Document:

Exhibit 10.1

 

MUTUAL RELEASE AGREEMENT

This Mutual Release Agreement ("Agreement") is entered into by and between W. JOHN SHORT (“Short” or “Employee”) and RICEBRAN TECHNOLOGIES (“RBT” or “Company”). The parties hereto may hereinafter be referred to individually as a "Party" or collectively as the "Parties."

BACKGROUND

A.            Short was employed by RBT, first as President and later as Chief Executive Officer, pursuant to that certain Employment Agreement by and between Short and RBT’s predecessor, NutraCea, effective July 6, 2009, as amended by: (i) the First Amendment, effective July 7, 2009; (ii) the Second Amendment, effective November 6, 2009; (iii) the Third Amendment, effective July 2, 2010; and (iv) the Fourth Amendment, effective July 15, 2011 (“Employment Agreement”).

B.            RBT terminated Short’s employment effective August 27, 2016. Short remains a member of RBT’s Board of Directors, but will resign as a Director under the terms of this Agreement subject to timely payments of amounts due as described below.

C.            RBT previously has paid Short all earned wages and accrued and unused vacation due him through August 27, 2016.

TERMS OF SETTLEMENT

1.             Payments. The following terms will govern the Company’s payment obligations:

1.1           Severance. The Company will pay Short (a) within three (3) business days after the Effective Date (as defined below), a lump sum equal to Two Hundred Twenty Thousand Dollars ($220,000.00), less applicable withholdings, (the “Initial Payment”); (b) on or before January 15, 2017, an additional lump sum payment equal to Two Hundred Twenty-Five Thousand Dollars ($225,000.00), less applicable withholdings; and (c) Two Hundred Fifty-Five Thousand Dollars, less applicable withholdings, to be paid in fifteen (15) equal installments of Seventeen Thousand Dollars ($17,000.00), with the first installment being paid on or before February 15, 2017, and the remaining installments paid on the 15th day of each of the succeeding fourteen (14) months. The above payments, collectively, are the “Severance Payments.” To the maximum extent permitted by the terms of the Company’s 401(k) plan and applicable law, for 2016 but not any future years, the Company will process the Severance Payments through RBT’s payroll system in order to maximize Short’s pre-tax contributions to the Company’s 401(k) plan.

1.2           Board Payment. As a substitute for future payments Short is foregoing by resigning from RBT’s Board of Directors, the Company will pay Short within three (3) business days after the Effective Date, a lump sum payment equal to Eighty Thousand Dollars ($80,000.00), with no withholdings (the “Board Payment”).

 

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The Severance Payments and the Board Payment will be made by wire transfer or direct deposit, at Company expense, into the same account used to deposit Short’s wages immediately before termination of his employment.

1.3           Attorneys’ Fees and Costs. Within ten (10) business days after the Effective Date, the Company will pay Short’s attorneys, Coppersmith Brockelman PLC, the sum of Thirty-Nine Thousand Dollars ($39,000.00) for attorneys’ fees and costs that Short has incurred (the “Fees Payment”). The Fees Payment will be made by wire transfer, at Company expense, into an account designated by Coppersmith Brockelman PLC.

1.4           Default. If the Company fails to make any Severance Payment, the Board Payment, or the Fees Payment when such payment is due, or fails to deliver the Unrestricted Stock Certificate as required, all unpaid payments required by this Agreement will immediately become due and payable.

1.5           Accelerated Payments for Asset Sales. If the Company sells (i) personal property assets located in the United States other than in the ordinary course of business or (ii) real property located in the United States, then the Company shall pay to Short, as an advance payment of Severance Payment amounts, the proceeds therefrom, net of transaction costs and taxes accrued or incurred as a result of such sale. Notwithstanding the foregoing provisions of this Section 1.5, the Company shall have no obligation to pay any portion of the Severance Payment as provided in the immediately preceding sentence (i) from any funds received from any debt or equity financing transaction, (ii) if immediately after the sale of assets the Company is not in compliance with the shareholder equity requirements of the Nasdaq Stock Market LLC (“Nasdaq”) or (iii) to the extent such payment would cause the Company to violate, or could reasonably likely cause the Company to later violate, any Nasdaq rules, including without limitation the Nasdaq shareholder equity requirements. Any payments made pursuant to this Section 1.5 shall be applied in reverse order of maturities, meaning the fifteenth (15th) monthly installment of the Severance Pay shall be paid first, the fourteenth (14th) monthly installment shall be paid second, and so on.

1.6           IRC Section 409A. This Agreement is intended to comply with Section 409A of the Internal Revenue Code of 1986, as amended (“Section 409A”) or an exemption thereunder and shall be construed and administered in accordance with Section 409A. Notwithstanding any other provision of this Agreement, payments provided under this Agreement may only be made upon an event and in a manner that complies with Section 409A or an applicable exemption. Any payments under this Agreement that may be excluded from Section 409A either as separation pay due to an involuntary separation from service or as a short-term deferral shall be excluded from Section 409A to the maximum extent possible. Any payments to be made under this Agreement upon a termination of employment shall only be made if such termination of employment constitutes a “separation from service” under Section 409A. Notwithstanding the foregoing, the Company makes no representations that the payments and benefits provided under this Agreement comply with Section 409A and in no event shall the Company be liable for all or any portion of any taxes, penalties, interest or other expenses that may be incurred by Short on account of non-compliance with Section 409A.

 

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2.             Equity Compensation.

2.1           Equity Instruments. Exhibit A hereto describes all stock, stock options and similar awards (the “Equity Instruments”) that have been granted to Short by RBT in connection with Short’s employment with RBT and that were outstanding at the time Short’s employment with RBT terminated, and Short and RBT hereby confirm that the agreements and awards relating to the Equity Instruments, and the current Equity Incentive Plan, remain in full force and effect in accordance with their terms. Short and RBT further agree and confirm that Short is not entitled to any additional equity rights in RBT or its affiliates other than as set forth on Exhibit A.

2.2           Acceleration of Vesting of Restricted Stock. Short holds 159,844 shares of the Company’s common stock that were granted to Short pursuant to the Company’s 2014 Equity Incentive Plan, 147,837 of which shares are unvested (such unvested shares, the “Unvested Shares”) and 12,007 of which shares are vested (such vested shares, the “Vested Shares”) as of the Effective Date. Effective upon the Company delivering the Initial Payment to Short and without any further action being required, all the Unvested Shares shall vest. Within three (3) business days thereafter, the Company shall deliver to the Company’s stock transfer agent a letter (the “Direction Letter”) directing the transfer agent to issue to Short a stock certificate representing any Unvested Shares and Vested Shares that are then held in escrow, adjusted for withholding of taxes by reducing the number of shares delivered, consistent with the Company’s past practices, so that Short receives a certificate for a net number of shares on which taxes have been withheld in the form of the reduction of the final number of shares delivered (the “Unrestricted Stock Certificate”), and will provide Short’s attorney with a copy of the Direction Letter. The Unrestricted Stock Certificate shall contain no restrictive legends so that the net shares delivered to Short can be sold immediately; provided however that Short understands and agrees that until he resigns as a member of Company’s Board of Directors, Short will be an affiliate of the Company. Short understands that because of Short’s affiliate status, if Short desires to transfer any shares of the Company Stock in accordance with Rule 144 under the Securities Act of 1933, Short will need to comply with certain notice and volume limitation requirements thereunder. Further, Short agrees to comply with anti-fraud rules under federal and state law in connection with his sale of Company shares, including without limitation any laws restricting the ability of a shareholder to transfer shares while in possession of material nonpublic information.

