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Exhibit 10.12  

 
 

COMSTOCK HOMEBUILDING COMPANIES, INC.    
    
    2004 LONG-TERM INCENTIVE COMPENSATION PLAN    
    

 
COMSTOCK HOMEBUILDING COMPANIES, INC.  

 2004 LONG-TERM INCENTIVE COMPENSATION PLAN  

	1.	Purpose	 	1
	2.	Definitions	 	1
	3.	Administration	 	6
	 	(a)	Authority of the Committee	 	6
	 	(b)	Manner of Exercise of Committee Authority	 	6
	 	(c)	Limitation of Liability	 	7
	4.	Shares Subject to Plan	 	7
	 	(a)	Limitation on Overall Number of Shares Available for Grant Under Plan	 	7
	 	(b)	Application of Limitation to Grants of Award	 	7
	 	(c)	Availability of Shares Not Delivered under Awards and Adjustments to Limits	 	7
	5.	Eligibility; Per-Person Award Limitations	 	8
	6.	Specific Terms of Awards	 	9
	 	(a)	General	 	9
	 	(b)	Options	 	9
	 	(c)	Stock Appreciation Rights	 	10
	 	(d)	Restricted Stock Awards	 	11
	 	(e)	Deferred Stock Award	 	12
	 	(f)	Bonus Stock and Awards in Lieu of Obligations	 	13
	 	(g)	Dividend Equivalents	 	13
	 	(h)	Performance Awards	 	13
	 	(i)	Other Stock-Based Awards	 	13
	7.	Certain Provisions Applicable to Awards	 	14
	 	(a)	Stand-Alone, Additional, Tandem, and Substitute Awards	 	14
	 	(b)	Term of Awards	 	14
	 	(c)	Form and Timing of Payment Under Awards; Deferrals	 	14
	 	(d)	Exemptions from Section 16(b) Liability	 	15
	8.	Code Section 162(m) Provisions	 	15
	 	(a)	Covered Employees	 	15
	 	(b)	Performance Criteria	 	15
	 	(c)	Performance Period; Timing for Establishing Performance Goals	 	16
	 	(d)	Adjustments	 	16
	 	(e)	Committee Certification	 	16
	9.	Change in Control	 	16
	 	(a)	Effect of Change in Control	 	16
	 	(b)	Definition of Change in Control	 	17
	10.	General Provisions	 	18
	 	(a)	Compliance With Legal and Other Requirements	 	19
	 	(b)	Limits on Transferability; Beneficiaries	 	19
	 	(c)	Adjustments	 	19
	 	(d)	Taxes	 	20
	 	(e)	Changes to the Plan and Awards	 	21
	 	(f)	Limitation on Rights Conferred Under Plan	 	21
	 	(g)	Unfunded Status of Awards; Creation of Trusts	 	21
	 	(h)	Nonexclusivity of the Plan	 	22
	 	(i)	Payments in the Event of Forfeitures; Fractional Shares	 	22
	 	(j)	Governing Law	 	22
	 	(k)	Non-U.S. Laws	 	22
	 	(l)	Plan Effective Date and Shareholder Approval; Termination of Plan	 	22

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COMSTOCK HOMEBUILDING COMPANIES, INC.
  2004 LONG-TERM INCENTIVE COMPENSATION PLAN    
    

        1.    Purpose.    The purpose of this 2004 LONG-TERM INCENTIVE COMPENSATION PLAN (the "Plan") is to assist
Comstock Homebuilding Companies, Inc., a Delaware corporation and its Related Entities (as hereinafter defined) in attracting, motivating, retaining and rewarding high-quality
executives and other employees, officers, directors, consultants and other persons who provide services to the Company or its Related Entities by enabling such persons to acquire or increase a
proprietary interest in the Company in order to strengthen the mutuality of interests between such persons and the Company's shareholders, and providing such persons with long term performance
incentives to expend their maximum efforts in the creation of shareholder value. 

        2.    Definitions.    For purposes of the Plan, the following terms shall be defined as set forth below, in addition
to such terms defined in Section 1 hereof. 

        (a)   "Award"
means any Option, Stock Appreciation Right, Restricted Stock Award, Deferred Stock Award, Share granted as a bonus or in lieu of another award, Dividend
Equivalent, Other Stock-Based Award or Performance Award, together with any other right or interest, granted to a Participant under the Plan. 

        (b)   "Award
Agreement" means any written agreement, contract or other instrument or document evidencing any Award granted by the Committee hereunder. 

        (c)   "Beneficiary"
means the person, persons, trust or trusts that have been designated by a Participant in his or her most recent written beneficiary designation filed with
the Committee to receive the benefits specified under the Plan upon such Participant's death or to which Awards or other rights are transferred if and to the extent permitted under
Section 10(b) hereof. If, upon a Participant's death, there is no designated Beneficiary or surviving designated Beneficiary, then the term Beneficiary means the person, persons, trust or
trusts entitled by will or the laws of descent and distribution to receive such benefits. 

        (d)   "Beneficial
Owner" shall have the meaning ascribed to such term in Rule 13d-3 under the Exchange Act and any successor to such Rule. 

        (e)   "Board"
means the Company's Board of Directors. 

        (f)    "Cause"
shall, with respect to any Participant have the meaning specified in the Award Agreement. In the absence of any definition in the Award Agreement, "Cause" shall
have the equivalent meaning or the same meaning as "cause" or "for cause" set forth in any employment, consulting, or other agreement for the performance of services between the Participant and the
Company or a Related Entity or, in the absence of any such agreement or any such definition in such agreement, such term shall mean (i) the failure by the Participant to perform, in a
reasonable manner, his or her duties as assigned by the Company or a Related Entity, (ii) any violation or breach by the Participant of his or her employment, consulting or other similar
agreement with the Company or a Related Entity, if any, (iii) any violation or breach by the Participant of any non-competition, non-solicitation,
non-disclosure and/or other similar agreement with the Company or a Related Entity, (iv) any act by the Participant of dishonesty or bad faith with respect to the Company (or a
Related Entity), (v) use of alcohol, drugs or other similar substances in a manner that adversely affects the Participant's work performance, or (vi) the commission by the Participant of
any act, misdemeanor, or crime reflecting unfavorably upon the Participant or the Company or any Related Entity. The good faith determination by the Committee of whether the Participant's Continuous
Service was terminated by the Company for "Cause" shall be final and binding for all purposes hereunder. 

        (g)   "Change
in Control" means a Change in Control as defined with related terms in Section 9(b) of the Plan. 

        (h)   "Code"
means the Internal Revenue Code of 1986, as amended from time to time, including regulations thereunder and successor provisions and regulations thereto. 

 

        (i)    "Company"
means Comstock Homebuilding Companies, Inc., a Delaware corporation, and its successors and assigns. 

        (j)    "Committee"
means a committee designated by the Board to administer the Plan; provided, however, that if the Board fails to designate a committee or if there are no
longer any members on the committee so designated by the Board, then the Board shall serve as the Committee. The Committee shall consist of at least two directors, and each member of the Committee
shall be (i) a
"non-employee director" within the meaning of Rule 16b-3 (or any successor rule) under the Exchange Act, unless administration of the Plan by "non-employee
directors" is not then required in order for exemptions under Rule 16b-3 to apply to transactions under the Plan, (ii) an "outside director" within the meaning of
Section 162(m) of the Code, and (iii) "Independent". 

        (k)   "Consultant"
means any person (other than an Employee or a Director, solely with respect to rendering services in such person's capacity as a director) who is engaged by
the Company or any Related Entity to render consulting or advisory services to the Company or such Related Entity. 

        (l)    "Continuous
Service" means the uninterrupted provision of services to the Company or any Related Entity in any capacity of Employee, Director, Consultant or other
service provider. Continuous Service shall not be considered to be interrupted in the case of (i) any approved leave of absence, (ii) transfers among the Company, any Related Entities,
or any successor entities, in any capacity of Employee, Director, Consultant or other service provider, or (iii) any change in status as long as the individual remains in the service of the
Company or a Related Entity in any capacity of Employee, Director, Consultant or other service provider (except as otherwise provided in the Award Agreement). An approved leave of absence shall
include sick leave, military leave, or any other authorized personal leave. 

        (m)  "Covered
Employee" means an Eligible Person who is a "covered employee" within the meaning of Section 162(m)(3) of the Code, or any successor provision thereto. 

        (n)   "Deferred
Stock" means a right to receive Shares, including Restricted Stock, cash or a combination thereof, at the end of a specified deferral period. 

        (o)   "Deferred
Stock Award" means an Award of Deferred Stock granted to a Participant under Section 6(e) hereof. 

        (p)   "Director"
means a member of the Board or the board of directors of any Related Entity. 

        (q)   "Disability"
means a permanent and total disability (within the meaning of Section 22(e) of the Code), as determined by a medical doctor satisfactory to the
Committee. 

        (r)   "Dividend
Equivalent" means a right, granted to a Participant under Section 6(g) hereof, to receive cash, Shares, other Awards or other property equal in value to
dividends paid with respect to a specified number of Shares, or other periodic payments. 

        (s)   "Effective
Date" means the effective date of the Plan, which shall be                        , 2004. 

        (t)    "Eligible
Person" means each officer, Director, Employee, Consultant and other person who provides services to the Company or any Related Entity. The foregoing
notwithstanding, only employees of the Company, or any parent corporation or subsidiary corporation of the Company (as those terms are defined in Code Sections 424(e) and (f), respectively), shall be
Eligible Persons for purposes of receiving any Incentive Stock Options. An Employee on leave of absence may be considered as still in the employ of the Company or a Related Entity for purposes of
eligibility for participation in the Plan. 

