limitations
Applicable to IRC Section 162(m) Participants. Notwithstanding any other provision of this Plan, in order for the compensation attributable to Awards
hereunder to qualify as Performance-Based Compensation, no one Eligible Person shall be granted any one or more Awards with respect to more than Two Million Five Hundred Thousand (2,500,000) shares of
Common Stock in any one calendar year. The limitation set forth in this Section 5.16(a) shall be subject to adjustment as provided in Section 3.4 or Section 4.5(b) and
Article 7, but only to the extent such adjustment would not affect the status of compensation attributable to Awards 

12

 

hereunder
as Performance-Based Compensation. To the extent required by Section 162(m) of the IRC, shares of Common Stock subject to Awards which are canceled shall continue to be counted
against such limitation and if, after the grant of an Award, the price of shares subject to such Award is reduced and the transaction is treated as a cancellation of the Award and a grant of a new
Award, both the Award deemed to be canceled and the Award deemed to be granted shall be counted against such limitation. 

        (b)   Limitations
Applicable to Section 16 Persons. Notwithstanding any other provision of this Plan, this Plan, and any Award granted or awarded to any individual who
is then subject to Section 16 of the Exchange Act, shall be subject to any additional limitations set forth in any applicable exemptive rule under Section 16 of the Exchange Act
(including Rule 16b-3) that are requirements for the application of such exemptive rule. To the extent permitted by applicable law, this Plan and Awards granted or awarded hereunder
shall be deemed amended to the extent necessary to conform to such applicable exemptive rule. 

 
 

        5.17 Performance-Based
Compensation. If the amount of compensation an Eligible Person may receive under any Award is not based solely on an increase in the value of Common
Stock after the date of grant, the Administering Body, in order to qualify such Awards as Performance-Based Compensation, may condition the payment, granting, vesting or exercisability or purchase
price of such Awards on the attainment of one or more pre-established, objective performance goals that are determined over a measurement period or periods established by the Administering
Body and relate to one or more Performance Criteria. The Administering Body shall establish and administer any such performance goals. Payment of compensation in respect of any such Award shall not be
made unless and until the Administering Body certifies in writing that the applicable Performance Criteria, performance goals and any other material terms of such Award were in fact satisfied, except
as otherwise provided by the Administering Body in accordance with this Plan and the applicable Award Agreement in the event of termination of a Recipient's employment or service with the Company or
an Affiliated Entity due to death or Disability or in the event of a Change in Control. 

 
 
	6.
	STOCK
OPTIONS
 
 

        6.1   Nature
of Stock Options. Subject to the limitations provided otherwise herein, Stock Options may be Incentive Stock Options or Non-qualified Stock Options.
Each Award Agreement relating to a Stock Option shall state whether such Option will be treated as an Incentive Stock Option or a Non-qualified Stock Option. 

 
 

        6.2   Option
Exercise Price. The exercise price for each Stock Option shall be determined by the Administering Body as of the date such Stock Option is granted and shall be
stated in the Award Agreement. The exercise price shall be no less than the Fair Market Value of the Common Stock subject to the Option on the date such option is granted; provided, however, that the
Administering Body may, in its discretion, with the consent of the Recipient in the case of an Incentive Stock Option, amend the terms of any Stock Option not intended to qualify as Performance-Based
Compensation to provide that the exercise price of the shares remaining subject to the Stock Option shall be reestablished at a price not less than 100% of the Fair Market Value of the Common Stock on
the effective date of the amendment. 

 
 

        6.3   Option
Period and Vesting. Stock Options granted hereunder shall vest and may be exercised as determined by the Administering Body and stated in the Award Agreement,
except that exercise of such Stock Options after termination of the Recipient's employment or engagement shall be subject to Section 5.13 or 5.14, as the case may be. Each Stock Option granted
hereunder and all rights or obligations thereunder shall expire on such date as shall be determined by the Administering Body, but not later than ten (10) years after the date the Stock Option
is granted and shall be subject to earlier termination as provided herein or in the Award Agreement. The Administering Body may, in its discretion at any time and from time to time after the grant of
a Stock Option, accelerate vesting of 

13

 

such
Stock Option as a whole or in part by increasing the number of shares then purchasable, provided that the total number of shares subject to such Stock Option may not be increased. Except as
otherwise provided herein, a Stock Option shall become exercisable, as a whole or in part, on the date or dates, or upon satisfaction of such conditions, specified by the Administering Body and
thereafter shall remain exercisable until the expiration or earlier termination of the Stock Option. 

