Document:

Exhibit

Exhibit 10.1

ECHELON CORPORATION
2016 EQUITY INCENTIVE PLAN
1.Purposes of the Plan.  The purposes of this Plan are: 
		
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	to attract and retain the best available personnel for positions of substantial responsibility,

		
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	to provide additional incentive to Employees, Directors and Consultants, and 

		
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	to promote the success of the Company’s business.

The Plan permits the grant of Incentive Stock Options, Nonstatutory Stock Options, Restricted Stock, Restricted Stock Units, Stock Appreciation Rights, Performance Units and Performance Shares.
2.    Definitions.  As used herein, the following definitions will apply:
(a)    “Administrator” means the Board or any of its Committees as will be administering the Plan, in accordance with Section 4 of the Plan.
(b)    “Affiliate” means any entity that, directly or indirectly, controls, is controlled by, or is under common control with, the Company.
(c)    “Applicable Laws” means the requirements relating to the administration of equity-based awards under U.S. state corporate laws, U.S. federal and state securities laws, the Code, any stock exchange or quotation system on which the Common Stock is listed or quoted and the applicable laws of any foreign country or jurisdiction where Awards are, or will be, granted under the Plan.
(d)    “Award” means, individually or collectively, a grant under the Plan of Options, Stock Appreciation Rights, Restricted Stock, Restricted Stock Units, Performance Units or Performance Shares.
(e)    “Award Agreement” means the written or electronic agreement setting forth the terms and provisions applicable to each Award granted under the Plan.  The Award Agreement is subject to the terms and conditions of the Plan.
(f)    “Base Salary” means the fixed amount of money paid to an Employee in return for work performed, excluding any commissions, bonuses, benefits or any other potential compensation.
(g)    “Board” means the Board of Directors of the Company.
(h)    “Cause” means (i) any act of personal dishonesty taken by the Participant in connection with his or her responsibilities as a Service Provider and intended to result in substantial personal enrichment of the Participant, (ii) Participant’s conviction of a felony, (iii) a willful act by the Participant which constitutes gross misconduct and which is injurious to the Company or its successor corporation, and (iv) following delivery to the Participant of a written demand for performance from the Company or its successor corporation which describes the basis for the belief of the Company or its successor corporation that the Participant has not 

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substantially performed his duties, continued violations by the Participant of the Participant’s obligations, which are demonstrably willful and deliberate on the Participant’s part.
(i)    “Change in Control” means the occurrence of any of the following events:
(i)    A change in the ownership of the Company which occurs on the date that any one person, or more than one person acting as a group (“Person”), acquires ownership of the stock of the Company that, together with the stock held by such Person, constitutes more than 50% of the total voting power of the stock of the Company; provided, however, that for purposes of this subsection, the acquisition of additional stock by any one Person, who is considered to own more than 50% of the total voting power of the stock of the Company will not be considered a Change in Control.  Further, if the stockholders of the Company immediately before such change in ownership continue to retain immediately after the change in ownership, in substantially the same proportions as their ownership of shares of the Company’s voting stock immediately prior to the change in ownership, direct or indirect beneficial ownership of 50% or more of the total voting power of the stock of the Company or of the ultimate parent entity of the Company, such event will not be considered a Change in Control under this subsection (i).  For this purpose, indirect beneficial ownership will include, without limitation, an interest resulting from ownership of the voting securities of one or more corporations or other business entities which own the Company, as the case may be, either directly or through one or more subsidiary corporations or other business entities; or 
(ii)    A change in the effective control of the Company which occurs on the date that a majority of members of the Board is replaced during any 12 month period by Directors whose appointment or election is not endorsed by a majority of the members of the Board prior to the date of the appointment or election.  For purposes of this subsection (ii), if any Person is considered to be in effective control of the Company, the acquisition of additional control of the Company by the same Person will not be considered a Change in Control; or
(iii)    A change in the ownership of a substantial portion of the Company’s assets which occurs on the date that any Person acquires (or has acquired during the 12 month period ending on the date of the most recent acquisition by such person or persons) assets from the Company that have a total gross fair market value equal to or more than 50% of the total gross fair market value of all of the assets of the Company immediately prior to such acquisition or acquisitions; provided, however, that for purposes of this subsection (iii), the following will not constitute a change in the ownership of a substantial portion of the Company’s assets: (A) a transfer to an entity that is controlled by the Company’s stockholders immediately after the transfer, or (B) a transfer of assets by the Company to: (1) a stockholder of the Company (immediately before the asset transfer) in exchange for or with respect to the Company’s stock, (2) an entity, 50% or more of the total value or voting power of which is owned, directly or indirectly, by the Company, (3) a Person, that owns, directly or indirectly, 50% or more of the total value or voting power of all the outstanding stock of the Company, or (4) an entity, at least 50% of the total value or voting power of which is owned, directly or indirectly, by a Person described in this subsection (iii)(B)(3).  For purposes of this subsection (iii), gross fair market value means the value of the assets of the Company, or the value of the assets being disposed of, determined without regard to any liabilities associated with such assets.
For purposes of this definition, persons will be considered to be acting as a group if they are owners of a corporation that enters into a merger, consolidation, purchase or acquisition of stock, or similar business transaction with the Company.
Notwithstanding the foregoing, a transaction will not be deemed a Change in Control unless the transaction qualifies as a change in control event within the meaning of Section 409A of the Code, as 

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it has been and may be amended from time to time, and any proposed or final Treasury Regulations and Internal Revenue Service guidance that has been promulgated or may be promulgated thereunder from time to time.
Further and for the avoidance of doubt, a transaction will not constitute a Change in Control if: (i) its sole purpose is to change the state of the Company’s incorporation, or (ii) its sole purpose is to create a holding company that will be owned in substantially the same proportions by the persons who held the Company’s securities immediately before such transaction.
(j)    “Code” means the Internal Revenue Code of 1986, as amended.  Reference to a specific section of the Code or regulation thereunder will include such section or regulation, any valid regulation promulgated under such section, and any comparable provision of any future legislation or regulation amending, supplementing or superseding such section or regulation.
(k)    “Committee” means a committee of Directors or of other individuals satisfying Applicable Laws appointed by the Board, or a duly authorized committee of the Board, in accordance with Section 4 hereof.
(l)    “Common Stock” means the common stock of the Company.
(m)    “Company” means Echelon Corporation, a Delaware corporation, or any successor thereto.
(n)    “Consultant” means any natural person, including an advisor, engaged by the Company or a Parent, Subsidiary, or Affiliate to render bona fide services to such entity, provided the services (i) are not in connection with the offer or sale of securities in a capital‐raising transaction, and (ii) do not directly promote or maintain a market for the Company’s securities, in each case, within the meaning of Form S-8 promulgated under the Securities Act, and provided, further, that a Consultant will include only those persons to whom the issuance of Shares may be registered under Form S-8 promulgated under the Securities Act.
(o)    “Determination Date” means the latest possible date that will not jeopardize the qualification of an Award granted under the Plan as “performance-based compensation” under Section 162(m) of the Code.
(p)    “Director” means a member of the Board.
(q)    “Disability” means total and permanent disability as defined in Section 22(e)(3) of the Code, provided that in the case of Awards other than Incentive Stock Options, the Administrator in its discretion may determine whether a permanent and total disability exists in accordance with uniform and non-discriminatory standards adopted by the Administrator from time to time.  
(r)    “Dividend Equivalent” means a credit, made at the discretion of the Administrator or as otherwise provided by the Plan, to the account of a Participant in an amount equal to the cash dividends paid on one Share for each Share represented by an Award held by such Participant.
(s)    “Employee” means any person, including Officers and Directors, employed by the Company or any Parent, Subsidiary, or Affiliate of the Company.  Neither service as a Director nor payment of a director’s fee by the Company will be sufficient to constitute “employment” by the Company.
(t)    “Exchange Act” means the Securities Exchange Act of 1934, as amended.
(u)    “Exchange Program” means a program under which (i) outstanding Awards are surrendered or cancelled in exchange for awards of the same type (which may have higher or lower exercise prices and different 

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terms), awards of a different type, and/or cash, (ii) Participants would have the opportunity to transfer any outstanding Awards to a financial institution or other person or entity selected by the Administrator, and/or (iii) the exercise price of an outstanding Award is increased or reduced.  The Administrator will determine the terms and conditions of any Exchange Program in its sole discretion.
(v)    “Fair Market Value” means, as of any date, the value of Common Stock determined as follows:
(i)    If the Common Stock is listed on any established stock exchange or a national market system, including without limitation the New York Stock Exchange, the NASDAQ Global Select Market, the NASDAQ Global Market or the NASDAQ Capital Market of The NASDAQ Stock Market, its Fair Market Value will be the closing sales price for such stock (or the closing bid, if no sales were reported) as quoted on such exchange or system on the day of determination, as reported in The Wall Street Journal or such other source as the Administrator deems reliable;
(ii)    If the Common Stock is regularly quoted by a recognized securities dealer but selling prices are not reported, the Fair Market Value of a Share will be the mean between the high bid and low asked prices for the Common Stock on the day of determination (or, if no bids and asks were reported on that date, as applicable, on the last trading date such bids and asks were reported), as reported in The Wall Street Journal or such other source as the Administrator deems reliable; or
(iii)    In the absence of an established market for the Common Stock, the Fair Market Value will be determined in good faith by the Administrator.
(w)    “Fiscal Year” means the fiscal year of the Company.
(x)    “Grant Date” means the date an Award is granted to a Service Provider pursuant to the Plan.
(y)    “Incentive Stock Option” means an Option that by its terms qualifies and is intended to qualify as an incentive stock option within the meaning of Section 422 of the Code and the regulations promulgated thereunder.
(z)    “Inside Director” means a Director who is an Employee.
(aa)    “Involuntary Termination” means (i) without the Participant's express written consent, a significant reduction of the Participant's duties, authority or responsibilities, relative to the Participant's duties, authority or responsibilities as in effect immediately prior to the Change of Control Merger; (ii) without the Participant's express written consent, a substantial reduction, without good business reasons, of the facilities and perquisites (including office space and location) available to the Participant immediately prior to the Change of Control Merger; (iii) a material reduction in the Base Salary of the Participant as in effect immediately prior to the Change of Control Merger, other than a uniform reduction applicable to all executives generally; (iv) a material reduction in the kind or level of employee benefits, including bonuses, to which the Participant was entitled immediately prior to the Change of Control Merger with the result that the Participant's overall benefits package is significantly reduced; (v) the relocation of the Participant to a facility or a location more than 30 miles from the Participant's then present location, without the Participant's express written consent; or (vi) any purported termination of the Participant which is not effected for Disability or for Cause, or any purported termination for which the grounds relied upon are not valid.  
(bb)    “Nonstatutory Stock Option” means an Option that by its terms does not qualify or is not intended to qualify as an Incentive Stock Option.