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        (u)   "Employee"
means any person, including an officer or Director, who is an employee of the Company or any Related Entity. The payment of a director's fee by the Company or
a Related Entity shall not be sufficient to constitute "employment" by the Company. 

        (v)   "Exchange
Act" means the Securities Exchange Act of 1934, as amended from time to time, including rules thereunder and successor provisions and rules thereto. 

        (w)  "Fair
Market Value" means the fair market value of Shares, Awards or other property as determined by the Committee, or under procedures established by the Committee.
Unless otherwise determined by the Committee, the Fair Market Value of a Share as of any given date after which the Company is a Publicly Held Corporation shall be the closing sale price per Share
reported on a consolidated basis for stock listed on the principal stock exchange or market on which Shares are traded on the date as of which such value is being determined or, if there is no sale on
that date, then on the last previous day on which a sale was reported. 

        (x)   "Good
Reason" shall, with respect to any Participant, have the meaning specified in the Award Agreement. In the absence of any definition in the Award Agreement, "Good
Reason" shall have the equivalent meaning or the same meaning as "good reason" or "for good reason" set forth in any employment, consulting or other agreement for the performance of services between
the Participant and the Company or a Related Entity or, in the absence of any such agreement or any such definition in such agreement, such term shall mean (i) the assignment to the Participant
of any duties inconsistent in any material respect with the Participant's position, duties or responsibilities as assigned by the Company or a Related Entity, or any other action by the Company or a
Related Entity which results in a material diminution in such position, authority, duties or responsibilities, excluding for this purpose an isolated, insubstantial and inadvertent action not taken in
bad faith and which is remedied by the Company or a Related Entity promptly after receipt of notice thereof given by the Participant; (ii) any material failure by the Company or a Related
Entity to comply with its obligations to the Participant as agreed upon, other than an isolated, insubstantial and inadvertent failure not occurring in bad faith and
which is remedied by the Company or a Related Entity promptly after receipt of notice thereof given by the Participant; or (iii) the Company's or Related Entity's requiring the Participant to
be based at any office or location outside of fifty miles from the location of employment or service as of the date of Award, except for travel reasonably required in the performance of the
Participant's responsibilities. 

        (y)   "Incentive
Stock Option" means any Option intended to be designated as an incentive stock option within the meaning of Section 422 of the Code or any successor
provision thereto. 

        (z)   "Independent",
when referring to either the Board or members of the Committee, shall have the same meaning as used in the rules of the Nasdaq Stock Market or any
national securities exchange on which any securities of the Company are listed for trading, and if not listed for trading, by the rules of the Nasdaq Stock Market. 

        (aa) "Incumbent
Board" means the Incumbent Board as defined in Section 9(b)(ii) of the Plan. 

        (bb) "Option"
means a right granted to a Participant under Section 6(b) hereof, to purchase Shares or other Awards at a specified price during specified time periods. 

        (cc) "Optionee"
means a person to whom an Option is granted under this Plan or any person who succeeds to the rights of such person under this Plan. 

        (dd) "Option
Proceeds" means the cash actually received by the Company for the exercise price in connection with the exercise of Options that are exercised after the
Effective Date of the Plan, plus the maximum tax benefit that could be realized by the Company as a result of the exercise of such Options, which tax benefit shall be determined by multiplying
(i) the amount that 

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is
deductible for Federal income tax purposes as a result of any such option exercise (currently, equal to the amount upon which the Participant's withholding tax obligation is calculated), times
(ii) the maximum Federal corporate income tax rate for the year of exercise. With respect to Options, to the extent that a Participant pays the exercise price and/or withholding taxes with
Shares, Option Proceeds shall not be calculated with respect to the amounts so paid in Shares. 

        (ee) "Other
Stock-Based Awards" means Awards granted to a Participant under Section 6(i) hereof. 

        (ff)  "Participant"
means a person who has been granted an Award under the Plan which remains outstanding, including a person who is no longer an Eligible Person. 

        (gg) "Performance
Award" shall mean any Award of Performance Shares or Performance Units granted pursuant to Section 6(h). 

        (hh) "Performance
Period" means that period established by the Committee at the time any Performance Award is granted or at any time thereafter during which any performance
goals specified by the Committee with respect to such Award are to be measured. 

        (ii)   "Performance
Share" means any grant pursuant to Section 8 of a unit valued by reference to a designated number of Shares, which value may be paid to the
Participant by delivery of such property as the Committee shall determine, including cash, Shares, other property, or any combination thereof, upon achievement of such performance goals during the
Performance Period as the Committee shall establish at the time of such grant or thereafter. 

        (jj)   "Performance
Unit" means any grant pursuant to Section 8 of a unit valued by reference to a designated amount of property (including cash) other than Shares,
which value may be paid to the Participant by delivery of such property as the Committee shall determine, including cash, Shares, other property, or any combination thereof, upon achievement of such
performance goals during the Performance Period as the Committee shall establish at the time of such grant or thereafter. 

        (kk) "Person"
shall have the meaning ascribed to such term in Section 3(a)(9) of the Exchange Act and used in Sections 13(d) and 14(d) thereof, and shall include a
"group" as defined in Section 13(d) thereof. 

        (ll)   "Publicly
Held Corporation" shall mean a publicly held corporation as that term is used under Section 162(m)(2) of the Code. 

        (mm) "Related
Entity" means any Subsidiary, and any business, corporation, partnership, limited liability company or other entity designated by Board in which the Company or
a Subsidiary holds a substantial ownership interest, directly or indirectly. 

        (nn) "Restricted
Stock" means any Share issued with the restriction that the holder may not sell, transfer, pledge or assign such Share and with such risks of forfeiture and
other restrictions as the Committee, in its sole discretion, may impose (including any restriction on the right to vote such Share and the right to receive any dividends), which restrictions may lapse
separately or in combination at such time or times, in installments or otherwise, as the Committee may deem appropriate. 

        (oo) "Restricted
Stock Award" means an Award granted to a Participant under Section 6(d) hereof. 

        (pp) "Rule 16b-3"
means Rule 16b-3, as from time to time in effect and applicable to the Plan and Participants, promulgated by the
Securities and Exchange Commission under Section 16 of the Exchange Act. 

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        (qq) "Shares"
means the shares of Class A common stock of the Company, par value $0.01 per share, and such other securities as may be substituted (or resubstituted)
for Shares pursuant to Section 10(c) hereof. 

        (rr)  "Stock
Appreciation Right" means a right granted to a Participant under Section 6(c) hereof. 

        (ss)  "Subsidiary"
means any corporation or other entity in which the Company has a direct or indirect ownership interest of 50% or more of the total combined voting power of
the then outstanding securities or interests of such corporation or other entity entitled to vote generally in the election of directors or in which the Company has the right to receive 50% or more of
the distribution of profits or 50% or more of the assets on liquidation or dissolution. 

        (tt)  "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, by a company acquired by the Company or any Related Entity or with which the Company or any Related Entity combines. 

        3.    Administration.    

        (a)    Authority of the Committee.    The Plan shall be administered by the Committee, except to the extent the Board
elects to administer the Plan, in which case references herein shall be deemed to include references to the Board; provided, however that for any period during which the Company is a Publicly Held
Corporation, the Plan shall be administered by only those directors who are Independent Directors and references herein to the "Committee" shall be deemed to include references to the Independent
members of the Board. The Committee shall have full and final authority, subject to and consistent with the provisions of the Plan, to select Eligible Persons to become Participants, grant Awards,
determine the type, number and other terms and conditions of, and all other matters relating
to, Awards, prescribe Award Agreements (which need not be identical for each Participant) and rules and regulations for the administration of the Plan, construe and interpret the Plan and Award
Agreements and correct defects, supply omissions or reconcile inconsistencies therein, and to make all other decisions and determinations as the Committee may deem necessary or advisable for the
administration of the Plan. In exercising any discretion granted to the Committee under the Plan or pursuant to any Award, the Committee shall not be required to follow past practices, act in a manner
consistent with past practices, or treat any Eligible Person or Participant in a manner consistent with the treatment of other Eligible Persons or Participants. 

        (b)    Manner of Exercise of Committee Authority.    Any action of the Committee shall be final, conclusive and
binding on all persons, including the Company, its Related Entities, Participants, Beneficiaries, transferees under Section 10(b) hereof or other persons claiming rights from or through a
Participant, and shareholders. The express grant of any specific power to the Committee, and the taking of any action by the Committee, shall not be construed as limiting any power or authority of the
Committee. The Committee may delegate to officers or managers of the Company or any Related Entity, or committees thereof, the authority, subject to such terms as the Committee shall determine to
perform such functions, including administrative functions as the Committee may determine to the extent that such delegation will not result in the loss of an exemption under
Rule 16b-3(d)(1) for Awards granted to Participants subject to Section 16 of the Exchange Act in respect of the Company and will not cause Awards intended to qualify as
"performance-based compensation" under Code Section 162(m) to fail to so qualify. The Committee may appoint agents to assist it in administering the Plan. 

