Document:

Exhibit 4.1

 

SUBSCRIPTION AGREEMENT

 

SUBSCRIPTION AGREEMENT (this
“Agreement”) made as of the last date set forth on the signature page hereof between Ipsidy Inc., a Delaware corporation
(the “Company”), and the undersigned (the “Subscriber”).

 

WITNESSETH:

 

WHEREAS, the Company is conducting
a private offering (the “Offering”) consisting of up to 20,000,000 shares (the “Shares”) of common stock,
$0.0001 par value per share (“Common Stock”), pursuant to Section 4(2) of the Securities Act of 1933, as amended (the
“Securities Act”) and Rule 506 promulgated thereunder; and

 

WHEREAS, the Subscriber desires
to purchase that number of Shares set forth on the signature page hereof on the terms and conditions hereinafter set forth.

 

NOW, THEREFORE, in consideration
of the premises and the mutual representations and covenants hereinafter set forth, the parties hereto do hereby agree as follows:

 

		I.	SUBSCRIPTION FOR SHARES AND REPRESENTATIONS BY SUBSCRIBER

 

1.1           Subject
to the terms and conditions hereinafter set forth, the Subscriber hereby irrevocably subscribes for and agrees to purchase from
the Company such number of Shares, and the Company agrees to sell to the Subscriber as is set forth on the signature page hereof,
at a per share price equal to $0.20 per Share. The purchase price is payable by wire transfer of immediately available funds or
check payable to the Company to the Company pursuant to the wire instructions set forth on Schedule 1.1.

 

1.2           The
Subscriber recognizes that the purchase of the Shares involves a high degree of risk including, but not limited to, the following:
(a) the Company has limited operating history and requires substantial funds in addition to the proceeds of the Offering; (b) an
investment in the Company is highly speculative, and only investors who can afford the loss of their entire investment should consider
investing in the Company and the Shares; (c) the Subscriber may not be able to liquidate its investment; (d) transferability of
the Shares is extremely limited and no sales of restricted stock may be made until the Company is current in its filings under
the Securities Exchange Act of 1934, as amended (the "Exchange Act"); (e) in the event of a disposition, the Subscriber
could sustain the loss of its entire investment; (f) the Company has not paid any dividends since its inception and does not anticipate
paying any dividends; (g) the Company may issue additional securities in the future which have rights and preferences that are
senior to those of the Common Stock and (h) the Company is not presently current in its filings under the Exchange Act. Without
limiting the generality of the representations set forth in Section 1.5 below, the Subscriber represents that the Subscriber has
carefully reviewed the risk factors described in the Company's filings made under the Exchange Act and the risk factors, which
have been separately delivered to the Subscriber by the Company.

 

     

     

    

 

1.3           The
Subscriber represents that the Subscriber is an “accredited investor” as such term is defined in Rule 501 of Regulation
D (“Regulation D”) promulgated under the Securities Act, as indicated by the Subscriber’s responses to the questions
contained in Article VI hereof, and that the Subscriber is able to bear the economic risk of an investment in the Shares.

 

1.4           The
Subscriber hereby acknowledges and represents that (a) the Subscriber has knowledge and experience in business and financial matters,
prior investment experience, including investment in securities that are non-listed, unregistered and/or not traded on a national
securities exchange nor on the NASDAQ, or the Subscriber has employed the services of a “purchaser representative”
(as defined in Rule 501 of Regulation D), attorney and/or accountant to read all of the documents furnished or made available by
the Company both to the Subscriber and to all other prospective investors in the Shares to evaluate the merits and risks of such
an investment on the Subscriber’s behalf; (b) the Subscriber recognizes the highly speculative nature of this investment;
and (c) the Subscriber is able to bear the economic risk that the Subscriber hereby assumes.

 

1.5           The
Subscriber hereby acknowledges receipt and careful review of this Agreement, including all exhibits thereto, and any documents
which may have been made available upon request as reflected therein (collectively referred to as the “Offering Materials”)
and hereby represents that the Subscriber has been furnished by the Company during the course of the Offering with all information
regarding the Company, the terms and conditions of the Offering and any additional information that the Subscriber has requested
or desired to know, and has been afforded the opportunity to ask questions of and receive answers from duly authorized officers
or other representatives of the Company concerning the Company and the terms and conditions of the Offering.

 

1.6           (a)          In
making the decision to invest in the Shares the Subscriber has relied solely upon the information provided by the Company in the
Offering Materials. To the extent necessary, the Subscriber has retained, at its own expense, and relied upon appropriate professional
advice regarding the investment, tax and legal merits and consequences of this Agreement and the purchase of the Shares hereunder.
The Subscriber disclaims reliance on any statements made or information provided by any person or entity in the course of Subscriber’s
consideration of an investment in the Shares other than the Offering Materials.

 

(b)          The
Subscriber represents that (i) the Subscriber was contacted regarding the sale of the Shares by the Company (or an authorized agent
or representative thereof) with whom the Subscriber had a prior substantial pre-existing relationship and (ii) no Shares were offered
or sold to it by means of any form of general solicitation or general advertising, and in connection therewith, the Subscriber
did not (A) receive or review any advertisement, article, notice or other communication published in a newspaper or magazine or
similar media or broadcast over television or radio, whether closed circuit, or generally available; or (B) attend any seminar
meeting or industry investor conference whose attendees were invited by any general solicitation or general advertising.

 

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1.7           The
Subscriber hereby represents that the Subscriber, either by reason of the Subscriber’s business or financial experience or
the business or financial experience of the Subscriber’s professional advisors (who are unaffiliated with and not compensated
by the Company or any affiliate or selling agent of the Company, directly or indirectly), has the capacity to protect the Subscriber’s
own interests in connection with the transaction contemplated hereby.

 

1.8           The
Subscriber hereby acknowledges that the Offering has not been reviewed by the United States Securities and Exchange Commission
(the “SEC”) nor any state regulatory authority since the Offering is intended to be exempt from the registration requirements
of Section 5 of the Securities Act, pursuant to Regulation D. The Subscriber understands that the Shares have not been registered
under the Securities Act or under any state securities or “blue sky” laws and agrees not to sell, pledge, assign or
otherwise transfer or dispose of the Shares unless they are registered under the Securities Act and under any applicable state
securities or “blue sky” laws or unless an exemption from such registration is available.

 

1.9           The
Subscriber understands that the Shares have not been registered under the Securities Act by reason of a claimed exemption under
the provisions of the Securities Act that depends, in part, upon the Subscriber’s investment intention. In this connection,
the Subscriber hereby represents that the Subscriber is purchasing the Shares for the Subscriber’s own account for investment
and not with a view toward the resale or distribution to others. The Subscriber, if an entity, further represents that it was not
formed for the purpose of purchasing the Shares.

 

1.10         The
Subscriber understands that the Common Stock is quoted on the OTC Markets and that there is a limited market for the Common Stock.
The Subscriber understands that even if a public market develops for the Common Stock, Rule 144 (“Rule 144”) promulgated
under the Securities Act requires for non-affiliates, among other conditions, a holding period prior to the resale (in limited
amounts) of securities acquired in a non-public offering without having to satisfy the registration requirements under the Securities
Act. The Subscriber understands and hereby acknowledges that the Company is under no obligation to register any of the Shares under
the Securities Act or any state securities or “blue sky” laws. The Subscriber understands that the Company must be
current under the Exchange Act for the Subscriber to take advantage of Rule 144. The Subscriber acknowledges that the Company is
not current with its required filing requirements under the Exchange Act.

 

1.11         The
Subscriber consents to the placement of a legend on any certificate or other document evidencing the Shares and any shares of common
stock issuable upon conversion of the Common Stock that such securities have not been registered under the Securities Act or any
state securities or “blue sky” laws and setting forth or referring to the restrictions on transferability and sale
thereof contained in this Agreement. The Subscriber is aware that the Company will make a notation in its appropriate records with
respect to the restrictions on the transferability of such Shares. The legend to be placed on each certificate shall be in form
substantially similar to the following:

 

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“THE SECURITIES REPRESENTED HEREBY HAVE
NOT BEEN REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”) OR ANY STATE SECURITIES
OR “BLUE SKY LAWS,” AND MAY NOT BE OFFERED, SOLD, TRANSFERRED, ASSIGNED, PLEDGED OR HYPOTHECATED ABSENT AN EFFECTIVE
REGISTRATION THEREOF UNDER SUCH ACT OR COMPLIANCE WITH RULE 144 PROMULGATED UNDER SUCH ACT, OR UNLESS THE COMPANY HAS RECEIVED
AN OPINION OF COUNSEL, REASONABLY SATISFACTORY TO THE COMPANY AND ITS COUNSEL, THAT SUCH REGISTRATION IS NOT REQUIRED.”

 

1.12         The
Subscriber understands that the Company will review this Agreement and is hereby given authority by the Subscriber to call Subscriber’s
bank or place of employment or otherwise review the financial standing of the Subscriber; and it is further agreed that the Company,
at its sole discretion, reserves the unrestricted right, without further documentation or agreement on the part of the Subscriber,
to reject or limit any subscription, to accept subscriptions for fractional Shares and to close the Offering to the Subscriber
at any time and that the Company will issue stop transfer instructions to its transfer agent with respect to such Shares.

 

1.13         The
Subscriber hereby represents that the address of the Subscriber furnished by Subscriber on the signature page hereof is the Subscriber’s
principal residence if Subscriber is an individual or its principal business address if it is a corporation or other entity.

 

1.14         The
Subscriber represents that the Subscriber has full power and authority (corporate, statutory and otherwise) to execute and deliver
this Agreement and to purchase the Shares. This Agreement constitutes the legal, valid and binding obligation of the Subscriber,
enforceable against the Subscriber in accordance with its terms.

 

1.15         If
the Subscriber is a corporation, partnership, limited liability company, trust, employee benefit plan, individual retirement account,
Keogh Plan, or other tax-exempt entity, it is authorized and qualified to invest in the Company and the person signing this Agreement
on behalf of such entity has been duly authorized by such entity to do so.

 

1.16         The
Subscriber acknowledges that he, she or it are not registered representative of a Finra member firm or a Finra firm.

 

1.17         The
Subscriber acknowledges that at such time, if ever, as the Shares are registered, sales of the Shares will be subject to state
securities laws. The Subscriber acknowledges that the Company has no obligation to register the Shares for re-sale under the Securities
Act.

 

1.18         (a)          The
Subscriber agrees not to issue any public statement with respect to the Subscriber’s investment or proposed investment in
the Company or the terms of any agreement or covenant between them and the Company without the Company’s prior written consent,
except such disclosures as may be required under applicable law or under any applicable order, rule or regulation.

 

(b)          The
Company agrees not to disclose the names, addresses or any other information about the Subscribers, except as required by law;
provided, that the Company may use the name of the Subscriber for any offering or in any registration statement filed.

 

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1.19         The
Subscriber acknowledges that the Company has engaged Network 1 Financial Securities, Inc., a broker dealer registered with FINRA
(“Network”), as a finder in connection with the sale of the Common Stock and Network shall be entitled to a fee equal
to six (6%) percent of the gross proceeds and, subject to the Company increasing its authorized shares of Common Stock, shares
of Common Stock of the Company equal to the aggregate principal amount of the Common Stock multiplied by five (5%) percent, which
product is divided by $0.20 (the “Network Compensation Shares”). For clarity, Network has agreed and acknowledged that
it will not accept the Network Compensation Shares until such time that the Company has increased its authorized shares of Common
Stock to allow for such issuance

 

1.20         The
Subscriber agrees to hold the Company and its directors, officers, employees, affiliates, controlling persons and agents and their
respective heirs, representatives, successors and assigns harmless and to indemnify them against all liabilities, costs and expenses
incurred by them as a result of (a) any sale or distribution of the Shares by the Subscriber in violation of the Securities Act
or any applicable state securities or “blue sky” laws; or (b) any false representation or warranty or any breach or
failure by the Subscriber to comply with any covenant made by the Subscriber in this Agreement (including the Confidential Investor
Questionnaire contained in Article VI herein) or any other document furnished by the Subscriber to any of the foregoing in connection
with this transaction.

 

		II.	REPRESENTATIONS BY AND COVENANTS OF THE COMPANY

 

The Company hereby represents
and warrants to the Subscriber that:

 

2.1           Organization
and Qualification. The Company and each of its Subsidiaries, if any, is a corporation duly organized, validly existing and
in good standing under the laws of the jurisdiction in which it is incorporated, with full power and authority (corporate and other)
to own, lease, use and operate its properties and to carry on its business as and where now owned, leased, used, operated and conducted.
“Subsidiary” shall mean any corporation or other entity of which at least a majority of the securities or other
ownership interests having ordinary voting power (absolutely or contingently) for the election of directors or other persons performing
similar functions are at the time owned directly or indirectly by the Company and/or any of its other Subsidiaries.

 

2.2           Capitalization.
The capitalization of the Company is as set forth on Schedule 2.2 attached hereto. The authorized, issued and outstanding
capital stock of the Company is as set forth in the reports, schedules, forms, statements and other documents required to be filed
by it with the SEC pursuant to the reporting requirements of the Exchange Act, including material filed pursuant to Section 13(a)
or 15(d) of the Exchange Act (all of the foregoing including filings incorporated by reference therein being referred to herein
as the “Commission Documents”).