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(cc)    “Officer” means a person who is an officer of the Company within the meaning of Section 16 of the Exchange Act and the rules and regulations promulgated thereunder.
(dd)    “Option” means a stock option granted pursuant to the Plan.
(ee)    “Outside Director” means a Director who is not an Employee.
(ff)    “Parent” means a “parent corporation,” whether now or hereafter existing, as defined in Section 424(e) of the Code.
(gg)    “Participant” means the holder of an outstanding Award.
(hh)    “Performance Goals” will have the meaning set forth in Section 11 of the Plan.
(ii)    “Performance Period” means any Fiscal Year of the Company or such other period as determined by the Administrator in its sole discretion. 
(jj)    “Performance Share” means an Award denominated in Shares which may be earned in whole or in part upon attainment of Performance Goals or other vesting criteria as the Administrator may determine pursuant to Section 10.
(kk)    “Performance Unit” means an Award which may be earned in whole or in part upon attainment of Performance Goals or other vesting criteria as the Administrator may determine and which may be settled for cash, Shares or other securities or a combination of the foregoing  pursuant to Section 10.
(ll)    “Period of Restriction” means the period during which the transfer of Shares of Restricted Stock are subject to restrictions and therefore, the Shares are subject to a substantial risk of forfeiture.  Such restrictions may be based on the passage of time, the achievement of target levels of performance, or the occurrence of other events as determined by the Administrator.
(mm)    “Plan” means this Echelon Corporation 2016 Equity Incentive Plan.
(nn)    “Restricted Stock” means Shares issued pursuant to a Restricted Stock award under Section 7 of the Plan, or issued pursuant to the early exercise of an Option.
(oo)    “Restricted Stock Unit” means a bookkeeping entry representing an amount equal to the Fair Market Value of one Share, granted pursuant to Section 8.  Each Restricted Stock Unit represents an unfunded and unsecured obligation of the Company.
(pp)    “Rule 16b-3” means Rule 16b-3 of the Exchange Act or any successor to Rule 16b-3, as in effect when discretion is being exercised with respect to the Plan.
(qq)    “Section 16(b)”  means Section 16(b) of the Exchange Act.
(rr)    “Service Provider” means an Employee, Director or Consultant.
(ss)    “Share” means a share of the Common Stock, as adjusted in accordance with Section 15 of the Plan.

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(tt)    “Stock Appreciation Right” means an Award, granted alone or in connection with an Option, that pursuant to Section 9 is designated as a Stock Appreciation Right.
(uu)    “Subsidiary” means a “subsidiary corporation,” whether now or hereafter existing, as defined in Section 424(f) of the Code.
3.    Stock Subject to the Plan.  
(a)    Stock Subject to the Plan.  Subject to the provisions of Section 15 of the Plan, the maximum aggregate number of Shares that may be issued under the Plan is (i) 500,000 Shares plus (ii) any Shares subject to stock options, restricted stock units, performance shares or similar awards granted under the 1997 Stock Plan (the “1997 Plan”) that, after the termination of the 1997 Plan, expire or otherwise terminate without having vested or without having been exercised in full and Shares issued pursuant to awards granted under the 1997 Plan that are forfeited to or repurchased by the Company, with the maximum number of Shares to be added to the Plan as a result of clause (ii) equal to 830,228.  The Shares may be authorized, but unissued, or reacquired Common Stock.  
(b)    Lapsed Awards.  If an Award expires or becomes unexercisable without having been exercised in full, is surrendered pursuant to an Exchange Program, or, with respect to Restricted Stock, Restricted Stock Units, Performance Units or Performance Shares, is forfeited to or repurchased by the Company due to failure to vest, then the unpurchased Shares (or for Awards other than Options or Stock Appreciation Rights the forfeited or repurchased Shares), which were subject thereto will become available for future grant or sale under the Plan (unless the Plan has terminated).  Shares that have actually been issued under the Plan under any Award will not be returned to the Plan and will not become available for future distribution under the Plan; provided, however, that if Shares issued pursuant to Awards of Restricted Stock, Restricted Stock Units, Performance Shares or Performance Units are repurchased by the Company or are forfeited to the Company, such Shares will become available for future grant under the Plan.  To the extent an Award under the Plan is paid out in cash rather than Shares, such cash payment will not result in reducing the number of Shares available for issuance under the Plan.  Notwithstanding the foregoing and, subject to adjustment as provided in Section 15, the maximum number of Shares that may be issued upon the exercise of Incentive Stock Options will equal the aggregate Share number stated in Section 3(a), plus, to the extent allowable under Section 422 of the Code and the Treasury Regulations promulgated thereunder, any Shares that become available for issuance under the Plan pursuant to Section 3(b).  Notwithstanding anything to the contrary contained herein, the following Shares shall not be added to the Shares authorized for grant under paragraph (a) of this Section: (i) Shares tendered by the Participant or withheld by the Company in payment of the purchase price of an Option, (ii) Shares tendered by the Participant or withheld by the Company to satisfy any tax withholding obligation with respect to an Award, (iii) Shares repurchased by the Company with Option proceeds, and (iv) Shares subject to a Stock Appreciation Right that are not issued in connection with the stock settlement of the Stock Appreciation Right on exercise thereof.
(c)    Share Reserve.  The Company, during the term of this Plan, will at all times reserve and keep available such number of Shares as will be sufficient to satisfy the requirements of the Plan.
(d)    Exception to Minimum One (1) Year Vesting, Period of Restriction, and Performance Period.  Notwithstanding anything contained in the Plan to the contrary, Awards up to a maximum of five percent (5%) of the Shares available for Awards pursuant to Section 3(a) may be granted without regard to the minimum one (1) year vesting, Period of Restriction, and Performance Period requirements of Sections 6(d)(i), 7(b), 8(b), 9(d) and 10(c).

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4.    Administration of the Plan. 
(a)    Procedure.
(i)    Multiple Administrative Bodies.  Different Committees with respect to different groups of Service Providers may administer the Plan.
(ii)    Section 162(m).  To the extent that the Administrator determines it to be desirable to qualify Awards granted hereunder as “performance-based compensation” within the meaning of Section 162(m) of the Code, the Plan will be administered by a Committee of two (2) or more “outside directors” within the meaning of Section 162(m) of the Code.
(iii)    Rule 16b-3.  To the extent desirable to qualify transactions hereunder as exempt under Rule 16b-3, the transactions contemplated hereunder will be structured to satisfy the requirements for exemption under Rule 16b-3.
(iv)    Other Administration.  Other than as provided above, the Plan will be administered by (A) the Board or (B) a Committee, which committee will be constituted to satisfy Applicable Laws.  
(b)    Powers of the Administrator.  Subject to the provisions of the Plan, and in the case of a Committee, subject to the specific duties delegated by the Board to such Committee, the Administrator will have the authority, in its discretion:
(i)    to determine the Fair Market Value;
(ii)    to select the Service Providers to whom Awards may be granted hereunder;
(iii)    to determine the number of Shares to be covered by each Award granted hereunder;
(iv)    to approve forms of Award Agreements for use under the Plan;
(v)    to determine the terms and conditions, not inconsistent with the terms of the Plan, of any Award granted hereunder.  Such terms and conditions include, but are not limited to, the exercise price, the time or times when Awards may be exercised (which may be based on performance criteria), any vesting acceleration or waiver of forfeiture restrictions, and any restriction or limitation regarding any Award or the Shares relating thereto, based in each case on such factors as the Administrator will determine;
(vi)    to determine whether Awards will be adjusted for Dividend Equivalents; provided, however, that in no event will a Dividend Equivalent be attached to an Option, Stock Appreciation Rights or full-value Award, in each case, with performance-based vesting conditions granted hereunder;
(vii)    to institute and determine the terms and conditions of an Exchange Program; provided however, that no Exchange Program may be implemented without prior approval from the Company’s stockholders;
(viii)    to construe and interpret the terms of the Plan and Awards granted pursuant to the Plan; 
(ix)    to prescribe, amend and rescind rules and regulations relating to the Plan, including rules and regulations relating to sub-plans established for the purpose of satisfying applicable foreign laws or for qualifying for favorable tax treatment under applicable foreign laws;

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(x)    to modify or amend each Award (subject to Section 20 of the Plan), including but not limited to the discretionary authority to extend the post-termination exercisability period of Awards and to extend the maximum term of an Option (subject to Section 6(b) of the Plan regarding Incentive Stock Options);
(xi)    to allow Participants to satisfy tax withholding obligations in such manner as prescribed in Section 16 of the Plan;
(xii)    to authorize any person to execute on behalf of the Company any instrument required to effect the grant of an Award previously granted by the Administrator;
(xiii)    to allow a Participant to defer the receipt of the payment of cash or the delivery of Shares that would otherwise be due to such Participant under an Award; and
(xiv)    to make all other determinations deemed necessary or advisable for administering the Plan.
(c)    Effect of Administrator’s Decision. The Administrator’s decisions, determinations and interpretations will be final and binding on all Participants and any other holders of Awards.
5.    Eligibility.  Nonstatutory Stock Options, Stock Appreciation Rights, Restricted Stock, Restricted Stock Units, Performance Shares and Performance Units may be granted to Service Providers.  Incentive Stock Options may be granted only to Employees.
6.    Stock Options.
(a)    Limitations.  
(i)    Each Option will be designated in the Award Agreement as either an Incentive Stock Option or a Nonstatutory Stock Option.  However, notwithstanding such designation, to the extent that the aggregate Fair Market Value of the Shares with respect to which Incentive Stock Options are exercisable for the first time by the Participant during any calendar year (under all plans of the Company and any Parent or Subsidiary) exceeds one hundred thousand dollars ($100,000), such Options will be treated as Nonstatutory Stock Options.  For purposes of this Section 6(a), Incentive Stock Options will be taken into account in the order in which they were granted.  The Fair Market Value of the Shares will be determined as of the time the Option with respect to such Shares is granted.
(ii)    Subject to Section 12 of the Plan, the following limitations will apply to grants of Options:
(1)    No Service Provider will be granted, in any Fiscal Year, Options to purchase more than 150,000 Shares.
(2)    In connection with his or her initial service, a Service Provider may be granted Options to purchase up to an additional 150,000 Shares that will not be counted against the limit set forth in subsection (1) above. 
(3)    The foregoing limitations will be adjusted proportionately in connection with any change in the Company’s capitalization, as described in Section 15.