        (c)    Limitation of Liability.    The Committee and the Board, and each member thereof, shall be entitled to, in good
faith, rely or act upon any report or other information furnished to him or 

5

 

her
by any officer or Employee, the Company's independent auditors, Consultants or any other agents assisting in the administration of the Plan. Members of the Committee and the Board, and any officer
or Employee acting at the direction or on behalf of the Committee or the Board, shall not be personally liable for any action or determination taken or made in good faith with respect to the Plan, and
shall, to the extent permitted by law, be fully indemnified and protected by the Company with respect to any such action or determination. 

        4.    Shares Subject to Plan.    

        (a)    Limitation on Overall Number of Shares Available for Grant Under Plan.    Subject to adjustment as provided in
Section 10(c) hereof, the total number of Shares reserved and available for grant under the Plan shall be 1,500,000, plus an annual increase to be added on January 1st of
each year, commencing on January 1, 2005 and ending on January 1, 2013 (each such day, a "Calculation Date"), equal to the lesser of (i) three percent (3%) of the Shares
outstanding on each such Calculation Date (rounded down to the nearest whole share) or (ii) 500,000 Shares. Notwithstanding the foregoing, the Board may act, prior to the first day of any
fiscal year of the Company, to increase the share reserve by such number of
Shares as the Board shall determine, which number shall be less than the amount described in the foregoing sentence. Any Shares delivered under the Plan may consist, in whole or in part, of authorized
and unissued shares or treasury shares. 

        (b)    Application of Limitation to Grants of Award.    No Award may be granted if the number of Shares to be
delivered in connection with such an Award or, in the case of an Award relating to Shares but settled only in cash (such as cash-only Stock Appreciation Rights), the number of Shares to
which such Award relates, exceeds the number of Shares remaining available under the Plan, minus the number of Shares deliverable in settlement of or relating to then outstanding Awards. The Committee
may adopt reasonable counting procedures to ensure appropriate counting, avoid double counting (as, for example, in the case of tandem or substitute awards) and make adjustments if the number of
Shares actually delivered differs from the number of Shares previously counted in connection with an Award. 

        (c)    Availability of Shares Not Delivered under Awards and Adjustments to Limits.    

        (i)    If
any Shares subject to an Award are forfeited, expire or otherwise terminate without issuance of such Shares, or any Award is settled for cash or otherwise does not
result in the issuance of all or a portion of the Shares subject to such Award, the Shares shall, to the extent of such forfeiture, expiration, termination, cash settlement or
non-issuance, again be available for Awards under the Plan, subject to Section 4(c)(v) below. 

        (ii)   In
the event that any Option or other Award granted hereunder is exercised through the tendering of Shares (either actually or by attestation) or by the withholding of
Shares by the Company, or withholding tax liabilities arising from such Option or other Award are satisfied by the tendering of Shares (either actually or by attestation) or by the withholding of
Shares by the Company, then only the number of Shares issued net of the Shares tendered or withheld shall be counted for purposes of determining the maximum number of Shares available for grant under
the Plan. 

        (iii)  Shares
reacquired by the Company on the open market using Option Proceeds shall be available for Awards under the Plan. The increase in Shares available pursuant to
the repurchase of Shares with Option Proceeds shall not be greater than the amount of such proceeds divided by the Fair Market Value of a Share on the date of exercise of the Option giving rise to
such Option Proceeds. 

        (iv)  Substitute
Awards shall not reduce the Shares authorized for grant under the Plan or authorized for grant to a Participant in any period. Additionally, in the event
that a company 

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acquired
by the Company or any Related Entity or with which the Company or any Related Entity combines has shares available under a pre-existing plan approved by shareholders 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; 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. 

        (v)   Notwithstanding
anything in this Section 4(c) to the contrary and solely for purposes of determining whether Shares are available for the grant of Incentive Stock
Options, the maximum aggregate number of shares that may be granted under this Plan shall be determined without regard to any Shares restored pursuant to this Section 4(c) that, if taken into
account, would cause the Plan to fail the requirement under Code Section 422 that the Plan designate a maximum aggregate number of shares that may be issued. 

        5.    Eligibility; Per-Person Award Limitations.    Awards may be granted under the Plan only to Eligible
Persons. Subject to adjustment as provided in Section 10(c), in any 12-month period during any part of which the Plan is in effect, no Participant may be granted (i) Options
or Stock Appreciation Rights with respect to more than 150,000 Shares or (ii) Restricted Stock, Deferred Stock, Performance Shares and/or Other Stock-Based Awards with respect to more than
150,000 Shares. In addition, the maximum dollar value payable to any one Participant with respect to any 12-month Performance Period with respect to Performance Units is $250,000
multiplied by the number of full years in the Performance Period. 

        6.    Specific Terms of Awards.    

        (a)    General.    Awards may be granted on the terms and conditions set forth in this Section 6. In addition,
the Committee may impose on any Award or the exercise thereof, at the date of grant or thereafter (subject to Section 10(e)), such additional terms and conditions, not inconsistent with the
provisions of the Plan, as the Committee shall determine, including terms requiring forfeiture of Awards in the event of termination of the Participant's Continuous Service and terms permitting a
Participant to make elections relating to his or her Award. The Committee shall retain full power and discretion to accelerate, waive or modify, at any time, any term or condition of an Award that is
not mandatory under the Plan. Except in cases in which the Committee is authorized to require other forms of consideration under the Plan, or to the extent other forms of consideration must be paid to
satisfy the
requirements of Delaware law, no consideration other than services may be required for the grant (but not the exercise) of any Award. 

        (b)    Options.    The Committee is authorized to grant Options to any Eligible Person on the following terms and
conditions: 

        (i)    Exercise Price.    Other than in connection with Substitute Awards, the exercise price per Share purchasable
under an Option shall be determined by the Committee, provided that such exercise price shall not, in the case of Incentive Stock Options, be less than 100% of the Fair Market Value of a Share on the
date of grant of the Option and shall not, in any event, be less than the par value of a Share on the date of grant of the Option. If an Employee owns or is deemed to own (by reason of the attribution
rules applicable under Section 424(d) of the Code) more than 10% of the combined voting power of all classes of stock of the Company (or any parent corporation or subsidiary corporation of the
Company, as those terms are 

7

 

defined
in Sections 424(e) and (f) of the Code, respectively) and an Incentive Stock Option is granted to such employee, the exercise price of such Incentive Stock Option (to the extent
required by the Code at the time of grant) shall be no less than 110% of the Fair Market Value a Share on the date such Incentive Stock Option is granted. 

        (ii)    Time and Method of Exercise.    The Committee shall determine the time or times at which or the circumstances
under which an Option may be exercised in whole or in part (including based on achievement of performance goals and/or future service requirements), the time or times at which Options shall cease to
be or become exercisable following termination of Continuous Service or upon other conditions, the methods by which the exercise price may be paid or deemed to be paid (including in the discretion of
the Committee a cashless exercise procedure), the form of such payment, including, without limitation, cash, Shares, other Awards or awards granted under other plans of the Company or a Related
Entity, or other property (including notes or other contractual obligations of Participants to make payment on a deferred basis provided that such deferred payments are not in violation of the
Sarbanes-Oxley Act of 2002, or any rule or regulation adopted thereunder or any other applicable law), and the methods by or forms in which Shares will be delivered or deemed to be delivered to
Participants. 

        (iii)    Incentive Stock Options.    The terms of any Incentive Stock Option granted under the Plan shall comply in
all respects with the provisions of Section 422 of the Code. Anything in the Plan to the contrary notwithstanding, no term of the Plan relating to Incentive Stock Options (including any Stock
Appreciation Right issued in tandem therewith) shall be interpreted, amended or altered, nor shall any discretion or authority granted under the Plan be exercised, so as to disqualify either the Plan
or any Incentive Stock Option under Section 422 of the Code, unless the Participant has first requested, or consents to, the change that will result in such disqualification. Thus, if and to
the extent required to
comply with Section 422 of the Code, Options granted as Incentive Stock Options shall be subject to the following special terms and conditions: 

        (A)  the
Option shall not be exercisable more than ten years after the date such Incentive Stock Option is granted; provided, however, that if a Participant owns or is deemed
to own (by reason of the attribution rules of Section 424(d) of the Code) more than 10% of the combined voting power of all classes of stock of the Company (or any parent corporation or
subsidiary corporation of the Company, as those terms are defined in Sections 424(e) and (f) of the Code, respectively) and the Incentive Stock Option is granted to such Participant, the term
of the Incentive Stock Option shall be (to the extent required by the Code at the time of the grant) for no more than five years from the date of grant; and 

        (B)  The
aggregate Fair Market Value (determined as of the date the Incentive Stock Option is granted) of the Shares with respect to which Incentive Stock Options granted
under the Plan and all other option plans of the Company (and any parent corporation or subsidiary corporation of the Company, as those terms are defined in Sections 424(e) and (f) of the Code,
respectively) during any calendar year exercisable for the first time by the Participant during any calendar year shall not (to the extent required by the Code at the time of the grant) exceed
$100,000. 

        (c)    Stock Appreciation Rights.    The Committee may grant Stock Appreciation Rights to any Eligible Person in
conjunction with all or part of any Option granted under the Plan or at any subsequent time during the term of such Option (a "Tandem Stock Appreciation Right"), or without regard to any Option (a
"Freestanding Stock Appreciation Right"), in each case upon such 

8

 

terms
and conditions as the Committee may establish in its sole discretion, not inconsistent with the provisions of the Plan, including the following: 

        (i)    Right to Payment.    A Stock Appreciation Right shall confer on the Participant to whom it is granted a right
to receive, upon exercise thereof, the excess of (A) the Fair Market Value of one Share on the date of exercise over (B) the grant price of the Stock Appreciation Right as determined by
the Committee. The grant price of a Tandem Stock Appreciation Right shall not be less than the associated Option exercise price. 