 

2.3           Authorization;
Enforcement. The Company has all requisite corporate power and authority to enter into and perform this Agreement.

 

2.4           Acknowledgment
of Dilution. The Company understands and acknowledges the dilutive effect to the Common Stock upon the issuance of the Shares.

 

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2.5           Bad
Actor Representation. None of the Company, any of its predecessors, any affiliated issuer, any director, executive officer,
other officer of the Company participating in the Offering, any beneficial owner of 20% or more of the Company’s outstanding
voting equity securities, calculated on the basis of voting power, nor any promoter (as that term is defined in Rule 405 under
the Securities Act) connected with the Company in any capacity at the time of sale (each, an “Issuer Covered Person”
and, together, “Issuer Covered Persons”) is subject to any of the “Bad Actor” disqualifications described
in Rule 506(d)(1)(i) to (viii) under the Securities Act (a “Disqualification Event”), except for a Disqualification
Event covered by Rule 506(d)(2) or (d)(3). The Company has exercised reasonable care to determine whether any Issuer Covered Person
is subject to a Disqualification Event.

 

2.6           Shell
Company Status. During the previous twelve (12) months, the Company has not been a shell as such term is defined in Rule 144(i)
under the Securities Act.

 

2.7           Commission
Documents, Financial Statements. Except for the amended Form 8-K disclosing the financial statements for Multipay, S.A.,
the amended Form 8-K disclosing the financial statements for Fin Holdings, Inc., the Company's Form 10-Qs for the quarter ended
March 31, 2016, June 30, 2016 and September 30, 2016, the Company has filed all Commission Documents. The SEC has advised that
if the Company does not become current in it filings under the 1934 Act, the Company may be subject, without further notice, to
an administrative proceedings by the Division of Enforcement under Section 12(j) of the 1934 Act to revoke its registration under
the 1934 Act and potentially suspend its trading under Section 12(k) of the 1934 Act.

 

2.8           No
Material Adverse Effect. Since December 31, 2015, neither the Company, nor any Subsidiary has experienced or suffered any Material
Adverse Effect which has not been disclosed in the Commission Documents. For the purposes of this Agreement, “Material
Adverse Effect” means any of (i) a material and adverse effect on the legality, validity or enforceability of this Agreement
or the other Offering Materials, (ii) a material adverse effect on the business, operations, properties, or financial condition
of the Company, its Subsidiaries, individually, or in the aggregate and/or any condition, circumstance, or situation that would
prohibit or otherwise materially interfere with the ability of the Company to perform any of its obligations under this Agreement
or the other Offering Materials in any material respect or (iii) an adverse impairment to the Company’s ability to perform
on a timely basis its obligations under this Agreement or the other Transaction Document.

 

2.9           No
Undisclosed Liabilities. Other than as disclosed in the Commission Documents, to the knowledge of the Company, neither the
Company, nor any Subsidiary has any liabilities, obligations, claims or losses (whether liquidated or unliquidated, secured or
unsecured, absolute, accrued, contingent or otherwise) other than those incurred in the ordinary course of the Company’s
and any Subsidiary’s respective businesses since December 31, 2015 and those which, individually or in the aggregate, do
not have a Material Adverse Effect on the Company and any Subsidiary.

 

2.10         No
Undisclosed Events or Circumstances. To the Company’s knowledge, no event or circumstance has occurred or exists with
respect to the Company or any Subsidiary or their respective businesses, properties, operations or financial condition, which,
under applicable law, rule or regulation, requires public disclosure or announcement by the Company but which has not been so publicly
announced or disclosed.

 

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2.11         Indebtedness.
The Commission Documents set forth all outstanding secured and unsecured Indebtedness of the Company, or for which the Company,
or any Subsidiary have commitments as of the date of the Financial Statements or any subsequent period that would require disclosure.
For the purposes of this Agreement, “Indebtedness” shall mean (a) any liabilities for borrowed money or amounts
owed (other than trade accounts payable incurred in the ordinary course of business), (b) all guaranties, endorsements and other
contingent obligations in respect of Indebtedness of others, whether or not the same should be reflected in the Company’s
consolidated balance sheet (or the Securities thereto), except guaranties by endorsement of negotiable instruments for deposit
or collection or similar transactions in the ordinary course of business; and (c) the present value of any lease payments due under
leases required to be capitalized in accordance with GAAP. Neither the Company, nor any Subsidiary is in default with respect to
any Indebtedness which, individually or in the aggregate, would have a Material Adverse Effect.

 

2.12         Actions
Pending. Except as disclosed in the Commission Documents, there is no action, suit, claim, investigation, arbitration, alternate
dispute resolution proceeding or any other proceeding pending or, to the knowledge of the Company, threatened against or involving
the Company, any Subsidiary (i) which questions the validity of this Agreement or any of the other Offering Materials or the transactions
contemplated hereby or thereby or any action taken or to be taken pursuant hereto or thereto or (ii) involving any of their respective
properties or assets. To the knowledge of the Company, there are no outstanding orders, judgments, injunctions, awards or decrees
of any court, arbitrator or governmental or regulatory body against the Company or any Subsidiary or any of their respective executive
officers or directors in their capacities as such.

 

2.13         Compliance
with Law. The Company and its Subsidiaries have all material franchises, permits, licenses, consents and other governmental
or regulatory authorizations and approvals necessary for the conduct of their respective business as now being conducted by it
unless the failure to possess such franchises, permits, licenses, consents and other governmental or regulatory authorizations
and approvals, individually or in the aggregate, could not reasonably be expected to have a Material Adverse Effect.

 

2.14         Compliance.
The Company: (i) is not in default under or in violation of (and no event has occurred that has not been waived that, with notice
or lapse of time or both, would result in a default by the Company), nor has the Company received notice of a claim that it is
in default under or that it is in violation of, any indenture, loan or credit agreement or any other agreement or instrument to
which it is a party or by which it or any of its properties is bound (whether or not such default or violation has been waived),
(ii) is in violation of any judgment, decree or order of any court, arbitrator or other governmental authority or (iii) is or has
been in violation of any statute, rule, ordinance or regulation of any governmental authority, including without limitation all
foreign, federal, state and local laws relating to taxes, environmental protection, occupational health and safety, product quality
and safety and employment and labor matters, except in each case as could not have or reasonably be expected to result in a Material
Adverse Effect.

 

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2.15         No
Violation. The business of the Company and any Subsidiary is not being conducted in violation of any federal, state, local
or foreign governmental laws, or rules, regulations and ordinances of any governmental entity, except for possible violations which
singularly or in the aggregate could not reasonably be expected to have a Material Adverse Effect. The Company is not required
under federal, state, local or foreign law, rule or regulation to obtain any consent, authorization or order of, or make any filing
or registration with, any court or governmental agency in order for it to execute, deliver or perform any of its obligations under
the Offering Materials, or issue and sell the Common Stock in accordance with the terms hereof or thereof (other than (x) any consent,
authorization or order that has been obtained as of the date hereof, (y) any filing or registration that has been made as of the
date hereof or (z) any filings which may be required to be made by the Company with the SEC or state securities administrators
subsequent to each closing).

 

2.16         No
Conflicts. The execution, delivery and performance of this Agreement and the Offering Materials by the Company and the consummation
by the Company of the transactions contemplated herein and therein do not and will not (i) violate any provision of the Articles
or Bylaws, (ii) conflict with, or constitute a default (or an event which with notice or lapse of time or both would become a default)
under, or give to others any rights of termination, amendment, acceleration or cancellation of, any agreement, mortgage, deed of
trust, indenture, note, bond, license, lease agreement, instrument or obligation to which the Company or any Subsidiary is a party
or by which it or its properties or assets are bound, (iii) create or impose a lien, mortgage, security interest, pledge, charge
or encumbrance (collectively, “Lien”) of any nature on any property of the Company or any Subsidiary under any agreement
or any commitment to which the Company or any Subsidiary is a party or by which the Company, or any Subsidiary is bound or by which
any of its respective properties or assets are bound, or (iv) result in a violation of any federal, state, local or foreign statute,
rule, regulation, order, judgment or decree (including federal and state securities laws and regulations) applicable to the Company
or any Subsidiary or by which any property or asset of the Company, or any Subsidiary are bound or affected, provided, however,
that, excluded from the foregoing in all cases are such conflicts, defaults, terminations, amendments, accelerations, cancellations
and violations as would not, individually or in the aggregate, have a Material Adverse Effect.

 

2.17         Taxes.
Each of the Company and any Subsidiary, to the extent its applicable, has accurately prepared and filed all federal, state and
other tax returns required by law to be filed by it, has paid or made provisions for the payment of all taxes shown to be due other
than payment being contested and all additional assessments, and adequate provisions have been and are reflected in the consolidated
financial statements of the Company for all current taxes and other charges to which the Company, or any Subsidiary, if any, is
subject and which are not currently due and payable. None of the federal income tax returns of the Company have been audited by
the Internal Revenue Service. The Company has no knowledge of any additional assessments, adjustments or contingent tax liability
(whether federal, state or foreign) of any nature whatsoever, whether pending or threatened against the Company or any Subsidiary
for any period, nor of any basis for any such assessment, adjustment or contingency.

 

2.18         Licenses.
Except as otherwise set forth in the Commission Documents, the Company has sufficient licenses, permits and other governmental
authorizations currently required for the conduct of its business or ownership of properties and is in all material respects in
compliance therewith.

 

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2.19         Litigation.
There is no action, suit, proceeding, or investigation (including without limitation any suit, proceeding, or investigation involving
the prior employment of any of the Company’s employees, their use in connection with the Company’s business of any
information or techniques allegedly proprietary to any of their former employers, or their obligations under any agreements with
prior employers) pending or, to the best of the Company’s knowledge, currently threatened before any court, administrative
agency, or other governmental body. The Company is not a party or subject to, and none of its assets is bound by, the provisions
of any order, writ, injunction, judgment, or decree of any court or government agency or instrumentality. There is no action, suit,
or proceeding by the Company currently pending or that the Company intends to initiate.

 

2.20         Disclosure.
The Company has fully provided each Subscriber with all the information that such Subscriber has requested for deciding whether
to purchase the Common Stock and all material information that the Company believes is reasonably necessary to enable a reasonable
Subscriber to make such decision. Neither this Agreement, nor any other agreements, statements or certificates made or delivered
to Subscriber in connection herewith or therewith contains any untrue statement of a material fact or, when taken together, omits
to state a material fact necessary to make the statements herein or therein, in light of the circumstances under which they were
made, not misleading.

 

2.21         Books
and Records Internal Accounting Controls. Except as may have otherwise been disclosed in the Commission Documents, the books
and records of the Company, and any Subsidiary accurately reflect in all material respects the information relating to the business
of the Company and any Subsidiary, the location and collection of their assets, and the nature of all transactions giving rise
to the obligations or accounts receivable of the Company, or any Subsidiary. The Company and any Subsidiary maintain a system of
internal accounting controls sufficient, in the judgment of the Company, to provide reasonable assurance that (i) transactions
are executed in accordance with management’s general or specific authorizations, (ii) transactions are recorded as necessary
to permit preparation of financial statements in conformity with GAAP and to maintain asset accountability, (iii) access to assets
is permitted only in accordance with management’s general or specific authorization and (iv) the recorded accountability
for assets is compared with the existing assets at reasonable intervals and appropriate actions are taken with respect to any differences.

 

2.22         Material
Agreements. Any and all written or oral contracts, instruments, agreements, commitments, obligations, plans or arrangements,
the Company and any Subsidiary is a party to, that a copy of which would be required to be filed with the SEC as an exhibit to
a registration statement (collectively, the “Material Agreements”) if the Company or any Subsidiary were registering
securities under the Securities Act has previously been publicly filed with the SEC in the Commission Documents. Each of the Company
and any Subsidiary has in all material respects performed all the obligations required to be performed by them to date under the
foregoing agreements, have received no notice of default and are not in default under any Material Agreement now in effect the
result of which would cause a Material Adverse Effect.

 

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2.23         Transactions
with Affiliates. Except as set forth in the Commission Documents, there are no loans, leases, or royalty agreements between
(a) the Company, or any Subsidiary on the one hand, and (b) on the other hand, any officer, employee, consultant or director of
the Company or any Subsidiary, or any person owning more than 10% capital stock of the Company, or any Subsidiary, or any member
of the immediate family of such officer, employee, consultant, director or stockholder or any corporation or other entity controlled
by such officer, employee, consultant, director or stockholder, or a member of the immediate family of such officer, employee,
consultant, director or stockholder.