 
 

        6.4   Special
Provisions Regarding Incentive Stock Options. 

        (a)   Notwithstanding
anything in this Article 6 to the contrary, the exercise price and vesting Period of any Stock Option intended to qualify as an Incentive Stock
Option shall comply with the provisions of Section 422 of the IRC and the regulations thereunder. As of the Effective Date, such provisions require, among other matters, that (i) the
exercise price must not be less than the Fair Market Value of the underlying stock as of the date the Incentive Stock Option is granted, and not less than 110% of the Fair Market Value as of such date
in the case of a grant to a Significant Shareholder; and (ii) that the Incentive Stock Option not be exercisable after the expiration of five (5) years from the date of grant in the case
of an Incentive Stock Option granted to a Significant Shareholder. 

        (b)   The
aggregate Fair Market Value (determined as of the respective date or dates of grant) of the Common Stock for which one or more Incentive Stock Options granted to any
Recipient under this Plan (or any other option plan of the Company or an Affiliated Entity) may for the first time become exercisable as "incentive stock options" under the IRC during any one calendar
year shall not exceed $100,000. 

        (c)   Any
Options granted as Incentive Stock Options pursuant to this Plan that for any reason fail or cease to qualify as such shall be treated as Non-qualified
Stock Options. 

 
 

        6.5   Restrictions:
The Administering Body, in its sole and absolute discretion, may impose such restrictions on the ownership and transferability of the shares purchasable
upon the exercise of a Stock Option as it deems appropriate. Any such restriction shall be set forth in the respective Award Agreement and may be referred to on the certificates evidencing such
shares. The Recipient shall give the Company prompt notice of any disposition of shares of Common Stock acquired by exercise of an Incentive Stock Option within (i) two years from the date of
granting (including the date the Option is modified, extended or renewed for purposes of Section 424(h) of the IRC) such Option to such Recipient or (ii) one year after the transfer of
such shares to such Recipient. 

 
 
	7.
	REORGANIZATIONS
 
 

        7.1   Corporate:
Transactions Not Involving a Change in Control. If the Company shall consummate any Reorganization not involving a Change in Control in which holders of
shares of Common Stock are entitled to receive in respect of such shares any securities, cash or other consideration (including without limitation a different number of shares of Common Stock), each
Award outstanding under this Plan shall thereafter be claimed or exercisable, in accordance with this Plan, only for the kind and amount of securities, cash and/or other consideration receivable upon
such Reorganization by a holder of the same number of shares of Common Stock as are subject to that Award immediately prior to such Reorganization, and any adjustments will be made to the terms of the
Award, and the underlying Award Agreement, in the sole discretion of the Administering Body as it may deem appropriate to give effect to the Reorganization. 

 
 

        7.2   Corporate:
Transactions Involving a Change in Control. As of the effective time and date of any Change in Control, this Plan and any then outstanding Awards (whether or
not vested) shall automatically terminate unless (a) provision is made in writing in connection with such transaction for the continuance of this Plan and for the assumption of such Awards, or
for the substitution for such Awards of new grants covering the securities of a successor entity or other party to the transaction resulting in such Change in Control or an affiliate thereof, with
appropriate adjustments as to the 

14

 

number
and kind of securities and exercise prices, in which event this Plan and such outstanding Awards shall continue or be replaced, as the case may be, in the manner and under the terms provided by
the Administering Body and/or in any written agreement relating to such Change in Control transaction; or (b) the Board otherwise has provided or shall provide in writing for such adjustments
as it deems appropriate in the terms and conditions of the then-outstanding Awards (whether or not vested), including without limitation (i) accelerating the vesting or
exercisability of outstanding Awards and/or (ii) providing for the cancellation of Awards and their automatic conversion into the right to receive the securities, cash and/or other
consideration that a holder of the shares underlying such Awards would have been entitled to receive upon consummation of such Change in Control had such shares been issued and outstanding immediately
prior to the effective date and time of the Change in Control (net of the appropriate option exercise prices). If, pursuant to the foregoing provisions of this Section 7.2, this Plan and any
outstanding Awards granted hereunder shall terminate by reason of the occurrence of a Change in Control without provision for any of the actions described in clause (a) or (b) hereof,
then any Recipient holding outstanding Awards shall have the right, at such time immediately prior to the consummation of the Change in Control as the Administering Body shall designate, to convert,
claim or exercise, as applicable, the Recipient's Awards to the full extent not theretofore converted, claimed or exercised, including any installments which have not yet become vested or exercisable. 

