Document:

Exhibit 10.2

 

OPTEX
SYSTEMS HOLDINGS, INC.

RESTRICTED
STOCK UNIT (RSU) AGREEMENT

 

as of June 15, 2016

 

The parties to this Restricted
Stock Unit (RSU) Agreement (this “Agreement”) are Optex Systems Holdings, Inc., a Delaware corporation, having its
principal place of business in Richardson, TX (the “Company”) and Danny Schoening, an Officer of the Company (the “Participant”).

 

The Company desires to
have the Participant to continue to serve as an Officer of the Company and to provide the Participant with an incentive to put
forth maximum effort for the success of the business.

 

The Company has adopted
the 2016 Restricted Stock Unit Plan (the “Plan”) to attract qualified personnel to accept and to continue to hold positions
as employees with the Company. Capitalized terms used in this Agreement, unless otherwise defined herein, shall have the meanings
given to such terms in the Plan.

 

This Agreement sets forth
the terms and conditions applicable to Restricted Stock Units to purchase shares of the Common Stock of the Company (the “Common
Stock”), awarded to the Participant under the Plan as of the date first above written (the “Award Date”).

 

Accordingly, intending
to be legally bound hereby, the parties agree as follows:

 

ARTICLE I

 

Award of Restricted Stock Units

 

1.1           Subject
to the terms and conditions of this Agreement and the Plan, the Company hereby awards to the Participant as of the Award Date 150,000
Restricted Stock Units.

 

ARTICLE II

 

Vesting, Settlement and Tax Withholding

 

2.1           Unless
sooner vested or terminated pursuant to this Agreement and the Plan, the Restricted Stock Units awarded to the Participant hereunder
shall vest in accordance with the following schedule:

 

	DATE ON AND AFTER WHICH RSU IS VESTED	 	Portion Vested	 
	 	 	 	 
	January 1, 2017	 	 	34	%
	January 1, 2018	 	 	33	%
	January 1, 2019	 	 	33	%

 

     

     

    

 

2.3           The
Company, subject to Committee approval, shall have the right to vest the Restricted Stock Units, in whole or in part, prior to
the time the Restricted Stock Units would otherwise vest under the terms of this Agreement in accordance with the 2016 Restricted
Stock Unit Plan.

 

2.4           Restricted
Stock Units (if not previously cancelled) will be automatically settled and distributed, in accordance with the applicable vesting
schedule within 30 calendar days of vesting. The period from the date of the Award through the date of settlement is referred to
as the "Deferral Period." The Committee may permit the participant to elect to further defer settlement (thereby extending
the Deferral Period), subject to such terms and conditions as the Committee may specify. In addition, unless otherwise determined
by the Committee, if the Committee reasonably determines that any settlement of Restricted Stock Units would result in payment
of compensation to a participant which is not deductible by the Company under Code Section 162(m), such settlement shall be automatically
deferred to the extent necessary to avoid payment of such non-deductible compensation, with this automatic deferral of each Restricted
Stock Unit continuing only until such date as settlement can be effected without loss of deductibility by the Company under Section
162(m).

 

2.5           All
shares of Common Stock received upon vesting and distribution shall be restricted from resale under Section 4(2) of the Securities
Act of 1933 and Rule 144 promulgated thereunder and shall bear an appropriate legend to that effect.

 

2.6           The
total value of the vested shares is taxable as ordinary income for the calendar vesting year. The Company shall notify the Participant
of the amount of withholding tax or other tax, that must be paid under federal and, where applicable, state and local law in connection
with the vesting of the Restricted Stock Units and distribution of shares. For purposes of federal income tax withholding, the
computation will be based on the supplemental federal income tax rate of 25% plus the FICA tax rate of 7.65%. The taxes on the
vested shares are calculated based on the Fair Market Value (FMV) of the vested shares (calculated based on the current market
price of the vested shares as of the vesting date multiplied by the vested share quantity). The FMV is then multiplied against
the federal tax withholding rate of 32.65%. The Participant shall meet his or her withholding requirement (i) by the Company's
withholding of shares of Common Stock issuable or deliverable hereunder “net share holdback” to satisfy the participants
tax withholding requirement, or (ii) by direct payment to the Company by check or cash in the amount of any taxes required to be
withheld with respect to such vested shares. If the participant chooses to make a payment, the participant should advise the company
of his selected method in writing no later than seven (7) days subsequent to the vesting date. Absent written notification of the
participant’s intent to pay by check or cash, the Company shall satisfy the withholding requirement using the “net
share holdback” whereby the calculated tax liability from above is divided by the vested date current market price to determine
the number of shares to be ‘held back’ to cover the federal tax liability. The remaining shares, net of the tax liability
shares, are delivered to the participant.