3.             Releases and Waivers of Liability. In consideration of the promises and covenants contained in this Agreement, the Parties agree to the following releases and waivers.

3.1           Short’s Release of Claims. Except for RBT’s obligations to Short that are expressly set forth in this Agreement, and with the exceptions noted in the last sentence of this Section 3.1, Short hereby releases, acquits and forever discharges RBT and its owners, officers, directors, administrators, agents, servants, employees, attorneys, successors, parent, subsidiaries, insurers, assigns and affiliates, and any other person acting by, under, through or in concert with any of them (collectively referred to as the “Released Parties”), of and from any and all claims, liabilities, demands, causes of action, costs, expenses, attorneys' fees, damages, penalties, indemnities, judgments, liens, contracts, agreements, rights, debts, suits, promises, and obligations of every kind and nature, in law, equity, or otherwise, known and unknown, suspected and unsuspected, disclosed and undisclosed, arising out of or in any way related to agreements, events, acts or conduct at any time prior to and including the execution date of this Agreement including, but not limited to, all claims and demands directly or indirectly arising out of or in any way connected with his employment with the Company or the end of that employment; claims or demands related to wages, vacation, fringe benefits, expense reimbursements, Board of Director fees or equity rights, separation pay, equity rights (other than as set forth in Section 2.1 and 2.2), or any other form of compensation; penalties under any statute or regulation; claims pursuant to any federal, state or local law, statute, or cause of action including, but not limited to, the federal Civil Rights Act of 1964, as amended; the federal Americans with Disabilities Act of 1990, as amended; the federal Employee Retirement Income Security Act of 1974, as amended; the federal Age Discrimination in Employment Act; the federal Family and Medical Leave Act, as amended; the California Fair Employment and Housing Act, as amended; the California Family Rights Act, as amended; the California Labor Code; the Arizona Civil Rights Act; the Arizona Employment Protect Act; the Arizona Wage Act; and/or any claim in tort law or contract law, including but not limited to: wrongful discharge; discrimination; harassment; retaliation; fraud; defamation; intentional or negligent infliction of emotional distress; intentional or negligent interference with contract or prospective economic advantage; breach of contract; and/or breach of the implied covenant of good faith and fair dealing. This Release shall not (a) affect Short’s rights under the Indemnification Agreement to which the Parties agreed in November 2009 (except that Short waives any rights he may have under the Indemnification Agreement for payment of fees or costs related to the termination of his employment by the Company or negotiation of this Agreement); or (b) affect Short’s rights to timely repayment of both principal and interest under existing subordinated notes owned by Short, currently in the amount of approximately $54,000.00; or (c) affect Short’s rights to coverage under applicable Director’s and Officer’s insurance policies; or (d) be construed in any way to waive any rights or benefits that may not be waived pursuant to applicable law.

 

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3.2           Older Workers Benefit Protection Act. Pursuant to the terms of the federal Older Workers' Benefit Protection Act (“OWBPA”), Short is waiving any claims he may have under the Age Discrimination in Employment Act. Short acknowledges that he has twenty-one (21) days in which to consider the terms of this waiver and that if he executes this Agreement prior to the expiration of such period, he does so voluntarily. Short further acknowledges that, by the terms of this Agreement, he has been advised that following execution of this Agreement, he has seven (7) days in which he may revoke his waiver pursuant to the OWBPA and that this Agreement does not become effective until the eighth (8th) day following execution of the Agreement by Short. Further, Short acknowledges that he is represented by counsel and has received legal advice in connection with the terms of this Agreement, and thus is fully aware of the rights and claims he is releasing by executing this Agreement.

3.3           RBT’s General Release. Short represents and warrants that he did not engage in any willful or intentional misconduct during, and related to, his employment with the Company. Based on Short’s representations and warranties, and excepting the obligations that are expressly set forth in this Agreement, RBT, and its predecessors, successors, heirs, assigns, owners, administrators, agents, employees, representatives, attorneys, affiliates, subsidiaries, and any and all past or present officers and directors for their part, shall and hereby do release and forever discharge Short against any and all claims, damages, actions, causes of action, liabilities, judgments, liens, contracts, agreements, rights, debts, suits, obligations, promises, acts, costs and expenses, (including, but not limited to attorneys' fees), damages and charges of whatsoever nature which RBT may now have, or claims to have, or at any time heretofore had or claimed to have had against Short, or any other claim, as a result of things undertaken, said, stated, done or admitted to be done up to and including the date of this Agreement.

 

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3.4           Waiver of Unknown and Unanticipated Claims. The Parties acknowledge that there is a risk that, subsequent to the execution of this Agreement, they may discover, incur or suffer from claims which are currently unknown or unanticipated and which, if known, would have materially affected their decision to execute this Agreement. The Parties acknowledge that they have read and understand Section 1542 of the California Civil Code which reads as follows:

 

"A general release does not extend to claims which the creditor does not know or suspect to exist in his or her favor at the time of executing the release, which if known by him or her must have materially affected his or her settlement with the debtor."

 

The Parties hereby expressly waive and relinquish all rights and benefits under Section 1542 and any law of any jurisdiction of similar effect with respect to the release of any unknown or unsuspected claims they may have against the other Party.

4.            Covenant Not To Sue. Short and his agents and assigns agree to refrain from initiating, prosecuting or maintaining (or causing or assisting in the initiation, prosecution or maintenance of) any action, suit, or proceeding against any of the Released Parties for damages, penalties, injunctive, and/or any other relief based upon the matters released in Section 3.1 hereof. RBT and its agents and assigns agree to refrain from initiating, prosecuting or maintaining (or causing or assisting in the initiation, prosecution or maintenance of) any action, suit, or proceeding against Short for damages, penalties, injunctive, and/or any other relief based upon the matters released in Section 3.3 hereof. Within ten (10) business days after the Effective Date, the Parties, through their attorneys, will take appropriate action to cause the American Arbitration Association to dismiss the arbitration proceeding (the “Arbitration”) that the Company commenced on September 22, 2016 (and including the counterclaims that Short asserted on September 23, 2016), and the Parties further agree that they will not take any further action in the Arbitration. Excepting the Arbitration, each of the Parties represents and warrants that no other administrative or legal complaints, petitions, motions or other proceedings are pending against each other.