 
 
	8.
	DEFINITIONS

        Capitalized
terms used in this Plan and not otherwise defined shall have the meanings set forth below: 

        "Administering
Body" means the Board as long as no Stock Plan Committee has been appointed and is in effect and shall mean the Stock Plan Committee as long as the Stock Plan Committee is
appointed and in effect. 

        "Affiliated
Entity" means any (i) any corporation or limited liability company, other than the Company, in an unbroken chain of corporations or limited liability companies ending
with the Company if each corporation or limited liability company owns stock or membership interests (as applicable) possessing more than fifty percent (50%) of the total combined voting power of all
classes of stock in one of the other corporations or limited liability companies in such chain; (ii) any corporation, trade or business (including, without limitation, a partnership or limited
liability company) which is more than fifty percent (50%) controlled (whether by ownership of stock, assets or an equivalent ownership interest or voting interest) by the Company or another Affiliated
Entity; or (iii) any other entity, approved by the Administering Body as an Affiliated Entity under the Plan, in which the Company or any other Affiliated Entity has a material equity interest. 

        "Award"
or "Awards," except where referring to a particular category or grant under this Plan, shall include Incentive Stock Options and Non-qualified Stock Options. 

        "Award
Agreement" means the agreement or confirming memorandum setting forth the terms and conditions of the Award. 

        "Board"
means the Board of Directors of the Company. 

        "Change
in Control" means the following and shall be deemed to occur if any of the following events specified in clauses (a), (b), (c) or (d) occur: 

        (a)   Any
Person (other than a Wei Zhou Affiliate) becomes, after the Effective Date, the beneficial owner (within the meaning of Rule 13d-3 promulgated
under the Exchange Act), directly or indirectly, of fifty percent (50%) or more of the combined voting power of the Company's then outstanding securities; or 

15

 

        (b)   During
any period of two (2) consecutive years, individuals, who at the beginning of such period, constitute the Board and any new Director of the Company (other
than a Director designated by a person who has entered into an agreement with the Company to effect a transaction described in clause (a), (c) or (d) of this definition) whose
election by the Board or nomination for election by the Company's stockholders was approved by a vote of at least two-thirds (2/3rds) of the Directors of the Company then
still in office who either were Directors of the Company at the beginning of the two-year period or whose election or nomination for election was previously so approved, cease for any
reason to constitute at least a majority of the Board; 

        (c)   A
merger or consolidation of the Company with any other corporation, other than a merger or consolidation that would result in the voting securities of the Company
outstanding immediately prior thereto continuing to represent (either by remaining outstanding or by being converted into voting securities of the surviving entity) more than fifty percent (50%) of
the combined voting power of the voting securities of the Company or such surviving entity outstanding immediately after such merger or consolidation; provided, however, that a merger or consolidation
effected to implement a recapitalization of the Company (or similar transaction) in which no person acquires more than fifty percent (50%) of the combined voting power of the Company's then
outstanding securities or a merger or consolidation primarily effected to change the Company's jurisdiction of incorporation shall not constitute a Change in Control, and provided further a merger or
consolidation in which the Company is the surviving entity (other than as a wholly owned subsidiary of another entity) and in which the Board of Directors of the Company or the successor to the
Company after giving effect to the merger or consolidation, is comprised of a majority of members who are either (x) Directors of the Company immediately preceding the merger or consolidation,
or (y) appointed to the Board of Directors by the Company (or the Board) as an integral part of such merger or consolidation, shall not constitute a Change in Control; or 

        (d)   Approval
by the stockholders of the Company or any order by a court of competent jurisdiction of a plan of liquidation of the Company, or the sale or disposition by the
Company of all or substantially all of the Company's assets other than (i) the sale or disposition of all or substantially all of the assets of the Company to a person or persons who
beneficially own, directly or indirectly, at least fifty percent (50%) or more of the combined voting power of the outstanding voting securities of the Company at the time of the sale; or
(ii) pursuant to a dividend in kind or spin-off type transaction, directly or indirectly, of such assets to the stockholders of the Company; 

        (e)   Notwithstanding
the foregoing, a Change in Control of the type described in clauses (b), (c) or (d) above shall be deemed to be completed on the date it
occurs, and a Change in Control of the type described in clause (a) above shall be deemed to be completed as of the date the entity or group attaining fifty percent (50%) or greater ownership
has elected its representatives to the Board of Directors and/or caused its nominees to become officers of the Company with the authority to terminate or alter the terms of any Employee's employment. 

        "Common
Stock" means the common stock of the Company, par value $0.001 per share, as constituted on the Effective Date, and as thereafter adjusted as a result of any one or more events
requiring adjustment of outstanding Awards under Section 3.4 above or any other provision of this Plan. 