 

    	 	-2-	 

     

    

 

ARTICLE III

 

Termination of Employment

 

In the event of a participant's Termination of Employment the
following provisions shall apply.

 

3.1           Death,
Permanent Disability or Retirement. In the event of a participant's Termination of Employment due to death, permanent disability
or retirement after attainment of age 65, Restricted Stock Units Awards that would otherwise have vested by the 90th
day subsequent to the termination date, shall become fully vested at the date of such Termination of Employment, and the Deferral
Period applicable to such Restricted Stock Units shall end and such units shall be settled in full by delivery of shares as promptly
as practicable following such Termination of Employment. Any portion of the participant's unvested Restricted Stock Units which
have a vesting date beyond 90 days from the date of such Termination of Employment shall not vest and shall be immediately cancelled
for no value.

 

3.2           Termination
of Employment Other than Death, Permanent Disability or Retirement. For purposes of this Agreement: "Termination of Employment"
means the event by which participant ceases to be employed by the Company or any subsidiary of the Company and, immediately thereafter,
is not employed by or providing substantial services to any of the Company or a subsidiary of the Company. Neither (i) a transfer
of an employee from the Company to a subsidiary or other affiliate of the Company to another, nor (ii) a duly authorized leave
of absence, shall be deemed a Termination of Employment.

 

3.2.1           Involuntary
Termination of Employment – Officers. Involuntary Termination will be deemed to occur upon (i) the Officers involuntary
dismissal or discharge by the Committee, the Company or its subsidiaries or their successors for reasons other than cause or (ii)
such Officers voluntary resignation following (i) a reduction in his or her level of compensation (including base salary, fringe
benefits and any corporate-performance based bonus or incentive programs) by more than ten percent or (ii) a relocation of such
individual’s place of employment by more than fifty (50) miles, provided and only if such reduction or relocation is effected
by the Company or its subsidiaries or their successor without the Officers written consent.

 

In the event of the involuntary termination of an
Officer (Participant) all unvested Restricted Stock Units shall become fully vested at the date of such Termination of Employment,
and the Deferral Period applicable to all Restricted Stock Units shall end and such units shall be settled in full by delivery
of shares, net of any shares withheld to satisfy the officer’s tax requirement, as promptly as practicable following such
Termination of Employment.

 

    	 	-3-	 

     

    

 

3.2.2           Other
Termination of Employment. In the event of the termination of employment of the Participant by the Participant or the Company
and its subsidiaries for any reason whatsoever other than death, permanent disability or retirement (as defined in Section 3.1),
or involuntary termination of an officer (as defined in Section 3.2.1) any Restricted Stock Units that were not vested prior to
the date of such termination of employment shall not vest and shall be immediately cancelled for no value. Any vested but undistributed
Restricted Stock Unit Shares will be distributed as promptly as practicable, net of any shares withheld to satisfy the employee’s
tax requirement.

 

ARTICLE IV

 

Miscellaneous

 

4.1           The
number and kind of shares subject to outstanding Restricted Stock Units and the Restricted Stock Unit price for such shares shall
be appropriately adjusted to reflect any stock dividend, stock split, combination or exchange of shares, merger, consolidation
or other change in capitalization with a similar substantive effect upon the Restricted Stock Units in accordance with the 2016
Restricted Stock Unit Plan.

 

4.2           In
the event of a Change in Control of the Company, as defined by the 2016 Restricted Stock Unit Plan, the Committee shall provide
that one of the following actions, at the Committees discretion, shall be taken as a result, or in anticipation, of any such event
to assure fair and equitable treatment of participants:

 

		(i)	acceleration of vesting of the Restricted Stock Units and/or
acceleration of the termination of the Deferral Period and settlement of Restricted Stock Units under the Plan;

 

		(ii)	offer to purchase any outstanding Restricted Stock Units
under the Plan from the participant or the Trustee for the award's equivalent cash value, as determined by the Committee, as of
the date of the Change in Control or another specified date; or

 

		(iii)	make adjustments or modifications, such as providing for
the assumption of the Restricted Stock Units by an acquirer and conversion of the underlying Common Stock to securities of the
acquirer, as the Committee deems appropriate to maintain and protect the rights and interests of the participants following such
Change in Control.

 

Any such action approved by the Committee
shall be conclusive and binding on the Company, its subsidiaries and all participants.