5.            Confidentiality of Employer's Proprietary Information. Short acknowledges that by reason of his position as Chief Executive Officer with RBT, he was, or may have been, given access to confidential or proprietary information or materials respecting RBT’s business affairs, or the business affairs of RBT’s customers. Such confidential information includes, but is not limited to, the Company’s business strategies, financial results, human resource and personnel documentation, contractual agreements between RBT and other individuals or entities, strategies and ideas, compilation of information and records which are owned by RBT and/or its customers, and which are regularly used in operation of its business, procedures, written descriptions, processes, research projects, protocols or other tangible items and documentation, including computer programs, reports and marketing information. Short represents that he has held all such information in confidence and will continue to do so. Short further represents that all files, records, documents, lists, equipment, inventions, computer programs, computer disk and other storage devices, research projects, protocols, processes and similar items relating to the business of RBT, or its customers, whether prepared by Short or otherwise coming into his possession on or before the Effective Date, shall remain the exclusive property of RBT. Short further represents that any of the confidential information described in this paragraph in Short’s possession will be returned or destroyed within three (3) business days of Short’s receipt of the Initial Payment, the Board Payment, and the Unrestricted Stock Certificate. Short further represents that he has returned all other RBT property, or will do so no later than the date he returns or destroys all confidential information as required by the immediately preceding sentence. Nothing in this Section 5, or in this Agreement generally, shall affect or limit Short’s rights as a Company shareholder, nor shall this Section 5 have any application to Short’s possession or use of any confidential information of RBT that Short may, in the future, lawfully and appropriately acquire.

 

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6.            Warranty of Ownership. Each Party represents and warrants that he/it has the sole right and exclusive authority to execute this Agreement and has not sold, assigned, transferred, subrogated, or granted a security interest in or otherwise disposed of any interest in any claims released hereby.

7.             No Admission of Liability. The Parties have entered into this Agreement to mutually release any claims they may have. However, nothing contained herein shall be deemed as an admission by (i) any of the Released Parties of any liability of any kind to Short or (ii) Short of any liability of any kind to RBT, all such liability being expressly denied.

8.             Short’s Affirmations re: Statutory Benefits. Short affirms, to the extent applicable, that: (a) he has no outstanding requests for copies of personnel, payroll, or other employment documents from RBT; (b) he was not denied a requested leave (paid or unpaid) or a requested accommodation for which he was entitled to under the Family Medical Leave Act, California Family Rights Act, the Americans With Disabilities Act, or the California Fair Employment and Housing Act; or any similar statute under any other jurisdiction; and (c) he has no known workplace injuries or occupational diseases for which he has not filed a claim for workers’ compensation benefits.

9.             Short’s Social Media/Website Profiles. Short acknowledges and agrees that he has updated any and all social media pages and/or other websites he can manage (e.g. LinkedIn, Avvo, Facebook, etc.) so that they no longer represent that he is employed as the Chief Executive Officer of RBT.

10.           Confidentiality. The Parties agree to keep the existence of this Agreement, and its terms confidential. Notwithstanding this confidentiality provision, the Parties may disclose the terms and conditions of this Agreement to their attorneys or accountants, or as they may be compelled by applicable law, and Short may disclose the terms and conditions of this Agreement to his spouse.

 

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11.           Non-Disparagement. Short agrees that he will forever refrain from disparaging the personal and/or professional reputation of the Company and the Released Parties, and RBT agrees that it will not knowingly permit the disparagement of Short’s personal and/or professional reputation by any officer, director, or employee of the Company. The Parties understand and agree that this covenant not to disparage applies to both written and oral comments, as well as any comments posted on any social media or other Internet site. Nothing in this Section 11 will preclude the Parties from fairly and lawfully competing with one another should such competition occur in the future, or from testifying honestly should such testimony be required in the future.

12.           Advice of Counsel and Waiver of Statutory Protections in Contract Interpretation. Each of the Parties has obtained advice of legal counsel prior to the execution of this Agreement, and understands fully the contents hereof. The Parties’ respective legal counsel drafted this Agreement. Therefore, this Agreement shall not be construed to have been drafted by any one Party and the Parties expressly waive the provisions of any law in any jurisdiction that requires an ambiguity to be interpreted against the drafting party.

13.           Attorneys' Fees and Costs. If the services of an attorney are required by any Party to secure the performance of this Agreement or otherwise upon the breach or default of another Party to this Agreement, or if any judicial remedy or arbitration is necessary to enforce or interpret any provision of this Agreement or the rights and duties of any person in relation thereto, the prevailing party shall be entitled to reasonable attorneys' fees, costs and other expenses, in addition to any other relief to which such Party may be entitled.

14.           Choice of Law and Venue. This Agreement shall be interpreted in accordance with the laws of the State of Arizona without reference to conflicts of law provisions thereof. The Parties agree that all disputes between them, including, without limitation, all disputes arising under or relating to this Agreement, will be resolved pursuant to the arbitration provisions in Section 8.9 of the Employment Agreement.

15.           Entire Agreement. This document constitutes the entire agreement between the Parties regarding the matters described herein. This Agreement supersedes any prior agreements or representations between the Parties or any of them, except that Section 2.5 and 8.9 of the Employment Agreement, the Proprietary Rights Agreement that Short previously executed, the Parties’ Indemnification Agreement (with the exception noted in Section 3.1 above), and the Equity Instruments will continue in full force and effect according to their terms. There are no representations, agreements, arrangements, or understandings, oral or written, between the Parties relating to the subject matter of this Agreement that are not fully expressed herein. The Parties agree that no extrinsic evidence may be introduced to vary the terms hereof in any judicial proceeding involving this Agreement.

16.           Severability. If any provision of this Agreement is held by a court of competent jurisdiction to be invalid or unenforceable, the remainder of the Agreement which can be given effect without the invalid provision shall continue in full force and effect and shall in no way be impaired or invalidated.

 

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17.           Counterparts. This Agreement may be executed in any number of counterparts with the same effect as if the parties had all signed the same document. All counterparts shall be construed together and shall constitute one agreement. Fax signatures are acceptable and shall be treated as original signatures.

18.           Amendment. No provision of this Agreement may be modified except through a writing signed by all Parties.

19.           Notices. Any notice, consent, waiver, and other communication under this Agreement shall be in writing, and any written notice or other document shall be deemed to have been duly given and received (a) if mailed by registered or certified mail, three business days after deposit in the United States mail, postage prepaid, return receipt requested; (b) upon confirmation of a receipt of a facsimile transmission; (c) if hand delivered, upon delivery against receipt or upon refusal to accept the notice; (d) if delivered by a recognized overnight courier, one business day after deposit with such courier, postage prepaid, in each case, addressed to such Party at the address set forth below or at the most recent address specified through written notice under this provision; or (e) if delivered via email, upon confirmation of receipt. Failure to conform to the requirement that mailing be done by registered mail or certified mail shall not defeat the effectiveness of notice actually received by the addressee.