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(4)    If an Option is cancelled in the same Fiscal Year in which it was granted (other than in connection with a transaction described in Section 15), the cancelled Option will be counted against the limits set forth in subsections (1) and (2) above.  For this purpose, if the exercise price of an Option is reduced, the transaction will be treated as a cancellation of the Option and the grant of a new Option. 
(b)    Term of Option.  The term of each Option will be stated in the Award Agreement.  In the case of an Incentive Stock Option, the term will be ten years from the date of grant or such shorter term as may be provided in the Award Agreement.  Moreover, in the case of an Incentive Stock Option granted to a Service Provider who, at the time the Incentive Stock Option is granted, owns stock representing more than 10% of the total combined voting power of all classes of stock of the Company or any Parent or Subsidiary, the term of the Incentive Stock Option will be five years from the date of grant or such shorter term as may be provided in the Award Agreement.
(c)    Option Exercise Price and Consideration.
(i)    Exercise Price.  The per share exercise price for the Shares to be issued pursuant to exercise of an Option will be determined by the Administrator, subject to the following:
(1)    In the case of an Incentive Stock Option
(A)    granted to an Employee who, at the time the Incentive Stock Option is granted, owns stock representing more than 10% of the voting power of all classes of stock of the Company or any Parent or Subsidiary, the per Share exercise price will be no less than 110% of the Fair Market Value per Share on the date of grant.
(B)    granted to any Employee other than an Employee described in paragraph (A) immediately above, the per Share exercise price will be no less than 100% of the Fair Market Value per Share on the date of grant.
(2)    In the case of a Nonstatutory Stock Option, the per Share exercise price will be no less than 100% of the Fair Market Value per Share on the date of grant.
(3)    Notwithstanding the foregoing, Options may be granted with a per Share exercise price of less than 100% of the Fair Market Value per Share on the date of grant pursuant to a transaction described in, and in a manner consistent with, Section 424(a) of the Code.
(ii)    Waiting Period and Exercise Dates.  At the time an Option is granted, the Administrator will fix the period within which the Option may be exercised and will determine any conditions that must be satisfied before the Option may be exercised.
(iii)    Form of Consideration.  The Administrator will determine the acceptable form of consideration for exercising an Option, including the method of payment.  In the case of an Incentive Stock Option, the Administrator will determine the acceptable form of consideration at the time of grant.  Such consideration may consist entirely of: (1) cash; (2) check; (3) promissory note, to the extent permitted by Applicable Laws, (4) other Shares, provided that such Shares have a Fair Market Value on the date of surrender equal to the aggregate exercise price of the Shares as to which such Option will be exercised and provided that accepting such Shares will not result in any adverse accounting consequences to the Company, as the Administrator determines in its sole discretion; (5) consideration received by the Company under a broker-assisted (or other) cashless exercise program (whether through a broker or otherwise) implemented by the Company in connection with the Plan; 

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(6) by net exercise; (7) such other consideration and method of payment for the issuance of Shares to the extent permitted by Applicable Laws; or (8) any combination of the foregoing methods of payment.
(d)    Exercise of Option.
(i)    Procedure for Exercise; Rights as a Stockholder.  Any Option granted hereunder will be exercisable according to the terms of the Plan and at such times and under such conditions as determined by the Administrator and set forth in the Award Agreement; provided, however, that Options shall become vested and exercisable no earlier than one (1) year after the Grant Date.  An Option may not be exercised for a fraction of a Share.
An Option will be deemed exercised when the Company receives: (i) a notice of exercise (in such form as the Administrator may specify from time to time) from the person entitled to exercise the Option, and (ii) full payment for the Shares with respect to which the Option is exercised (together with applicable withholding taxes).  Full payment may consist of any consideration and method of payment authorized by the Administrator and permitted by the Award Agreement and the Plan.  Shares issued upon exercise of an Option will be issued in the name of the Participant or, if requested by the Participant, in the name of the Participant and his or her spouse.  Until the Shares are issued (as evidenced by the appropriate entry on the books of the Company or of a duly authorized transfer agent of the Company), no right to vote or receive dividends or any other rights as a stockholder will exist with respect to the Shares subject to an Option, notwithstanding the exercise of the Option.  The Company will issue (or cause to be issued) such Shares promptly after the Option is exercised.  No adjustment will be made for a dividend or other right for which the record date is prior to the date the Shares are issued, except as provided in Section 14 of the Plan.
Exercising an Option in any manner will decrease the number of Shares thereafter available, both for purposes of the Plan and for sale under the Option, by the number of Shares as to which the Option is exercised.
(ii)    Termination of Relationship as a Service Provider.  If a Participant ceases to be a Service Provider, other than upon the Participant’s termination as the result of the Participant’s death or Disability, the Participant may exercise his or her Option within such period of time as is specified in the Award Agreement to the extent that the Option is vested on the date of termination (but in no event later than the expiration of the term of such Option as set forth in the Award Agreement).  In the absence of a specified time in the Award Agreement, the Option will remain exercisable for three months following the Participant’s termination, but in no event later than the expiration of the term of such Option as set forth in the Award Agreement.  If Participant dies during such post-employment period, the Option may be exercised following the Participant’s death for 1 year after Participant’s death, but in no event later than the expiration of the term of such Option as set forth in the Award Agreement.  Unless otherwise provided by the Administrator, if on the date of termination the Participant is not vested as to his or her entire Option, the Shares covered by the unvested portion of the Option will revert to the Plan.  If after termination the Participant does not exercise his or her Option within the time specified by the Administrator, the Option will terminate, and the Shares covered by such Option will revert to the Plan.
(iii)    Disability of Participant.  If a Participant ceases to be a Service Provider as a result of the Participant’s Disability, the Participant may exercise his or her Option within such period of time as is specified in the Award Agreement to the extent the Option is vested on the date of termination (but in no event later than the expiration of the term of such Option as set forth in the Award Agreement).  In the absence of a specified time in the Award Agreement, the Option will remain exercisable for 12 months following the Participant’s termination, , but in no event later than the expiration of the term of such Option as set forth in the Award 

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Agreement.  Unless otherwise provided by the Administrator, if on the date of termination the Participant is not vested as to his or her entire Option, the Shares covered by the unvested portion of the Option will revert to the Plan.  If after termination the Participant does not exercise his or her Option within the time specified herein, the Option will terminate, and the Shares covered by such Option will revert to the Plan.
(iv)    Death of Participant.  If a Participant dies while a Service Provider, the Option may be exercised following the Participant’s death within such period of time as is specified in the Award Agreement to the extent that the Option is vested on the date of death (but in no event may the option be exercised later than the expiration of the term of such Option as set forth in the Award Agreement), by the Participant’s designated beneficiary, provided such beneficiary has been designated prior to Participant’s death in a form acceptable to the Administrator.  If no such beneficiary has been designated by the Participant, then such Option may be exercised by the personal representative of the Participant’s estate or by the person(s) to whom the Option is transferred pursuant to the Participant’s will or in accordance with the laws of descent and distribution.  In the absence of a specified time in the Award Agreement, the Option will remain exercisable for 12 months following Participant’s death, , but in no event later than the expiration of the term of such Option as set forth in the Award Agreement.  Unless otherwise provided by the Administrator, if at the time of death Participant is not vested as to his or her entire Option, the Shares covered by the unvested portion of the Option will immediately revert to the Plan.  If the Option is not so exercised within the time specified herein, the Option will terminate, and the Shares covered by such Option will revert to the Plan.  
7.    Restricted Stock.
(a)    Grant of Restricted Stock.  Subject to the terms and provisions of the Plan, the Administrator, at any time and from time to time, may grant Shares of Restricted Stock to Service Providers in such amounts as the Administrator, in its sole discretion, will determine, provided that during any Fiscal Year no Service Provider will receive more than an aggregate of 75,000 Shares of Restricted Stock, subject to Section 12 of the Plan.  Notwithstanding the foregoing limitation, in connection with a Service Provider’s initial service as an Employee, an Employee may be granted an aggregate of up to an additional 100,000 Shares of Restricted Stock.
(b)    Restricted Stock Agreement.  Each Award of Restricted Stock will be evidenced by an Award Agreement that will specify the Period of Restriction, the number of Shares granted, and such other terms and conditions as the Administrator, in its sole discretion, will determine; provided, however, that Awards of Restricted Stock shall have a vesting period and Period of Restriction of at least one (1) year.  Unless the Administrator determines otherwise, the Company as escrow agent will hold Shares of Restricted Stock until the restrictions on such Shares have lapsed.
(c)    Transferability.  Except as provided in this Section 7 or the Award Agreement, Shares of Restricted Stock may not be sold, transferred, pledged, assigned, or otherwise alienated or hypothecated until the end of the applicable Period of Restriction.
(d)    Other Restrictions.  The Administrator, in its sole discretion, may impose such other restrictions on Shares of Restricted Stock as it may deem advisable or appropriate.
(e)    Removal of Restrictions.  Except as otherwise provided in this Section 7, Shares of Restricted Stock covered by each Restricted Stock grant made under the Plan will be released from escrow as soon as practicable after the last day of the Period of Restriction or at such other time as the Administrator may determine.  The Administrator, in its discretion, may accelerate the time at which any restrictions will lapse or be removed.  

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(f)    Voting Rights.  During the Period of Restriction, Service Providers holding Shares of Restricted Stock granted hereunder may exercise full voting rights with respect to those Shares, unless the Administrator determines otherwise.
(g)    Dividends and Other Distributions.  During the Period of Restriction, Service Providers holding Shares of Restricted Stock will be entitled to receive all dividends and other distributions paid with respect to such Shares, unless the Administrator provides otherwise.  If any such dividends or distributions are paid in Shares, the Shares will be subject to the same restrictions on transferability and forfeitability as the Shares of Restricted Stock with respect to which they were paid.
(h)    Return of Restricted Stock to Company.  On the date set forth in the Award Agreement, the Restricted Stock for which restrictions have not lapsed will revert to the Company and again will become available for grant under the Plan.
(i)    Section 162(m) Performance Restrictions.  For purposes of qualifying grants of Restricted Stock as “performance-based compensation” under Section 162(m) of the Code, the Administrator, in its discretion, may set restrictions based upon the achievement of Performance Goals.  The Performance Goals will be set by the Administrator on or before the Determination Date.  In granting Restricted Stock which is intended to qualify under Section 162(m) of the Code, the Administrator will follow any procedures determined by it from time to time to be necessary or appropriate to ensure qualification of the Award under Section 162(m) of the Code (e.g., in determining the Performance Goals).
8.    Restricted Stock Units.
(a)    Grant.  Restricted Stock Units may be granted at any time and from time to time as determined by the Administrator, provided that during any Fiscal Year no Service Provider will receive Restricted Stock Units covering more than 75,000 Shares, subject to Section 12 of the Plan.  Notwithstanding the foregoing limitation, in connection with a Service Provider’s initial service as an Employee, an Employee may be granted Restricted Stock Units covering up to an additional 100,000 Shares.  After the Administrator determines that it will grant Restricted Stock Units under the Plan, it will advise the Service Provider in an Award Agreement of the terms, conditions, and restrictions related to the grant, including the number of Restricted Stock Units.  
(b)    Vesting Criteria and Other Terms.  The Administrator will set vesting criteria in its discretion, which, depending on the extent to which the criteria are met, will determine the number of Restricted Stock Units that will be paid out to the Participant.  The Administrator may set vesting criteria based upon the achievement of Company-wide, divisional, business unit, or individual goals (including, but not limited to, continued employment or service), applicable federal or state securities laws or any other basis determined by the Administrator in its discretion; provided, however, that Awards of Restricted Stock Units shall have a vesting period and Period of Restriction of at least one (1) year.
(c)    Earning Restricted Stock Units.  Upon meeting the applicable vesting criteria, the Participant will be entitled to receive a payout as determined by the Administrator.  Notwithstanding the foregoing, at any time after the grant of Restricted Stock Units, the Administrator, in its sole discretion, may reduce or waive any vesting criteria that must be met to receive a payout.
(d)    Form and Timing of Payment.  Payment of earned Restricted Stock Units will be made as soon as practicable after the date(s) determined by the Administrator and set forth in the Award Agreement.  The Administrator, in its sole discretion, may only settle earned Restricted Stock Units in cash, Shares, or a combination of both.