 

    	 	-4-	 

     

    

 

4.3           The
Board of Directors may amend, suspend or terminate the Plan or the Committee's authority to grant Awards under the 2016 Restricted
Stock Unit Plan without the consent of participants; provided, however, that, without the consent of an affected participant, no
such Board action may materially and adversely affect the rights of such participant under this outstanding Award. The Committee
may amend this outstanding Award without the consent of the affected participant; provided, however, that, without such consent,
no such action may materially and adversely affect the rights of such participant under any outstanding Award. For purposes of
this Section, accelerated settlement of an Award shall not be considered a materially adverse effect on the rights of a participant,
regardless of the tax consequences to such participant.

 

4.4           The
Company may, to the extent deemed necessary or advisable by the Committee, postpone the issuance or delivery of shares or payment
of other benefits under any Award until completion of registration or qualification of the Common Stock or other required action
under any federal or state law, rule or regulation, listing or other required action with respect to any stock exchange or automated
quotation system upon which the Common Stock or other securities of the Company are listed or quoted, or compliance with any other
obligation of the Company, as the Committee may consider appropriate, and may require any participant to make such representations,
furnish such information and comply with or be subject to such other conditions as it may consider appropriate in connection with
the issuance or delivery of shares or payment of other benefits in compliance with applicable laws, rules, and regulations, listing
requirements, or other obligations.

 

4.5           Neither
the Plan nor any action taken hereunder shall be construed as (i) giving any eligible employee or participant the right to continue
in the employ or service of the Company or a subsidiary or affiliate, (ii) interfering in any way with the right of the Company
or a subsidiary or affiliate to terminate such eligible employee's or participant's employment or service at any time, (iii) giving
an eligible employee or participant any claim to be granted any Award under the Plan or to be treated uniformly with other participants
and employees, or (iv) conferring on a participant any of the rights of a stockholder of the Company unless and until the participant
is duly issued or transferred shares of Common Stock in accordance with the terms of an Award. Except as expressly provided in
the Plan and an Award agreement, neither the Plan nor any Award agreement shall confer on any person other than the Company and
the participant any rights or remedies thereunder.

 

4.6           A
Participant shall have no rights as a shareholder with respect to Common Stock covered by a Restricted Stock Units Award until
the Common Shares have been vested and issued in settlement, pursuant to the Award agreement and applicable deferral period. No
participant shall have voting rights, and no adjustment shall be made for dividends in cash or other property or distributions
or other rights with respect to any such common stock for which the record date is prior to the date on which the Participant shall
have become the holder of record of any such shares covered by the Award agreement; provided, however, that Participants
are entitled to share adjustments to reflect capital changes under Section 4.1 and the 2016 Restricted Stock Unit Plan.

 

4.7           No
amounts of income received by the Participant pursuant to this Agreement shall be considered compensation for purposes of any pension
or retirement plan, insurance plan or any other employee benefit plan of the Company or its subsidiaries, unless otherwise provided
in such plan.

 

    	 	-5-	 

     

    

 

4.8           Every notice
or other communication relating to this Agreement shall be in writing and shall be mailed to or delivered to the party for whom
it is intended at such address as may from time to time be designated by it in a notice mailed or delivered to the other party
as herein provided; provided, however, that unless and until some other address be so designated, all notices or
communications by the Participant to the Company shall be mailed or delivered to the CEO of Company at its headquarters in Richardson,
TX and all notices or communications by the Company to Participant may be given to the Participant personally or may be mailed
to the Participant at the Participant’s home address as reflected in the Company’s records.

 

4.9           This
Agreement shall be governed by the laws of the State of Delaware applicable to agreements made and performed wholly within the
State of Delaware (regardless of the laws that might otherwise govern under applicable conflicts of laws principles).

 

4.10         As
used in this Agreement, unless the context otherwise requires (i) references to “Articles” or “Sections”
are to articles or sections of this Agreement, (ii) “hereof”, “hereunder”, “hereunder” and
comparable tends refer to this Agreement in its entirety and not to any particular part of this Agreement, (iii) references to
any gender include references to all genders, (iv) “including” means including without limitation, and (v) headings
of the various articles and sections are for convenience of reference only.

 

4.11        This
Agreement and the 2016 Restricted Stock Unit Plan (the terms of which are incorporated by reference herein) sets forth a complete
understanding between the parties with respect to its subject matter and supersedes all prior and contemporaneous agreements and
understandings with respect thereto. Except as expressly set forth in this Agreement, the Company makes no representations, warranties
or covenants to the Participant with respect to this Agreement or its subject matter, including with respect to (i) the current
or future value of the shares subject to the Restricted Stock Units and (ii) whether the Restricted Stock Unit value is equal to
less than or greater than the fair market value of a share of Common Stock. Any modification, amendment or waiver of this Agreement
will be effective only if it is in writing signed by the Company and the Participant. The failure of any party to enforce at any
time any provision of this Agreement shall not be construed to be a waiver of that or any other provision of this Agreement.