 

2.24         Private
Placement and Solicitation. Assuming the accuracy of the Subscribers’ representations and warranties set forth in Section
1, no registration under the Securities Act is required for the offer and sale of the Common Stock by the Company to the Subscribers
as contemplated hereby. Based in part on the accuracy of the representations of the Subscribers in Section 1, and subject to timely
applicable Form D filings pursuant to Regulation D of the Securities Act with the SEC and pursuant to applicable state securities
laws, the offer, sale and issuance of the Common Stock to be issued pursuant to and in conformity with the terms of this Agreement,
will be issued in compliance with all applicable federal and state securities laws. Neither the Company nor any of its affiliates,
nor any person acting on its or their behalf, has engaged in any form of general solicitation or general advertising (within the
meaning of Regulation D under the Securities Act) in connection with the offer or sale of any of the Common Stock.

 

2.25         Governmental
Approvals. Except for the filing of any notice prior or subsequent to each closing that may be required under applicable state
and/or federal securities laws (which if required, shall be filed on a timely basis), including the filing of a Form D, no authorization,
consent, approval, license, exemption of, filing or registration with any court or governmental department, commission, board,
bureau, agency or instrumentality, domestic or foreign, is or will be necessary for, or in connection with, the execution or delivery
of the Common Stock, or for the performance by the Company of its obligations under this Agreement and the Offering Materials.

 

2.26         Employees.
The Company does not have a collective bargaining arrangements covering any of its employees. A description of the employment contracts
with executive officers are set forth in the Commission Documents. Except as disclosed in the Commission Documents, since December
31, 2015, no officer, consultant or key employee of the Company or any Subsidiary whose termination, either individually or in
the aggregate, would have a Material Adverse Effect, has terminated or, to the knowledge of the Company, has any present intention
of terminating his or her employment or engagement with the Company or any Subsidiary.

 

2.27         Investment
Company. The Company is not an “investment company” within the meaning of such term under the Investment Company
Act of 1940, as amended, and the rules and regulations of the SEC thereunder.

 

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2.28         Intellectual
Property. Each of the Company and any Subsidiary, owns or has the lawful right to use all patents, trademarks, domain names
(whether or not registered) and any patentable improvements or copyrightable derivative works thereof, websites and intellectual
property rights relating thereto, service marks, trade names, copyrights, licenses and authorizations, if any, and all rights with
respect to the foregoing, if any, which are necessary for the conduct of their respective business as now conducted without any
conflict with the rights of others, except where the failure to so own or possess would not have a Material Adverse Effect

 

2.29         Title
to Assets. Except as set forth in the Commission Documents, the Company has good and marketable title in fee simple to all
real property owned by it and good and marketable title in all personal property owned by it that is material to the business of
the Company, in each case free and clear of all Liens, except for (i) Liens as do not materially affect the value of such property
and do not materially interfere with the use made and proposed to be made of such property by the Company and (ii) Liens for the
payment of federal, state or other taxes, for which appropriate reserves have been made therefore in accordance with GAAP and,
the payment of which is neither delinquent nor subject to penalties (liens referenced in subsection (i) and (ii) above are collectively
referred to as "Permitted Liens"). Any real property and facilities held under lease by the Company are held by it under
valid, subsisting and enforceable leases with which the Company is in compliance.

 

2.30         Blue
Sky Laws. The Company shall take such action as the Company shall reasonably determine is necessary to qualify the Common Stock
for sale to the Subscribers at the applicable closing pursuant to this Agreement under applicable securities or “blue sky”
laws of the states of the United States (or to obtain an exemption from such qualification), and shall provide evidence of any
such action so taken to each Subscriber.

 

2.31         Use
of Proceeds. The Company shall use the proceeds from the sale of the Common Stock for working capital purposes and/or
for the acquisition or manufacture of unattended payment collection and fare ticketing kiosks pursuant to the Contract for the
Provision of Cash Collection Services entered between ID Global LATAM S.A.S., a wholly owned subsidiary of the Company, and Recaudo
Bogota S.A.S. its and shall not, directly or indirectly, use such proceeds for any distribution or dividend to any shareholder
of the Company. The use of proceeds may change as management deems fit. As is the case with any business, particularly one without
a proven business model, it should be expected that certain expenses unforeseeable to management at this juncture will arise in
the future. There can be no assurance that management’s use of proceeds generated through this Offering will prove optimal
or translate into revenue or profitability for the Company.

 

2.32         Securities
Compliance. The Company shall notify the SEC in accordance with its rules and regulations, of the transactions contemplated
by this Agreement and the Offering Materials, including filing a Form D with respect to the Common Stock, as required under Regulation
D and applicable “blue sky” laws if such Common Stock is offered pursuant to Rule 506 of Regulation D and shall take
all other necessary action and proceedings as may be required and permitted by applicable law, rule and regulation, for the legal
and valid issuance of the Common Stock to the Subscribers.

 

    	 	11	 

     

    

 

2.33         Liquidation.
Subject to the terms of the Offering Materials, the Company covenants that it will take such further action as the Subscribers
may reasonably request, all to the extent required from time to time to enable the Subscribers to sell the Common Stock without
registration under the Securities Act within the limitation of the exemptions provided by Rule 144 promulgated under the Securities
Act, as amended.

 

2.34         Keeping
of Records and Books of Account. The Company shall keep and cause each Subsidiary to keep adequate records and books of account,
in which complete entries will be made in accordance with GAAP consistently applied, reflecting all financial transactions of the
Company and its Subsidiaries, and in which, for each fiscal year, all proper reserves for depreciation, depletion, obsolescence,
amortization, taxes, bad debts and other purposes in connection with its business shall be made.

 

2.35         Intentionally
left blank.

 

2.36         Other
Agreements. The Company shall not and shall cause its Subsidiaries, enter into any agreement the terms of which would restrict
or impair the ability of the Company to perform its obligations under this Agreement and the Offering Materials.

 

2.37         Reporting
Status. Subject to the Company becoming current in its filings under the Exchange Act, so long as a Subscriber beneficially
owns any of the Common Stock, the Company shall timely file all reports required to be filed with the SEC pursuant to the Exchange
Act, and the Company shall not terminate its status as an issuer required to file reports under the Exchange Act even if the Exchange
Act or the rules and regulations thereunder would permit such termination.

 

2.38         Disclosure
of Transaction. The Company shall file with the SEC, a Current Report on Form 8-K describing the material terms of the transactions
contemplated hereby and all material non-public information disclosed to the Subscribers prior to the filing as soon as practicable
after each closing but in no event later than 5:30 P.M. (EDT) on the fourth Business Day following each closing. In the event that
the Company is unable to disclose specific non-public information in the Form 8-K, the Company shall include such information in
its Form 10-Q for the interim period during which the closing contemplated hereby occurs. “Business Day” means
any day during which the NASDAQ (or other principal exchange) shall be open for trading.

 

2.39         Sarbanes-Oxley
Act. The Company shall be in compliance with the applicable provisions of the Sarbanes-Oxley Act of 2002, and the rules and
regulations promulgated thereunder, as required under such Act.

 

2.40         No
Integrated Offerings. The Company shall not make any offers or sales of any security (other than the securities being offered
or sold hereunder) under circumstances that would require registration of the securities being offered or sold hereunder under
the Securities Act.

 

		III.	TERMS OF SUBSCRIPTION

 

3.1           All
funds shall be submitted directly to the Company’s account identified in Schedule 1.1 hereof.

 

3.2           Certificates
representing the Common Stock purchased by the Subscriber pursuant to this Agreement will be prepared for delivery to the Subscriber
within 15 business days following the closing, the timing of which is at the Company’s sole discretion, at which such purchase
takes place. The Subscriber hereby authorizes and directs the Company to deliver the certificates representing the Common Stock
purchased by the Subscriber pursuant to this Agreement directly to the Subscriber’s residential or business address indicated
on the signature page hereto.

 

    	 	12	 

     

    

 

		IV.	CONDITIONS TO OBLIGATIONS OF THE SUBSCRIBERS

 

4.1           The
Subscriber’s obligation to purchase the Shares at the closing at which such purchase is to be consummated is subject to the
fulfillment on or prior to such closing of the following conditions, which conditions may be waived at the option of each Subscriber
to the extent permitted by law:

 

(a)          Covenants.
All covenants, agreements and conditions contained in this Agreement to be performed by the Company on or prior to the date of
such closing shall have been performed or complied with in all material respects.

 

(b)          No
Legal Order Pending. There shall not then be in effect any legal or other order enjoining or restraining the transactions contemplated
by this Agreement.

 

(c)          No
Law Prohibiting or Restricting Such Sale. There shall not be in effect any law, rule or regulation prohibiting or restricting
such sale or requiring any consent or approval of any person, which shall not have been obtained, to issue the Shares (except as
otherwise provided in this Agreement).

 

		V.	MISCELLANEOUS

 

5.1           Any
notice or other communication given hereunder shall be deemed sufficient if in writing and sent by registered or certified mail,
return receipt requested, or delivered by hand against written receipt therefor, addressed as follows:

 

if to the Company,
to it at:

 

Ipsidy Inc.

780 Long Beach
Blvd.

Long Beach, NY
11561

Attention: Stuart
P. Stoller, CFO

Facsimile: 
407-951-8634

 

with a copy to:

 

Stephen M. Fleming, Esq.

Fleming PLLC

49 Front Street, Suite 206

Rockville Centre, NY 11570

Facsimile:  516-977-1209

 

if to the Subscriber, to the Subscriber’s
address indicated on the signature page of this Agreement.

 

Notices shall be deemed to have been given
or delivered on the date of mailing, except notices of change of address, which shall be deemed to have been given or delivered
when received.

 

    	 	13	 

     

    

 

5.2           Except
as otherwise provided herein, this Agreement shall not be changed, modified or amended except by a writing signed by the parties
to be charged, and this Agreement may not be discharged except by performance in accordance with its terms or by a writing signed
by the party to be charged.

 

5.3           Subject
to the provisions of Section 5.10, this Agreement shall be binding upon and inure to the benefit of the parties hereto and to their
respective heirs, legal representatives, successors and assigns. This Agreement sets forth the entire agreement and understanding
between the parties as to the subject matter hereof and merges and supersedes all prior discussions, agreements and understandings
of any and every nature among them.

 

5.4           Upon
the execution and delivery of this Agreement by the Subscriber, this Agreement shall become a binding obligation of the Subscriber
with respect to the purchase of Shares as herein provided, subject, however, to the right hereby reserved by the Company to enter
into the same agreements with other subscribers and to add and/or delete other persons as subscribers.

 

5.5           NOTWITHSTANDING
THE PLACE WHERE THIS AGREEMENT MAY BE EXECUTED BY ANY OF THE PARTIES HERETO, THE PARTIES EXPRESSLY AGREE THAT ALL THE TERMS AND
PROVISIONS HEREOF SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE STATE OF FLORIDA WITHOUT REGARD TO SUCH
STATE’S PRINCIPLES OF CONFLICTS OF LAW. IN THE EVENT THAT A JUDICIAL PROCEEDING IS NECESSARY, THE SOLE FORUM FOR RESOLVING
DISPUTES ARISING OUT OF OR RELATING TO THIS AGREEMENT IS THE COURTS STATE OF FLORIDA IN AND FOR THE COUNTY OF SEMINOLE OR THE FEDERAL
COURTS FOR SUCH STATE AND COUNTY, AND ALL RELATED APPELLATE COURTS, THE PARTIES HEREBY IRREVOCABLY CONSENT TO THE JURISDICTION
OF SUCH COURTS AND AGREE TO SAID VENUE.

 

5.6           In
order to discourage frivolous claims the parties agree that unless a claimant in any proceeding arising out of this Agreement succeeds
in establishing his claim and recovering a judgment against another party (regardless of whether such claimant succeeds against
one of the other parties to the action), then the other party shall be entitled to recover from such claimant all of its/their
reasonable legal costs and expenses relating to such proceeding and/or incurred in preparation therefor.

 

5.7           The
holding of any provision of this Agreement to be invalid or unenforceable by a court of competent jurisdiction shall not affect
any other provision of this Agreement, which shall remain in full force and effect. If any provision of this Agreement shall be
declared by a court of competent jurisdiction to be invalid, illegal or incapable of being enforced in whole or in part, such provision
shall be interpreted so as to remain enforceable to the maximum extent permissible consistent with applicable law and the remaining
conditions and provisions or portions thereof shall nevertheless remain in full force and effect and enforceable to the extent
they are valid, legal and enforceable, and no provisions shall be deemed dependent upon any other covenant or provision unless
so expressed herein.

 

    	 	14	 

     

    

 

5.8           It
is agreed that a waiver by either party of a breach of any provision of this Agreement shall not operate, or be construed, as a
waiver of any subsequent breach by that same party.

 

5.9           The
parties agree to execute and deliver all such further documents, agreements and instruments and take such other and further action
as may be necessary or appropriate to carry out the purposes and intent of this Agreement.

 

5.10         This
Agreement may be executed in two or more counterparts each of which shall be deemed an original, but all of which shall together
constitute one and the same instrument.

 

5.11         Nothing
in this Agreement shall create or be deemed to create any rights in any person or entity not a party to this Agreement.