	If to Short:	
W. John Short

2932 NW Celilo Lane

Bend, Oregon 97703

	If to RBT:	
RiceBran Technologies

ATTN: Chief Executive Officer

6720 N. Scottsdale Road, Suite 390,

Scottsdale, Arizona 85253

20.           Effective Date. This Agreement shall become effective on the eighth (8th) day following execution by Short and provided Short does not revoke the Agreement before then (such date of effectiveness, the “Effective Date”). Upon the Effective Date, the Parties hereto agree to be bound by all of its terms and provisions of the Agreement.

21.           Company Product. Each quarter for the next five (5) years, with the initial shipment being made within five (5) business days after the Effective Date, the Company will provide to Short, at no cost to Short: (i) five 25-pound bags of RiSolubles, and (ii) five one-pound canisters of RiBalance. These products will be shipped to such address within the United States as Short specifies.

 

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22.           Resignation as Director. Effective upon the Company transmitting to Short the Initial Payment and the Board Payment, and transmitting to Short’s attorney the Unrestricted Stock Certificate, without any further action being required, Short resigns as a Director of the Company.

	
Dated: November 15, 2016

	
/s/ W. John Short

	 	
W. JOHN SHORT

	 	 	 
	
Dated: November 18, 2016

	
RICEBRAN TECHNOLOGIES

	 	 	 
	 	
By:

	
/s/ J. Dale Belt

	 	 	
J. Dale Belt

	 	 	
Executive Vice-President and CFO

 

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Exhibit A

Equity Compensation

	
Award Type When Granted

	 	
Number of Shares

	 	
Date of Grant

	 	
Exercise Price Per Share

	 	 	
Shares Vested on August 27, 2016

	 	 	
Share Unvested on August 27, 2016

	 
	
Non-Statutory Stock Option (1)

	 	 	
12,000

	 	
7/6/2009

	 	
$

	
16.00

	 	 	 	
12,000

	 	 	 	
0

	 
	
Non-Statutory Stock Option (1)

	 	 	
7,000

	 	
7/6/2009

	 	
$

	
16.00

	 	 	 	
7,000

	 	 	 	
0

	 
	
Non-Statutory Stock Option (1)

	 	 	
6,000

	 	
7/6/2009

	 	
$

	
16.00

	 	 	 	
6,000

	 	 	 	
0

	 
	
Non-Statutory Stock Option (2)

	 	 	
15,000

	 	
7/7/2010

	 	
$

	
16.00

	 	 	 	
15,000

	 	 	 	
0

	 
	
Non-Statutory Stock Option (2)

	 	 	
5,000

	 	
7/7/2010

	 	
$

	
16.00

	 	 	 	
5,000

	 	 	 	
0

	 
	
Non-Statutory Stock Option (2)

	 	 	
5,000

	 	
7/7/2010

	 	
$

	
16.00

	 	 	 	
5,000

	 	 	 	
0

	 
	
Non-Statutory Stock Option (2)

	 	 	
1,719

	 	
4/25/2012

	 	
$

	
16.00

	 	 	 	
1,719

	 	 	 	
0

	 
	
Incentive Stock Option (3)

	 	 	
45,892

	 	
8/19/2014

	 	
$

	
4.77

	 	 	 	
30,598

	 	 	 	
15,294

	 
	
Incentive Stock Option (3)

	 	 	
40,453

	 	
6/23/2015

	 	
$

	
3.47

	 	 	 	
15,736

	 	 	 	
24,717

	 
	
Total Options

	 	 	
138,064

	 	 	 	 	 	 	 	 	
98,053

	 	 	 	
40,011

	 
	
Restricted Stock (3)

	 	 	
123,821

	 	
8/19/2014

	 	 	
N/A

	 	 	 	
0

	 	 	 	
123,821

	 
	
Restricted Stock (3)

	 	 	
36,023

	 	
6/23/2015

	 	 	
N/A

	 	 	 	
12,007

	 	 	 	
24,016

	 
	
Total Stock

	 	 	
159,844

	 	 	 	 	 	 	 	 	
12,007

	 	 	 	
147,837

	 

		(1)	
Granted pursuant to the 2005 Equity Incentive Plan.

		(2)	
Granted pursuant to the 2010 Equity Incentive Plan.

		(3)	
Granted pursuant to the 2014 Equity Incentive Plan.

 

 

10 | Page2014 Incentive Plan

(as amended)

 

Article
1

Establishment
and Purpose

 

1.1
Establishment of the Plan. ATRM Holdings, Inc., a Minnesota corporation (the “Company”), hereby establishes
an incentive compensation plan (the “Plan”), as set forth in this document.

 

1.2
Purpose of the Plan. The purpose of the Plan is to promote the success and enhance the value of the Company by linking
the personal interests of Participants (as defined below) to those of the Company’s shareholders, and by providing Participants
with an incentive for outstanding performance.

 

1.3
Effective Date of the Plan. The Plan is effective as of the date the Plan is approved by the Company’s shareholders
(the “Effective Date”). The Plan will be deemed to be approved by shareholders if it receives the affirmative vote
of the holders of a majority of the Shares (as defined below) present, in person or by proxy, and entitled to vote on the matter
at a shareholder meeting duly held in accordance with the applicable provisions of the Company’s Bylaws, as amended (the
“Bylaws”).

 

Article
2

Definitions

 

Whenever
used in the Plan, the following terms shall have the meanings set forth below and, when the meaning is intended, the initial letter
of the word or words are capitalized:

 

(a)
“Applicable Law” means the legal requirements relating to the administration of options and share-based or performance-based
awards under any applicable laws of the United States, any other country, and any provincial, state, or local subdivision, any
applicable stock exchange or automated quotation system rules or regulations, as such laws, rules, regulations and requirements
shall be in place from time to time.

 

(b)
“Award” means, individually or collectively, a grant or award under the Plan of Stock Options, Stock Appreciation
Rights, Restricted Stock (including unrestricted Stock), Restricted Stock Units, Performance Stock Units, Performance Shares,
Deferred Stock Awards or Other Stock-Based Awards, Dividend Equivalents Awards and Performance Bonus Awards.

 

(c)
“Award Agreement” means an agreement which may be entered into by each Participant and the Company, setting forth
the terms and provisions applicable to Awards granted to Participants under the Plan. In the event of any inconsistency between
the Plan and an Award Agreement, the terms of the Plan shall govern.

 

(d)
“Board” or “Board of Directors” means the Company’s Board of Directors.

 

(e)
“Cause” means that Participant (i) pleads “guilty” or “no contest” to or is indicted for or
convicted of a felony under federal or state law or of a crime under federal or state law which involves Participant’s fraud
or dishonesty; (ii) in carrying out Participant’s duties to the Company or any Subsidiary, engages in conduct that constitutes
gross negligence or willful misconduct, as determined by the Company in its sole discretion; or (iii) engages in misconduct that
causes material and demonstrable harm to the reputation of the Company, as determined by the Company in its sole discretion.