 

By the Participant’s
signature and the signature of the Company’s representative below, the Participant and the Company agree that this Grant
is awarded under and governed by the terms and conditions of the Plan and this Restricted Stock Unit Agreement. The Participant
has reviewed the 2016 Restricted Stock Unit Plan and this Restricted Stock Unit Agreement in their entirety, has had an opportunity
to obtain the advice of counsel prior to executing this Restricted Stock Unit Agreement and fully understands all provisions of
the Plan and this Restricted Stock Unit Agreement. The Participant hereby agrees to accept as binding, conclusive and final all
decisions or interpretations of the Committee upon any questions relating to the Plan and this Restricted Stock Unit Agreement.
The Participant further agrees to notify the Company upon any change in the Participant’s residence address.

 

    	 	-6-	 

     

    

 

IN WITNESS WHEREOF, the
parties hereto have executed this Agreement as of the day and year first above written.

 

	 	OPTEX SYSTEMS HOLDINGS, INC.
	 	 	 
	 	By:	 
	 	 	Name:	 
	 	 	Title:  	 
	 	 	 
	 	PARTICIPANT:
	 	 	 
	 		 
	 	 	Name:	 

 

    	 	-7-Unassociated Document

CONDOR HOSPITALITY TRUST 2016 STOCK PLAN

 

SECTION 1

 

NAME AND PURPOSE

 

1.1           NAME. The name of the plan shall be the Condor Hospitality Trust 2016 Stock Plan (the "Plan").

 

1.2.           PURPOSE OF PLAN. The purpose of the Plan is to foster and promote the long-term financial success of the Company and increase stockholder value by (a) motivating superior performance by means of stock incentives, (b) encouraging and providing for the acquisition of an ownership interest in the Company by Participants and (c) enabling the Company to attract and retain the services of a management team responsible for the long-term financial success of the Company.

 

SECTION 2

 

DEFINITIONS

 

2.1           DEFINITIONS. Whenever used herein, the following terms shall have the respective meanings set forth below:

 

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

 

	
(b)

	
"Award" means any Option, Stock Appreciation Right, Restricted Stock, or Other Stock-Based Award granted under the Plan, including Awards combining two or more types of Awards in a single grant.

 

(c)           "Board" means the Board of Directors of the Company.

 

(d)           "Code" means the Internal Revenue Code of 1986, as amended.

 

	
(e)

	
"Committee" means the Compensation Committee of the Board, or its successor, or such other committee of the Board to which the Board delegates power to act under or pursuant to the provisions of the Plan.

 

	
(f)

	
"Company" means Condor Hospitality Trust, Inc. a Maryland corporation (and any successor thereto) and its Subsidiaries.

 

	
(g)

	
"Eligible Director" means a person who is serving as a member of the Board and who is not an Employee.

 

(h)           "Employee" means any employee of the Company or any of its Subsidiaries.

 

	
(i)

	
"Fair Market Value" means, on any date, the closing price of the Stock as reported on the Nasdaq Stock Exchange (or on such other recognized market or quotation system on which the trading prices of the Stock are traded or quoted at the relevant time) on such date. In the event that there are no Stock transactions reported on such exchange (or such other system) on such date, Fair Market Value shall mean the closing price on the immediately preceding date on which Stock transactions were so reported.

 

	
(j)

	
"Option" means the right to purchase Stock at a stated price for a specified period of time. For purposes of the Plan, an Option may be either (i) an Incentive Stock Option within the meaning of Section 422 of the Code or (ii) a Nonstatutory Stock Option.

 

	
(k)

	
“Other Stock-Based Award” means an award of a share of Stock or units of common stock, including restricted stock units and deferred stock units, to a Participant subject to such terms as the Committee may determine.

 

	
(l)

	
"Participant" means any Employee, Eligible Director or consultant (a non-employee who performs bona fide services for the Company) designated by the Committee to participate in the Plan.

 

	
(m)

	
"Plan" means the Condor Hospitality Trust 2016 Stock Plan, as in effect from time to time.

 

	
(n)

	
"Restricted Stock" shall mean a share of Stock granted to a Participant subject to such restrictions as the Committee may determine.

 

	
(o)

	
“Series D Stock” means the Company’s Series D convertible cumulative preferred stock.

 

(p)           "Stock" means the Common Stock of the Company, par value $0.01per share.

 

	
(q)

	
"Stock Appreciation Right" means the right, subject to such terms and conditions as the Committee may determine, to receive an amount in cash or Stock, as determined by the Committee, equal to the excess of (i) the Fair Market Value, as of the date such Stock Appreciation Right is exercised, of the number shares of Stock covered by the Stock Appreciation Right being exercised over (ii) the aggregate exercise price of such Stock Appreciation Right.