 

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

 

    	 	15	 

     

    

 

		VI.	CONFIDENTIAL INVESTOR QUESTIONNAIRE

 

6.1           The
Subscriber represents and warrants that he, she or it comes within one category marked below, and that for any category marked,
he, she or it has truthfully set forth, where applicable, the factual basis or reason the Subscriber comes within that category.
ALL INFORMATION IN RESPONSE TO THIS SECTION WILL BE KEPT STRICTLY CONFIDENTIAL. The undersigned agrees to furnish any additional
information which the Company deems necessary in order to verify the answers set forth below.

 

	Category A ___	The undersigned is an individual (not a partnership, corporation, etc.) whose individual net worth, or joint net worth with his or her spouse, presently exceeds $1,000,000.
	 	 
	 	Explanation.  In calculating net worth you may include equity in personal property and real estate (excluding your principal residence), cash, short-term investments, stock and securities.  Equity in personal property and real estate should be based on the fair market value of such property less debt secured by such property.
	 	 
	Category B ___	The undersigned is an individual (not a partnership, corporation, etc.) who had an income in excess of $200,000 in each of the two most recent years, or joint income with his or her spouse in excess of $300,000 in each of those years (in each case including foreign income, tax exempt income and full amount of capital gains and losses but excluding any income of other family members and any unrealized capital appreciation) and has a reasonable expectation of reaching the same income level in the current year.
	 	 
	Category C ___	The undersigned is a director or executive officer of the Company which is issuing and selling the Shares.
	 	 
	Category D ___	The undersigned is a bank; a savings and loan association; insurance company; registered investment company; registered business development company; licensed small business investment company (“SBIC”); or employee benefit plan within the meaning of Title 1 of ERISA and (a) the investment decision is made by a plan fiduciary which is either a bank, savings and loan association, insurance company or registered investment advisor, or (b) the plan has total assets in excess of $5,000,000 or (c) is a self directed plan with investment decisions made solely by persons that are accredited investors. (describe entity)
	 	 
	 	 
	 	 
	Category E ___	The undersigned is a private business development company as defined in section 202(a) (22) of the Investment Advisors Act of 1940. (describe entity) 
	 	 
	 	 

 

    	 	16	 

     

    

 

 

	Category F ___	The undersigned is either a corporation, partnership, Massachusetts business trust, or non-profit organization within the meaning of Section 501(c) (3) of the Internal Revenue Code, in each case not formed for the specific purpose of acquiring the Shares and with total assets in excess of $5,000,000. (describe entity)
	 	 
	 	 
	 	 
	Category G ___	The undersigned is a trust with total assets in excess of $5,000,000, not formed for the specific purpose of acquiring the Shares, where the purchase is directed by a “sophisticated investor” as defined in Regulation 506(b)(2)(ii) under the Act.
	 	 
	Category H ___	The undersigned is an entity (other than a trust) in which all of the equity owners are “accredited investors” within one or more of the above categories.  If relying upon this Category alone, each equity owner must complete a separate copy of this Agreement.  (describe entity)
	 	 
	 	 
	 	 
	Category I ___	The undersigned is not within any of the categories above and is therefore not an accredited investor.
	 	 
	 	The undersigned agrees that the undersigned will notify the Company at any time on or prior to the closing in the event that the representations and warranties in this Agreement shall cease to be true, accurate and complete.

 

6.2           SUITABILITY
(please answer each question)

 

(a)          For
an individual Subscriber, please describe your current employment, including the company by which you are employed and its principal
business:

 

	 
	 
	 

 

(b)          For
an individual Subscriber, please describe any college or graduate degrees held by you:

 

	 
	 
	 

 

(c)          For
all Subscribers, please list types of prior investments:

 

	 
	 
	 

 

    	 	17	 

     

    

 

(d)          For
all Subscribers, please state whether you have participated in other private placements before:

 

	YES_______	NO_______

 

(e)          If
your answer to question (d) above was “YES”, please indicate frequency of such prior participation in private placements
of:

 

	 	 	Public
 Companies	 	 	Private
 Companies	 	 	Public or Private Companies
 with no, or insignificant, 
 assets and operations	 
	Frequently	 	 		 	 	 		 	 	 		 
	Occasionally	 	 	 	 	 	 	 	 	 	 	 	 
	Never	 	 	 	 	 	 	 	 	 	 	 	 

 

(f)          For
individual Subscribers, do you expect your current level of income to significantly decrease in the foreseeable future:

 

	YES_______	NO_______

 

(g)          For
trust, corporate, partnership and other institutional Subscribers, do you expect your total assets to significantly decrease in
the foreseeable future:

 

	YES_______	NO_______

 

(h)          For
all Subscribers, do you have any other investments or contingent liabilities which you reasonably anticipate could cause you to
need sudden cash requirements in excess of cash readily available to you:

 

	YES_______	NO_______

 

(i)          For
all Subscribers, are you familiar with the risk aspects and the non-liquidity of investments such as the securities for which you
seek to subscribe?

 

	YES_______	NO_______

 

(j)          
For all Subscribers, do you understand that there is no guarantee of financial return on this investment and that you run the risk
of losing your entire investment?

 

	YES_______	NO_______

 

6.3           MANNER
IN WHICH TITLE IS TO BE HELD. (circle one)

 

	(a)	Individual Ownership
	(b)	Community Property
	(c)	Joint Tenant with Right of Survivorship (both parties must sign)
	(d)	Partnership*
	(e)	Tenants in Common
	(f)	Company*
	(g)	Trust*
	(h)	Other*

 

    	 	18	 

     

    

 

*If Securities are being
subscribed for by an entity, the attached Certificate of Signatory must also be completed.

 

6.4           The
undersigned is informed of the significance to the Company of the foregoing representations and answers contained in the Confidential
Investor Questionnaire contained in this Article VI and such answers have been provided under the assumption that the Company will
rely on them.

 

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

 

    	 	19	 

     

    

 

	NUMBER OF SHARES _________ X $0.20  = $_________ (the “Purchase Price”)
	 	 	 
	 	 	 
	Signature	 	Signature (if purchasing jointly)
	 	 	 
	 	 	 
	Name Typed or Printed	 	Name Typed or Printed
	 	 	 
	 	 	 
	Title (if Subscriber is an Entity)	 	Title (if Subscriber is an Entity)
	 	 	 
	 	 	 
	Entity Name (if applicable)	 	Entity Name (if applicable
	 	 	 
	 	 	 
	 	 	 
	 	 	 
	Address	 	Address
	 	 	 
	 	 	 
	City, State and Zip Code	 	City, State and Zip Code
	 	 	 
	 	 	 
	Telephone-Business	 	Telephone-Business
	 	 	 
	 	 	 
	Telephone-Residence	 	Telephone-Residence
	 	 	 
	 	 	 
	Facsimile-Business	 	Facsimile-Business
	 	 	 
	 	 	 
	Facsimile-Residence	 	Facsimile-Residence
	 	 	 
	 	 	 
	Tax ID # or Social Security #	 	Tax ID # or Social Security #
	 	 	 
	Name in which securities should be issued:	 	 
	 	 	 
	Dated: _____________ , 2017	 	 

 

This Subscription Agreement
is agreed to and accepted as of ________________ , 2017.

 

	 	IPSIDY INC.
	 	 	 
	 	By:	 	 
	 	Name:	 
	 	Title:	 

 

    	 	20	 

     

    

 

CERTIFICATE OF SIGNATORY

 

(To be completed if Securities are

being subscribed for by an entity)

 

I, ____________________________, am the ____________________________
of

 

__________________________________________
(the “Entity”).

 

I certify that I am empowered and duly authorized
by the Entity to execute and carry out the terms of the Subscription Agreement and to purchase and hold the shares of Common Stock,
and certify further that the Subscription Agreement has been duly and validly executed on behalf of the Entity and constitutes
a legal and binding obligation of the Entity.

 

IN WITNESS WHEREOF, I have set my hand this
________ day of _________________, 2017

 

	 	 	 
	 	(Signature)	 

 

    	 	21	 

     

    

 

SCHEDULES TO SECURITIES PURCHASE AGREEMENT

 

Schedule 1.1

 

	Account Name:	
	Account #:	
	ABA #:	
	Bank:	
	Address:	 

 

Schedule 2.2 Capitalization

 

Capitalization Table

 

	Common Shares Outstanding	 	 	325,309,604	 
	 	 	 	 	 
	 Stock Options	 	 	106,050,000	 
	 	 	 	 	 
	Warrants	 	 	47,538,697	 
	 	 	 	 	 
	 	 	 	478,898,301	 

 

Note - The above does not include 20,000,000 shares of restricted
stock awarded to two executives, which shall be issued upon the Company increasing its authorized shares of Common Stock.

 

    	 	22lone-ex101_477.htm

Exhibit 10.1 

 

 

 

LONESTAR RESOURCES US INC. 

AMENDED AND RESTATED 

2016 INCENTIVE PLAN 

ARTICLE I. 

PURPOSE 

This Plan is a restatement of the Lonestar Resources US Inc. 2016 Incentive Plan, which was adopted by the Board on March 22, 2016 as a successor to the Lonestar Resources Limited 2012 Employee Share Option Plan for use following the re-domiciliation of Lonestar Resources Limited to the United States by means of the Company’s acquisition of Lonestar Resources Limited. The Plan’s purpose is to enhance the Company’s ability to attract, retain and motivate persons who make (or are expected to make) important contributions to the Company by providing these individuals with equity ownership and other incentive opportunities. Capitalized terms used in the Plan are defined in Article XI. 

ARTICLE II. 

ELIGIBILITY 

Service Providers are eligible to be granted Awards under the Plan, subject to the limitations described herein. 

ARTICLE III. 

ADMINISTRATION AND DELEGATION 

3.1 Administration. The Plan is administered by the Administrator. The Administrator has authority to determine which Service Providers receive Awards, grant Awards and set Award terms and conditions, subject to the conditions and limitations in the Plan. The Administrator also has the authority to take all actions and make all determinations under the Plan, to interpret the Plan and Award Agreements and to adopt, amend and repeal Plan administrative rules, guidelines and practices as it deems advisable. The Administrator may correct defects and ambiguities, supply omissions and reconcile inconsistencies in the Plan or any Award as it deems necessary or appropriate to administer the Plan and any Awards. The Administrator’s determinations under the Plan are in its sole discretion and will be final and binding on all persons having or claiming any interest in the Plan or any Award. 

3.2 Appointment of Committees. To the extent Applicable Laws permit, the Board may delegate any or all of its powers under the Plan to one or more Committees or officers of the Company or any of its Subsidiaries. The Board may abolish any Committee or re-vest in itself any previously delegated authority at any time. 

ARTICLE IV. 

STOCK AVAILABLE FOR AWARDS 

4.1 Number of Shares. Subject to adjustment under Article VIII and the terms of this Article IV, Awards may be made under the Plan covering up to the Overall Share Limit. Shares issued under the Plan may consist of authorized but unissued Shares, Shares purchased on the open market or treasury Shares. 

4.2 Share Recycling. If all or any part of an Award (including for the avoidance of doubt an Award granted prior to the Restatement) expires, lapses or is terminated, exchanged for cash, surrendered, repurchased, canceled 

 

1 

without having been fully exercised or forfeited, in any case, in a manner that results in the Company acquiring Shares covered by the Award at a price not greater than the price (as adjusted to reflect any Equity Restructuring) paid by the Participant for such Shares or not issuing any Shares covered by the Award, the unused Shares covered by the Award will, as applicable, become or again be available for Award grants under the Plan. Further, Shares delivered (either by actual delivery or attestation) to the Company by a Participant to satisfy the applicable exercise or purchase price of an Award and/or to satisfy any applicable tax withholding obligation (including Shares retained by the Company from the Award being exercised or purchased and/or creating the tax obligation) will, as applicable, become or again be available for Award grants under the Plan. The payment of Dividend Equivalents in cash in conjunction with any outstanding Awards shall not count against the Overall Share Limit.

4.3 Incentive Stock Option Limitations. Notwithstanding anything to the contrary herein, no more than 1,500,000 Shares may be issued pursuant to the exercise of Incentive Stock Options. 

4.4 Substitute Awards. In connection with an entity’s merger or consolidation with the Company or the Company’s acquisition of an entity’s property or stock, the Administrator may grant Awards in substitution for any options or other stock or stock-based awards granted before such merger or consolidation by such entity or its affiliate. Substitute Awards may be granted on such terms as the Administrator deems appropriate, notwithstanding limitations on Awards in the Plan. Substitute Awards will not count against the Overall Share Limit (nor shall Shares subject to a Substitute Award be added to the Shares available for Awards under the Plan as provided above), except that Shares acquired by exercise of substitute Incentive Stock Options will count against the maximum number of Shares that may be issued pursuant to the exercise of Incentive Stock Options under the Plan. Additionally, in the event that a company acquired by the Company or any Subsidiary or with which the Company or any Subsidiary combines has shares available under a pre-existing plan approved by stockholders and not adopted in contemplation of such acquisition or combination, the shares available for grant pursuant to the terms of such pre-existing plan (as adjusted, to the extent appropriate, using the exchange ratio or other adjustment or valuation ratio or formula used in such acquisition or combination to determine the consideration payable to the holders of common stock of the entities party to such acquisition or combination) may be used for Awards under the Plan and shall not reduce the Shares authorized for grant under the Plan (and Shares subject to such Awards shall not be added to the Shares available for Awards under the Plan as provided above); provided that Awards using such available shares shall not be made after the date awards or grants could have been made under the terms of the pre-existing plan, absent the acquisition or combination, and shall only be made to individuals who were not Employees or Directors prior to such acquisition or combination. 