 

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(f)
“Change in Control” shall be deemed to have occurred if: (i) any “person” (as such term is used in Sections
13(d) and 14(d) of the Exchange Act), other than a trustee or other fiduciary holding securities under an employee benefit plan
of the Company or a corporation owned directly or indirectly by the shareholders of the Company in substantially the same proportions
as their ownership of stock of the Company, becomes the “beneficial owner” (as defined in Rule 13d-3 under the Exchange
Act), directly or indirectly, of securities of the Company representing fifty percent (50%) or more of the total voting power
represented by the Company’s then outstanding voting securities; (ii) during any period of two (2) consecutive years, individuals
who at the beginning of such period constitute the Board of Directors and any new Director whose election by the Board of Directors
or nomination for election by the Company’s shareholders was approved by a vote of a majority of the Directors then still
in office who either were Directors at the beginning of the period or whose election or nomination for election was previously
so approved, cease for any reason to constitute a majority thereof; or (iii) the consummation of a merger or consolidation of
the Company with any other corporation, other than a merger or consolidation which would result in the voting securities of the
Company outstanding immediately prior thereto continuing to represent (either by remaining outstanding or by being converted into
voting securities of the surviving entity) at least fifty percent (50%) of the total voting power represented by the voting securities
of the Company or such surviving entity outstanding immediately after such merger or consolidation, or the shareholders of the
Company approve a plan of complete liquidation of the Company or an agreement for the sale or disposition by the Company of all
or substantially all the Company’s assets.

 

(g)
“Code” means the Internal Revenue Code of 1986, as amended from time to time.

 

(h)
“Committee” means the committee or committees of the Board of Directors given authority to administer the Plan as
provided in Article 3.

 

(i)
“Consultant” means any consultant or adviser if:

 

(i)
The consultant or adviser renders bona fide services to the Company or any Subsidiary;

 

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

 

(iii)
The consultant or adviser is a natural person who has contracted directly with the Company or any Subsidiary to render such services.

 

(j)
“Covered Employee” means an Employee who is, or could be, a “covered employee” within the meaning of Section
162(m) of the Code.

 

(k)
“Deferred Stock” means a right to receive a specified number of Shares during specified time periods pursuant to Article
9.

 

(l)
“Director” means any individual who is a member of the Board of Directors.

 

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(m)
“Disability” means absence of an Employee from work under the relevant Company or Subsidiary long term disability
plan; provided, however, that to entitle a Participant to an extended exercise period for an Incentive Stock Option, the Participant
must meet the description in Section 22(e)(3) of the Code.

 

(n)
“Dividend Equivalents” means a right granted pursuant to Article 9 to receive the equivalent value (in cash or Stock)
of dividends paid on Stock.

 

(o)
“Employee” means any employee, as defined in accordance with Section 3401(c) of the Code, of the Company or any Subsidiary.
“Employment” means the employment of an Employee by the Company or any Subsidiary. Directors who are not otherwise
employed by the Company or any Subsidiary shall not be considered Employees under the Plan.

 

(p)
“Exchange Act” means the Securities Exchange Act of 1934, as amended from time to time, or any successor Act thereto.

 

(q)
“Exercise Price” means the price at which a Share may be purchased pursuant to an Option, as determined by the Committee.

 

(r)
“Fair Market Value” means the closing price reported for the Shares on the relevant date as reported on NASDAQ or
such other principal national securities exchange in the United States on which the Shares are then traded, or, if such date is
not a trading day, the last prior day on which the Shares were so traded, or if not so listed, the mean between the closing bid
and asked prices of publicly traded Shares in the over-the-counter market, or, if such bid and asked prices shall not be available,
as reported by any nationally recognized quotation service selected by the Company, or as determined by the Committee in a manner
consistent with the provisions of the Code.

 

(s)
“Incentive Stock Option” means an Option that is intended to meet the requirements of Section 422 of the Code.

 

(t)
“Independent Director” means a member of the Board who is not an Employee of the Company.

 

(u)
“Insider” means an Employee who is, on the relevant date, an officer, director, or ten percent (10%) beneficial owner
of the Company, as those terms are defined under Section 16 of the Exchange Act.

 

(v)
“NASDAQ” means The NASDAQ Stock Market.

 

(w)
“Non-Employee Director” means a member of the Board who qualifies as a “Non-Employee Director” as defined
in Rule 16b-3(b)(3) of the Exchange Act, or any successor definition adopted by the Board.

 

(x)
“Non-Qualified Stock Option” means an Option that is not intended to be an Incentive Stock Option.

 

(y)
“Option” means an option to purchase Shares from the Company. An Option may be either an Incentive Stock Option or
Non-Qualified Stock Option.

 

(z)
“Other Stock-Based Award” means an Award granted or denominated in Stock or units of Stock pursuant to Section 9.6.

 

    	 	3	 

     

    

 

(aa)
“Participant” means an Employee, a Consultant, or a member of the Board who holds an outstanding Award granted under
the Plan.

 

(bb)
“Performance-Based Award” means an Award granted to selected Covered Employees pursuant to Articles 7 and 9 (other
than SARs awarded under Section 9.5), but which is subject to the terms and conditions set forth in Article 8. All Performance-Based
Awards are intended to qualify as Qualified Performance-Based Compensation.

 

(cc)
“Performance Criteria” means the criteria provided in Section 8.6.

 

(dd)
“Performance Period” means the one or more periods of time, which may be of varying and overlapping durations, as
the Committee may select, over which the attainment of one or more Performance Goals will be measured for the purpose of determining
a Participant’s right to, and the payment of, a Performance-Based Award.

 

(ee)
“Performance Stock Unit” and “Performance Share” each mean an Award granted pursuant to Article 9.

 

(ff)
“Plan” means this 2014 Incentive Plan, as it may be amended from time to time.

 

(gg)
“Qualified Performance-Based Compensation” means any compensation that is intended to qualify as “qualified
performance-based compensation” as described in Section 162(m) of the Code.

 

(hh)
“Restricted Stock” means Stock awarded pursuant to Section 7.1 that is subject to certain restrictions and may be
subject to risk of forfeiture.

 

(ii)
“Restricted Stock Unit” means an Award granted pursuant to Section 7.9.

 

(jj)
“Shares” or “Stock” means the shares of common stock of the Company.

 

(kk)
“Stock Appreciation Right” or “SAR” means a right granted pursuant to Section 9.5 to receive a payment
equal to the excess of the Fair Market Value of a specified number of shares of Stock on the date the SAR is exercised over the
Fair Market Value on the date the SAR was granted as set forth in the applicable Award Agreement.