 

	
(r)

	
"Subsidiary" means any corporation or partnership in which the Company owns, directly or indirectly, 50% or more of the total combined voting power of all classes of stock of such corporation or of the capital interest or profits interest of such partnership.

 

2.2           GENDER AND NUMBER. Except when otherwise indicated by the context, words in the masculine gender used in the Plan shall include the feminine gender, the singular shall include the plural, and the plural shall include the singular.

 

SECTION 3

 

ELIGIBILITY AND PARTICIPATION

 

The only persons eligible to participate in the Plan shall be those Participants selected by the Committee.

 

SECTION 4

 

POWERS OF THE COMMITTEE

 

4.1           COMMITTEE MEMBERS. The Plan shall be administered by the Committee comprised of no fewer than two members of the Board. Each Committee member shall satisfy the requirements for (i) an “independent director” for purposes of the Company’s corporate charter, (ii) an “independent director” under rules adopted by the Nasdaq Stock Exchange, (iii) a “non-employee director” for purposes of Rule 16b-3 under the Exchange Act, and (iv) an “outside director” under Section 162(m) of the Code.

 

4.2           POWER TO GRANT. The Committee shall determine the Participants to whom Awards shall be granted, the type or types of Awards to be granted, and the terms and conditions of any and all such Awards. The Committee may establish different terms and conditions for different types of Awards, for different Participants receiving the same type of Awards, and for the same Participant for each Award such Participant may receive, whether or not granted at different times.

 

4.3           ADMINISTRATION. The Committee shall be responsible for the administration of the Plan. The Committee, by majority action thereof, is authorized to prescribe, amend, and rescind rules and regulations relating to the Plan, to provide for conditions deemed necessary or advisable to protect the interests of the Company, and to make all other determinations necessary or advisable for the administration and interpretation of the Plan in order to carry out its provisions and purposes. Determinations, interpretations, or other actions made or taken by the Committee pursuant to the provisions of the Plan shall be final, binding, and conclusive for all purposes and upon all persons.

 

4.4           DELEGATION BY COMMITTEE.  The Committee may, at any time and from time to time, (a) delegate to one or more of its members all or any of its responsibilities and powers, including the responsibilities and authority described under Sections 4.2 and 4.3, and (b) grant authority to Employees or designate Employees of the Company to execute documents on behalf of the Committee or to otherwise assist the Committee in the administration and operating of the Plan.

 

SECTION 5

 

STOCK SUBJECT TO PLAN

 

5.1           NUMBER. The number of shares of Stock subject to Awards under the Plan may not exceed 3,000,000 shares of Stock, provided, however, Awards under this plan may not exceed 250,000 shares of Stock prior to the conversion into Stock of all of the shares the Series D Stock.

 

The shares to be delivered under the Plan may consist, in whole or in part, of treasury Stock or authorized but unissued Stock, not reserved for any other purpose.

 

5.2           AVAILABILITY OF STOCK NOT ISSUED PURSUANT TO AWARDS. Any shares of Stock subject to an Award which for any reason are cancelled, terminated or otherwise settled without the issuance of any Stock shall again be available for Awards under the Plan. Notwithstanding the foregoing, shares of Stock subject to Options or Stock Appreciation Rights shall be deducted from the Plan share reserve based on the gross number of shares of Stock exercised and not deducted based on the net number of shares of Stock delivered; the shares of Stock subject to an Award that are tendered to the Company or retained by the Company to pay the exercise price or withholding taxes shall be deducted from the Plan share reserve and shall not become available again for issuance under the Plan.

 

5.3           ADJUSTMENT IN CAPITALIZATION. In the event of any Stock dividend or Stock split, recapitalization (including, without limitation, the payment of an extraordinary dividend), merger, consolidation, combination, spin-off, distribution of assets to stockholders, exchange of shares, or other similar corporate transaction or event, (i) the aggregate number of shares of Stock available for Awards under Section 5.1 and (ii) the number of shares and exercise price with respect to Options and the number, prices and dollar value of other Awards, shall be appropriately adjusted by the Committee, whose determination shall be conclusive.

 

5.4           DIVIDEND EQUIVALENT RIGHTS. No dividends or dividend equivalents shall be paid on Options or Stock Appreciation Rights. The Committee may at the time of a Restricted Stock or Other Stock-Based Award provide that any dividends declared on common stock or dividend equivalents be (i) paid to the Participant, (ii) accumulated for the benefit of the Participant and paid to the Participant only after the expiration of any restrictions, or (ii) not paid or accumulated.