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(e)    Cancellation.  On the date set forth in the Award Agreement, all unearned Restricted Stock Units will be forfeited to the Company.
(f)    Section 162(m) Performance Restrictions.  For purposes of qualifying grants of Restricted Stock Units as “performance-based compensation” under Section 162(m) of the Code, the Administrator, in its discretion, may set restrictions based upon the achievement of Performance Goals.  The Performance Goals will be set by the Administrator on or before the Determination Date.  In granting Restricted Stock Units which are intended to qualify under Section 162(m) of the Code, the Administrator will follow any procedures determined by it from time to time to be necessary or appropriate to ensure qualification of the Award under Section 162(m) of the Code (e.g., in determining the Performance Goals).
9.    Stock Appreciation Rights.  
(a)    Grant of Stock Appreciation Rights.  Subject to the terms and conditions of the Plan, a Stock Appreciation Right may be granted to Service Providers at any time and from time to time as will be determined by the Administrator, in its sole discretion, provided that during any Fiscal Year, no Service Provider will be granted Stock Appreciation Rights covering more than 100,000 Shares, subject to Section 12 of the Plan.  Notwithstanding the foregoing limitation, in connection with a Service Provider’s initial service as an Employee, an Employee may be granted Stock Appreciation Rights covering up to an additional 100,000 Shares.  
(b)    Number of Shares.  The Administrator will have complete discretion to determine the number of Stock Appreciation Rights granted to any Service Provider.
(c)    Exercise Price and Other Terms.  The per share exercise price for the Shares to be issued pursuant to exercise of a Stock Appreciation Right will be determined by the Administrator and will be no less than one hundred percent (100%) of the Fair Market Value per Share on the date of grant.  Otherwise, the Administrator, subject to the provisions of the Plan, will have complete discretion to determine the terms and conditions of Stock Appreciation Rights granted under the Plan.
(d)    Stock Appreciation Right Agreement.  Each Stock Appreciation Right grant will be evidenced by an Award Agreement that will specify the exercise price, the term of the Stock Appreciation Right, the conditions of exercise, and such other terms and conditions as the Administrator, in its sole discretion, will determine; provided, however, that Stock Appreciation Rights shall become vested and exercisable no earlier than one (1) year after the Grant Date.
(e)    Expiration of Stock Appreciation Rights.  A Stock Appreciation Right granted under the Plan will expire upon the date determined by the Administrator, in its sole discretion, and set forth in the Award Agreement.  Notwithstanding the foregoing, the rules of Section 6(b) relating to the maximum term and Section 6(d) relating to exercise also will apply to Stock Appreciation Rights.
(f)    Payment of Stock Appreciation Right Amount.  Upon exercise of a Stock Appreciation Right, a Participant will be entitled to receive payment from the Company in an amount determined by multiplying:
(i)    The difference between the Fair Market Value of a Share on the date of exercise over the exercise price; times
(ii)    The number of Shares with respect to which the Stock Appreciation Right is exercised.

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At the discretion of the Administrator, the payment upon Stock Appreciation Right exercise may be in cash, in Shares of equivalent value, or in some combination thereof.
10.    Performance Units and Performance Shares. 
(a)    Grant of Performance Units/Shares.  Performance Units and Performance Shares may be granted to Service Providers at any time and from time to time, as will be determined by the Administrator, in its sole discretion.  Subject to Section 12 of the Plan, the Administrator will have complete discretion in determining the number of Performance Units and Performance Shares granted to each Service Provider, provided that during any Fiscal Year, (i) no Service Provider will receive Performance Units having an initial value greater than $1,000,000 and (ii) no Service Provider will receive more than 100,000 Performance Shares.  Notwithstanding the foregoing limitation, in connection with a Service Provider’s initial service as an Employee, an Employee may be granted up to an additional 100,000 Performance Shares.
(b)    Value of Performance Units/Shares.  Each Performance Unit will have an initial value that is established by the Administrator on or before the date of grant.  Each Performance Share will have an initial value equal to the Fair Market Value of a Share on the date of grant.
(c)    Performance Objectives and Other Terms.  The Administrator will set performance objectives or other vesting provisions (including, without limitation, continued status as a Service Provider) in its discretion which, depending on the extent to which they are met, will determine the number or value of Performance Units/Shares that will be paid out to the Service Providers; provided, however, that Awards of Performance Units and Performance Shares to Service Providers shall have a vesting period and Performance Period of at least one (1) year.  Each Award of Performance Units/Shares will be evidenced by an Award Agreement that will specify the Performance Period, and such other terms and conditions as the Administrator, in its sole discretion, will determine.  The Administrator may set performance objectives based upon the achievement of Company-wide, divisional, business unit or individual goals (including, but not limited to, continued employment or service), applicable federal or state securities laws, or any other basis determined by the Administrator in its discretion.
(d)    Earning of Performance Units/Shares.  After the applicable Performance Period has ended, the holder of Performance Units/Shares will be entitled to receive a payout of the number of Performance Units/Shares earned by the Participant over the Performance Period, to be determined as a function of the extent to which the corresponding performance objectives or other vesting provisions have been achieved.  After the grant of a Performance Unit/Share, the Administrator, in its sole discretion, may reduce or waive any performance objectives or other vesting provisions for such Performance Unit/Share.
(e)    Form and Timing of Payment of Performance Units/Shares.  Payment of earned Performance Units/Shares will be made as soon as practicable after the expiration of the applicable Performance Period.  The Administrator, in its sole discretion, may pay earned Performance Units/Shares in the form of cash, in Shares (which have an aggregate Fair Market Value equal to the value of the earned Performance Units/Shares at the close of the applicable Performance Period) or in a combination thereof.
(f)    Cancellation of Performance Units/Shares.  On the date set forth in the Award Agreement, all unearned or unvested Performance Units/Shares will be forfeited to the Company, and again will be available for grant under the Plan.
(g)    Section 162(m) Performance Restrictions.  For purposes of qualifying grants of Performance Units/Shares as “performance-based compensation” under Section 162(m) of the Code, the 

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Administrator, in its discretion, may set restrictions based upon the achievement of Performance Goals.  The Performance Goals will be set by the Administrator on or before the Determination Date.  In granting Performance Units/Shares which are intended to qualify under Section 162(m) of the Code, the Administrator will follow any procedures determined by it from time to time to be necessary or appropriate to ensure qualification of the Award under Section 162(m) of the Code (e.g., in determining the Performance Goals).
11.    Performance-Based Compensation Under Section 162(m) of the Code.
(a)    General.  If the Administrator, in its discretion, decides to grant an Award intended to qualify as “performance-based compensation” under Section 162(m) of the Code, the provisions of this Section 11 will control over any contrary provision in the Plan; provided, however, that the Administrator may in its discretion grant Awards that are not intended to qualify as “performance-based compensation” under Section 162(m) of the Code to Service Providers that are based on Performance Goals or other specific criteria or goals but that do not satisfy the requirements of this Section 11.
(b)    Performance Goals.  The granting and/or vesting of Awards of Restricted Stock, Restricted Stock Units, Performance Shares and Performance Units and other incentives under the Plan may be made subject to the attainment of performance goals relating to one or more business criteria within the meaning of Section 162(m) of the Code and may provide for a targeted level or levels of achievement (“Performance Goals”) including (i) revenue, (ii) gross margin, (iii) operating margin, (iv) operating income, (v) pre-tax profit, (vi) earnings before interest, taxes and depreciation, (vii) net income, (viii) operating cash flow, (ix) cash position, (x) expenses, (xi) the market price of a Common Stock, (xii) earnings per share, (xiii) return on stockholder equity, (xiv) return on capital, (xv) total shareholder return, (xvi) economic value added, (xvii) number of customers, (xviii) market share, (xix) return on investments, (xx) profit after taxes, (xxi) objective customer indicators, (xxii) productivity improvements, (xxiii) supplier awards from significant customers, (xxiv) new product development, (xxv) working capital, (xxvi) objectively determinable individual objectives, (xxvii) return on equity, (xxviii) return on assets, (xxix) return on sales, and (xxx) sales.  Performance Goals may differ from Participant to Participant and from Award to Award. Any criteria used may be measured, as applicable, (A) in absolute terms, (B) in combination with another Performance Goal or Goals (for example, but not by way of limitation, as a ratio or matrix), (C) in relative terms (including, but not limited to, results for other periods, passage of time and/or against another company or companies or an index or indices), (D) on a per-share or per-capita basis, (E) against the performance of the Company as a whole or a segment of the Company and/or (F) on a pre-tax or after-tax basis. Prior to the Determination Date, the Administrator shall determine whether any significant element(s) or item(s) shall be included in or excluded from the calculation of any Performance Goal with respect to any Participants. As determined in the discretion of the Administrator prior to the Determination Date, achievement of Performance Goals for a particular Award may be calculated in accordance with the Company's financial statements, prepared in accordance with generally accepted accounting principles (“GAAP”), or on a basis other than GAAP, including as adjusted for certain costs, expenses, gains and losses to provide non-GAAP measures of operating results.  Prior to the Determination Date, the Administrator will determine whether any significant element(s) will be included in or excluded from the calculation of any Performance Goal with respect to any Participant.
(c)    Procedures.  To the extent necessary to comply with the performance-based compensation provisions of Section 162(m) of the Code, with respect to any Award granted subject to Performance Goals, within the first 25% of the Performance Period, but in no event more than 90 days following the commencement of any Performance Period (or such other time as may be required or permitted by Section 162(m) of the Code), the Administrator will, in writing, (i) designate one or more Service Providers to whom an Award will be made, (ii) select the Performance Goals applicable to the Performance Period, (iii) establish the 

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Performance Goals, and amounts of such Awards, as applicable, which may be earned for such Performance Period, and (iv) specify the relationship between Performance Goals and the amounts of such Awards, as applicable, to be earned by each Participant for such Performance Period.  Following the completion of each Performance Period, the Administrator will certify in writing whether the applicable Performance Goals have been achieved for such Performance Period.  In determining the amounts earned by a Participant, the Administrator will have the right to reduce or eliminate (but not to increase) the amount payable at a given level of performance to take into account additional factors that the Administrator may deem relevant to the assessment of individual or corporate performance for the Performance Period.  A Participant will be eligible to receive payment pursuant to an Award for a Performance Period only if the Performance Goals for such period are achieved.  
(d)    Additional Limitations.  Notwithstanding any other provision of the Plan, any Award which is granted to a Service Provider and is intended to constitute qualified performance based compensation under Section 162(m) of the Code will be subject to any additional limitations set forth in the Code (including any amendment to Section 162(m) of the Code) or any regulations and ruling issued thereunder that are requirements for qualification as qualified performance-based compensation as described in Section 162(m) of the Code, and the Plan will be deemed amended to the extent necessary to conform to such requirements.
12.    Outside Director Limitation.  No Outside Director may be granted, in any Fiscal Year, Awards covering more than 25,000 Shares.  Any Awards granted to an individual while he or she was an Employee, or while he or she was a Consultant but not an Outside Director, will not count for purposes of the limitations under this Section 12.
13.    Leaves of Absence/Transfer Between Locations.  Unless the Administrator provides otherwise, vesting of Awards granted hereunder will be suspended during any unpaid leave of absence.  A Participant will not cease to be an Employee in the case of (i) any leave of absence approved by the Company or (ii) transfers between locations of the Company or between the Company, its Parent, or any Subsidiary.  For purposes of Incentive Stock Options, no such leave may exceed 3 months, unless reemployment upon expiration of such leave is guaranteed by statute or contract.  If reemployment upon expiration of a leave of absence approved by the Company is not so guaranteed, then 6 months following the 1st day of such leave any Incentive Stock Option held by the Participant will cease to be treated as an Incentive Stock Option and will be treated for tax purposes as a Nonstatutory Stock Option.
14.    Transferability of Awards.  Unless determined otherwise by the Administrator, an Award may not be sold, pledged, assigned, hypothecated, transferred, or disposed of in any manner other than by will or by the laws of descent or distribution and may be exercised, during the lifetime of the Participant, only by the Participant.  If the Administrator makes an Award transferable, such Award will contain such additional terms and conditions as the Administrator deems appropriate.
15.    Adjustments; Dissolution or Liquidation; Merger or Change in Control.
(a)    Adjustments.  In the event that any dividend or other distribution (whether in the form of cash, Shares, other securities, or other property), recapitalization, stock split, reverse stock split, reorganization, merger, consolidation, split-up, spin-off, combination, repurchase, or exchange of Shares or other securities of the Company, or other change in the corporate structure of the Company affecting the Shares occurs, the Administrator, in order to prevent diminution or enlargement of the benefits or potential benefits intended to be made available under the Plan, will adjust the number and class of Shares that may be delivered under the Plan and/or the number, class, and price of Shares covered by each outstanding Award, and the numerical Share limits in Sections 6, 7, 8, 9, 10, and 12 of the Plan.  