4.5 Non-Employee Director Compensation. Notwithstanding any provision to the contrary in the Plan, the Administrator may establish compensation for non-employee Directors from time to time, subject to the limitations in the Plan. The Administrator will from time to time determine the terms, conditions and amounts of all such non-employee Director compensation in its discretion and pursuant to the exercise of its business judgment, taking into account such factors, circumstances and considerations as it shall deem relevant from time to time, provided that the sum of any cash compensation, or other compensation, and the value (determined as of the grant date in accordance with Financial Accounting Standards Board Accounting Standards Codification Topic 718, or any successor thereto) of Awards granted to a non-employee Director as compensation for services as a non-employee Director during any fiscal year of the Company may not exceed $500,000 increased to $1,000,000 in the fiscal year of his or her initial service as a non-employee Director. The Administrator may make exceptions to this limit for individual non-employee Directors in extraordinary circumstances, as the Administrator may determine in its discretion, provided that the non-employee Director receiving such additional compensation may not participate in the decision to award such compensation or in other contemporaneous compensation decisions involving non-employee Directors. 

 

2 

ARTICLE V. 

STOCK OPTIONS AND STOCK APPRECIATION RIGHTS 

5.1 General. The Administrator may grant Options or Stock Appreciation Rights to Service Providers subject to the limitations in the Plan, including any limitations in the Plan that apply to Incentive Stock Options. The Administrator will determine the number of Shares covered by each Option and Stock Appreciation Right, the exercise price of each Option and Stock Appreciation Right and the conditions and limitations applicable to the exercise of each Option and Stock Appreciation Right. A Stock Appreciation Right will entitle the Participant (or other person entitled to exercise the Stock Appreciation Right) to receive from the Company upon exercise of the exercisable portion of the Stock Appreciation Right an amount determined by multiplying the excess, if any, of the Fair Market Value of one Share on the date of exercise over the exercise price per Share of the Stock Appreciation Right by the number of Shares with respect to which the Stock Appreciation Right is exercised, subject to any limitations of the Plan or that the Administrator may impose and payable in cash, Shares valued at Fair Market Value or a combination of the two as the Administrator may determine or provide in the Award Agreement. 

5.2 Exercise Price. The Administrator will establish each Option’s and Stock Appreciation Right’s exercise price and specify the exercise price in the Award Agreement. The exercise price will not be less than 100% of the Fair Market Value on the grant date of the Option or Stock Appreciation Right. Notwithstanding the foregoing, if on the last day of the term of an Option or Stock Appreciation Right the Fair Market Value of one Share exceeds the applicable exercise or base price per Share, the Participant has not exercised the Option or Stock Appreciation Right and remains employed by the Company or one of its Subsidiaries and the Option or Stock Appreciation Right has not expired, the Option or Stock Appreciation Right shall be deemed to have been exercised by the Participant on such day with payment made by withholding Shares otherwise issuable in connection with its exercise. In such event, the Company shall deliver to the Participant the number of Shares for which the Option or Stock Appreciation Right was deemed exercised, less the number of Shares required to be withheld for the payment of the total purchase price and required withholding taxes; provided, however, any fractional Share shall be settled in cash.

5.3 Duration. Each Option or Stock Appreciation Right will be exercisable at such times and as specified in the Award Agreement, provided that the term of an Option or Stock Appreciation Right will not exceed ten years. Notwithstanding the foregoing and unless determined otherwise by the Company, in the event that on the last business day of the term of an Option or Stock Appreciation Right (other than an Incentive Stock Option) (i) the exercise of the Option or Stock Appreciation Right is prohibited by Applicable Law, as determined by the Company, or (ii) Shares may not be purchased or sold by the applicable current or former Service Provider due to any Company insider trading policy (including blackout periods) or a “lock-up” agreement undertaken in connection with an issuance of securities by the Company, the term of the Option or Stock Appreciation Right shall be extended for a period of thirty (30) days following the end of the legal prohibition, black-out period or lock-up agreement, as determined by the Company; provided, however, in no event shall the extension last beyond the ten year term of the applicable Option or Stock Appreciation Right unless the exercise would violate an Applicable Law. Notwithstanding the foregoing, if the Participant, prior to the end of the term of an Option or Stock Appreciation Right, violates the non-competition, non-solicitation or confidentiality provisions of any employment contract, confidentiality and nondisclosure agreement or other agreement between the Participant and the Company or any of its Subsidiaries, the right to exercise the Option or Stock Appreciation Right, as applicable, may be terminated by the Company and the Company may suspend the Participant’s right to exercise the Option or Stock Appreciation Right when it reasonably believes that the Participant has participated in any such violation. In addition, if, prior to the end of the term of an Option or Stock Appreciation Right, the Participant is given notice by the Company or any of its Subsidiaries of the termination of his or her employment or other relationship by the Company or any of its Subsidiaries for Cause, and the effective date of such employment or other termination is subsequent to the date of the delivery of such notice, the right to exercise the Option or Stock Appreciation Right, as applicable, shall be suspended from the time of the delivery of such notice until the earlier of (i) such time as it is determined or otherwise agreed that the Participant’s employment 

 

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or other relationship shall not be terminated for Cause as provided in such notice or (ii) the effective date of such termination of employment or other relationship (in which case the right to exercise the Option or Stock Appreciation Right, as applicable, shall terminate immediately upon the effective date of such termination of employment or other relationship). 

5.4 Exercise. Options and Stock Appreciation Rights may be exercised by delivering to the Company a written notice of exercise, in a form the Administrator approves (which may be electronic), signed by the person authorized to exercise the Option or Stock Appreciation Right, together with, as applicable, payment in full (i) as specified in Section 5.5 for the number of Shares for which the Award is exercised and (ii) as specified in Section 9.5 for any applicable taxes. Unless the Administrator otherwise determines, an Option or Stock Appreciation Right may not be exercised for a fraction of a Share. 

5.5 Payment Upon Exercise. Subject to Section 10.8, any Company insider trading policy (including blackout periods) and Applicable Laws, the exercise price of an Option must be paid by: 

(a) cash, wire transfer of immediately available funds or by check payable to the order of the Company; provided, that, the Company may limit the use of one of the foregoing exercise methods if one or more of the exercise methods below is permitted; 

(b) if there is a public market for Shares at the time of exercise, unless the Company otherwise determines, (A) delivery (including telephonically to the extent permitted by the Company) of a notice that the Participant has placed a market sell order with a broker acceptable to the Company with respect to Shares then issuable upon exercise of the Option and that the broker has been directed to deliver promptly to the Company sufficient funds to pay the exercise price, or (B) the Participant’s delivery to the Company of a copy of irrevocable and unconditional instructions to a broker acceptable to the Company to deliver promptly to the Company cash or a check sufficient to pay the exercise price; provided that such amount is paid to the Company at such time as may be required by the Administrator;

(c) to the extent permitted by the Administrator, delivery (either by actual delivery or attestation) of Shares owned by the Participant valued at their Fair Market Value; 

(d) to the extent permitted by the Administrator, surrendering Shares then issuable upon the Option’s exercise valued at their Fair Market Value on the exercise date; 

(e) to the extent permitted by the Administrator, delivery of a promissory note or any other property that the Administrator determines is good and valuable consideration; or 

(f) to the extent permitted by the Company, any combination of the above payment forms approved by the Administrator. 

ARTICLE VI. 

RESTRICTED STOCK; RESTRICTED STOCK UNITS 

6.1 General. The Administrator may grant Restricted Stock, or the right to purchase Restricted Stock, to any Service Provider, subject to forfeiture or the Company’s right to repurchase all or part of such shares at their issue price or other stated or formula price from the Participant if conditions the Administrator specifies in the Award Agreement are not satisfied before the end of the applicable restriction period or periods that the Administrator establishes for such Award. In addition, the Administrator may grant to Service Providers Restricted Stock Units, which may be subject to vesting and forfeiture conditions during the applicable restriction period or periods, as set forth in an Award Agreement. The Administrator will determine and set forth in the Award Agreement the terms and conditions for each Restricted Stock and Restricted Stock Unit Award, subject to the conditions and limitations contained in the Plan. 

 

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6.2 Restricted Stock. 

(a) Dividends. Participants holding shares of Restricted Stock will be entitled to all ordinary cash dividends paid with respect to such Shares, unless the Administrator provides otherwise in the Award Agreement. In addition, unless the Administrator provides otherwise, if any dividends or distributions are paid in Shares, or consist of a dividend or distribution to holders of Common Stock of property other than an ordinary cash dividend, the Shares or other property will be subject to the same restrictions on transferability and forfeitability as the shares of Restricted Stock with respect to which they were paid.

(b) Stock Certificates. The Company may require that the Participant deposit in escrow with the Company (or its designee) any stock certificates issued in respect of shares of Restricted Stock, together with a stock power endorsed in blank. 

6.3 Restricted Stock Units. 

(a) Settlement. The Administrator may provide that settlement of Restricted Stock Units will occur upon or as soon as reasonably practicable after the Restricted Stock Units vest or will instead be deferred, on a mandatory basis or at the Participant’s election, in a manner intended to comply with Section 409A. 

(b) Stockholder Rights. A Participant will have no rights of a stockholder with respect to Shares subject to any Restricted Stock Unit unless and until the Shares are delivered in settlement of the Restricted Stock Unit. 

(c) Dividend Equivalents. If the Administrator provides, a grant of Restricted Stock Units may provide a Participant with the right to receive Dividend Equivalents. Dividend Equivalents may be paid currently or credited to an account for the Participant, settled in cash or Shares and subject to the same restrictions on transferability and forfeitability as the Restricted Stock Units with respect to which the Dividend Equivalents are granted and subject to other terms and conditions as set forth in the Award Agreement.

ARTICLE VII. 

OTHER STOCK OR CASH BASED AWARDS 

Other Stock or Cash Based Awards may be granted to Participants, including Awards entitling Participants to receive Shares to be delivered in the future and including annual or other periodic or long-term cash bonus awards (whether based on specified Performance Criteria or otherwise), in each case subject to any conditions and limitations in the Plan. Such Other Stock or Cash Based Awards will also be available as a payment form in the settlement of other Awards, as standalone payments and as payment in lieu of compensation to which a Participant is otherwise entitled. Other Stock or Cash Based Awards may be paid in Shares, cash or other property, as the Administrator determines. Subject to the provisions of the Plan, the Administrator will determine the terms and conditions of each Other Stock or Cash Based Award, including any purchase price, performance goal (which may be based on the Performance Criteria), transfer restrictions, and vesting conditions, which will be set forth in the applicable Award Agreement. 

ARTICLE VIII. 

ADJUSTMENTS FOR CHANGES IN COMMON STOCK 

AND CERTAIN OTHER EVENTS 

8.1 Equity Restructuring. In connection with any Equity Restructuring, notwithstanding anything to the contrary in this Article VIII, the Administrator will equitably adjust each outstanding Award as it deems appropriate to reflect the Equity Restructuring, which may include adjusting the number and type of securities subject to each outstanding Award and/or the Award’s exercise price or grant price (if applicable), granting new 

 

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Awards to Participants, and making a cash payment to Participants. The adjustments provided under this Section 8.1 will be nondiscretionary and final and binding on the affected Participant and the Company; provided that the Administrator will determine whether an adjustment is equitable. 

8.2 Corporate Transactions. In the event of any dividend or other distribution (whether in the form of cash, Common Stock, other securities, or other property), reorganization, merger, consolidation, combination, amalgamation, repurchase, recapitalization, liquidation, dissolution, or sale, transfer, exchange or other disposition of all or substantially all of the assets of the Company, or sale or exchange of Common Stock or other securities of the Company, Change in Control, issuance of warrants or other rights to purchase Common Stock or other securities of the Company, other similar corporate transaction or event, other unusual or nonrecurring transaction or event affecting the Company or its financial statements or any change in any Applicable Laws or accounting principles, the Administrator, on such terms and conditions as it deems appropriate, either by the terms of the Award or by action taken prior to the occurrence of such transaction or event (except that action to give effect to a change in Applicable Law or accounting principles may be made within a reasonable period of time after such change) and either automatically or upon the Participant’s request, is hereby authorized to take any one or more of the following actions whenever the Administrator determines that such action is appropriate in order to (x) prevent dilution or enlargement of the benefits or potential benefits intended by the Company to be made available under the Plan or with respect to any Award granted or issued under the Plan, (y) to facilitate such transaction or event or (z) give effect to such changes in Applicable Laws or accounting principles:

(a) To provide for the cancellation of any such Award in exchange for either an amount of cash or other property with a value equal to the amount that could have been obtained upon the exercise or settlement of the vested portion of such Award or realization of the Participant’s rights under the vested portion of such Award, as applicable; provided that, if the amount that could have been obtained upon the exercise or settlement of the vested portion of such Award or realization of the Participant’s rights, in any case, is equal to or less than zero, then the Award may be terminated without payment;

(b) To provide that such Award shall vest and, to the extent applicable, be exercisable as to all shares covered thereby, notwithstanding anything to the contrary in the Plan or the provisions of such Award; 

(c) To provide that such Award be assumed by the successor or survivor corporation or entity, or a parent or subsidiary thereof, or shall be substituted for by awards covering the stock of the successor or survivor corporation or entity, or a parent or subsidiary thereof, with appropriate adjustments as to the number and kind of shares and/or applicable exercise or purchase price, in all cases, as determined by the Administrator;

(d) To make adjustments in the number and type of shares of Common Stock (or other securities or property) subject to outstanding Awards and/or with respect to which Awards may be granted under the Plan (including, but not limited to, adjustments of the limitations in Article IV hereof on the maximum number and kind of shares which may be issued) and/or in the terms and conditions of (including the grant or exercise price), and the criteria included in, outstanding Awards;

(e) To replace such Award with other rights or property selected by the Administrator; and/or 

(f) To provide that the Award will terminate and cannot vest, be exercised or become payable after the applicable event. 