 

SECTION 6

 

STOCK OPTIONS

 

6.1           GRANT OF OPTIONS. Options may be granted to Participants at such time or times as shall be determined by the Committee. Options granted under the Plan may be of two types: (i) Incentive Stock Options and (ii) Nonstatutory Stock Options. The Committee shall have complete discretion in determining the number of Options, if any, to be granted to a Participant. Each Option shall be evidenced by an Option agreement that shall specify the type of Option granted, the exercise price, the duration of the Option, the number of shares of Stock to which the Option pertains, the exercisability (if any) of the Option in the event of death, retirement, disability or termination of employment, and such other terms and conditions not inconsistent with the Plan as the Committee shall determine. Options may also be granted in replacement of or upon assumption of options previously issued by companies acquired by the Company by merger or stock purchase, and any options so replaced or assumed may have the same terms including exercise price as the options so replaced or assumed; any such options shall not count against the limits established in Section 5.1.

 

6.2           OPTION PRICE. Nonstatutory Stock Options and Incentive Stock Options granted pursuant to the Plan shall have an exercise price which is not less than the Fair Market Value on the date the Option is granted.

 

6.3           EXERCISE OF OPTIONS. Options awarded to a Participant under the Plan shall be exercisable at such times and shall be subject to such restrictions and conditions as the Committee may impose, subject to the Committee's right to accelerate the exercisability of such Option in its discretion. Notwithstanding the foregoing, no Option shall be exercisable for more than ten years after the date on which it is granted.

 

6.4           PAYMENT. The Committee shall establish procedures governing the exercise of Options, which shall require that written notice of exercise be given and that the Option price be paid in full in cash or cash equivalents, including by personal check, at the time of exercise or pursuant to any arrangement that the Committee shall approve. The Committee may, in its discretion, permit a Participant to make payment (i) by tendering, either by actual delivery of shares or by attestation, shares of Stock already owned by the Participant valued at its Fair Market Value on the date of exercise or (ii) by electing to have the Company retain Stock which would otherwise be issued on exercise of the Option, valued at its Fair Market Value on the date of exercise. As soon as practicable after receipt of a written exercise notice and full payment of the exercise price, the Company shall deliver to the Participant a certificate or certificates representing the acquired shares of Stock. The Committee may permit a Participant to elect to pay the exercise price upon the exercise of an Option by irrevocably authorizing a third party to sell shares of Stock (or a sufficient portion of the shares) acquired upon exercise of the Option and remit to the Company a sufficient portion of the sale proceeds to pay the entire exercise price and any required tax withholding resulting from such exercise. The Committee may approve other methods of payment.

 

6.5           INCENTIVE STOCK OPTIONS. Notwithstanding anything in the Plan to the contrary, no term of this Plan relating to Incentive Stock Options shall be interpreted, amended or altered, nor shall any discretion or authority granted under the Plan be so exercised, so as to disqualify the Plan under Section 422 of the Code, or, without the consent of any Participant affected thereby, to cause any Incentive Stock Option previously granted to fail to qualify for the Federal income tax treatment afforded under Section 421 of the Code.

 

6.6           NO REPRICING. Other than in connection with the change in capitalization (as described in Section 5.3 of the Plan), the terms of Awards may not be amended to reduce the exercise price of Options or Stock Appreciation Rights or cancel outstanding Options or Stock Appreciation Rights in exchange for cash, other awards or Options or Stock Appreciation Rights with an exercise price that is less than the exercise price of the original Option or Stock Appreciation Right.

 

6.7           NO RELOAD GRANTS. Options shall not be granted under the Plan in consideration for the delivery of Stock to the Company in payment of the exercise price and/or tax withholding obligation under any other Option.

 

SECTION 7

 

DIRECTOR AWARDS

 

7.1           DIRECTOR AWARDS. Any Award or formula for granting an Award under the Plan made to Eligible Directors shall be approved by the Board. With respect to awards to such directors, all rights, powers and authorities vested in the Committee under the Plan shall instead be exercised by the Board.

 

SECTION 8

 

STOCK APPRECIATION RIGHTS

 

8.1           SAR'S IN TANDEM WITH OPTIONS. Stock Appreciation Rights may be granted to Participants in tandem with any Option granted under the Plan, either at or after the time of the grant of such Option, subject to such terms and conditions, not inconsistent with the provisions of the Plan, as the Committee shall determine. Each Stock Appreciation Right shall only be exercisable to the extent that the corresponding Option is exercisable, and shall terminate upon termination or exercise of the corresponding Option. Upon the exercise of any Stock Appreciation Right, the corresponding Option shall terminate.