        "Company"
means INTAC International, Inc., a Nevada corporation, and its successors. 

        "Consultant"
means any consultant or advisor if: 

        (a)   the
consultant or advisor renders bona fide services to the Company or any Affiliated Entity; 

16

 

        (b)   the
services rendered by the consultant or advisor are not in connection with the offer or sale of securities in a capital-raising transaction and do not directly or
indirectly promote or maintain a market for the Company's securities; and 

        (c)   the
consultant or advisor is a natural person who has contracted directly with the Company or an Affiliated Entity to render such services. 

        "Director"
means any person serving on the Board of the Company or the Board of Directors of an Affiliated Entity irrespective of whether such person is also an Employee of the Company
or an Affiliated Entity. 

        "DRO"
means a domestic relations order as defined by the IRC or Title I of ERISA or the rules thereunder. 

        "Effective
Date" means November 28, 2001, which is the date this Plan was adopted by the Board. 

        "Eligible
Person" shall include key Employees, Directors and Consultants of the Company or of any Affiliated Entity. 

        "Employee"
means any officer or other employee (as defined in accordance with Section 3401(c) of the IRC) of the Company or any Affiliated Entity. 

        "ERISA"
means the Employee Retirement Income Security Act of 1974, as amended. 

        "Exchange
Act" means the Securities Exchange Act of 1934, as amended. 

        "Exchange
Act Registered Company" means that the Company has any class of any equity security registered pursuant to Section 12 of the Exchange Act. 

        "Expiration
Date" means the tenth anniversary of the Effective Date. 

        "Fair
Market Value" of a share of the Company's capital stock as of a particular date shall be: (a) if the stock is listed on an established stock exchange or exchanges (including
for this purpose, the NASDAQ National Market), the closing sale price of the stock quoted for such date as reported in the transactions index of each such exchange, as published in The Wall Street
Journal and determined by the Administering Body, or, if no sale price was quoted in any such index for such date, then as of the next preceding date on which such a sale price was quoted; or
(b) if the stock is not then listed on an exchange or the NASDAQ National Market, the average of the closing bid and asked prices per share for the stock in the
over-the-counter market as quoted on the NASDAQ Small Cap Market on such date, or if not so quoted, on the OTC Bulletin Board on such date; or (c) if the stock is not
then listed on an exchange or quoted in the over-the-counter market or the OTC Bulletin Board, an amount determined in good faith by the Administering Body; provided, however,
that (i) when appropriate, the Administering Body, in determining Fair Market Value of capital stock of the Company, may take into account such other factors as it may deem appropriate under
the circumstances and (ii) if the stock is traded on the NASDAQ Small Cap Market and both sales prices and bid and asked prices are quoted or available, the Administering Body may elect to
determine Fair Market Value under either clause (a) or (b) above. Notwithstanding the foregoing, the Fair Market Value of capital stock for purposes of grants of Incentive Stock Options
shall be determined in compliance with applicable provisions of the IRC. 

        "Incentive
Stock Option" means a Stock Option that qualifies as an incentive stock option under Section 422 of the IRC, or any successor statute thereto. 

        "IRC"
means the Internal Revenue Code of 1986, as amended. 

        "Just
Cause Dismissal" shall mean a termination of a Recipient's employment for any of the following reasons: (a) the Recipient violates any reasonable rule or regulation of the
Board, the Company's Chief Executive Officer or the Recipient's superiors that results in material damage to the 

17

 

Company
or an Affiliated Entity or which, after written notice to do so, the Recipient fails to correct within a reasonable time; (b) any willful misconduct or gross negligence by the Recipient
in the material responsibilities assigned to the Recipient; (c) any willful failure to perform the Recipient's job as required to meet the objectives of the Company and/or an Affiliated Entity;
(d) any wrongful conduct of a Recipient that has a material adverse impact on the Company or an Affiliated Entity or which constitutes a misappropriation of assets of the Company or an
Affiliated Entity; (e) the Recipient's performing services for any other person or entity that competes with the Company and/or an Affiliated Entity while the Recipient is employed by the
Company or an Affiliated Entity, without the express written approval of the Chief Executive Officer of the Company or an Affiliated Entity, as applicable; or (f) any other conduct that the
Administering Body determines constitutes just cause for dismissal; provided, however, that if a Recipient is party to an employment agreement with the Company and/or an Affiliated Entity providing
for just cause dismissal (or some comparable notion) of such Recipient from his or her employment with the Company or an Affiliated Entity, "Just Cause Dismissal" for purposes of this Plan shall have
the same meaning as ascribed thereto or to such comparable notion in such employment agreement. 