8.3 Acceleration Upon a Change in Control. Notwithstanding anything in Section 8.2 to the contrary, and except as may otherwise be provided in any applicable Award Agreement or other written agreement between the Company or any of its Subsidiaries and a Participant, if a Change in Control occurs and Awards are not continued, converted, assumed, or replaced by (i) the Company or a Subsidiary or (ii) a Successor Entity, then immediately prior to the Change in Control such Awards shall become fully exercisable and/or payable, as applicable, and all forfeiture, repurchase and other restrictions on such Awards shall lapse. Upon, or in 

 

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anticipation of, a Change in Control, the Administrator may cause any and all Awards outstanding hereunder to terminate at a specific time in the future, including but not limited to the date of such Change in Control, and shall give each Participant the right to exercise such Awards during a period of time as the Administrator, in its sole and absolute discretion, shall determine. 

8.4 Administrative Stand Still. In the event of any pending stock dividend, stock split, combination or exchange of shares, merger, consolidation or other distribution (other than normal cash dividends) of Company assets to stockholders, or any other extraordinary transaction or change affecting the Shares or the share price of Common Stock, including any Equity Restructuring or any securities offering or other similar transaction, for administrative convenience, the Administrator may refuse to permit the exercise of any Award for up to sixty days before or after such transaction. 

8.5 General. Except as expressly provided in the Plan or the Administrator’s action under the Plan, no Participant will have any rights due to any subdivision or consolidation of Shares of any class, dividend payment, increase or decrease in the number of Shares of any class or dissolution, liquidation, merger, or consolidation of the Company or other corporation. Except as expressly provided with respect to an Equity Restructuring under Section 8.1 above or the Administrator’s action under the Plan, no issuance by the Company of Shares of any class, or securities convertible into Shares of any class, will affect, and no adjustment will be made regarding, the number of Shares subject to an Award or the Award’s grant or exercise price. The existence of the Plan, any Award Agreements and the Awards granted hereunder will not affect or restrict in any way the Company’s right or power to make or authorize (i) any adjustment, recapitalization, reorganization or other change in the Company’s capital structure or its business, (ii) any merger, consolidation dissolution or liquidation of the Company or sale of Company assets or (iii) any sale or issuance of securities, including securities with rights superior to those of the Shares or securities convertible into or exchangeable for Shares. The Administrator may treat Participants and Awards (or portions thereof) differently under this Article VIII. 

ARTICLE IX. 

GENERAL PROVISIONS APPLICABLE TO AWARDS 

9.1 Transferability. Except as the Administrator may determine or provide in an Award Agreement or otherwise for Awards other than Incentive Stock Options, Awards may not be sold, assigned, transferred, pledged or otherwise encumbered, either voluntarily or by operation of law, except by will or the laws of descent and distribution, or, subject to the Administrator’s consent, pursuant to a domestic relations order, and, during the life of the Participant, will be exercisable only by the Participant. References to a Participant, to the extent relevant in the context, will include references to a Participant’s authorized transferee that the Administrator specifically approves. 

9.2 Documentation. Each Award will be evidenced in an Award Agreement, which may be written or electronic, as the Administrator determines. Each Award may contain terms and conditions in addition to those set forth in the Plan. 

9.3 Discretion. Except as the Plan otherwise provides, each Award may be made alone or in addition or in relation to any other Award. The terms of each Award to a Participant need not be identical, and the Administrator need not treat Participants or Awards (or portions thereof) uniformly. 

9.4 Termination of Status. The Administrator will determine how the disability, death, retirement, authorized leave of absence or any other change or purported change in a Participant’s Service Provider status affects an Award and the extent to which, and the period during which, the Participant, the Participant’s legal representative, conservator, guardian or Designated Beneficiary may exercise rights under the Award, if applicable. 

 

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9.5 Withholding. Each Participant must pay the Company, or make provision satisfactory to the Administrator for payment of, any taxes required by law to be withheld in connection with such Participant’s Awards by the date of the event creating the tax liability. The Company may deduct an amount sufficient to satisfy such tax obligations based on the minimum statutory withholding rates (or such other rate as may be determined by the Company after considering any accounting consequences or costs) from any payment of any kind otherwise due to a Participant. Subject to Section 10.8 and any Company insider trading policy (including blackout periods), Participants may satisfy such tax obligations (i) in cash, by wire transfer of immediately available funds, by check made payable to the order of the Company; provided, that, the Company may limit the use of one of the foregoing methods if one or more of the exercise methods below is permitted, (ii) to the extent permitted by the Administrator, in whole or in part by delivery of Shares, including Shares retained from the Award creating the tax obligation, valued at their Fair Market Value, (iii) if there is a public market for Shares at the time the tax obligations are satisfied, unless the Company otherwise determines, (A) delivery (including telephonically to the extent permitted by the Company) of a notice that the Participant has placed a market sell order with a broker acceptable to the Company with respect to Shares then issuable upon exercise of the Award and that the broker has been directed to deliver promptly to the Company sufficient funds to satisfy the tax obligations, or (B) delivery by the Participant to the Company of a copy of irrevocable and unconditional instructions to a broker acceptable to the Company to deliver promptly to the Company cash or a check sufficient to satisfy the tax withholding; provided that such amount is paid to the Company at such time as may be required by the Administrator, or (iv) to the extent permitted by the Company, any combination of the foregoing payment forms approved by the Administrator. If any tax withholding obligation will be satisfied under clause (ii) of the immediately preceding sentence by the Company’s retention of Shares from the Award creating the tax obligation and there is a public market for Shares at the time the tax obligation is satisfied, the Company may elect to instruct any brokerage firm determined acceptable to the Company for such purpose to sell on the applicable Participant’s behalf some or all of the Shares retained and to remit the proceeds of the sale to the Company or its designee, and each Participant’s acceptance of an Award under the Plan will constitute the Participant’s authorization to the Company and instruction and authorization to such brokerage firm to complete the transactions described in this sentence. 

9.6 Amendment of Award; Prohibition on Repricing. The Administrator may amend, modify or terminate any outstanding Award, including by substituting another Award of the same or a different type, changing the exercise or settlement date, and converting an Incentive Stock Option to a Non-Qualified Stock Option. The Participant’s consent to such action will be required unless (i) the action, taking into account any related action, does not materially and adversely affect the Participant’s rights under the Award, or (ii) the change is permitted under Article VIII or pursuant to Section 10.6. Other than pursuant to Sections 8.1 and 8.2, the Administrator shall not without the approval of the Company’s stockholders (a) lower the exercise price per Share of an Option or Stock Appreciation Right after it is granted, (b) cancel an Option or Stock Appreciation Right when the exercise price per Share exceeds the Fair Market Value of one Share in exchange for cash or another Award, or (c) take any other action with respect to an Option or Stock Appreciation Right that the Company determines would be treated as a repricing under the rules and regulations of the principal U.S. national securities exchange on which the Shares are listed. 

9.7 Conditions on Delivery of Stock. The Company will not be obligated to deliver any Shares under the Plan or remove restrictions from Shares previously delivered under the Plan until (i) all Award conditions have been met or removed to the Company’s satisfaction, (ii) as determined by the Company, all other legal matters regarding the issuance and delivery of such Shares have been satisfied, including any applicable securities laws and stock exchange or stock market rules and regulations, and (iii) the Participant has executed and delivered to the Company such representations or agreements as the Administrator deems necessary or appropriate to satisfy any Applicable Laws. The Company’s inability to obtain authority from any regulatory body having jurisdiction, which the Administrator determines is necessary to the lawful issuance and sale of any securities, will relieve the Company of any liability for failing to issue or sell such Shares as to which such requisite authority has not been obtained. 

 

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9.8 Acceleration. The Administrator may at any time provide that any Award will become immediately vested and fully or partially exercisable, free of some or all restrictions or conditions, or otherwise fully or partially realizable. 

9.9 Additional Terms of Incentive Stock Options. The Administrator may grant Incentive Stock Options only to employees of the Company, any of its present or future parent or subsidiary corporations, as defined in Sections 424(e) or (f) of the Code, respectively, and any other entities the employees of which are eligible to receive Incentive Stock Options under the Code. If an Incentive Stock Option is granted to a Greater Than 10% Stockholder, the exercise price will not be less than 110% of the Fair Market Value on the Option’s grant date, and the term of the Option will not exceed five years. All Incentive Stock Options will be subject to and construed consistently with Section 422 of the Code. By accepting an Incentive Stock Option, the Participant agrees to give prompt notice to the Company of dispositions or other transfers (other than in connection with a Change in Control) of Shares acquired under the Option made within (i) two years from the grant date of the Option or (ii) one year after the transfer of such Shares to the Participant, specifying the date of the disposition or other transfer and the amount the Participant realized, in cash, other property, assumption of indebtedness or other consideration, in such disposition or other transfer. Neither the Company nor the Administrator will be liable to a Participant, or any other party, if an Incentive Stock Option fails or ceases to qualify as an “incentive stock option” under Section 422 of the Code. Any Incentive Stock Option or portion thereof that fails to qualify as an “incentive stock option” under Section 422 of the Code for any reason, including becoming exercisable with respect to Shares having a fair market value exceeding the $100,000 limitation under Treasury Regulation Section 1.422-4, will be a Non-Qualified Stock Option. 

ARTICLE X. 

MISCELLANEOUS 

10.1 No Right to Employment or Other Status. No person will have any claim or right to be granted an Award, and the grant of an Award will not be construed as giving a Participant the right to continued employment or any other relationship with the Company. The Company expressly reserves the right at any time to dismiss or otherwise terminate its relationship with a Participant free from any liability or claim under the Plan or any Award, except as expressly provided in an Award Agreement. 

10.2 No Rights as Stockholder; Certificates. Subject to the Award Agreement, no Participant or Designated Beneficiary will have any rights as a stockholder with respect to any Shares to be distributed under an Award until becoming the record holder of such Shares. Notwithstanding any other provision of the Plan, unless the Administrator otherwise determines or Applicable Laws require, the Company will not be required to deliver to any Participant certificates evidencing Shares issued in connection with any Award and instead such Shares may be recorded in the books of the Company (or, as applicable, its transfer agent or stock plan administrator). The Company may place legends on stock certificates issued under the Plan that the Administrator deems necessary or appropriate to comply with Applicable Laws. 

10.3 Effective Date and Term of Plan; Effect of Restatement. The Plan was initially adopted by the Board on March 22, 2016 (the “Effective Date”) and, unless earlier terminated by the Board, will remain in effect until the tenth anniversary of the Effective Date, but Awards previously granted may extend beyond that date in accordance with the Plan. The Restatement shall become effective on the later of the date that it is approved by the Board or the date that it is approved by the Company’s stockholders (the “Restatement Effective Date). From and after the Restatement Effective Date, the Plan, as restated by the Restatement, shall govern all Awards hereunder, including Awards granted prior to the Restatement Effective Date, provided, however, that to the extent that any provision of the Plan as in effect after the Restatement conflicts with a term of the Plan as in effect prior to the Restatement and the Restatement would adversely affect a Participant’s rights with respect to an Award granted prior to the Restatement Effective Date, the terms of the Plan as in effect prior to the Restatement shall control (but only to such extent). 

 

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10.4 Amendment of Plan. The Administrator may amend, suspend or terminate the Plan at any time; provided that no amendment, other than an increase to the Overall Share Limit, may materially and adversely affect any Award outstanding at the time of such amendment without the affected Participant’s consent. No Awards may be granted under the Plan during any suspension period or after Plan termination. Awards outstanding at the time of any Plan suspension or termination will continue to be governed by the Plan and the Award Agreement, as in effect before such suspension or termination. The Board will obtain stockholder approval of any Plan amendment to the extent necessary to comply with Applicable Laws. 

10.5 Provisions for Foreign Participants. The Administrator may modify Awards granted to Participants who are foreign nationals or employed outside the United States or establish subplans or procedures under the Plan to address differences in laws, rules, regulations or customs of such foreign jurisdictions with respect to tax, securities, currency, employee benefit or other matters. 