        (ii)    Other Terms.    The Committee shall determine at the date of grant or thereafter, the time or times at which
and the circumstances under which a Stock Appreciation Right may be exercised in whole or in part (including based on achievement of performance goals and/or future service requirements), the time or
times at which Stock Appreciation Rights shall cease to be or become exercisable following termination of Continuous Service or upon other conditions, the method of exercise, method of settlement,
form of consideration payable in settlement, method by or forms in which Shares will be delivered or deemed to be delivered to Participants, whether or not a Stock Appreciation Right shall
be in tandem or in combination with any other Award, and any other terms and conditions of any Stock Appreciation Right. 

        (iii)    Tandem Stock Appreciation Rights.    Any Tandem Stock Appreciation Right may be granted at the same time as
the related Option is granted or, for Options that are not Incentive Stock Options, at any time thereafter before exercise or expiration of such Option. Any Tandem Stock Appreciation Right related to
an Option may be exercised only when the related Option would be exercisable and the Fair Market Value of the Shares subject to the related Option exceeds the exercise price at which Shares can be
acquired pursuant to the Option. In addition, if a Tandem Stock Appreciation Right exists with respect to less than the full number of Shares covered by a related Option, then an exercise or
termination of such Option shall not reduce the number of Shares to which the Tandem Stock Appreciation Right applies until the number of Shares then exercisable under such Option equals the number of
Shares to which the Tandem Stock Appreciation Right applies. Any Option related to a Tandem Stock Appreciation Right shall no longer be exercisable to the extent the Tandem Stock Appreciation Right
has been exercised, and any Tandem Stock Appreciation Right shall no longer be exercisable to the extent the related Option has been exercised. 

        (d)    Restricted Stock Awards.    The Committee is authorized to grant Restricted Stock Awards to any Eligible Person
on the following terms and conditions: 

        (i)    Grant and Restrictions.    Restricted Stock Awards shall be subject to such restrictions on transferability,
risk of forfeiture and other restrictions, if any, as the Committee may impose, or as otherwise provided in this Plan, covering a period of time specified by the Committee (the "Restriction Period").
The terms of any Restricted Stock Award granted under the Plan shall be set forth in a written Award Agreement which shall contain provisions determined by the Committee and not inconsistent with the
Plan. The restrictions may lapse separately or in combination at such times, under such circumstances (including based on achievement of performance goals and/or future service requirements), in such
installments or otherwise, as the Committee may determine at the date of grant or thereafter. Except to the extent restricted under the terms of the Plan and any Award Agreement relating to a
Restricted Stock Award, a Participant granted Restricted Stock shall have all of the rights of a shareholder, including the right to vote the Restricted Stock and the right to receive dividends
thereon (subject to any mandatory reinvestment or other requirement imposed by the Committee). During the Restriction Period, subject to Section 10(b) below, the Restricted 

9

 

Stock
may not be sold, transferred, pledged, hypothecated, margined or otherwise encumbered by the Participant. 

        (ii)    Forfeiture.    Except as otherwise determined by the Committee, upon termination of a Participant's Continuous
Service during the applicable Restriction Period, the Participant's Restricted Stock that is at that time subject to a risk of forfeiture that has not lapsed or otherwise been satisfied shall be
forfeited and reacquired by the Company; provided that the Committee may provide, by rule or regulation or in any Award Agreement, or may determine in any individual case, that forfeiture conditions
relating to
Restricted Stock Awards shall be waived in whole or in part in the event of terminations resulting from specified causes. 

        (iii)    Certificates for Stock.    Restricted Stock granted under the Plan may be evidenced in such manner as the
Committee shall determine. If certificates representing Restricted Stock are registered in the name of the Participant, the Committee may require that such certificates bear an appropriate legend
referring to the terms, conditions and restrictions applicable to such Restricted Stock, that the Company retain physical possession of the certificates, and that the Participant deliver a stock power
to the Company, endorsed in blank, relating to the Restricted Stock. 

        (iv)    Dividends and Splits.    As a condition to the grant of a Restricted Stock Award, the Committee may require or
permit a Participant to elect that any cash dividends paid on a Share of Restricted Stock be automatically reinvested in additional Shares of Restricted Stock or applied to the purchase of additional
Awards under the Plan. Unless otherwise determined by the Committee, Shares distributed in connection with a stock split or stock dividend, and other property distributed as a dividend, shall be
subject to restrictions and a risk of forfeiture to the same extent as the Restricted Stock with respect to which such Shares or other property have been distributed. 

        (e)    Deferred Stock Award.    The Committee is authorized to grant Deferred Stock Awards to any Eligible Person on
the following terms and conditions: 

        (i)    Award and Restrictions.    Satisfaction of a Deferred Stock Award shall occur upon expiration of the deferral
period specified for such Deferred Stock Award by the Committee (or, if permitted by the Committee, as elected by the Participant). In addition, a Deferred Stock Award shall be subject to such
restrictions (which may include a risk of forfeiture) as the Committee may impose, if any, which restrictions may lapse at the expiration of the deferral period or at earlier specified times
(including based on achievement of performance goals and/or future service requirements), separately or in combination, in installments or otherwise, as the Committee may determine. A Deferred Stock
Award may be satisfied by delivery of Shares, cash equal to the Fair Market Value of the specified number of Shares covered by the Deferred Stock, or a combination thereof, as determined by the
Committee at the date of grant or thereafter. Prior to satisfaction of a Deferred Stock Award, a Deferred Stock Award carries no voting or dividend or other rights associated with Share ownership. 

        (ii)    Forfeiture.    Except as otherwise determined by the Committee, upon termination of a Participant's Continuous
Service during the applicable deferral period or portion thereof to which forfeiture conditions apply (as provided in the Award Agreement evidencing the Deferred Stock Award), the Participant's
Deferred Stock Award that is at that time subject to a risk of forfeiture that has not lapsed or otherwise been satisfied shall be forfeited; provided that the Committee may provide, by rule or
regulation or in any Award Agreement, or may determine in any individual case, that forfeiture conditions relating to a Deferred Stock Award shall be waived in whole or in part in the event of
terminations resulting from specified causes, and the Committee may in other cases waive in whole or in part the forfeiture of any Deferred Stock Award. 

10

 

        (iii)    Dividend Equivalents.    Unless otherwise determined by the Committee at date of grant, any Dividend
Equivalents that are granted with respect to any Deferred Stock Award shall be either (A) paid with respect to such Deferred Stock Award at the dividend payment date in cash or in Shares of
unrestricted stock having a Fair Market Value equal to the amount of such dividends, or (B) deferred with respect to such Deferred Stock Award and the amount or value thereof automatically
deemed reinvested in additional Deferred Stock, other Awards or other investment vehicles, as the Committee shall determine or permit the Participant to elect. 

        (f)    Bonus Stock and Awards in Lieu of Obligations.    The Committee is authorized to grant Shares to any Eligible
Persons as a bonus, or to grant Shares or other Awards in lieu of obligations to pay cash or deliver other property under the Plan or under other plans or compensatory arrangements, provided that, in
the case of Eligible Persons subject to Section 16 of the Exchange Act, the amount of such grants remains within the discretion of the Committee to the extent necessary to ensure that
acquisitions of Shares or other Awards are exempt from liability under Section 16(b) of the Exchange Act. Shares or Awards granted hereunder shall be subject to such other terms as shall be
determined by the Committee. 

        (g)    Dividend Equivalents.    The Committee is authorized to grant Dividend Equivalents to any Eligible Person
entitling the Eligible Person to receive cash, Shares, other Awards, or other property equal in value to the dividends paid with respect to a specified number of Shares, or other periodic payments.
Dividend Equivalents may be awarded on a free-standing basis or in connection with another Award. The Committee may provide that Dividend Equivalents shall be paid or distributed when
accrued or shall be deemed to have been reinvested in additional Shares, Awards, or other investment vehicles, and subject to such restrictions on transferability and risks of forfeiture, as the
Committee may specify. 

        (h)    Performance Awards.    The Committee is authorized to grant Performance Awards to any Eligible Person payable
in cash, Shares, or other Awards, on terms and conditions established by the Committee, subject to the provisions of Section 8 if and to the extent that the Committee shall, in its sole
discretion, determine that an Award shall be subject to those provisions. The performance criteria to be achieved during any Performance Period and the length of the Performance Period shall be
determined by the Committee upon the grant of each Performance Award. Except as provided in Section 9 or as may be provided in an Award Agreement, Performance Awards will be distributed only
after the end of the relevant Performance Period. The performance goals to be achieved for each Performance Period shall be conclusively determined by the Committee and may be based upon the criteria
set forth in Section 8, or in the case of an Award that the Committee determines shall not be subject to Section 8 hereof, any other criteria that the Committee, in its sole discretion,
shall determine should be used for that purpose. The amount of the Award to be distributed shall be conclusively determined by the Committee. Performance Awards may be paid in a lump sum or in
installments following the close of the Performance Period or, in accordance with procedures established by the Committee, on a deferred basis. 