        "Non-Employee
Director" means any director of the Company who qualifies as a "non-employee director" within the meaning of Rule 16b-3. 

        "Non-qualified
Stock Option" means a Stock Option that is not an Incentive Stock Option. 

        "Outside
Director" means an "outside director" as defined in the regulations adopted under Section 162(m) of the IRC. 

        "Parent
Corporation" means any parent corporation of the Company as defined in Section 424(e) of the IRC. 

        "Performance-Based
Compensation" means performance-based compensation as described in Section 162(m)4(C) of the IRC. 

        "Performance
Criteria" means the following business criteria with respect to the Company, any Affiliated Entity or any division or operating unit of any thereof: (a) income or net
income, (b) pre-tax income, (c) operating income or net operating income, (d) cash flow,
(e) earnings per share (including earnings before interest, taxes and amortization), (f) return on equity, (g) return on invested capital or assets, (h) cost reductions or
savings, (i) funds from operations, (j) appreciation in the fair market value of Common Stock, (k) earnings before any one or more of the following items: interest, taxes,
depreciation or amortization, (1) book value of Common Stock, (m) total stockholder return, (n) return on capital, (o) return on assets or net assets, or
(p) operating margin. 

        "Permanent
Disability" means that the Recipient becomes physically or mentally incapacitated or disabled so that the Recipient is unable to perform substantially the same services as the
Recipient performed prior to incurring such incapacity or disability (the Administering Body, at its option and the Company's expense, may retain a physician to confirm the existence of such
incapacity or disability, and the determination of such physician shall be binding upon the Company and the Recipient), and such incapacity or disability continues for a period of three consecutive
months or six months in any 12-month period or such other period(s) as may be determined by the Administering Body with respect to any Award, provided that for purposes of determining the
period during which an Incentive Stock Option may be exercised pursuant to Section 5.13(b)(ii) hereof, Permanent Disability shall mean "permanent and total disability" as defined in
Section 22(e) of the IRC. 

        "Person"
means any person, entity or group, within the meaning of Section 13(d) or 14(d) of the Exchange Act, but excluding (a) the Company and its Affiliated Entities,
(b) any employee stock ownership or other employee benefit plan maintained by the Company that is qualified under ERISA, (c) any trustee or other fiduciary holding securities under any
employee benefit plan of the Company or an Affiliated Entity, (d) any company owned, directly or indirectly, by the stockholders of the 

18

 

Company
in substantially the same proportions as their ownership of Common Stock of the Company, or (e) any entity holding non-participating shares of an entity which is a
shareholder of the Company or which owns or controls, directly or indirectly, a shareholder of the Company becomes the "beneficial owner" (as defined in Rule 13d-3 under the Act),
directly or indirectly, of securities of the Company representing fifty percent (50%) or more of the combined voting power of the Company's then outstanding securities. 

        "Plan"
means this 2001 Long Term Incentive Plan of the Company. 

        "Plan
Term" means the period during which this Plan remains in effect (commencing on the Effective Date and ending on the Expiration Date). 

        "Recipient"
means an Eligible Person who has received an Award or Awards under this Plan or any person who is recognized under the Plan as the successor in interest to such Eligible
Person with respect to such Eligible Person's Award. 

        "Reorganization"
means any merger, consolidation, business combination, other reorganization or other similar transaction. 

        "Retirement"
means normal retirement from employment with the Company or an Affiliated Entity in accordance with the retirement policies of the Company or any such Affiliated Entity then
in effect as determined by the Administering Body. 

        "Rule 16b-3"
means Rule 16b-3 under the Exchange Act or any successor or similar rule under the Exchange Act, as the same may be amended from time
to time. 

        "Securities
Act" means the Securities Act of 1933, as amended. 

        "Significant
Shareholder" is an individual who, at the time an Award is granted to such individual under this Plan, owns more than ten percent (10%) of the combined voting power of all
classes of stock of the Company or of any Parent Corporation or Subsidiary Corporation (after application of the attribution rules set forth in Section 424(d) of the IRC). 

        "Stock
Option" or "Option" means a right to purchase stock of the Company granted under Article 6 of this Plan to an Eligible Person. 

        "Stock
Plan Committee" means the committee appointed by the Board to administer this Plan pursuant to Section 4.1. 

        "Subsidiary
Corporation" means any subsidiary corporation of the Company as defined in Section 424(f) of the IRC. 

        "Wei
Zhou Affiliate" means Wei Zhou or any entity controlled by Wei Zhou. 

19

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