10.6 Section 409A.

(a) General. The Company intends that all Awards be structured to comply with, or be exempt from, Section 409A, such that no adverse tax consequences, interest, or penalties under Section 409A apply. Notwithstanding anything in the Plan or any Award Agreement to the contrary, the Administrator may, without a Participant’s consent, amend this Plan or Awards, adopt policies and procedures, or take any other actions (including amendments, policies, procedures and retroactive actions) as are necessary or appropriate to preserve the intended tax treatment of Awards, including any such actions intended to (A) exempt this Plan or any Award from Section 409A, or (B) comply with Section 409A, including regulations, guidance, compliance programs and other interpretative authority that may be issued after an Award’s grant date. The Company makes no representations or warranties as to an Award’s tax treatment under Section 409A or otherwise. The Company will have no obligation under this Section 10.6 or otherwise to avoid the taxes, penalties or interest under Section 409A with respect to any Award and will have no liability to any Participant or any other person if any Award, compensation or other benefits under the Plan are determined to constitute noncompliant “nonqualified deferred compensation” subject to taxes, penalties or interest under Section 409A. 

(b) Separation from Service. If an Award constitutes “nonqualified deferred compensation” under Section 409A, any payment or settlement of such Award upon a termination of a Participant’s Service Provider relationship will, to the extent necessary to avoid taxes under Section 409A, be made only upon the Participant’s “separation from service” (within the meaning of Section 409A), whether such “separation from service” occurs upon or after the termination of the Participant’s Service Provider relationship. For purposes of this Plan or any Award Agreement relating to any such payments or benefits, references to a “termination,” “termination of employment” or like terms means a “separation from service.” 

(c) Payments to Specified Employees. Notwithstanding any contrary provision in the Plan or any Award Agreement, any payment(s) of “nonqualified deferred compensation” required to be made under an Award to a “specified employee” (as defined under Section 409A and as the Administrator determines) due to his or her “separation from service” will, to the extent necessary to avoid taxes under Section 409A(a)(2)(B)(i) of the Code, be delayed for the six-month period immediately following such “separation from service” (or, if earlier, until the specified employee’s death) and will instead be paid (as set forth in the Award Agreement) on the day immediately following such six-month period or as soon as administratively practicable thereafter (without interest). Any payments of “nonqualified deferred compensation” under such Award payable more than six months following the Participant’s “separation from service” will be paid at the time or times the payments are otherwise scheduled to be made. 

10.7 Limitations on Liability. Notwithstanding any other provisions of the Plan, no individual acting as a director, officer, other employee or agent of the Company or any Subsidiary will be liable to any Participant, former Participant, spouse, beneficiary, or any other person for any claim, loss, liability, or expense incurred in connection with the Plan or any Award, and such individual will not be personally liable with respect to the Plan 

 

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because of any contract or other instrument executed in his or her capacity as an Administrator, director, officer, other employee or agent of the Company or any Subsidiary. The Company will indemnify and hold harmless each director, officer, other employee and agent of the Company or any Subsidiary that has been or will be granted or delegated any duty or power relating to the Plan’s administration or interpretation, against any cost or expense (including attorneys’ fees) or liability (including any sum paid in settlement of a claim with the Administrator’s approval) arising from any act or omission concerning this Plan unless arising from such person’s own fraud or bad faith. 

10.8 Lock-Up Period. The Company may, at the request of any underwriter representative or otherwise, in connection with registering the offering of any Company securities under the Securities Act, prohibit Participants from, directly or indirectly, selling or otherwise transferring any Shares or other Company securities, whether subject to outstanding Awards or otherwise, during a period of up to one hundred eighty days following the effective date of a Company registration statement filed under the Securities Act, or such longer period as determined by the underwriter (the “Lock-Up Period”). The Company may impose stop-transfer instructions with respect to Shares subject to the foregoing prohibitions until the end of the Lock-Up Period and these restrictions will be binding on the applicable Participant. Further, each Participant shall, if so requested by any underwriter representative, execute a customary lock-up agreement which shall provide such terms as such underwriter representative may in its discretion request, including, without limitation the prohibition on sale and transfer during the Lock-Up Period described in this Section 10.8. 

10.9 Data Privacy. As a condition for receiving any Award, each Participant explicitly and unambiguously consents to the collection, use and transfer, in electronic or other form, of personal data as described in this section by and among the Company and its Subsidiaries and affiliates exclusively for implementing, administering and managing the Participant’s participation in the Plan. The Company and its Subsidiaries and affiliates may hold certain personal information about a Participant, including the Participant’s name, address and telephone number; birthdate; social security, insurance number or other identification number; salary; nationality; job title(s); any Shares held in the Company or its Subsidiaries and affiliates; and Award details, to implement, manage and administer the Plan and Awards (the “Data”). The Company and its Subsidiaries and affiliates may transfer the Data amongst themselves as necessary to implement, administer and manage a Participant’s participation in the Plan, and the Company and its Subsidiaries and affiliates may transfer the Data to third parties assisting the Company with Plan implementation, administration and management. These recipients may be located in the Participant’s country, or elsewhere, and the Participant’s country may have different data privacy laws and protections than the recipients’ country. By accepting an Award, each Participant authorizes such recipients to receive, possess, use, retain and transfer the Data, in electronic or other form, to implement, administer and manage the Participant’s participation in the Plan, including any required Data transfer to a broker or other third party with whom the Company or the Participant may elect to deposit any Shares. The Data related to a Participant will be held only as long as necessary to implement, administer, and manage the Participant’s participation in the Plan. A Participant may, at any time, view the Data that the Company holds regarding such Participant, request additional information about the storage and processing of the Data regarding such Participant, recommend any necessary corrections to the Data regarding the Participant or refuse or withdraw the consents in this Section 10.9 in writing, without cost, by contacting the local human resources representative. The Company may cancel Participant’s ability to participate in the Plan and, in the Administrator’s discretion, the Participant may forfeit any outstanding Awards if the Participant refuses or withdraws the consents in this Section 10.9. For more information on the consequences of refusing or withdrawing consent, Participants may contact their local human resources representative. 

10.10 Severability. If any portion of the Plan or any action taken under it is held illegal or invalid for any reason, the illegality or invalidity will not affect the remaining parts of the Plan, and the Plan will be construed and enforced as if the illegal or invalid provisions had been excluded, and the illegal or invalid action will be null and void. 

10.11 Governing Documents. If any contradiction occurs between the Plan and any Award Agreement or other written agreement between a Participant and the Company (or any Subsidiary) that the Administrator has 

 

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approved, the Plan will govern, unless it is expressly specified in such Award Agreement or other written document that a specific provision of the Plan will not apply. 

10.12 Governing Law. The Plan and all Awards will be governed by and interpreted in accordance with the laws of the State of Delaware, disregarding any state’s choice-of-law principles requiring the application of a jurisdiction’s laws other than the State of Delaware. 

10.13 Claw-back Provisions. All Awards (including any proceeds, gains or other economic benefit the Participant actually or constructively receives upon receipt or exercise of any Award or the receipt or resale of any Shares underlying the Award) will be subject to any Company claw-back policy, including any claw-back policy adopted to comply with Applicable Laws (including the Dodd-Frank Wall Street Reform and Consumer Protection Act and any rules or regulations promulgated thereunder) as set forth in such claw-back policy or the Award Agreement. 

10.14 Titles and Headings. The titles and headings in the Plan are for convenience of reference only and, if any conflict, the Plan’s text, rather than such titles or headings, will control. 

10.15 Conformity to Securities Laws. Participant acknowledges that the Plan is intended to conform to the extent necessary with Applicable Laws. Notwithstanding anything herein to the contrary, the Plan and all Awards will be administered only in conformance with Applicable Laws. To the extent Applicable Laws permit, the Plan and all Award Agreements will be deemed amended as necessary to conform to Applicable Laws. 

10.16 Relationship to Other Benefits. No payment under the Plan will be taken into account in determining any benefits under any pension, retirement, savings, profit sharing, group insurance, welfare or other benefit plan of the Company or any Subsidiary except as expressly provided in writing in such other plan or an agreement thereunder. 

10.17 Broker-Assisted Sales. In the event of a broker-assisted sale of Shares in connection with the payment of amounts owed by a Participant under or with respect to the Plan or Awards, including amounts to be paid under the final sentence of Section 9.5: (a) any Shares to be sold through the broker-assisted sale will be sold on the day the payment first becomes due, or as soon thereafter as practicable; (b) such Shares may be sold as part of a block trade with other Participants in the Plan in which all participants receive an average price; (c) the applicable Participant will be responsible for all broker’s fees and other costs of sale, and by accepting an Award, each Participant agrees to indemnify and hold the Company harmless from any losses, costs, damages, or expenses relating to any such sale; (d) to the extent the Company or its designee receives proceeds of such sale that exceed the amount owed, the Company will pay such excess in cash to the applicable Participant as soon as reasonably practicable; (e) the Company and its designees are under no obligation to arrange for such sale at any particular price; and (f) in the event the proceeds of such sale are insufficient to satisfy the Participant’s applicable obligation, the Participant may be required to pay immediately upon demand to the Company or its designee an amount in cash sufficient to satisfy any remaining portion of the Participant’s obligation. 

10.18 Section 162(m) Limitations.

(a) Individual Award Limitations. Notwithstanding any provision in the Plan to the contrary, and subject to adjustment as provided in Article VIII, (i) the maximum aggregate number of Shares with respect to one or more Awards of Options or Stock Appreciation Rights that may be granted to any one person during any fiscal year of the Company shall be 750,000; (ii) the maximum aggregate number of Shares with respect to one or more Awards of Restricted Stock, Restricted Stock Units, or Other Stock or Cash Based Awards that are intended to qualify as “performance-based compensation” within the meaning of Section 162(m) of the Code (“Performance-Based Compensation”) and are denominated in Shares that may be granted to any one person during any fiscal year of the Company shall be 500,000; and (iii) the maximum amount of cash that may be paid in cash to any one person during any fiscal year of the Company with respect to one or more Awards payable in 

 

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cash and not denominated in Shares shall be U.S. $5,000,000; provided, however, that in no event will more than the Overall Share Limit be granted to any one person during any fiscal year of the Company with respect to one or more Awards denominated in Shares. To the extent required by Section 162(m) of the Code, Shares subject to Awards which are canceled shall continue to be counted against the award limits above. Each of the limitations in this Section, other than the Overall Share Limit, shall be multiplied by two (2) with respect to Awards denominated in Shares granted to a Participant and Awards paid in cash to a Participant during the first fiscal year in which the Participant commences employment with the Company and/or its Subsidiaries. 

(b) Committee Composition. To the extent an Award is intended to qualify as Performance-Based Compensation, the Administrator shall be a Committee and it is intended that each member of such Committee will be an “outside director” within the meaning of Section 162(m) of the Code. 

(c) Performance-Based Compensation. The Administrator, in its sole discretion, may determine at the time an Award is granted or at any time thereafter whether such Award is intended to qualify as Performance-Based Compensation. For the avoidance of doubt, nothing herein shall require the Administrator to structure any Awards in a manner intended to constitute Performance-Based Compensation and the Administrator shall be free, in its sole discretion, to grant Awards that are not intended to be Performance-Based Compensation. Notwithstanding any other provision of the Plan and except as otherwise determined by the Administrator, any Award which is intended to qualify as Performance-Based Compensation shall be subject to any additional limitations set forth in Section 162(m) of the Code or any regulations or rulings issued thereunder that are requirements for qualification as Performance-Based Compensation, and the Plan and the applicable Award Agreement shall be deemed amended to the extent necessary to conform to such requirements. In addition, Awards of Restricted Stock, Restricted Stock Units and Other Stock or Cash Based Awards that are intended to qualify as Performance-Based Compensation shall be subject to the following provisions, which shall control over any conflicting provision in the Plan or any Award Agreement: 

(i) To the extent necessary to comply with the requirements of Section 162(m)(4)(C) of the Code, no later than 90 days following the commencement of any performance period or any designated fiscal period or period of service (or such earlier time as may be required under Section 162(m) of the Code), the Administrator shall, in writing, (a) designate the Participant to receive such Award, (b) select the Performance Criteria applicable to the performance period, which Performance Criteria shall be limited to the specific performance goals set forth in the definition of Performance Criteria, (c) establish the performance goals (and any exclusions), and amounts of such Awards, as applicable, which may be earned for such performance period based on the Performance Criteria, and (d) specify the relationship between Performance Criteria and the performance goals and the amounts of such Awards, as applicable, to be earned by each Participant for such performance period. 

(ii) Following the completion of each performance period, the Administrator shall certify in writing whether and the extent to which the applicable performance goals have been achieved for such performance period. In determining the amount earned under such Awards, the Administrator shall have the right to reduce or eliminate (but not to increase) the amount payable at a given level of performance to take into account additional factors that the Administrator may deem relevant, including the assessment of individual or corporate performance for the performance period. 