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(b)    Dissolution or Liquidation.  In the event of the proposed dissolution or liquidation of the Company, the Administrator will notify each Participant as soon as practicable prior to the effective date of such proposed transaction.  To the extent it has not been previously exercised, an Award will terminate immediately prior to the consummation of such proposed action.
(c)    Change in Control.  In the event of a merger of the Company with or into another corporation or other entity or a Change in Control, each outstanding Award will be treated as the Administrator determines, including, without limitation, that each Award be assumed or an equivalent option or right substituted by the successor corporation or a Parent or Subsidiary of the successor corporation.  The Administrator will not be required to treat all Awards similarly in the transaction.
In the event that the successor corporation does not assume or substitute for the Award (or portion thereof), the Participant will fully vest in and have the right to exercise such outstanding Option and Stock Appreciation Right, including Shares as to which such Award would not otherwise be vested or exercisable, all restrictions on such Restricted Stock and Restricted Stock Units will lapse, and, with respect to such Awards with performance-based vesting, all performance goals or other vesting criteria will be deemed achieved at one hundred percent (100%) of target levels and all other terms and conditions met.  In addition, if an Option or Stock Appreciation Right is not assumed or substituted in the event of a merger or Change in Control, the Administrator will notify the Participant in writing or electronically that such Option or Stock Appreciation Right will be exercisable for a period of time determined by the Administrator in its sole discretion, and the Option or Stock Appreciation Right will terminate upon the expiration of such period.
For the purposes of this subsection (c), an Award will be considered assumed if, following the Change in Control, the Award confers the right to purchase or receive, for each Share subject to the Award immediately prior to the Change in Control, the consideration (whether stock, cash, or other securities or property) received in the Change in Control by holders of Common Stock for each Share held on the effective date of the 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 Change in Control is not solely common stock of the successor corporation or its Parent, the Administrator may, with the consent of the successor corporation, provide for the consideration to be received upon the exercise of an Option or Stock Appreciation Right or upon the payout of a Restricted Stock Unit, Performance Unit or Performance Share, for each Share subject to such Award, to be solely common stock of the successor corporation or its Parent equal in fair market value to the per share consideration received by holders of Common Stock in the Change in Control.
Notwithstanding anything in this Section 15(c) to the contrary, an Award that vests, is earned or paid-out upon the satisfaction of one or more performance goals will not be considered assumed if the Company or its successor modifies any of such performance goals without the Participant’s consent; provided, however, a modification to such performance goals only to reflect the successor corporation’s post-Change in Control corporate structure will not be deemed to invalidate an otherwise valid Award assumption. 
(d)    Employee Options Following Assumption or Substitution.  Following an assumption or substitution in connection with a merger of the Company with or into another corporation or the sale of substantially all of the assets of the Company where upon such transaction the stockholders of the Company immediately prior to the transaction hold less than 50% of the outstanding voting equity securities of the successor corporation following the transaction (a “Change in Control Merger”), if a Participant’s status as an Employee of the successor corporation is terminated by the successor corporation as a result of an Involuntary Termination within 12 months following the Change in Control Merger, the Participant will fully vest in and have the right 

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to exercise Participant’s then-outstanding Options, including Shares as to which otherwise would not have been vested and exercisable.  Thereafter the Option will remain exercisable in accordance with its terms.
(e)    Outside Director Awards.  With respect to Awards granted to an Outside Director that are assumed or substituted for in the event of a Change in Control, the Outside Director will fully vest in and have the right to exercise Options and Stock Appreciation Rights as to all of the Shares underlying such Award, including those Shares which would not otherwise be vested or exercisable, all restrictions on Restricted Stock and Restricted Stock Units will lapse, and, with respect to Awards with performance-based vesting, all performance goals or other vesting criteria will be deemed achieved at 100% of target levels and all other terms and conditions met.
16.    Tax.
(a)    Withholding Requirements.  Prior to the delivery of any Shares or cash pursuant to an Award (or exercise thereof) or such earlier time as any tax withholding obligations are due, the Company will have the power and the right to deduct or withhold, or require a Participant to remit to the Company, an amount sufficient to satisfy federal, state, local, foreign or other taxes (including the Participant’s FICA obligation) required to be withheld with respect to such Award (or exercise thereof).  
(b)    Withholding Arrangements.  The Administrator, in its sole discretion and pursuant to such procedures as it may specify from time to time, may permit a Participant to satisfy such tax withholding obligation, in whole or in part by (without limitation) (i) paying cash, (ii) electing to have the Company withhold otherwise deliverable Shares having a fair market value equal to the minimum statutory amount required to be withheld, (iii) delivering to the Company already-owned Shares having a fair market value equal to the statutory amount required to be withheld, provided the delivery of such Shares will not result in any adverse accounting consequences, as the Administrator determines in its sole discretion, or (iv) selling a sufficient number of Shares otherwise deliverable to the Participant through such means as the Administrator may determine in its sole discretion (whether through a broker or otherwise) equal to the amount required to be withheld.  The amount of the withholding requirement will be deemed to include any amount which the Administrator agrees may be withheld at the time the election is made, not to exceed the amount determined by using the maximum federal, state or local marginal income tax rates applicable to the Participant with respect to the Award on the date that the amount of tax to be withheld is to be determined.
(c)    Compliance With Section 409A of the Code.  Awards will be designed and operated in such a manner that they are either exempt from the application of, or comply with, the requirements of Section 409A of the Code such that the grant, payment, settlement or deferral will not be subject to the additional tax or interest applicable under Section 409A of the Code, except as otherwise determined in the sole discretion of the Administrator.  The Plan and each Award Agreement under the Plan is intended to meet the requirements of Section 409A of the Code and will be construed and interpreted in accordance with such intent, except as otherwise determined in the sole discretion of the Administrator.  To the extent that an Award or payment, or the settlement or deferral thereof, is subject to Section 409A of the Code, the Award will be granted, paid, settled or deferred in a manner that will meet the requirements of Section 409A of the Code, such that the grant, payment, settlement or deferral will not be subject to the additional tax or interest applicable under Section 409A of the Code.
17.    No Effect on Employment or Service.  Neither the Plan nor any Award will confer upon a Participant any right with respect to continuing the Participant’s relationship as a Service Provider with the Company, nor will they interfere in any way with the Participant’s right or the Company’s right to terminate such relationship at any time, with or without cause, to the extent permitted by Applicable Laws.

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18.    Date of Grant.  The date of grant of an Award will be, for all purposes, the date on which the Administrator makes the determination granting such Award, or such other later date as is determined by the Administrator.  Notice of the determination will be provided to each Participant within a reasonable time after the date of such grant.
19.    Term of Plan.  Subject to Section 23 of the Plan, the Plan will become effective upon its adoption by the Board.  It will continue in effect for a term of ten (10) years from the date adopted by the Board, unless terminated earlier under Section 20 of the Plan.
20.    Amendment and Termination of the Plan.
(a)    Amendment and Termination.  The Administrator may at any time amend, alter, suspend or terminate the Plan.  
(b)    Stockholder Approval.  The Company will obtain stockholder approval of any Plan amendment to the extent necessary and desirable to comply with Applicable Laws. 
(c)    Effect of Amendment or Termination.  No amendment, alteration, suspension or termination of the Plan will materially impair the rights of any Participant, unless mutually agreed otherwise between the Participant and the Administrator, which agreement must be in writing and signed by the Participant and the Company.  Termination of the Plan will not affect the Administrator’s ability to exercise the powers granted to it hereunder with respect to Awards granted under the Plan prior to the date of such termination.
21.    Conditions Upon Issuance of Shares.
(a)    Legal Compliance.  Shares will not be issued pursuant to the exercise of an Award unless the exercise of such Award and the issuance and delivery of such Shares will comply with Applicable Laws and will be further subject to the approval of counsel for the Company with respect to such compliance.
(b)    Investment Representations.  As a condition to the exercise of an Award, the Company may require the person exercising such Award to represent and warrant at the time of any such exercise that the Shares are being purchased only for investment and without any present intention to sell or distribute such Shares if, in the opinion of counsel for the Company, such a representation is required.
22.    Inability to Obtain Authority.  The inability of the Company to obtain authority from any regulatory body having jurisdiction or to complete or comply with the requirements of any registration or other qualification of the Shares under any state, federal or foreign law or under the rules and regulations of the Securities and Exchange Commission, the stock exchange on which Shares of the same class are then listed, or any other governmental or regulatory body, which authority, registration, qualification or rule compliance is deemed by the Company’s counsel to be necessary or advisable for the issuance and sale of any Shares hereunder, will relieve the Company of any liability in respect of the failure to issue or sell such Shares as to which such requisite authority, registration, qualification or rule compliance will not have been obtained.
23.    Stockholder Approval.  The Plan will be subject to approval by the stockholders of the Company within 12 months after the date the Plan is adopted by the Board.  Such stockholder approval will be obtained in the manner and to the degree required under Applicable Laws. 
24.    Forfeiture Events. The Administrator may specify in an Award Agreement that the Participant’s rights, payments, and benefits with respect to an Award shall be subject to reduction, cancellation, forfeiture, or 

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recoupment upon the occurrence of certain specified events, in addition to any otherwise applicable vesting or performance conditions of an Award. Such events may include, but shall not be limited to, fraud, breach of a fiduciary duty, restatement of financial statements as a result of fraud or willful errors or omissions, termination of employment for cause, violation of material Company and/or Subsidiary policies, breach of non-competition, confidentiality, or other restrictive covenants that may apply to the Participant, or other conduct by the Participant that is detrimental to the business or reputation of the Company and/or its Subsidiaries. The Administrator may also require the application of this Section 24 with respect to any Award previously granted to a Participant even without any specified terms being included in any applicable Award Agreement to the extent required under Applicable Laws.