 

8.2           OTHER STOCK APPRECIATION RIGHTS. Stock Appreciation Rights may also be granted to Participants separately from any Option, subject to such terms and conditions, not inconsistent with the provisions of the Plan, as the Committee shall determine.

 

8.3           LIMITATIONS. The provisions of Sections 6.2, 6.3, 6.6 and 6.7 of the Plan shall also apply to Stock Appreciation Rights.

 

SECTION 9

 

RESTRICTED STOCK

 

9.1           GRANT OF RESTRICTED STOCK. The Committee may grant Restricted Stock to Participants at such times and in such amounts, and subject to such other terms and conditions not inconsistent with the Plan as it shall determine. Each grant of Restricted Stock shall be subject to such restrictions, which may relate to continued employment with the Company, performance of the Company, or other restrictions, as the Committee may determine. Each grant of Restricted Stock shall be evidenced by a written agreement setting forth the terms of such Award.

 

9.2           REMOVAL OF RESTRICTIONS. The Committee may accelerate or waive such restrictions in whole or in part at any time in its discretion.

 

SECTION 10

 

OTHER STOCK-BASED AWARDS

 

10.1            GENERAL. The Committee may grant Awards of Stock and Awards that are valued in whole or in part by reference to, or are otherwise based on the Fair Market Value of, Shares. Such other stock-based awards shall be in such form, and dependent on such conditions, as the Committee shall determine, including, without limitation, the right to receive or vest with respect to, one or more shares of Stock (or the equivalent cash value of such Stock) upon the completion of a specified period of service, the occurrence of an event, and/or the attainment of performance objectives. Such other stock-based awards may include the awards referenced in Sections 10.2 and 10.3.

 

10.2           RESTRICTED STOCK UNITS. Restricted Stock Units represent an unfunded and unsecured obligation of the Company. Settlement of a Restricted Stock Unit upon expiration of the deferral or vesting period shall be made in Stock or otherwise as determined by the Committee.

 

10.3           PERFORMANCE SHARES. Performance shares are awards the grant, issuance, retention, vesting and/or settlement of which is subject to the satisfaction of one or more of the performance criteria established by the Committee. With respect to Participants covered by any Company executive incentive plan, the performance measures shall be those designated in such executive incentive plan.

 

10.4           DEFERRED STOCK UNITS. Deferred Stock Units shall entitle the Participant to receive shares of Stock (or the equivalent value in cash or other property if so determined by the Committee) at a future time as determined by the Committee or as determined by the Participant within guidelines established by the Committee in the case of voluntary deferral elections.

 

SECTION 11

 

AMENDMENT, MODIFICATION, AND TERMINATION OF PLAN

 

11.1           GENERAL. The Board may from time to time amend, modify or terminate any or all of the provisions of the Plan, subject to the provisions of this Section 11.1. The Board may not change the Plan in a manner which would prevent outstanding Incentive Stock Options granted under the Plan from being Incentive Stock Options without the written consent of the optionees concerned. Furthermore, the Board may not make any amendment which would (i) materially modify the requirements for participation in the Plan, (ii) increase the number of shares of Stock subject to Awards under the Plan pursuant to Section 5.1, (iii) change the minimum exercise price for stock options as provided in Section 6.2, (iv) eliminate the prohibitions in Sections 6.6 and 6.7, or (v) extend the term of the Plan, in each case without the approval of a majority of the outstanding shares of Stock entitled to vote thereon. No amendment or modification shall affect the rights of any Participant with respect to a previously granted Award without the written consent of the Participant.

 

11.2           TERMINATION OF PLAN. No further Awards shall be granted under the Plan subsequent to June 15, 2026, or such earlier date as may be determined by the Board.

 

SECTION 12

 

MISCELLANEOUS PROVISIONS

 

12.1           NONTRANSFERABILITY OF AWARDS. Except as otherwise provided by the Committee, Awards under the Plan are not transferable, except by will or by the laws of descent and distribution.

 

12.2           BENEFICIARY DESIGNATION. Each Participant under the Plan may from time to time name any beneficiary or beneficiaries (who may be named contingent or successively) to whom any benefit under the Plan is to be paid or by whom any right under the Plan is to be exercised in case of his death. Each designation will revoke all prior designations by the same Participant shall be in a form prescribed by the Committee, and will be effective only when filed in writing with the Company. In the absence of any such designation, Awards outstanding at death may be exercised by the Participant's surviving spouse, if any, or otherwise by his estate.

 

12.3           NO GUARANTEE OF EMPLOYMENT OR PARTICIPATION. Nothing in the Plan shall interfere with or limit in any way the right of the Company or any Subsidiary to terminate any Participant's employment at any time, nor confer upon any Participant any right to continue in the employ of the Company or any Subsidiary. No Employee shall have a right to be selected as a Participant, or, having been so selected, to receive any future Awards.