        (i)    Other Stock-Based Awards.    The Committee is authorized, subject to limitations under applicable law, to grant
to any Eligible Person such other Awards that may be denominated or payable in, valued in whole or in part by reference to, or otherwise based on, or related to, Shares, as deemed by the Committee to
be consistent with the purposes of the Plan. Other Stock-Based Awards may be granted to Participants either alone or in addition to other Awards granted under the Plan, and such Other Stock-Based
Awards shall also be available as a form of payment in the settlement of other Awards granted under the Plan. The Committee shall determine the terms and conditions of such Awards. Shares delivered
pursuant to an Award in the nature of a purchase right granted under this Section 6(i) shall 

11

 

be
purchased for such consideration, (including without limitation loans from the Company or a Related Entity provided that such loans are not in violation of the Sarbanes Oxley Act of 2002, or any
rule or regulation adopted thereunder or any other applicable law), paid for at such times, by such methods, and in such forms, including, without limitation, cash, Shares, other Awards or other
property, as the Committee shall determine. 

        7.    Certain Provisions Applicable to Awards.    

        (a)    Stand-Alone, Additional, Tandem, and Substitute Awards.    Awards granted under the Plan may, in the discretion
of the Committee, be granted either alone or in addition to, in tandem with, or in substitution or exchange for, any other Award or any award granted under another plan of the Company, any Related
Entity, or any business entity to be acquired by the Company or a Related Entity, or any other right of a Participant to receive payment from the Company or any Related Entity. Such additional,
tandem, and substitute or exchange Awards may be granted at any time. If an Award is granted in substitution or exchange for another Award or award, the Committee shall require the surrender of such
other Award or award in consideration for the grant of the new Award. In addition, Awards may be granted in lieu of cash compensation, including in lieu of cash amounts payable under other plans of
the Company or any Related Entity, in which the value of Stock subject to the Award is equivalent in value to the cash compensation (for example, Deferred Stock or Restricted Stock), or in which the
exercise price, grant price or purchase price of the Award in the nature of a right that may be exercised is equal to the Fair Market Value of the underlying Stock minus the value of the cash
compensation surrendered (for example, Options or Stock Appreciation Right granted with an exercise price "discounted" by the amount of the cash compensation surrendered). 

        (b)    Term of Awards.    The term of each Award shall be for such period as may be determined by the Committee;
provided that in no event shall the term of any Option or Stock Appreciation Right exceed a period of ten years (or in the case of an Incentive Stock Option such shorter term as may be required under
Section 422 of the Code). 

        (c)    Form and Timing of Payment Under Awards; Deferrals.    Subject to the terms of the Plan and any applicable
Award Agreement, payments to be made by the Company or a Related Entity upon the exercise of an Option or other Award or settlement of an Award may be made in such forms as the Committee shall
determine, including, without limitation, cash, Shares, other Awards or other property, and may be made in a single payment or transfer, in installments, or on a deferred basis. Any installment or
deferral provided for in the preceding sentence shall, however, be subject to the Company's compliance with the provisions of the Sarbanes-Oxley Act of 2002, the rules and regulations adopted by the
Securities and Exchange Commission thereunder, and all applicable rules of the Nasdaq Stock Market or any national securities exchange on which the Company's securities are listed for trading and, if
not listed for trading on either the Nasdaq Stock Market or a national securities exchange, then the rules of the Nasdaq Stock Market. The settlement of any Award may be accelerated, and cash paid in
lieu of Stock in connection with such settlement, in the discretion of the Committee or upon occurrence of one or more specified events (in addition to a Change in Control). Installment or deferred
payments may be required by the Committee (subject to Section 10(e) of the Plan, including the consent provisions thereof in the case of any deferral of an outstanding Award not provided for in
the original Award Agreement) or permitted at the election of the Participant on terms and conditions established by the Committee. Payments may include, without limitation, provisions for the payment
or crediting of a reasonable interest rate on installment or deferred payments or the grant or crediting of Dividend Equivalents or other amounts in respect of installment or deferred payments
denominated in Shares. 

12

 

        (d)    Exemptions from Section 16(b) Liability.    It is the intent of the Company that the grant of any Awards
to or other transaction by a Participant who is subject to Section 16 of the Exchange Act shall be exempt from Section 16 pursuant to an applicable exemption (except for transactions
acknowledged in writing to be non-exempt by such Participant). Accordingly, if any provision of this Plan or any Award Agreement does not comply with the requirements of
Rule 16b-3 then applicable to any such transaction, such provision shall be construed or deemed amended to the extent necessary to conform to the applicable requirements of
Rule 16b-3 so that such Participant shall avoid liability under Section 16(b). 

        8.    Code Section 162(m) Provisions.    

        (a)    Covered Employees.    The Committee, in its discretion, may determine at the time an Award is granted to an
Eligible Person who is, or is likely to be, as of the end of the tax year in which the Company
would claim a tax deduction in connection with such Award, a Covered Employee, that the provisions of this Section 8 shall be applicable to such Award. 

        (b)    Performance Criteria.    If an Award is subject to this Section 8, then the lapsing of restrictions
thereon and the distribution of cash, Shares or other property pursuant thereto, as applicable, shall be contingent upon achievement of one or more objective performance goals. Performance goals shall
be objective and shall otherwise meet the requirements of Section 162(m) of the Code and regulations thereunder including the requirement that the level or levels of performance targeted by the
Committee result in the achievement of performance goals being "substantially uncertain." One or more of the following business criteria for the Company, on a consolidated basis, and/or for Related
Entities, or for business or geographical units of the Company and/or a Related Entity (except with respect to the total shareholder return and earnings per share criteria), shall be used by the
Committee in establishing performance goals for such Awards: (1) earnings per share; (2) revenues or margins; (3) cash flow; (4) operating margin; (5) return on net
assets, investment, capital, or equity; (6) economic value added; (7) direct contribution; (8) net income; pretax earnings; earnings before interest and taxes; earnings before
interest, taxes, depreciation and amortization; earnings after interest expense and before extraordinary or special items; operating income; income before interest income or expense, unusual items and
income taxes, local, state or federal and excluding budgeted and actual bonuses which might be paid under any ongoing bonus plans of the Company; (9) working capital; (10) management of
fixed costs or variable costs; (11) identification or consummation of investment opportunities or completion of specified projects in accordance with corporate business plans, including
strategic mergers, acquisitions or divestitures; (12) total shareholder return; and (13) debt reduction. Any of the above goals may be determined on an absolute or relative basis or as
compared to the performance of a published or special index deemed applicable by the Committee including, but not limited to, the Standard & Poor's 500 Stock Index or a group of companies that
are comparable to the Company. The Committee may exclude the impact of an event or occurrence which the Committee determines should appropriately be excluded, including without limitation
(i) restructurings, discontinued operations, extraordinary items, and other unusual or non-recurring charges, (ii) an event either not directly related to the operations of
the Company or not within the reasonable control of the Company's management, or (iii) a change in accounting standards required by generally accepted accounting principles. 

        (c)    Performance Period; Timing For Establishing Performance Goals.    Achievement of performance goals in respect
of such Performance Awards shall be measured over a Performance Period specified by the Committee. Performance goals shall be established not later than 90 days after the beginning of any
Performance Period applicable to such Performance Awards, or at such other date as may be required or permitted for "performance-based compensation" under Code Section 162(m). 

13

 

        (d)    Adjustments.    The Committee may, in its discretion, reduce the amount of a settlement otherwise to be made in
connection with Awards subject to this Section 8, but may not exercise discretion to increase any such amount payable to a Covered Employee in respect of an Award subject to this
Section 8. The Committee shall specify the circumstances in which such Awards shall be paid or forfeited in the event
of termination of Continuous Service by the Participant prior to the end of a Performance Period or settlement of Awards. 

        (e)    Committee Certification.    No Participant shall receive any payment under the Plan unless the Committee has
certified, by resolution or other appropriate action in writing, that the performance criteria and any other material terms previously established by the Committee or set forth in the Plan, have been
satisfied to the extent necessary to qualify as "performance based compensation" under Code Section 162(m). 

        9.    Change in Control.    

        (a)    Effect of "Change in Control."    Subject to Section 9(a)(iv), and if and only to the extent provided in
the Award Agreement, or to the extent otherwise determined by the Committee, upon the occurrence of a "Change in Control," as defined in Section 9(b): 

        (i)    Any
Option or Stock Appreciation Right that was not previously vested and exercisable as of the time of the Change in Control, shall become immediately vested and
exercisable, subject to applicable restrictions set forth in Section 10(a) hereof. 

        (ii)   Any
restrictions, deferral of settlement, and forfeiture conditions applicable to a Restricted Stock Award, Deferred Stock Award or an Other Stock-Based Award subject
only to future service requirements granted under the Plan shall lapse and such Awards shall be deemed fully vested as of the time of the Change in Control, except to the extent of any waiver by the
Participant and subject to applicable restrictions set forth in Section 10(a) hereof. 

        (iii)  With
respect to any outstanding Award subject to achievement of performance goals and conditions under the Plan, the Committee may, in its discretion, deem such
performance goals and conditions as having been met as of the date of the Change in Control. 