 

(ll)
“Subsidiary” means any corporation, partnership, venture or other entity in which the Company holds, directly or indirectly,
a fifty percent (50%) or greater ownership interest, provided, however, that with respect to an Incentive Stock Option, a Subsidiary
must be a corporation. The Committee may, at its sole discretion, designate, on such terms and conditions as the Committee shall
determine, any other corporation, partnership, limited liability company, venture, or other entity a Subsidiary for purposes of
the Plan.

 

(mm)
“Termination of Employment” or a similar reference means (i) with respect to an Employee, the event where the Employee
is no longer an Employee of the Company or of any Subsidiary, including but not limited to where the employing company ceases
to be a Subsidiary and (ii) with respect to any Participant who is not an Employee, cessation of the performance of services to
the Company or any Subsidiary. With respect to any Award that provides “non-qualified deferred compensation” within
the meaning of Section 409A of the Code, “Termination of Employment” shall mean a “separation from service”
as defined under Section 409A of the Code.

 

    	 	4	 

     

    

 

(nn)
“Treasury Regulation” or “Treas. Reg.” means any regulation promulgated under the Code, as such regulation
may be amended from to time.

 

Article
3

Administration

 

3.1
The Committee. The Plan shall be administered by the Compensation Committee of the Board. The Committee shall consist of
at least two individuals, each of whom qualifies as (a) a Non-Employee Director, (b) an “outside director” pursuant
to Section 162(m) of the Code, and (c) an “independent director” under the listing requirements of NASDAQ, or any
similar rule or listing requirement that may be applicable to the Company from time to time. Reference to the Committee shall
refer to the Board if the Compensation Committee ceases to exist and the Board does not appoint a successor Committee.

 

3.2
Authority of the Committee. The Committee shall have complete control over the administration of the Plan and shall have
the authority in its sole discretion to (a) exercise all of the powers granted to it under the Plan, (b) construe, interpret and
implement the Plan, grant terms and grant notices, and all Award Agreements, (c) prescribe, amend and rescind rules and regulations
relating to the Plan, including rules governing its own operations, (d) make all determinations necessary or advisable in administering
the Plan, (e) correct any defect, supply any omission and reconcile any inconsistency in the Plan, (f) amend the Plan to reflect
changes in applicable law (whether or not the rights of the holder of any Award are adversely affected, unless otherwise provided
by the Committee), (g) grant Awards and determine who shall receive Awards, when such Awards shall be granted and the terms and
conditions of such Awards, including, but not limited to, conditioning the exercise, vesting, payout or other term of condition
of an Award on the achievement of Performance Goals, (h) unless otherwise provided by the Committee, amend any outstanding Award
in any respect, not materially adverse to the Participant, including, without limitation, to (1) accelerate the time or times
at which the Award becomes vested, unrestricted or may be exercised (and, in connection with such acceleration, the Committee
may provide that any Shares acquired pursuant to such Award shall be Restricted Shares, which are subject to vesting, transfer,
forfeiture or repayment provisions similar to those in the Participant’s underlying Award), (2) accelerate the time or times
at which shares of Stock are delivered under the Award (and, without limitation on the Committee’s rights, in connection
with such acceleration, the Committee may provide that any shares of Stock delivered pursuant to such Award shall be Restricted
Shares, which are subject to vesting, transfer, forfeiture or repayment provisions similar to those in the Participant’s
underlying Award), or (3) waive or amend any goals, restrictions or conditions applicable to such Award, or impose new goals,
restrictions and (i) determine at any time whether, to what extent and under what circumstances and method or methods (1) Awards
may be (A) settled in cash, shares of Stock, other securities, other Awards or other property (in which event, the Committee may
specify what other effects such settlement will have on the Participant’s Award), (B) exercised or (C) canceled, forfeited
or suspended, (2) Shares, other securities, cash, other Awards or other property and other amounts payable with respect to an
Award may be deferred either automatically or at the election of the Participant or of the Committee, or (3) Awards may be settled
by the Company or any of its Subsidiaries or any of its or their designees.

 

No
Award may be made under the Plan after the tenth (10th) anniversary of the Effective Date.

 

All
determinations and decisions made by the Company pursuant to the provisions of the Plan and all related orders or resolutions
of the Committee shall be final, conclusive, and binding on all persons, including but not limited to the Company, its shareholders,
Employees, Participants, and their estates and beneficiaries.

 

    	 	5	 

     

    

 

Article
4

Shares
Subject to the Plan

 

4.1
Number of Shares. Subject to adjustment as provided in Sections 4.2 and 4.3, the aggregate number of shares of Stock which
may be issued or transferred pursuant to Awards under the Plan shall be four hundred thousand (400,000) shares. Notwithstanding
the foregoing, in order that the applicable regulations under the Code relating to Incentive Stock Options be satisfied, the maximum
number of shares of Stock that may be delivered upon exercise of Incentive Stock Options shall be four hundred thousand (400,000)
shares, as adjusted under Sections 4.2 and 4.3.

 

4.2
Share Accounting. Without limiting the discretion of the Committee under this section, the following rules will apply for
purposes of the determination of the number of Shares available for grant under the Plan or compliance with the foregoing limits:

 

(a)
If an outstanding Award for any reason expires or is terminated or canceled without having been exercised or settled in full,
or if Shares acquired pursuant to an Award subject to forfeiture are forfeited under the terms of the Plan or the relevant Award,
the Shares allocable to the terminated portion of such Award or such forfeited Shares shall again be available for issuance under
the Plan.

 

(b)
Shares shall not be deemed to have been issued pursuant to the Plan with respect to any portion of an Award that is settled in
cash, other than an Option.

 

(c)
If the Exercise Price of an Option is paid by tender to the Company, or attestation to the ownership, of Shares owned by the Participant,
or an Option is settled without the payment of the Exercise Price, or the payment of taxes with respect to any Award is settled
by a net exercise, the number of shares available for issuance under the Plan shall be reduced by the gross number of shares for
which the Option is exercised or other Awards that have vested.

 

4.3
Adjustments in Authorized Plan Shares and Outstanding Awards. In the event of any merger, reorganization, consolidation,
recapitalization, separation, split-up, liquidation, Share combination, Stock split, Stock dividend, or other change in the corporate
structure of the Company affecting the Shares, an adjustment shall be made in a manner consistent with Section 422 of the Code
for Incentive Stock Options and in a manner consistent with Section 409A of the Code for Non-Qualified Stock Options and, for
Qualified Performance-Based Compensation, in accordance with Section 162(m) of the Code in the number and class of Shares which
may be delivered under the Plan (including but not limited to individual limits), and in the number and class of and/or price
of Shares subject to outstanding Awards granted under the Plan, and/or the number of outstanding Options, Shares of Restricted
Stock, and Performance Shares (and Restricted Stock Units, Performance Stock Units and other Awards whose value is based on a
number of Shares) constituting outstanding Awards, as may be determined to be appropriate and equitable by the Committee, in its
sole discretion, to prevent dilution or enlargement of rights.