-20-Exhibit

EXHIBIT 10.1
REDEMPTION AGREEMENT AND AMENDMENT
TO
LIMITED LIABILITY COMPANY AGREEMENT OF LEGACY YARDS LLC
THIS REDEMPTION AGREEMENT AND AMENDMENT TO LIMITED LIABILITY COMPANY AGREEMENT OF LEGACY YARDS LLC (this “Agreement”) is made and entered into as of August 1, 2016, at 1:50 p.m., New York City time (the “Effective Time”), by and among LEGACY YARDS LLC, a Delaware limited liability company (the “Company”), COACH LEGACY YARDS LLC, a Delaware limited liability company (“Redeemed Member”), and PODIUM FUND TOWER C SPV LLC, a Delaware limited liability company (“Continuing Member”).
RECITALS
A.Redeemed Member owns a Membership Interest in the Company, which Membership Interest (the “Redeemed Interest”) is more particularly described in that certain Limited Liability Company Agreement of Legacy Yards LLC dated as of April 10, 2013, by and between Continuing Member and Redeemed Member (the “LLC Agreement”). Initially capitalized terms used in this Agreement without definition have the respective meanings given such terms in the LLC Agreement.
B.Continuing Member has agreed to cause the Company to redeem the Redeemed Interest, and Redeemed Member has agreed to the redemption of the Redeemed Interest and to withdraw from the Company.
C.Company, Continuing Member and Redeemed Member desire to consent to the redemption of the Redeemed Interest and the withdrawal of Redeemed Member from the Company, as described herein and effectuated hereby, and Continuing Member further desires to amend the LLC Agreement to reflect such redemption and withdrawal of Redeemed Member.
NOW, THEREFORE, in consideration of the foregoing, the mutual promises and agreements set forth herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:
1.    Redemption and Withdrawal.
(a)Effective immediately from and after the Effective Time, in consideration of the payment of the Redemption Price to Redeemed Member at the Closing, (a) Redeemed Member unconditionally and irrevocably relinquishes, transfers, assigns, sells and conveys to the Company free and clear of any Liens (as defined below), and the Company accepts and redeems from the Redeemed Member, the Redeemed Interest (including, without limitation, all right, title and interest of Redeemed Member in, to and against the Company, any associated beneficial interest in the Coach Unit or any related portion of the Building C Lease, and any other rights afforded to Redeemed Member under and in accordance with the LLC Agreement), and (b) Redeemed Member withdraws from the Company.
(b)The aggregate consideration payable under this Agreement by the Company shall be $706,711,528 (the “Redemption Price”). The parties acknowledge and agree
NY 76274446v6