        (iv)  Notwithstanding
the foregoing, if in the event of a Change in Control the successor company assumes or substitutes for an Option, Stock Appreciation Right, Restricted
Stock Award, Deferred Stock Award or Other Stock-Based Award, then each outstanding Option, Stock Appreciation Right, Restricted Stock Award, Deferred Stock Award or Other Stock-Based Award shall not
be accelerated as described in Sections 9(a)(i), (ii) and (iii). For the purposes of this Section 9(a)(iv), an Option, Stock Appreciation Right, Restricted Stock Award, Deferred Stock
Award or Other Stock-Based Award shall be considered assumed or substituted for if following the Change in Control the award confers the right to purchase or receive, for each Share subject to the
Option, Stock Appreciation Right, Restricted Stock Award, Deferred Stock Award or Other Stock-Based Award immediately prior to the Change in Control, the consideration (whether stock, cash or other
securities or property) received in the transaction constituting a Change in Control by holders of Shares for each Share held on the effective date of such transaction (and if holders were offered a
choice of consideration, the type of consideration chosen by the holders of a majority of the outstanding shares); provided, however, that if such consideration received in the transaction
constituting a Change in Control is not solely common stock of the successor company or its parent or subsidiary, the Committee may, with the consent of the successor company or its parent or
subsidiary, provide that the consideration to be received upon the exercise or vesting of an Option, Stock Appreciation Right, Restricted Stock Award, Deferred Stock Award or Other Stock-Based Award,
for each Share subject thereto, will be solely common stock of the successor company 

14

 

or
its parent of subsidiary substantially equal in fair market value to the per share consideration received by holders of Shares in the transaction constituting a Change in Control. The determination
of such substantial equality of value of consideration shall be made by the Committee in its sole discretion and its determination shall be conclusive and binding. 

        (b)    Definition of "Change in Control".    Unless otherwise specified in an Award Agreement, a "Change in Control"
shall mean the occurrence of any of the following: 

        (i)    The
acquisition by any Person of Beneficial Ownership (within the meaning of Rule 13d-3 promulgated under the Exchange Act) of more than fifty percent
(50%) of either (A) the then outstanding shares of common stock of the Company (the "Outstanding Company Common Stock") or (B) the combined voting power of the then outstanding voting
securities of the Company entitled to vote generally in the election of directors (the "Outstanding Company Voting Securities) (the foregoing Beneficial Ownership hereinafter being referred to as a
"Controlling Interest"); provided, however, that for purposes of this Section 9(b), the following acquisitions shall not constitute or result in a Change of Control: (u) any acquisition
by Chris Clemente or Gregory Benson or any of their spouses or beneficiaries, or any trusts, partnerships, corporations, or other entities in which they are the sole beneficiaries or own all of the
Beneficial Interests; (v) any acquisition directly from the Company; (w) any acquisition by the Company; (x) any acquisition by any Person that as of the Effective Date owns
Beneficial Ownership of a Controlling Interest; (y) any acquisition by any employee benefit plan (or related trust) sponsored or maintained by the Company or any Subsidiary; or (z) any
acquisition by any corporation pursuant to a transaction which complies with clauses (A), (B) and (C) of subsection (iii) below; or 

        (ii)   During
any period of two (2) consecutive years (not including any period prior to the Effective Date) individuals who constitute the Board on the Effective Date
(the "Incumbent Board") cease for any reason to constitute at least a majority of the Board; provided, however, that any individual becoming a director subsequent to the Effective Date whose election,
or nomination for election by the Company's shareholders, was approved by a vote of at least a majority of the directors then comprising the Incumbent Board shall be considered as though such
individual were a member of the Incumbent Board, but excluding, for this purpose, any such individual whose initial assumption of office occurs as a result of an actual or threatened election contest
with respect to the election or removal of directors or other actual or threatened solicitation of proxies or consents by or on behalf of a Person other than the Board; or 

        (iii)  Consummation
of a reorganization, merger, statutory share exchange or consolidation or similar corporate transaction involving the Company or any of its Subsidiaries,
a sale or other disposition of all or substantially all of the assets of the Company, or the acquisition of assets or stock of another entity by the Company or any of its Subsidiaries (each a
"Business Combination"), in each case, unless, following such Business Combination, (A) all or substantially all of the individuals and entities who were the Beneficial Owners, respectively, of
the Outstanding Company Common Stock and Outstanding Company Voting Securities immediately prior to such Business Combination beneficially own, directly or indirectly, more than fifty percent (50%) of
the then outstanding shares of common stock and the combined voting power of the then outstanding voting securities entitled to vote generally in the election of directors, as the case may be, of the
corporation resulting from such Business Combination (including, without limitation, a corporation which as a result of such transaction owns the Company or all 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 Company Common
Stock and Outstanding 

15

 

Company
Voting Securities, as the case may be, (B) no Person (excluding any employee benefit plan (or related trust) of the Company or such corporation resulting from such Business Combination
or any Person that as of the Effective Date owns Beneficial Ownership of a Controlling Interest) beneficially owns, directly or indirectly, fifty percent (50%) or more of, the then outstanding shares
of common stock of the corporation resulting from such Business Combination or the combined voting power of the then outstanding voting securities of such corporation except to the extent that such
ownership existed prior to the Business Combination and (C) at least a majority of the members of the Board of Directors of the corporation resulting from such Business Combination were members
of the Incumbent Board at the time of the execution of the initial agreement, or of the action of the Board, providing for such Business Combination; or 

        (iv)  Approval
by the shareholders of the Company of a complete liquidation or dissolution of the Company. 

        10.    General Provisions.    

        (a)    Compliance With Legal and Other Requirements.    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 such registration or qualification of such Shares 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 Shares or other Company
securities 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. 

        (b)    Limits on Transferability; Beneficiaries.    No Award or other right or interest granted under the Plan shall
be pledged, hypothecated or otherwise encumbered or subject to any lien, obligation or liability of such Participant to any party, or assigned or transferred by such Participant otherwise than by will
or the laws of descent and distribution or to a Beneficiary upon the death of a Participant, and such Awards or rights that may be exercisable shall be exercised during the lifetime of the Participant
only by the Participant or his or her guardian or legal representative, except that Awards and other rights (other than Incentive Stock Options and Stock Appreciation Rights in tandem therewith) may
be transferred to one or more Beneficiaries or other transferees during the lifetime of the Participant, and may be exercised by such transferees in accordance with the terms of such Award, but only
if and to the extent such transfers are permitted by the Committee pursuant to the express terms of an Award Agreement (subject to any terms and conditions which the Committee may impose thereon). A
Beneficiary, transferee, or other person claiming any rights under the Plan from or through any Participant shall be subject to all terms and conditions of the Plan and any Award Agreement applicable
to such Participant, except as otherwise determined by the Committee, and to any additional terms and conditions deemed necessary or appropriate by the Committee. 

        (c)    Adjustments.    

        (i)    Adjustments to Awards.    In the event that any extraordinary dividend or other distribution (whether in the
form of cash, Shares, or other property), recapitalization, forward or reverse split, reorganization, merger, consolidation, spin-off, combination, repurchase, share exchange, liquidation,
dissolution or other similar corporate transaction or event affects the Shares and/or such other securities of the Company or any other issuer such that a substitution, exchange, or adjustment is
determined by the Committee to be appropriate, then 

16

 

the
Committee shall, in such manner as it may deem equitable, substitute, exchange or adjust any or all of (A) the number and kind of Shares which may be delivered in connection with Awards
granted thereafter, (B) the number and kind of Shares by which annual per-person Award limitations are measured under Section 5 hereof, (C) the number and kind of
Shares subject to or deliverable in respect of outstanding Awards, (D) the exercise price, grant price or purchase price relating to any Award and/or make provision for payment of cash or other
property in respect of any outstanding Award, and (E) any other aspect of any Award that the Committee determines to be appropriate. 

        (ii)    Adjustments in Case of Certain Corporate Transactions.    In the event of any merger, consolidation or other
reorganization in which the Company does not survive, or in the event of any Change in Control, any outstanding Awards may be dealt with in accordance with any of the following approaches, as
determined by the agreement effectuating the transaction or, if and to the extent not so determined, as determined by the Committee: (a) the continuation of the outstanding Awards by the
Company, if the Company is a surviving corporation, (b) the assumption or substitution for, as those terms are defined in Section 9(b)(iv) hereof, the outstanding Awards by the
surviving corporation or its parent or subsidiary, (c) full exercisability or vesting and accelerated expiration of the outstanding Awards, or (d) settlement of the value of the
outstanding Awards in cash or cash equivalents or other property followed by cancellation of such Awards (which value, in the case of Options or Stock Appreciation Rights, shall be measured by the
amount, if any, by which the Fair Market Value of a Share exceeds the exercise or grant price of the Option or Stock Appreciation Right as of the effective date of the transaction). The Committee
shall give written notice of any proposed transaction referred to in this Section 10(c)(ii) a reasonable period of time prior to the closing date for such transaction (which notice may
be given either before or after the approval of such transaction), in order that Participants may have a reasonable period of time prior to the closing date of such transaction within which to
exercise any Awards that are then exercisable (including any Awards that may become exercisable upon the closing date of such transaction). A Participant may condition his exercise of any Awards upon
the consummation of the transaction. 

        (iii)    Other Adjustments.    The Committee (and the Board if and only to the extent such authority is not required
to be exercised by the Committee to comply with Section 162(m) of the Code) is authorized to make adjustments in the terms and conditions of, and the criteria included in, Awards (including
Performance Awards, or performance goals relating thereto) in recognition of unusual or nonrecurring events (including, without limitation, acquisitions and dispositions of businesses and assets)
affecting the Company, any Related Entity or any business unit, or the financial statements of the Company or any Related Entity, or in response to changes in applicable laws, regulations, accounting
principles, tax rates and regulations or business conditions or in view of the Committee's assessment of the business strategy of the Company, any Related Entity or business unit thereof, performance
of comparable organizations, economic and business conditions, personal performance of a Participant, and any other circumstances deemed relevant; provided that no such adjustment shall be authorized
or made if and to the extent that such authority or the making of such adjustment would cause Awards granted subject to the provisions of Section 8 hereof to Participants designated by the
Committee as Covered Employees and intended to qualify as "performance-based compensation" under Code Section 162(m) and the regulations thereunder to otherwise fail to qualify as
"performance-based compensation" under Code Section 162(m) and regulations thereunder. 