 

12.4           TAX WITHHOLDING. The Company shall have the power to withhold, or require a Participant or Eligible Director to remit to the Company, an amount sufficient to satisfy federal, state, and local withholding tax requirements on any Award under the Plan, and the Company may defer issuance of Stock until such requirements are satisfied. The Committee may, in its discretion, permit a Participant to elect, subject to such conditions as the Committee shall impose, (i) to have shares of Stock otherwise issuable under the Plan withheld by the Company or (ii) to deliver to the Company previously acquired shares of Stock, in each case having a Fair Market Value sufficient to satisfy all or part of the Participant's estimated total federal, state and local tax obligation associated with the transaction.

 

12.5           CHANGE OF CONTROL. Unless otherwise provided by the Committee at the time of grant, if a Triggering Event for a Participant shall occur within the 12-month period beginning with a Change of Control of the Company, then, for such Participant, all outstanding options and stock appreciation rights shall become immediately exercisable and all restrictions with respect to Restricted Stock shall lapse. The Committee may make appropriate provision for the effect of a Change of Control on Restricted Stock Units, Deferred Stock Units and performance-based Awards.  “Triggering Event” shall mean the involuntary termination of employment of a Participant with the Company. "Change of Control" shall mean:

 

	
  

	
(i)

	
The acquisition (other than from the Company) by any person, entity or "group", within the meaning of Section 13(d)(3) or 14(d)(2) of the Act (excluding any acquisition or holding by (i) the Company or its subsidiaries, (ii) any employee benefit plan of the Company or its subsidiaries which acquires beneficial ownership of voting securities of the Company, and (iii) anyone pursuant to rights to acquire common stock or voting power held as of the date this Plan is approved by the Company’s stockholders) of beneficial ownership (within the meaning of Rule 13d-3 promulgated under the Act) of 50% or more of either the then outstanding shares of common stock or the combined voting power of the Company's then outstanding voting securities entitled to vote generally in the election of directors;

 

	
  

	
(ii)

	
Individuals who, as of the date hereof, constitute the Board (as of the date hereof the "Incumbent Board") cease for any reason to constitute at least a majority of the Board, provided that any person becoming a director subsequent to the date hereof whose election, or nomination for the election by the Company's stockholders, was approved by a vote of at least a majority of the directors then comprising the Incumbent Board shall be, for purposes of this Plan, considered as though such person were a member of the Incumbent Board;

 

	
  

	
(iii)

	
Consummation of a reorganization, merger or consolidation, or sale or other disposition of substantially all of the assets of the Company (a “Business Combination”), in each case, unless following such Business Combination, the persons who were the beneficial owners of outstanding voting securities of the Company immediately prior to such Business Combination beneficially own directly or indirectly more than 50% of the combined voting power of the then outstanding voting securities entitled to vote generally in the election of directors, of the Company resulting from such Business Combination (including a company which, as a result of such transaction, owns the Company or substantially all of the Company’s assets either directly or through one or more subsidiaries), in substantially the same proportions as their ownership, immediately prior to such Business Combination, of the outstanding voting securities of the Company; or

 

	
  

	
(iv)

	
The complete liquidation or dissolution of the Company.

 

12.6           AGREEMENTS WITH COMPANY. An Award under the Plan shall be subject to such terms and conditions, not inconsistent with the Plan, as the Committee may, in its sole discretion, prescribe. The terms and conditions of any Award to any Participant shall be reflected in such form of written document as is determined by the Committee or its designee.

 

12.7           COMPANY INTENT. The Company intends that the Plan comply in all respects with Rule 16b-3 under the Act, and any ambiguities or inconsistencies in the construction of the Plan shall be interpreted to give effect to such intention. If any provision of the Plan or an Award contravenes any regulations promulgated under Section 409A of the Code or could cause an Award to be subject to interest and penalties under Section 409A of the Code, such provision of the Plan or any Award shall be modified to maintain, to the maximum extent practicable, the original intent of the applicable provision without violating the provisions of Section 409A of the Code.

 

12.8           REQUIREMENTS OF LAW. The granting of Awards and the issuance of shares of Stock shall be subject to all applicable laws, rules, and regulations, and to such approvals by any governmental agencies or securities exchanges as may be required.

 

12.9           EFFECTIVE DATE. The Plan shall be effective upon its adoption by the Board subject to approval by the Company's stockholders at the 2016 annual stockholders' meeting.

 

12.10           GOVERNING LAW. The Plan, and all agreements hereunder, shall be construed in accordance with and governed by the laws of the State of Maryland.

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