that, notwithstanding anything in the LLC Agreement to the contrary, including with respect to conveyance of the Coach Unit, the Redemption Price is the only consideration due, payable and owing for the Redeemed Interest, now and in the future.
2.    Closing. The closing (the “Closing”) of the transactions contemplated hereby
shall occur on the date hereof and as of the Effective Time. At the Closing, (a) the Company shall deliver to Redeemed Member, by wire transfer of immediately available funds, the Redemption Price, and (b) Redeemed Member shall unconditionally and irrevocably relinquish, transfer, assign, sell and convey, the Redeemed Interest, free and clear of all Liens, and the Company shall accept such interests and cancel the Redeemed Interest on its books and records.
3.    Percentage Interest. As of (and from and after) the Effective Time, the
Percentage Interest of Continuing Member in the Company is hereby increased to 100%, and all Capital Contributions made to the Company will be deemed to have been made, from and after the Effective Time, by Continuing Member.
4.    Consent. The Company, Redeemed Member and Continuing Member each
hereby consents to the redemption by the Company of the Redeemed Interest and the withdrawal of Redeemed Member from the Company as of the Effective Time.
5.    No Further Rights.
(a)As of (and from and after) the Effective Time, Redeemed Member (and its affiliates) shall not have any direct or indirect, record or beneficial, ownership interest in the Company or in or right to the Redeemed Interest, or to any distributions of any kind, or any further authority, right or power as a Member of the Company.
(b)Redeemed Member acknowledges and agrees that, notwithstanding anything to the contrary in the LLC Agreement, the transactions relating to the conveyance and sale of the Coach Unit as contemplated by the LLC Agreement are not going to take place, and as of (and from and after) the Effective Time (i) Redeemed Member shall automatically cease to be a Member of the Company, (ii) the Option Agreement contemplated by the LLC Agreement shall not be entered into, (iii) the Company and/or the Remaining Member may take such steps in their sole discretion to dissolve and/or wind-up the Company at any time, and (iv) (X) the Redeemed Member shall not be owed any obligations or duties by the Company or the Continuing Member under the terms of the LLC Agreement, and (Y) the terms of the LLC Agreement that purport to survive the withdrawal of a Member, including, without limitation, those set forth in Section 3.8(k), Section 3.8(l), Section 3.9, Section 3.10, Section 6.1(d), Section 8.3, Section 8.4 and Article 14, shall no longer be binding, nor shall they create any remaining or on-going duty, obligation or liability among or between the Redeemed Member on the one hand, and the Company and/or the Continuing Member, on the other hand.
6.    Additional Amendments of the LLC Agreement. For the avoidance of doubt, the
LLC Agreement is hereby amended, effective immediately after the Effective Time, to delete (i) all references to the “Coach Member” and “Coach Unit” and (ii) all provisions in the LLC Agreement relating to the conveyance to the Coach Member of a beneficial interest or fee title in the Coach Unit and the Leasehold Estate with respect thereto, including, without limitation, Section 1.8, Section 3.3 and Section 3.8, and all transactions related thereto; provided that
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Section 12.4 of the LLC Agreement, as in effect immediately prior to the entry into this Agreement, shall continue to govern all Tax Returns filed or required to be filed with respect to tax periods ending prior to or on the date hereof.
7.    Representations and Warranties. Each party hereto hereby represents and
warrants that:
(a)it is duly organized, validly existing and in good standing under the laws of the state of its formation;
(b)it has the full power and authority to execute and deliver this Agreement and to perform all of its obligations arising hereunder, it has duly taken all actions necessary to authorize the execution and delivery of this Agreement by it and the authorized signatories have executed and delivered this Agreement;
(c)this Agreement constitutes the legal, valid and binding obligation of such party, enforceable against such party in accordance with its terms, subject to bankruptcy, reorganization and other similar laws affecting the enforcement of creditors rights generally and except as may be limited by general equitable principles;
(d)there are no actions, suits, proceedings, claims, governmental investigations or other legal or administrative proceedings, or any orders, decrees or judgments in progress, pending or in effect, or, to the knowledge of such party, threatened against or relating to the transactions contemplated by this Agreement, that would, if adversely determined, prevent or materially impair the consummation by such party of the transactions contemplated hereby;
(e)such party has not dealt with any broker or finder in connection with the transactions contemplated in this Agreement and no broker or other person or entity is entitled to any commission or finder’s or other fee in connection with this transaction; and
(f)the execution and delivery of this Agreement by such party and the performance by such party of its obligations under this Agreement and the consummation of the transactions contemplated hereby will not, (a) conflict with or result in a violation or breach of, (b) constitute (with or without notice or lapse of time or both) a default under, (c) require such party to obtain any consent, approval or action of, make any filing with or give any notice to any person or entity (including any governmental authority) as a result or under, or (d) result in the creation or imposition of any Lien upon the property or assets of such party pursuant to the terms of, its organizational documents or any other agreement, commitment or instrument to which such party is a party or any of its assets or properties are bound or affected, or any law, rule, regulation, judgment, award, order, writ, injunction, or decree of any court, governmental body or arbitrator.
8.    Additional Representations and Warranties.
(a)    The Redeemed Member hereby represents and warrants that:
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(i)Ownership; No Liens. Redeemed Member is the sole beneficial and record owner of, and has good and marketable title to, the Redeemed Interest, free and clear of any charge, claim, community property interest, pledge, condition, equitable interest, lien (statutory or other), option, security interest, mortgage, easement, encroachment, encumbrance, right of way, right of first refusal, or restriction of any kind, including any restriction on use, voting, transfer, receipt of income or exercise of any other attribute of ownership or title thereto (collectively, “Liens”). There are no outstanding options, rights of first refusal, warrants, subscription rights, securities that are convertible into or exchangeable for, or any other commitments of any character relating to, the Redeemed Interest (other than those in favor of the Company under this Agreement) and Redeemed Member has not entered into any agreement with respect to the foregoing or the voting of the Redeemed Interest. Redeemed Member has not sold, transferred, conveyed, assigned, pledged or granted any Lien with respect to all or any portion of the Redeemed Interest to any Person or entity other than the Company, as applicable, or entered into any agreement to do any of the foregoing. Other than the Redeemed Interest, the entirety of which is being redeemed by the Company hereunder, and documents entered into in connection with that certain Lease dated as of August 1, 2016 (the “Lease”) between Legacy Yards Tenant LP and Coach, Inc., Redeemed Member has no right, title or interest in the Company or any assets or property of the Company (including, without limitation, the Coach Unit). Upon the consummation of the transactions contemplated hereby, the Company will receive good and marketable title to the Redeemed Interest, free and clear of any Liens.
(ii)Information. Redeemed Member: (a) has received from the Company all information that Redeemed Member or any of its advisors have requested in connection with Redeemed Member’s decision to redeem the Redeemed Interests and withdraw as a Member of the Company; (b) has had the opportunity to ask, and has asked, such questions of the Company as Redeemed Member or any of its advisors deems appropriate in connection with Redeemed Member’s decision to redeem the Redeemed Interest and withdraw as a Member of the Company; (c) acknowledges that by redeeming the Redeemed Interest and withdrawing as a Member of the Company, Redeemed Member will lose the opportunity to receive any consideration for or in respect of the Redeemed Interest, upon a sale or liquidation of the Company, or participate in any appreciation in the value of the Redeemed Interest, and Redeemed Member is willing to accept this risk of lost opportunity; (d) has carefully examined the redemption of the Redeemed Interest and the withdrawal as a Member of the Company, the risk involved with such actions and has considered such actions with such tax, business, financial and legal advisors as Redeemed Member has determined to be necessary in the circumstances; and (e) acknowledges and agrees, that, (i) the Company and the Continuing Member are not making any representations or warranties as to its current or future business, prospects, operations, investments, results of operations, condition (financial or otherwise) or assets or properties in connection with the redemption of the Redeemed Interest (all of which the Company and the Continuing Member expressly disclaim), and (ii) Seller is relying solely on its own independent investigation and acknowledges and agrees to such disclaimer.
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(iii) Taxes. Redeemed Member is not a “foreign person” within the meaning of Sections 897 or 1445 of the Internal Revenue Code of 1986, as amended (the “Code”), or any similar law requiring disclosure or withholding with respect to a “foreign person” (as used in the Code), and Redeemed Member (or its owner for tax purposes) shall deliver at Closing a duly executed certificate of non-foreign status in the applicable form set forth in Treasury Regulations §1.1445-2(b)(2).
(b)    Podium Fund HY REIT Owner LP hereby represents and warrants that its net worth in accordance with generally accepted accounting principles as of the date hereof is at least $100,000,000.
9.    Transfer Taxes. Simultaneously with the execution of this Agreement, (A) Redeemed Member and the Company shall execute and deliver to Royal Abstract of New York LLC, for filing by Royal Abstract of New York LLC (i) a duly executed counterpart of the Combined Real Estate Transfer Tax Return, Credit Line Mortgage Certificate and Certification of Exemption from the Payment of Estimated Personal Income Tax (Form TP-584) and (ii) a duly executed counterpart of the New York City Real Property Transfer Tax Return and (B) Redeemed Member shall pay to Royal Abstract of New York LLC, for payment to New York City and New York State, $18,643,556.12 on account of the New York City Real Property Transfer Tax and $2,840,922.84 on account of the New York State Real Estate Transfer Tax (the sum of such amounts, the “Closing Tax Payment”). If the amounts payable in connection with the transactions contemplated by this Agreement on account of the New York City Real Property Transfer Tax and/or the New York State Real Estate Transfer Tax (collectively, “New York Transfer Tax”) exceed the Closing Tax Payment (any such excess, “Increased Tax Payments”), Redeemed Member and Coach, Inc., jointly and severally, shall remain responsible for payment of the Increased Tax Payments (together with interest and penalties due thereunder) and shall indemnify, defend, and hold harmless the Company, the Continuing Member and the Company Released Parties from and against all Claims arising in connection therewith. The parties hereto acknowledge that contemporaneous with the redemption contemplated by this Agreement, the Company and certain of its affiliates are engaging in a restructuring (the “Restructuring”) as contemplated by, and described in, an Interest Purchase Agreement, dated as of August 1, 2016 (the “Interest Purchase Agreement”), by and among Podium Fund MM, Podium-K Investors LLC (“Podium-K”) and Allianz HY Investor LP (“Allianz”), and the parties agree that, notwithstanding anything herein to the contrary, in no event will (a) Redeemed Member and/or Coach, Inc. be responsible for payment of any New York Transfer Taxes (together with interest and penalties due thereunder) in connection with the Other Restructuring Steps (as such term is defined in the last sentence of this Section 9) and (b) the liability of Redeemed Member and Coach, Inc. to make any Increased Tax Payments and to indemnify, defend, and hold harmless the Company, the Continuing Member and the Company Released Parties, in each case under the immediately prior sentence, exceed the amount for which the Redeemed Member and Coach, Inc. would be liable if the redemption contemplated hereby were subject to a New York Transfer Tax and the only transaction occurring (such amount reduced by the Closing Tax Payment). Podium Fund HY REIT Owner LP hereby agrees to pay or cause to be paid any New York Transfer Taxes (together with interest and penalties due thereunder) in connection with the Other Restructuring Steps and shall indemnify, defend, and hold harmless Redeemed Member, Coach, Inc., and the Redeemed Member Released Parties from and against all Claims arising in connection therewith. In the case of an audit or judicial proceeding (i) relating solely to New
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York Transfer Taxes, (ii) that is a function solely of or results solely from the redemption contemplated hereby (and for purposes of clarification does not relate to the Other Restructuring Steps), and (iii) for which New York Transfer Taxes are solely the responsibility of Redeemed Member pursuant to this Section 9, Redeemed Member shall control the conduct of such audit or proceeding, and may reach a settlement or other resolution in its sole discretion. The Continuing Member shall reasonably cooperate with Redeemed Member in connection with such audit or proceeding, including forwarding any correspondence related to such audit or proceeding that is received by the Continuing Member or any of its affiliates. In the case of an audit or judicial proceeding (i) relating solely to New York Transfer Taxes, (ii) that relates to the Other Restructuring Steps and (iii) for which New York Transfer Taxes are solely the responsibility of Persons other than the Redeemed Member pursuant to this Section 9, Continuing Member (or its designee) shall control the conduct of such audit or proceeding, and may reach a settlement or other resolution in its sole discretion. In the case of an audit or judicial proceeding (i) relating solely to New York Transfer Taxes, (ii) that relates to the Other Restructuring Steps or to the redemption contemplated hereby and (iii) for which New York Transfer Taxes may be the responsibility of both Redeemed Member and Continuing Member (or its affiliates) pursuant to this Section 9, until such time as it may be reasonably ascertained which party hereto has the higher responsibility for the associated New York Transfer Taxes pursuant to this Section 9 the parties shall jointly control the conduct of such audit or proceeding, and the consent of each shall be required prior to agreeing to any settlement or resolution thereof, which consent shall not be unreasonably withheld, conditioned or delayed. After such time as it may be reasonably ascertained which party hereto has the higher responsibility for the associated New York Transfer Taxes pursuant to this Section 9, such party shall control the conduct of such audit or proceeding; provided that the other parties shall be provided with the opportunity to participate in any such audit or proceeding at their expense, and the consent of each shall be required prior to agreeing to any settlement or resolution thereof. For purposes of this Section 9, “Other Restructuring Steps” means the Restructuring other than the redemption contemplated by this Agreement.
10.Further Assurances. Each party hereto agrees to execute and deliver all other appropriate supplemental agreements and other instruments, and to take any other action necessary, to make this Agreement and the redemption and withdrawal contemplated hereby fully and legally effective, binding and enforceable between and among the parties hereto, and as against third parties or as necessary to effectuate the intent of this Agreement, including in connection with any dissolution or winding-up of the Company.
11.Release. 
(a)    Release by Redeemed Member and Coach, Inc. The Redeemed Member and Coach, Inc., on their own behalf and on behalf of the other Redeemed Member Released Parties (as defined below), releases and forever discharges, each of the Company and the Continuing Member and each of their respective present and former direct or indirect officers, directors, agents, employees, representatives, partners, members, managers, shareholders, principals, constituents, attorneys, affiliates, subsidiaries, partnerships, limited liability companies, joint ventures, joint venturers, predecessors, successors, and assigns, and each of their respective successors, assigns, and representatives (collectively with the Company and the Continuing Member, the “Company Released Parties”), from any and all claims, demands,
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liabilities, actions, causes of action, suits, proceedings, controversies, disputes, damages, remedies, debts, rights of setoff, obligations, costs, expenses, and attorney fees (collectively, “Claims”), at law or in equity, of every kind, nature, character, and description, whether known or unknown, suspected or unsuspected, anticipated or unanticipated, liquidated or unliquidated, which Redeemed Member, Coach, Inc., and/or the other Redeemed Member Released Parties ever had, now has or may hereafter have against the Company Released Parties arising from any act or omission by the Company Released Parties on or prior to the date hereof relating solely to any matters arising out of or relating to the Company, the LLC Agreement and the Redeemed Member’s status as a Member and/or former Member of the Company from the beginning of time to the date of this Agreement (collectively, the “Company Released Claims”), provided, however, that nothing contained herein shall release any Claims by Redeemed Member, Coach, Inc., and/or the Redeemed Member Released Parties arising under this Agreement or such Claims that survive by their terms under (i) that certain Termination of License Agreement, dated as of the date hereof, by and between Coach, Inc., and Legacy Yards Tenant LP, a Delaware limited partnership (“Legacy Tenant”), dated as of the date hereof, (ii) that certain Lease dated as of the date hereof between Legacy Tenant and Coach Inc., (iii) that certain Amended and Restated Development Agreement, dated as of the date hereof, by and among Redeemed Member, Coach, Inc., and ERY Developer, LLC, a Delaware limited liability company (“Developer”), (iv) that certain Amended and Restated Guaranty Agreement dated as of the date hereof by and among The Related Companies, L.P., a New York limited partnership (“Related”), OP USA Debt Holdings Limited Partnership, an Ontario limited partnership (“OPUSA”), and Redeemed Member, (v) that certain Certificate re: Redemption Agreement dated as of the date hereof made by Related, OP USA, the Company, Continuing Member and Podium Fund MM, (vi) a Closing Statement prepared and approved by Continuing Member, Redeemed Member, and Developer, and entered into by and among Redeemed Member, Coach, Inc., Legacy Tenant, Legacy Yards, Continuing Member, Developer, and Podium Fund MM LLC, a Delaware limited liability company (“Podium Fund MM”), and (vii) that certain Termination and Release of the Coach Guaranty, dated as of the date hereof, by and between Continuing Member and Developer (collectively, the “Coach Closing Documents”). In entering into this release of claims Redeemed Party and Coach, Inc. acknowledge and agree that Claims or facts in addition to or different from what they now know, believe, or suspect to exist might hereafter be discovered; nevertheless, it is the intention by entering into this Agreement to fully, finally, and forever release, discharge, and settle all of the Company Released Claims, notwithstanding the existence or possible future discovery of any such additional or different claim or fact, and the existence or possible future discovery of any such additional or different claim or fact will in no manner affect this Agreement or the release of claims set forth herein.
(b)    Release by the Company and the Continuing Member. Each of the
Company and the Continuing Member, on its own behalf and on behalf of the Company Released Parties, and ERY Developer, releases and forever discharges, Redeemed Member, Coach, Inc., and its present and former, direct or indirect officers, directors, agents, employees, representatives, partners, members, managers, shareholders, principals, constituents attorneys, affiliates, subsidiaries, partnerships, limited liability companies, joint ventures, joint venturers, predecessors, successors, and assigns, and each of their respective successors, assigns, and representatives (collectively with the Redeemed Member and Coach, Inc., the “Redeemed Member Released Parties”), from any and all Claims, at law or in equity, of every kind, nature, character, and description, whether known or unknown, suspected or unsuspected, anticipated or
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unanticipated, liquidated or unliquidated, which the Company, the Continuing Member or the Company Released Parties and/or ERY Developer ever had, now has or may hereafter have against the Redeemed Member Released Parties arising from any act or omission by the Redeemed Member Released Parties on or prior to the date hereof relating solely to any matters arising out of or relating to the Company, the LLC Agreement, that certain Guaranty Agreement, dated as of April 10, 2013 (the “Coach Guaranty”), made by Coach, Inc., and the Redeemed Member’s status as a Member and/or former Member of the Company from the beginning of time to the date of this Agreement; provided, however, that nothing contained herein shall release any Claims by the Company, the Continuing Member and/or the Company Released Parties arising under this Agreement or such Claims that survive by their terms under the Coach Closing Documents (collectively, the “Redeemed Member Released Claims”). In entering into this release of claims each of the Company and the Continuing Member acknowledges and agrees that Claims or facts in addition to or different from what it now knows, believes, or suspects to exist might hereafter be discovered; nevertheless, it is the intention by entering into this Agreement to fully, finally, and forever release, discharge, and settle all of the Redeemed Member Released Claims, notwithstanding the existence or possible future discovery of any such additional or different claim or fact, and the existence or possible future discovery of any such additional or different claim or fact will in no manner affect this Agreement or the release of claims set forth herein.
(c)No Assignment of Claims, etc. Each party hereto represents that such party has made no assignment or transfer of any of the claims (whether express or implied) released pursuant hereto. The provisions of this Section 11 are severable, and if any part of it is found to be unenforceable, the other paragraphs shall remain fully valid and enforceable.
(d)All parties acknowledge that they have read all of the terms of this Section 11 and have had an opportunity to discuss it with their respective attorneys. Each party understands the terms of the release granted pursuant to this Section 11. All parties execute this Section 11 of their own free will in exchange for the consideration to be given, which each acknowledges is adequate and satisfactory.
12.[Reserved.]  
13.Coach Unit Tenant Improvements. Parties hereto agree that (i) the title to all the tenant improvements that the Redeemed Member undertook with respect to the Coach Unit (as defined in the unamended LLC Agreement) passed to the Company and/or the Company’s subsidiaries as such tenant improvements (or any part thereof) were erected, constructed or installed, and (ii) the Redemption Price for the Redeemed Interest takes into account that the Company owns directly or indirectly the Coach Unit (including the leasehold estate with respect thereto) and such tenant improvements.
14.Governing Law. This Agreement shall be governed by, interpreted under, and construed and enforced in accordance with, the laws of the State of Delaware without regard to any conflicts of laws principle which would give rise to the application of the laws of any other jurisdiction.
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15.Submission to Jurisdiction.    EACH PARTY HERETO IRREVOCABLY  
SUBMITS TO THE JURISDICTION OF (A) THE SUPREME COURT OF THE STATE OF NEW YORK AND (B) THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK FOR THE PURPOSES OF ANY SUIT, ACTION OR OTHER PROCEEDING ARISING OUT OF THIS AGREEMENT OR ANY TRANSACTION CONTEMPLATED HEREBY. EACH PARTY HERETO FURTHER AGREES THAT SERVICE OF ANY PROCESS, SUMMONS, NOTICE OR DOCUMENT BY U.S. REGISTERED MAIL TO SUCH PARTY’S RESPECTIVE ADDRESS SET FORTH ON THE SIGNATURE PAGES HERETO SHALL BE EFFECTIVE SERVICE OF PROCESS FOR ANY ACTION, SUIT OR PROCEEDING IN NEW YORK WITH RESPECT TO ANY MATTERS TO WHICH IT HAS SUBMITTED TO JURISDICTION AS SET FORTH ABOVE IN THE IMMEDIATELY PRECEDING SENTENCE. EACH PARTY HERETO IRREVOCABLY AND UNCONDITIONALLY WAIVES ANY OBJECTION TO THE LAYING OF VENUE OF ANY ACTION, SUIT OR PROCEEDING ARISING OUT OF THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY IN (X) THE SUPREME COURT OF THE STATE OF NEW YORK AND (Y) THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK, AND HEREBY FURTHER IRREVOCABLY AND UNCONDITIONALLY WAIVES AND AGREES NOT TO PLEAD OR CLAIM IN ANY SUCH COURT THAT ANY SUCH ACTION, SUIT OR PROCEEDING BROUGHT IN ANY SUCH COURT HAS BEEN BROUGHT IN AN INCONVENIENT FORUM.
16.Waiver of Jury Trial. THE PARTIES HERETO HEREBY IRREVOCABLY WAIVE TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM BROUGHT BY ONE PARTY AGAINST ANOTHER PARTY ON ANY MATTER ARISING OUT OF OR IN ANY WAY CONNECTED WITH THIS AGREEMENT.
17.Entire Agreement. This Agreement constitutes the full and entire understanding and agreement between and among the parties with regard to the subject matter hereof, and supersedes any and all prior agreements and understandings (written or oral) of the parties with regard to such subject matter.
18.Survival. The agreements, covenants, representations and warranties in this Agreement shall survive the execution and delivery of this Agreement , the consummation of the transactions contemplated hereby, including the redemption of Redeemed Member, and any dissolution or winding-up of the Company.
19.Amendments. This Agreement may not be amended, modified, supplemented or terminated, nor may any of the obligations hereunder of any party hereto be waived, except by written agreement executed by each party hereto.
20.Severability. If any term or provision of this Agreement or the application thereof to any person or circumstances shall, to any extent, be invalid or unenforceable, the remainder of this Agreement or the application of such term or provision to persons or circumstances other than those as to which it is held invalid or unenforceable shall not be affected thereby, and each term and provision of this Agreement shall be valid and enforceable to the fullest extent permitted by law.
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21.Counterparts. This Agreement may be executed in two or more counterparts and by facsimile or PDF or electronic signatures, which taken together still constitute collectively one agreement. In making proof of this Agreement it shall not be necessary to produce or account for more than one such counterpart with each party’s counterpart or facsimile signature.
22.Tax Matters.
(a)The parties hereto agree that the transactions contemplated by this Agreement shall be treated, for U.S. federal (and applicable state and local) Tax purposes, as a taxable sale by the Redeemed Member of a partnership interest in the Company, so that the Company, which was a partnership prior to the Effective Time, will become a disregarded entity at the Effective Time (the “Transaction Tax Treatment”). The parties hereto agree (and agree to cause their respective affiliates) to (x) prepare and file all Tax Returns in a manner consistent with the Transaction Tax Treatment and (y) not take any position (whether in financial statements, audits, Tax Returns, in connection with any tax proceeding or otherwise) which is inconsistent with the Transaction Tax Treatment, except to the extent otherwise required pursuant to a “determination” within the meaning of Section 1313(a) of the Code (or any similar provision of state, local or foreign Tax law).
(b)Without the prior written consent of the Redeemed Member (not to be unreasonably withheld, delayed or conditioned), the Company will not file (or cause or permit any other person or entity to file) any amended Tax Return of Company or any of its subsidiaries relating to any Pre-Closing Tax Period.
(c)The Continuing Member shall, and shall cause the Company to, and the Redeemed Member shall, cooperate fully, as and to the extent reasonably requested by the other party, in connection with the filing of any Tax Returns, the conduct of any tax proceeding or the determination of any liability for Taxes hereunder. Such cooperation shall include the retention and (upon the other party’s request) the provision of records and information which are reasonably relevant and making employees available on a mutually convenient basis to provide additional information and explanation of any material provided hereunder.
(d)The Company shall pay over to the Redeemed Member, any Tax refunds and any amounts credited (in lieu of a refund) against Tax to the extent attributable, in each case, solely to the Redeemed Interest, if (i) the Company or any of the Company’s subsidiaries or affiliates receives such a refund in cash or actually receives the benefit of such a credit (in lieu of a refund) against Taxes payable and (ii) such refund or credit is attributable to any Pre-Closing Tax Period. Such payment by the Company shall be made forty (40) days after receipt of such refund or credit.
(e)For purposes of this Agreement, (i) “Pre-Closing Tax Period” means a taxable period (or portion thereof) ending on or prior to the date hereof; (ii) “Tax” or “Taxes” means all federal, state, local and foreign income, profits, windfall profits, franchise, gross receipts, gains, environmental, customs duty, capital stock, license, occupation, severance, stamp, transfer, payroll, sales, employment, unemployment, disability, use, property, real property, intangibles, withholding, excise production, ad valorem, value added, occupancy, alternative, add-on minimum, and other taxes, levies, duties and charges of any kind whatsoever,
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together with all interest, penalties or additions to tax attributable thereto, in each case imposed by any taxing authority; and (iii) “Tax Return” means any report, return, statement or other written information (including elections, declarations, disclosures, schedules, estimates and information returns) filed or required to be filed by the Company or any of its subsidiaries with a taxing authority in connection with any Taxes, and any amendment or attachment thereto.
23.Construction. The parties acknowledge that the parties and their counsel have reviewed and revised this Agreement and that the normal rule of construction to the effect that any ambiguities are to be resolved against the drafting party shall not be employed in the interpretation of this Agreement or any amendments hereto. Whenever the words “including”, “include” or “includes” are used in this Agreement, they shall be interpreted in a non-exclusive manner. The section headings in this Agreement are included for purposes of convenience only and shall not affect the construction or interpretation of any of its provisions.
24.Third Party Beneficiaries. The persons and entities to be released pursuant to Section 11, shall be deemed third party beneficiaries of this Agreement.
25.Disclosure. The parties hereto hereby acknowledge that the Company Released Parties, Coach, Inc., Redeemed Member or any of their affiliates may disclose this Agreement in its entirety (i) to the extent legally compelled (by deposition, interrogatory, request for documents, subpoena, civil investigative demand or similar process) to disclose the same, (ii) to the extent required by any federal, state, local or foreign laws, or by any rules or regulations of the United States Securities and Exchange Commission (or its equivalent in any foreign country) or any domestic or foreign public stock exchange or stock quotation system, that may be applicable to Coach, Inc. or Redeemed Member or any of their direct or indirect constituent owners or affiliates, (iii) to the extent any information was previously or is hereafter publicly disclosed (other than in violation of this Agreement), (iv) to their partners, advisers, underwriters, analysts, employees, Affiliates, officers, directors, consultants, lenders or potential lenders, investors or potential investors, accountants, legal counsel, title companies or other advisors of any of the foregoing in each case to the extent reasonably necessary for such party’s business purposes, provided that they are advised as to the confidential nature of such information and are instructed to maintain such confidentiality or (v) to the extent necessary to enforce rights under this Agreement. Notwithstanding any other provision in this Agreement, (i) any party (and any employee, representative or other agent of any such party) may disclose to any and all persons, without limitation of any kind, the United States federal, state or local tax treatment and tax structure of the transactions contemplated herein, it being understood and agreed, for this purpose, the name of or any other identifying information regarding the entities or transactions involved does not constitute such tax treatment or structure information, and (ii) one or more of the Company Released Parties or the Redeemed Member Parties may issue press releases with respect to the Restructuring and the transactions contemplated by this Agreement, provided that party obtain the prior written consent and approval of the other parties hereto prior to issuing or disseminating any press releases, which consent shall not be unreasonably withheld, conditioned or delayed.
26.Successors and Assigns. The stipulations, terms, covenants and agreements contained in this Agreement shall inure to the benefit of, and shall be binding upon, the parties hereto and their respective permitted successors and assigns. The parties hereto hereby agree
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that the Company may assign this Agreement and its rights hereunder to any affiliate of the Company.
                                                      [No Further Text on This Page]