        (d)    Taxes.    The Company and any Related Entity are authorized to withhold from any Award granted, any payment
relating to an Award under the Plan, including from a distribution of 

17

 

Shares,
or any payroll or other payment to a Participant, amounts of withholding and other taxes due or potentially payable in connection with any transaction involving an Award, and to take such
other action as the Committee may deem advisable to enable the Company or any Related Entity and Participants to satisfy obligations for the payment of withholding taxes and other tax obligations
relating to any Award. This authority shall include authority to withhold or receive Shares or other property and to make cash payments in respect thereof in satisfaction of a Participant's tax
obligations, either on a mandatory or elective basis in the discretion of the Committee. 

        (e)    Changes to the Plan and Awards.    The Board may amend, alter, suspend, discontinue or terminate the Plan, or
the Committee's authority to grant Awards under the Plan, without the consent of shareholders or Participants, except that any amendment or alteration to the Plan shall be subject to the approval of
the Company's shareholders not later than the annual meeting next following such Board action if such shareholder approval is required by any federal or state law or regulation (including, without
limitation, Rule 16b-3 or Code Section 162(m)) or the rules of any stock exchange or automated quotation system on which the Shares may then be listed or quoted, and the
Board may otherwise, in its discretion, determine to submit other such changes to the Plan to shareholders for approval; provided that, without the consent of an affected Participant, no such Board
action may materially and adversely affect the rights of such Participant under any previously granted and outstanding Award. The Committee may waive any conditions or rights under, or amend, alter,
suspend, discontinue or terminate any Award theretofore granted and any Award Agreement relating thereto, except as otherwise provided in the Plan; provided that, without the consent of an affected
Participant, no such Committee or the Board action may materially and adversely affect the rights of such Participant under such Award. Notwithstanding anything to the contrary, the Committee shall be
authorized to amend any outstanding Option and/or Stock Appreciation Right to reduce the exercise price or grant price without the prior approval of the shareholders of the Company. In addition, the
Committee shall be authorized to cancel outstanding Options and/or Stock Appreciate Rights replaced with Awards having a lower exercise price without the prior approval of the shareholders of the
Company. 

        (f)    Limitation on Rights Conferred Under Plan.    Neither the Plan nor any action taken hereunder shall be
construed as (i) giving any Eligible Person or Participant the right to continue as an Eligible Person or Participant or in the employ or service of the Company or a Related Entity;
(ii) interfering in any way with the right of the Company or a Related Entity to terminate any Eligible Person's or Participant's Continuous Service at any time, (iii) giving an Eligible
Person 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 shareholder of the Company unless and until the Participant is duly issued or transferred Shares in accordance with the terms of an Award. 

        (g)    Unfunded Status of Awards; Creation of Trusts.    The Plan is intended to constitute an "unfunded" plan for
incentive and deferred compensation. With respect to any payments not yet made to a Participant or obligation to deliver Shares pursuant to an Award, nothing contained in the Plan or any Award shall
give any such Participant any rights that are greater than those of a general creditor of the Company; provided that the Committee may authorize the creation of trusts and deposit therein cash,
Shares, other Awards or other property, or make other arrangements to meet the Company's obligations under the Plan. Such trusts or other arrangements shall be consistent with the "unfunded" status of
the Plan unless the Committee otherwise determines with the consent of each affected Participant. The trustee of such trusts may be authorized to dispose of trust assets and reinvest the proceeds in
alternative investments, subject to such terms and conditions as the Committee may specify and in accordance with applicable law. 

18

 

        (h)    Nonexclusivity of the Plan.    Neither the adoption of the Plan by the Board nor its submission to the
shareholders of the Company for approval shall be construed as creating any limitations on the power of the Board or a committee thereof to adopt such other incentive arrangements as it may deem
desirable including incentive arrangements and awards which do not qualify under Section 162(m) of the Code. 

        (i)    Payments in the Event of Forfeitures; Fractional Shares.    Unless otherwise determined by the Committee, in
the event of a forfeiture of an Award with respect to which a Participant paid cash or other consideration, the Participant shall be repaid the amount of such cash or other consideration. No
fractional Shares shall be issued or delivered pursuant to the Plan or any Award. The Committee shall determine whether cash, other Awards or other property shall be issued or paid in lieu of such
fractional shares or whether such fractional shares or any rights thereto shall be forfeited or otherwise eliminated. 

        (j)    Governing Law.    The validity, construction and effect of the Plan, any rules and regulations under the Plan,
and any Award Agreement shall be determined in accordance with the laws of the State of Delaware without giving effect to principles of conflict of laws, and applicable federal law. 

        (k)    Non-U.S. Laws.    The Committee shall have the authority to adopt such modifications, procedures,
and subplans as may be necessary or desirable to comply with provisions of the laws of foreign countries in which the Company or its Subsidiaries may operate to assure the viability of the benefits
from Awards granted to Participants performing services in such countries and to meet the objectives of the Plan. 

        (l)    Plan Effective Date and Shareholder Approval; Termination of Plan.    The Plan shall become effective on the
Effective Date, subject to subsequent approval, within 12 months of its adoption by the Board, by shareholders of the Company eligible to vote in the election of directors, by a vote sufficient
to meet
the requirements of Code Sections 162(m) (if applicable) and 422, Rule 16b-3 under the Exchange Act (if applicable), applicable requirements under the rules of any stock exchange or
automated quotation system on which the Shares may be listed or quoted, and other laws, regulations, and obligations of the Company applicable to the Plan. Awards may be granted subject to shareholder
approval, but may not be exercised or otherwise settled in the event the shareholder approval is not obtained. The Plan shall terminate at the earliest of (a) such time as no Shares remain
available for issuance under the Plan, (b) termination of this Plan by the Board, or (c) the tenth anniversary of the Effective Date. Awards outstanding upon expiration of the Plan shall
remain in effect until they have been exercised or terminated, or have expired. 

19

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COMSTOCK HOMEBUILDING COMPANIES, INC. 2004 LONG-TERM INCENTIVE COMPENSATION PLAN

COMSTOCK HOMEBUILDING COMPANIES, INC. 2004 LONG-TERM INCENTIVE COMPENSATION PLANQuickLinks
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Exhibit 10.13  

 
  COMSTOCK HOMEBUILDING COMPANIES, INC.
  NON-QUALIFIED STOCK OPTION AGREEMENT
  FOR
  [insert name of optionee here]    
    

 
  Agreement    
    

        1.    Grant of Option.    Comstock Homebuilding Companies, Inc. (the "Company") hereby grants, as of
[    ] ("Date of Grant"), to [    ] (the "Optionee") an option (the "Option") to purchase up to
[    ] shares of the Company's Class A Common Stock, $.01 par value per share (the "Shares"), at an exercise price per share equal to
$[    ] (the "Exercise Price"). The Option shall be subject to the terms and conditions set forth herein. The Option was issued pursuant to the Company's 2004
Long-Term Incentive Compensation Plan (the "Plan"), which is incorporated herein for all purposes. The Option is a Non-Qualified Stock Option, and not an Incentive Stock Option. The Optionee hereby
acknowledges receipt of a copy of the Plan and agrees to be bound by all of the terms and conditions hereof and thereof and all applicable laws and regulations. 

        2.    Definitions.    Unless otherwise provided herein, terms used herein that are defined in the Plan and not defined
herein shall have the meanings attributed thereto in the Plan. 

        3.    Exercise Schedule.    Except as otherwise provided in Sections 6 or 9 of this Agreement, or in the Plan, the
Option is exercisable in installments as provided below, which shall be cumulative. To the extent that the Option has become exercisable with respect to a percentage of Shares as provided below, the
Option may thereafter be exercised by the Optionee, in whole or in part, at any time or from time to time prior to the expiration of the Option as provided herein. The following table indicates each
date (the "Vesting Date") upon which the Optionee shall be entitled to exercise the Option with respect to
the percentage of Shares granted as indicated beside the date, provided that the Continuous Service of the Optionee continues through and on the applicable Vesting Date: 

	Percentage of Shares
 
	 	Vesting Date

	

  	
 	

 
	

  	
 	

 
	

  	
 	

 

        Except
as otherwise specifically provided herein, there shall be no proportionate or partial vesting in the periods prior to each Vesting Date, and all vesting shall occur only on the
appropriate Vesting Date. Upon the termination of the Optionee's Continuous Service with the Company and its Related Entities, any unvested portion of the Option shall terminate and be null and void. 

        4.    Method of Exercise.    The vested portion of this Option shall be exercisable in whole or in part in accordance
with the exercise schedule set forth in Section 3 hereof by written notice which shall state the election to exercise the Option, the number of Shares in respect of which the Option is being
exercised, and such other representations and agreements as to the holder's investment intent with respect to such Shares as may be required by the Company pursuant to the provisions of the Plan. Such
written notice shall be signed by the Optionee and shall be delivered in person or by certified mail to the Secretary of the Company. The written notice shall be accompanied by payment of the Exercise
Price. This Option shall be deemed to be exercised after both (a) receipt by the Company of such written notice accompanied by the Exercise Price and (b) arrangements that are satisfactory to the
Committee in its sole discretion have been made for Optionee's payment to the Company of the amount, if any, that is necessary to be withheld in accordance with applicable Federal or state withholding
requirements. No Shares will be issued pursuant to the Option unless and until such issuance and such exercise shall comply with all relevant provisions of applicable law, including the requirements
of any stock exchange upon which the Shares then may be traded. 