 

4.4
Limitation on Number of Shares Subject to Awards. Notwithstanding any provision in the Plan to the contrary, and subject
to Section 4.3, the maximum number of shares of Stock with respect to one or more Awards that may be granted to any one Participant
during each calendar year shall be fifty thousand (50,000), provided that in no event shall any Participant receive one or more
Awards of Restricted Stock or Other Stock-Based Awards in excess of fifty thousand (50,000) shares of Stock in any calendar year.

 

    	 	6	 

     

    

 

Article
5

Eligibility
and Participation

 

5.1
General. Persons eligible to participate in the Plan include Employees, Consultants and all members of the Board, as determined
by the Committee.

 

5.2
Foreign Participants. In order to assure the viability of Awards granted to Participants employed in foreign countries,
the Committee may provide for such special terms as it may consider necessary or appropriate to accommodate differences in local
law, tax policy, or custom. Moreover, the Committee may approve such supplements to, or amendments, restatements, or alternative
versions of, the Plan as it may consider necessary or appropriate for such purposes without thereby affecting the terms of the
Plan as in effect for any other purpose; provided, however, that no such supplements, amendments, restatements, or alternative
versions shall increase the share limitations contained in Section 4.1 of the Plan.

 

Article
6

Stock
Options

 

6.1
Grant of Options. Subject to the terms and provisions of the Plan, Options may be granted at any time and from time to
time, and under such terms and conditions, as shall be determined by the Committee; provided, however, that Incentive Stock Options
may only be awarded to Employees, and provided further, that no Award of an Incentive Stock Option may be made pursuant to the
Plan after the tenth (10th) anniversary of the Effective Date. In addition, the Committee may, from time to time, provide
for the payment of Dividend Equivalents on Options, prospectively and/or retroactively, on such terms and conditions as the Committee
may require. The Committee shall have discretion in determining the number of Shares subject to Options, subject to the limitations
set forth in Article 4.

 

6.2
Form of Issuance. Each Option grant may be issued in the form of an Award Agreement and/or may be recorded on the books
and records of the Company for the account of the Participant. If an Option is not issued in the form of an Award Agreement, then
the Option shall be deemed granted as determined by the Committee. The terms and conditions of an Option shall be set forth in
the Award Agreement, in the notice of the issuance of the grant, or in such other documents as the Committee shall determine.
Such terms and conditions shall include the Exercise Price, the duration of the Option, the number of Shares to which an Option
pertains (unless otherwise provided by the Committee, each Option may be exercised to purchase one Share), and such other provisions
as the Committee shall determine.

 

6.3
Exercise Price. Unless a greater Exercise Price is determined by the Committee, the Exercise Price for each Option awarded
under the Plan shall be equal to one hundred percent (100%) of the Fair Market Value of a Share on the date the Option is granted.
Subject to adjustment as provided in Section 4.3 herein or as otherwise provided herein, the terms of an Option may not be amended
to reduce the Exercise Price nor may an Option be cancelled or exchanged for cash, other awards or Options with an Exercise Price
that is less than the Exercise Price of the original Option.

 

In
the case of an Incentive Stock Option granted to any individual who, at the date of grant, owns stock possessing more than ten
percent (10%) of the total combined voting power all classes of stock of the Company, such Incentive Stock Option shall be granted
at a price that is not less than one hundred and ten percent (110%) of Fair Market Value on the date of grant and such Incentive
Stock Option shall be exercisable for no more than five (5) years from the date of grant.

 

    	 	7	 

     

    

 

6.4
Duration of Options. Each Option shall expire at such time as the Committee shall determine at the time of grant (which
duration may be extended by the Committee); provided, however, that no Option shall be exercisable later than the tenth (10th)
anniversary date of its grant. In the event the Committee does not specify the expiration date of an Option, then such Option
will expire on the tenth (10th) anniversary date of its grant, except as otherwise provided herein.

 

In
the case of an Incentive Stock Option, such Incentive Stock Option may not be exercised to any extent by anyone after the first
to occur of the following events:

 

(a)
The expiration date of the Incentive Stock Option.

 

(b)
One (1) year after the date of the Participant’s Termination of Employment on account of Disability or death. Upon the Participant’s
Disability or death, any Incentive Stock Options exercisable at the Participant’s Disability or death may be exercised by
the Participant’s legal representative or representatives, by the person or persons entitled to do so pursuant to the Participant’s
last will and testament, or, if the Participant fails to make testamentary disposition of such Incentive Stock Option or dies
intestate, by the person or persons entitled to receive the Incentive Stock Option pursuant to the applicable laws of descent
and distribution.

 

(c)
Three (3) months after the date of the Participant’s Termination of Employment for any reason other than Disability or death.
Whether a Participant continues to be an Employee shall be determined in accordance with Treas. Reg. Section 1.421-1(h)(2).

 

6.5
Vesting of Options. A grant of Options shall vest at such times and under such terms and conditions as determined by the
Committee including, without limitation, suspension of a Participant’s vesting during all or a portion of a Participant’s
leave of absence. The Committee shall have the right to accelerate the vesting of any Option. The Chairman of the Board or his
successors, or such other persons designated by the Committee, shall have the authority to accelerate the vesting of Options for
any Participant who is not an Insider.

 

6.6
Exercise of Options. Options granted under the Plan shall be exercisable at such times and be subject to such restrictions
and conditions as the Committee shall in each instance approve, which need not be the same for each grant or for each Participant;
provided, however, that during a Participant’s lifetime, an Incentive Stock Option may be exercised only by the Participant.
Exercises of Options may be effected only on days and during the hours NASDAQ or such other principal national securities exchange
in the United States on which the Shares are then traded is open for regular trading. The Company may change or limit the times
or days Options may be exercised. If an Option expires on a day or at a time when exercises are not permitted, then the Option
may be exercised no later than the immediately preceding date and time that the Option was exercisable.

 

An
Option shall be exercised by providing notice to the designated agent selected by the Company (if no such agent has been designated,
then to the Company), in the manner and form determined by the Company, which notice shall be irrevocable, setting forth the exact
number of Shares with respect to which the Option is being exercised and including with such notice payment of the Exercise Price,
as applicable. When an Option has been transferred, the Company or its designated agent may require appropriate documentation
that the person or persons exercising the Option, if other than the Participant, has the right to exercise the Option. No Option
may be exercised with respect to a fraction of a Share.

 

Additionally,
the Participant shall give the Company prompt notice of any disposition of shares of Stock acquired by exercise of an Incentive
Stock Option within (i) two (2) years from the date of grant of such Incentive Stock Option or (ii) one (1) year after the transfer
of such shares of Stock to the Participant.