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

LEGACY YARDS LLC, 
a Delaware limited liability company

	 

	 

	By:  _/s/ L. Jay Cross____________________

	Name:  L. Jay Cross

	Title:  Authorized Signatory

 Address for Company:
Legacy Yards LLC
do The Related Companies, L.P.
60 Columbus Circle
New York, NY 10023
Attn: Richard O'Toole, Esq.
CONTINUING MEMBER:
	
		
	PODIUM FUND TOWER C SPV LLC,
a Delaware limited liability company

	 

	By: Podium Fund REIT LP, 
a Delaware limited partnership, its managing member

	 

	By: _/s/ L. Jay Cross________________________
	 

	Name: L. Jay Cross
	 

	Title: President
	 

Address for Continuing Member:
Podium Fund Tower C SPV LLC c/o The Related Companies, L.P. 60 Columbus Circle, 19th Floor New York, NY 10023
Attn: Richard O'Toole, Esq.
[Signatures Continue on Next Page]

[Signature Page to Redemption Agreement]
REDEEMED MEMBER:
	
		
	COACH LEGACY YARDS LLC,

	a Delaware limited liability company

	 

	By:
	/s/ Todd Kahn______________

	 
	Name: Todd Kahn

	 
	Title: President, Chief Administrative Officer

Address for Redeemed Member.
Coach Legacy Yards LLC
do Coach, Inc.
516 West 34`h Street
New York, NY 10001
Attn: Todd Kahn
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[Signature Page to Redemption Agreement]

WITH RESPECT TO SECTIONS 9 AND 11 ONLY, COACH, INC.
COACH, INC.
a Maryland corporation

By:_/s/ Todd Kahn __________________________

Name:    Todd Kahn
Title:    President
Chief Administrative Officer 
Address for Coach, Inc.:
Coach, Inc.
516 West 34th Street  
New York. NY 10001  
Ann: Todd Kahn
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[Signature Page to Redemption Agreement]

WITH RESPECT TO SECTION 11 ONLY, ERY DEVELOPER LLC
	
	
	ERY DEVELOPER LLC,
a Delaware limited liability company

	 

	 

	By: /s/ L. Jay Cross_________

	Name: L. Jay Cross

	Title:  President

Address for ERY Developer LLC:
Podium Fund Tower C SPV LLC  
do The Related Companies, L.P.  
60 Columbus Circle, 19th Floor  
New York, NY 10023
Attn: Richard O'Toole, Esq.

[Signature Page to Redemption Agreement]

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