        5.    Method of Payment.    Payment of the Exercise Price shall be by any of the following, or a combination thereof,
at the election of the Optionee: (a) cash, (b) check, (c) with Shares that have been held by the Optionee for at least 6 months (or such other Shares as the Company determines will not cause the
Company to recognize for financial accounting purposes a charge for compensation expense), (d) pursuant to a "cashless exercise" procedure, by delivery of a properly executed exercise notice together
with such other documentation, and subject to such guidelines, as the Committee shall require to effect an exercise of the Option and delivery to the Company by a licensed broker acceptable to the
Company of proceeds from the sale of Shares or a margin loan sufficient to pay the Exercise Price and any applicable income or employment taxes, or (e) such other consideration or in such other manner
as may be determined by the Committee in its absolute discretion. 

        6.    Termination of Option.    

        (a)   Any
unexercised portion of the Option shall automatically and without notice terminate and become null and void at the time of the earliest to occur of the following: 

        (i)    unless
the Committee otherwise determines in writing in its sole discretion, three months after the date on which the Optionee's Continuous Service with the Company and
its Related Entities is terminated for any reason other than by reason of (A) by the Company or a Related Entity for Cause, (B) a Disability of the Optionee as determined by a medical doctor
satisfactory to the Committee, or (C) the Optionee's death; 

        (ii)   immediately
upon the termination of the Optionee's Continuous Service with the Company and its Related Entities for Cause; 

        (iii)  twelve
months after the date on which the Optionee's Continuous Service with the Company and its Related Entities is terminated by reason of a Disability as determined
by a medical doctor satisfactory to the Committee; 

        (iv)  twelve
months after the date of termination of the Optionee's Continuous Service with the Company and its Related Entities by reason of the death of the Optionee (or,
if later, three months after the date on which the Optionee shall die if such death shall occur during the one year period specified in paragraph (iii) of this Section 6); [or] 

        (v)   the
tenth anniversary of the date as of which the Option is granted[.] [; or] 

        [(vi) immediately
in the event that the Optionee shall file any lawsuit or arbitration claim against the Company or any Subsidiary, or any of their respective
officers, directors or shareholders.] 

        (b)   In
the event of any merger, consolidation or other reorganization in which the Company does not survive, or in the event of any Change in Control, as defined in Section
9(b) of the Plan, the Option may be dealt with in accordance with any of the following approaches, as determined by the agreement effectuating the transaction or, if and to the extent not so
determined, as determined by the Committee: (a) the continuation of the Option by the Company, if the Company is a surviving corporation, (b) the assumption or substitution for, as those terms are
defined in Section 9(b)(iv) of the Plan, the outstanding Option by the surviving corporation or its parent or subsidiary, (c) full exercisability or vesting and accelerated expiration of the Option,
or (d) settlement of the value of the Option in cash or cash equivalents or other property followed by cancellation of the Option (which value shall be measured by the amount, if any, by which the
Fair Market Value of a Share exceeds the exercise or grant price of the Option as of the effective date of the transaction). The Committee shall give written notice of any proposed transaction
referred to in this Section 6(b) a reasonable period of time prior to the closing date for such transaction (which notice may be given either before or after the approval of such transaction), in
order that the Optionee may have a reasonable period of time prior to the closing date of such transaction within which to exercise the portion of the Option that is then exercisable (including any
portion of the Option that may become exercisable upon the closing date of such transaction). The Optionee may condition his exercise of the Option upon the consummation of the transaction. 

        7.    Transferability.    Unless otherwise determined by the Committee, the Option granted hereby is not transferable
otherwise than by will or under the applicable laws of descent and distribution, and during
the lifetime of the Optionee the Option shall be exercisable only by the Optionee, or the Optionee's guardian or legal representative. In addition, the Option shall not be assigned, negotiated,
pledged or hypothecated in any way (whether by operation of law or otherwise), and the Option shall not be subject to execution, attachment or similar process. Upon any attempt to transfer, assign,
negotiate, pledge or hypothecate the Option, or in the event of any levy upon the Option by reason of any execution, attachment or similar process contrary to the provisions hereof, the Option shall
immediately become null and void. The terms of this Option shall be binding upon the executors, administrators, heirs, successors and assigns of the Optionee. 

        8.    No Rights of Stockholders.    Neither the Optionee nor any personal representative (or beneficiary) shall be, or
shall have any of the rights and privileges of, a stockholder of the Company with respect to any shares of Stock purchasable or issuable upon the exercise of the Option, in whole or in part, prior to
the date of exercise of the Option. 

        9.    Acceleration of Exercisability of Option.    

        (a)   The
exercisability of the Option shall accelerate if and to the extent provided pursuant to Section 6(b) hereof. 

        (b)   Notwithstanding
the foregoing, if, within twelve months after a Change in Control of the Company, the Optionee's Continuous Service is terminated (i) by the Company or a
Related Entity without Cause, [or] (ii) by the Optionee for Good Reason, [or (iii) by reason of the Optionee's death or Disability,] then the Option (or
any Substitute Award for the Option) shall be immediately fully exercisable for the applicable period following the termination of the Optionee's Continuous Service, as described in this Section 6. 

        10.    No Right to Continued Employment.    Neither the Option nor this Agreement shall confer upon the Optionee any
right to continued employment or service with the Company. 

        11.    Law Governing.    This Agreement shall be governed in accordance with and governed by the internal laws of the
State of Delaware. 

        12.    Interpretation/Provisions of Plan Control.    This Agreement is subject to all the terms, conditions and
provisions of the Plan, including, without limitation, the amendment provisions thereof, and to such rules, regulations and interpretations relating to the Plan adopted by the Committee as may be in
effect from time to time. If and to the extent that this Agreement conflicts or is inconsistent with the terms, conditions and provisions of the Plan, the Plan shall control, and this Agreement shall
be deemed to be modified accordingly. The Optionee accepts the Option subject to all the terms and provisions of the Plan and this Agreement. The undersigned Optionee hereby accepts as binding,
conclusive and final all
decisions or interpretations of the Committee upon any questions arising under the Plan and this Agreement, unless shown to have been made in an arbitrary and capricious manner. 

        13.    Notices.    Any notice under this Agreement shall be in writing and shall be deemed to have been duly given
when delivered personally or when deposited in the United States mail, registered, postage prepaid, and addressed, in the case of the Company, to the Company's Secretary at
[    ], or if the Company should move its principal office, to such principal office, and, in the case of the Optionee, to the Optionee's last permanent address as
shown on the Company's records, subject to the right of either party to designate some other address at any time hereafter in a notice satisfying the requirements of this Section. 

        14.    Tax Consequences.    Set forth below is a brief summary as of the date of this Option Agreement of some of the
federal tax consequences of exercise of this Option and disposition of the Shares. THIS SUMMARY IS NECESSARILY INCOMPLETE, AND THE TAX LAWS AND REGULATIONS ARE SUBJECT TO CHANGE. THE OPTIONEE SHOULD
CONSULT A TAX ADVISER BEFORE EXERCISING THIS OPTION OR DISPOSING OF THE SHARES. 

        (a)   The
Optionee will not recognize any income on receipt of the Option. 

        (b)   The
Optionee will recognize ordinary income at the time he exercises the Option equal to the amount by which the Fair Market Value of the Shares on the date of exercise
exceeds the Exercise Price paid for the Shares. The amount so recognized is subject to income tax withholding and employment taxes if the Optionee is an employee of the Company or a Related Entity. 

        (c)   The
Optionee's tax basis for the Shares received as a result of the exercise of the Option will be equal to the Fair Market Value of those Shares on the date the Option
is exercised. 

        (d)   Upon
the sale of the Shares, the Optionee will recognize a capital gain or loss on the difference between the amount realized from the sale of the Shares and the Fair
Market Value on the date the Option is exercised. The gain or loss would be short- or long-term depending upon whether the Shares were held for at least one year after the date of exercise of the
Option. 

        IN WITNESS WHEREOF, the undersigned have executed this Agreement as of the [    ] day of
[                    ], [    ]. 

	 	 	COMPANY:
	

 	
 	
COMSTOCK HOMEBUILDING COMPANIES, INC.,

a Delaware Corporation
	

 	
 	

By:	

  

	 	 	 	[                    ]

        The
Optionee acknowledges receipt of a copy of the Plan and represents that he or she has reviewed the provisions of the Plan and this Option Agreement in their entirety, is familiar
with and understands their terms and provisions, and hereby accepts this Option subject to all of the terms and provisions of the Plan and the Option Agreement. The Optionee further represents that he
or she has had an opportunity to obtain the advice of counsel prior to executing this Option Agreement. 

	

Dated:	

  
	
 	
OPTIONEE:
	

 	

 	
 	

By:	

  

	 	 	 	 	[                    ]

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COMSTOCK HOMEBUILDING COMPANIES, INC. NON-QUALIFIED STOCK OPTION AGREEMENT FOR [insert name of optionee here]

Agreement

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