(iii) Unless otherwise specified by the Administrator at the time of grant, the Performance Criteria with respect to an Award intended to be Performance-Based Compensation payable to a Participant shall be determined on the basis of Applicable Accounting Standards. For this purpose, “Applicable Accounting Standards” means the U.S. Generally Accepted Accounting Principles, International Financial Reporting Standards or other accounting principles or standards applicable to the Company’s financial statements under U.S. federal securities laws. 

(iv) No adjustment or action described in Article VIII or in any other provision of the Plan shall be authorized to the extent that such adjustment or action would cause such Award to fail to so qualify as Performance-Based Compensation, unless the Administrator determines that the Award should not so qualify. 

 

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ARTICLE XI. 

DEFINITIONS 

As used in the Plan, the following words and phrases will have the following meanings: 

11.1 “Administrator” means the Board or a Committee to the extent that the Board’s powers or authority under the Plan have been delegated to such Committee. 

11.2 “Applicable Laws” means the requirements relating to the administration of equity incentive plans under U.S. federal and state securities, tax and other applicable laws, rules and regulations, the applicable rules of any stock exchange or quotation system on which the Common Stock is listed or quoted and the applicable laws and rules of any foreign country or other jurisdiction where Awards are granted. 

11.3 “Award” means, individually or collectively, a grant under the Plan of Options, Stock Appreciation Rights, Restricted Stock, Restricted Stock Units or Other Stock or Cash Based Awards. For the avoidance of doubt, Options granted under the Plan prior to the Restatement shall constitute Awards hereunder 

11.4 “Award Agreement” means a written agreement evidencing an Award, which may be electronic, that contains such terms and conditions as the Administrator determines, consistent with and subject to the terms and conditions of the Plan. 

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

11.6 “Change in Control” means and includes each of the following: 

(a) A transaction or series of transactions occurring after the Effective Date whereby any “person” or related “group” of “persons” (as such terms are used in Sections 13(d) and 14(d)(2) of the Exchange Act) (other than the Company, any of its subsidiaries, an employee benefit plan maintained by the Company or any of its subsidiaries or a “person” that, prior to such transaction, directly or indirectly controls, is controlled by, or is under common control with, the Company) directly or indirectly acquires beneficial ownership (within the meaning of Rule 13d-3 under the Exchange Act) of securities of the Company possessing more than 50% of the total combined voting power of the Company’s securities outstanding immediately after such transaction; or 

(b) During any period of two consecutive years, individuals who, at the beginning of such period, constitute the Board together with any new Director(s) (other than a Director designated by a person who shall have entered into an agreement with the Company to effect a transaction described in subsections (a) or (c)) whose election by the Board or nomination for election by the Company’s stockholders was approved by a vote of at least two-thirds of the Directors then still in office who either were Directors 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 a majority thereof; or 

(c) The consummation by the Company (whether directly involving the Company or indirectly involving the Company through one or more intermediaries) after the Effective Date of (x) a merger, consolidation, reorganization, or business combination or (y) a sale or other disposition of all or substantially all of the Company’s assets in any single transaction or series of related transactions or (z) the acquisition of assets or stock of another entity, in each case other than a transaction: 

(i) which results in the Company’s voting securities outstanding immediately before the transaction continuing to represent (either by remaining outstanding or by being converted into voting securities of the Company or the person that, as a result of the transaction, controls, directly or indirectly, the Company or owns, directly or indirectly, all or substantially all of the Company’s assets or otherwise succeeds to the business of the Company (the Company or such person, the “Successor Entity”)) directly or indirectly, at least a majority of the combined voting power of the Successor Entity’s outstanding voting securities immediately after the transaction, and 

 

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(ii) after which no person or group beneficially owns voting securities representing 50% or more of the combined voting power of the Successor Entity; provided, however, that no person or group shall be treated for purposes of this clause (ii) as beneficially owning 50% or more of the combined voting power of the Successor Entity solely as a result of the voting power held in the Company prior to the consummation of the transaction. 

Notwithstanding the foregoing, if a Change in Control constitutes a payment event with respect to any Award (or portion of any Award) that provides for the deferral of compensation that is subject to Section 409A, to the extent required to avoid the imposition of additional taxes under Section 409A, the transaction or event described in subsection (a), (b) or (c) with respect to such Award (or portion thereof) shall only constitute a Change in Control for purposes of the payment timing of such Award if such transaction also constitutes a “change in control event” as defined in Treasury Regulation Section 1.409A-3(i)(5). 

The Administrator shall have full and final authority, which shall be exercised in its discretion, to determine conclusively whether a Change in Control has occurred pursuant to the above definition, the date of the occurrence of such Change in Control and any incidental matters relating thereto; provided that any exercise of authority in conjunction with a determination of whether a Change in Control is a “change in control event” as defined in Treasury Regulation Section 1.409A-3(i)(5) shall be consistent with such regulation. 

11.7 “Code” means the Internal Revenue Code of 1986, as amended, and the regulations issued thereunder. 

11.8 “Committee” means one or more committees or subcommittees of the Board, which may include one or more Company directors or executive officers, to the extent Applicable Laws permit. To the extent required to comply with the provisions of Rule 16b-3, it is intended that each member of the Committee will be, at the time the Committee takes any action with respect to an Award that is subject to Rule 16b-3, a “non-employee director” within the meaning of Rule 16b-3; however, a Committee member’s failure to qualify as a “non-employee director” within the meaning of Rule 16b-3 will not invalidate any Award granted by the Committee that is otherwise validly granted under the Plan.

11.9 “Common Stock” means the Class A common stock of the Company. 

11.10 “Company” means Lonestar Resources US Inc., a Delaware corporation, or any successor. 

11.11 “Consultant” means any person, including any adviser, engaged by the Company or its parent or Subsidiary to render services to such entity if the consultant or adviser: (i) renders bona fide services to the Company; (ii) renders services not in connection with the offer or sale of securities in a capital-raising transaction and does not directly or indirectly promote or maintain a market for the Company’s securities; and (iii) is a natural person. 

11.12 “Designated Beneficiary” means the beneficiary or beneficiaries the Participant designates, in a manner the Administrator determines, to receive amounts due or exercise the Participant’s rights if the Participant dies or becomes incapacitated. Without a Participant’s effective designation, “Designated Beneficiary” will mean the Participant’s estate. 

11.13 “Director” means a Board member. 

11.14 “Disability” means a permanent and total disability under Section 22(e)(3) of the Code, as amended. 

11.15 “Dividend Equivalents” means a right granted to a Participant under the Plan to receive the equivalent value (in cash or Shares) of dividends paid on Shares. 

11.16 “Employee” means any employee of the Company or its Subsidiaries. 

 

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11.17 “Equity Restructuring” means a nonreciprocal transaction between the Company and its stockholders, such as a stock dividend, stock split, spin-off or recapitalization through a large, nonrecurring cash dividend, that affects the number or kind of Shares (or other Company securities) or the share price of Common Stock (or other Company securities) and causes a change in the per share value of the Common Stock underlying outstanding Awards. 

11.18 “Exchange Act” means the Securities Exchange Act of 1934, as amended. 

11.19 “Fair Market Value” means, as of any date, the value of Common Stock determined as follows: (i) if the Common Stock is listed on any established stock exchange, its Fair Market Value will be the closing sales price for such Common Stock as quoted on such exchange for such date, or if no sale occurred on such date, the last day preceding such date during which a sale occurred, as reported in The Wall Street Journal or another source the Administrator deems reliable; (ii) if the Common Stock is not traded on a stock exchange but is quoted on a national market or other quotation system, the closing sales price on such date, or if no sales occurred on such date, then on the last date preceding such date during which a sale occurred, as reported in The Wall Street Journal or another source the Administrator deems reliable; or (iii) without an established market for the Common Stock, the Administrator will determine the Fair Market Value in its discretion. 

11.20 “Greater Than 10% Stockholder” means an individual then owning (within the meaning of Section 424(d) of the Code) more than 10% of the total combined voting power of all classes of stock of the Company or its parent or subsidiary corporation, as defined in Section 424(e) and (f) of the Code, respectively. 

11.21 “Incentive Stock Option” means an Option intended to qualify as an “incentive stock option” as defined in Section 422 of the Code. 

11.22 “Non-Qualified Stock Option” means an Option not intended or not qualifying as an Incentive Stock Option. 

11.23 “Option” means an option to purchase Shares. 

11.24 “Other Stock or Cash Based Awards” means cash awards, awards of Shares, and other awards valued wholly or partially by referring to, or are otherwise based on, Shares or other property. 

11.25 “Overall Share Limit” means 1,500,000 Shares. 

11.26 “Participant” means a Service Provider who has been granted an Award. 

11.27 “Performance Criteria” mean the criteria (and adjustments) that the Administrator may select for an Award to establish performance goals for a performance period, which may include the following: net earnings (either before or after interest, taxes, depreciation and amortization), sales or revenue, net income (either before or after taxes), operating earnings, cash flow (including, but not limited to, operating cash flow and free cash flow), return on net assets, return on stockholders’ equity, return on assets, return on capital, return on sales, gross or net profit margin, expenses or expense levels, total shareholder return, internal rate of return (IRR), financial ratios (including those measuring liquidity, activity, profitability or leverage), working capital, earnings per Share, price per Share, market capitalization, any GAAP financial performance measures, inventory management, measures related to A/R balance and write-offs, timeliness and/or accuracy of business reporting, approval or implementation of strategic plans, financing and other capital raising transactions, debt levels or reductions, cash levels, acquisition activity, investment sourcing activity, marketing initiatives, projects or processes, achievement of customer satisfaction objectives, net asset value, net asset value per share, capital expenditures, net borrowing, debt leverage levels, credit quality or debt ratings, economic value added, individual business objectives, growth in production, added reserves, growth in reserves, inventory growth, environmental health and safety performance, effectiveness of hedging programs, improvements in internal 

 

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controls and policies, and retention and recruitment of employees, any of which may be measured in absolute terms or as compared to any incremental increase or decrease. Such performance goals also may be based solely by reference to the Company’s performance or the performance of a Subsidiary, division, business segment or business unit of the Company or a Subsidiary, or based upon performance relative to performance of other companies or upon comparisons of any of the indicators of performance relative to performance of other companies. Any performance goals that are financial metrics, may be determined in accordance with U.S. Generally Accepted Accounting Principles (“GAAP”), in accordance with accounting principles established by the International Accounting Standards Board (“IASB Principles”), or may be adjusted when established to include or exclude any items otherwise includable or excludable under GAAP or under IASB Principles. The Committee may provide for exclusion of the impact of an event or occurrence which the Committee determines should appropriately be excluded, including (a) restructurings, discontinued operations, extraordinary items, and other unusual, infrequently occurring or non-recurring charges or events, (b) asset write-downs, (c) litigation or claim judgments or settlements, (d) acquisitions or divestitures, (e) reorganization or change in the corporate structure or capital structure of the Company, (f) an event either not directly related to the operations of the Company, Subsidiary, division, business segment or business unit or not within the reasonable control of management, (g) foreign exchange gains and losses, (h) a change in the fiscal year of the Company, (i) the refinancing or repurchase of bank loans or debt securities, (j) unbudgeted capital expenditures, (k) the issuance or repurchase of equity securities and other changes in the number of outstanding shares, (l) conversion of some or all of convertible securities to Common Stock, (m) any business interruption event, (n) the cumulative effects of tax or accounting changes in accordance with U.S. generally accepted accounting principles, or (o) the effect of changes in other laws or regulatory rules affecting reported results. 

11.28 “Plan” means this Amended and Restated 2016 Incentive Plan. 

11.29 “Restatement” means the restatement of the Plan as described in the first sentence of Article I hereof. 

11.30 “Restricted Stock” means Shares awarded to a Participant under Article VI subject to certain vesting conditions and other restrictions. 

11.31 “Restricted Stock Unit” means an unfunded, unsecured right to receive, on the applicable settlement date, one Share or an amount in cash or other consideration determined by the Administrator to be of equal value as of such settlement date, subject to certain vesting conditions and other restrictions. 

11.32 “Rule 16b-3” means Rule 16b-3 promulgated under the Exchange Act. 

11.33 “Section 409A” means Section 409A of the Code and all regulations, guidance, compliance programs and other interpretative authority thereunder. 

11.34 “Securities Act” means the Securities Act of 1933, as amended. 

11.35 “Service Provider” means an Employee, Consultant or Director. 

11.36 “Shares” means shares of Common Stock. 

11.37 “Stock Appreciation Right” means a stock appreciation right granted under Article V. 

11.38 “Subsidiary” means any entity (other than the Company), whether domestic or foreign, in an unbroken chain of entities beginning with the Company if each of the entities other than the last entity in the unbroken chain beneficially owns, at the time of the determination, securities or interests representing at least 50% of the total combined voting power of all classes of securities or interests in one of the other entities in such chain. 

 

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11.39 “Substitute Awards” shall mean Awards granted or Shares issued by the Company in assumption of, or in substitution or exchange for, awards previously granted, or the right or obligation to make future awards, in each case by a company acquired by the Company or any Subsidiary or with which the Company or any Subsidiary combines. 

11.40 “Termination of Service” means the date the Participant ceases to be a Service Provider. 

* * * * * 

 

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