 

    	 	8	 

     

    

 

6.7
Individual Dollar Limitation. The aggregate Fair Market Value (determined as of the time the Option is granted) of all
shares of Stock with respect to which Incentive Stock Options are first exercisable by a Participant in any calendar year may
not exceed $100,000.00 or such other limitation as imposed by Section 422(d) of the Code. To the extent that Incentive Stock Options
are first exercisable by a Participant in excess of such limitation, the excess shall be considered Non-Qualified Stock Options.

 

6.8
Payment. Unless otherwise determined by the Committee, the Exercise Price shall be paid in full at the time of exercise.
No Shares shall be issued or transferred until full payment has been received or the next business day thereafter, as determined
by the Company.

 

The
Committee may, from time to time, determine or modify the method or methods of exercising Options or the manner in which the Exercise
Price is to be paid. Unless otherwise provided by the Committee in full or in part:

 

(a)
Payment may be made in cash.

 

(b)
Payment may be made by delivery of Shares owned by the Participant in partial (if in partial payment, then together with cash)
or full payment.

 

(c)
If the Company has designated a stockbroker to act as the Company’s agent to process Option exercises, an Option may be
exercised by issuing an exercise notice together with instructions to such stockbroker irrevocably instructing the stockbroker:
(i) to immediately sell (which shall include an exercise notice that becomes effective upon execution of a sale order) a sufficient
portion of the Shares to be received from the Option exercise to pay the Exercise Price of the Options being exercised and the
required tax withholding, and (ii) to deliver on the settlement date the portion of the proceeds of the sale equal to the Exercise
Price and tax withholding to the Company. In the event the stockbroker sells any Shares on behalf of a Participant, the stockbroker
shall be acting solely as the agent of the Participant, and the Company disclaims any responsibility for the actions of the stockbroker
in making any such sales. However, if the Participant is an Insider, then the instruction to the stockbroker to sell in the preceding
sentence is intended to comply with the requirements of Rule 10b5-1(c)(1)(i)(B) of the Exchange Act to the extent permitted by
law. No Shares shall be issued until the settlement date and until the proceeds (equal to the Exercise Price and tax withholding)
are paid to the Company.

 

(d)
At any time, the Committee may, in addition to or in lieu of the foregoing, provide that an Option may be “stock settled,”
which shall mean upon exercise of an Option, the Company may fully satisfy its obligation under the Option by delivering that
number of shares of Stock found by taking the difference between (i) the Fair Market Value of the Stock on the exercise date,
multiplied by the number of Options being exercised and (ii) the total Exercise Price of the Options being exercised, and dividing
such difference by the Fair Market Value of the Stock on the exercise date.

 

If
payment is made by the delivery of Shares, the value of the Shares delivered shall be equal to the then most recent Fair Market
Value of the Shares established before the exercise of the Option.

 

Restricted
Stock may not be used to pay the Exercise Price.

 

Notwithstanding
any other provision of the Plan to the contrary, no Participant who is a member of the Board or an “Executive Officer”
of the Company shall be permitted to pay the Exercise Price of an Option in any method which would violate Section 13(h) of the
Exchange Act.

 

    	 	9	 

     

    

 

6.9
Termination of Employment. Unless otherwise provided by the Committee, the following limitations on exercise of Options
shall apply upon Termination of Employment:

 

(a)
Termination by Death or Disability. In the event of the Participant’s Termination of Employment by reason of death
or Disability, all outstanding Options granted to that Participant shall immediately vest as of the date of Termination of Employment
and may be exercised, if at all, no more than one (1) year from the date of the Termination of Employment, unless the Options,
by their terms, expire earlier.

 

(b)
Termination for Cause. In the event of the Participant’s Termination of Employment by the Company for Cause, all
outstanding Options held by the Participant shall immediately be forfeited to the Company and no additional exercise period shall
be allowed, regardless of the vested status of the Options.

 

(c)
Other Termination of Employment. In the event of the Participant’s Termination of Employment for any reason other
than the reasons set forth in (a) or (b), above:

 

(i)
All outstanding Options which are vested as of the effective date of Termination of Employment may be exercised, if at all, no
more than one (1) year from the date of Termination of Employment if the Participant is eligible to retire, or three (3) months
from the date of the Termination of Employment if the Participant is not eligible to retire, as the case may be, unless in either
case the Options, by their terms, expire earlier; and

 

(ii)
In the event of the death of the Participant after Termination of Employment, this paragraph (c) shall still apply and not paragraph
(a), above.

 

(d)
Options not Vested at Termination. Except as provided in paragraph (a) above, all Options held by the Participant which
are not vested on or before the effective date of Termination of Employment shall immediately be forfeited to the Company (and
the Shares subject to such forfeited Options shall once again become available for issuance under the Plan).

 

(e)
Other Terms and Conditions. Notwithstanding the foregoing, the Committee may, in its sole discretion, establish different,
or waive, terms and conditions pertaining to the effect of Termination of Employment on Options, whether or not the Options are
outstanding, but no such modification shall shorten the terms of Options issued prior to such modification or otherwise be materially
adverse to the Participant.

 

6.10
Restrictions on Exercise and Transfer of Options. Unless otherwise provided by the Committee:

 

(a)
During the Participant’s lifetime, the Participant’s Options shall be exercisable only by the Participant or by the
Participant’s guardian or legal representative. After the death of the Participant, except as otherwise provided by Article
10, an Option shall only be exercised by the holder thereof (including, but not limited to, an executor or administrator of a
decedent’s estate) or his or her guardian or legal representative.

 

(b)
No Option shall be transferable except: (i) in the case of the Participant, only upon the Participant’s death and in accordance
with Article 10; and (ii) in the case of any holder after the Participant’s death, only by will or by the laws of descent
and distribution; and (iii) pursuant to a domestic relations order.

 

    	 	10	 

     

    

 

Article
7

Restricted
Stock

 

7.1
Grant of Restricted Stock. Subject to the terms and provisions of the Plan, the Committee, at any time and from time to
time, may grant Shares of Restricted Stock in such amounts, subject to the limitations in Article 4, and upon such terms and conditions
as the Committee shall determine. In addition to any other terms and conditions imposed by the Committee, vesting of Restricted
Stock may be conditioned upon the achievement of Performance Goals in the same manner as provided in Section 8.6 with respect
to Performance-Based Awards.

 

7.2
Restricted Stock Agreement. The Committee may require, as a condition to receiving a Restricted Stock Award, that the Participant
enter into a Restricted Stock Award Agreement, setting forth the terms and conditions of the Award. In lieu of a Restricted Stock
Award Agreement, the Committee may provide the terms and conditions of an Award in a notice to the Participant of the Award, on
the stock certificate representing the Restricted Stock, in the resolution approving the Award, or in such other manner as it
deems appropriate. The Committee may further provide that an Award of Restricted Stock is conditioned upon the Participant making
or refraining from making an election with respect to the Award under Section 83(b) of the Code. If a Participant makes an election
pursuant to Section 83(b) of the Code concerning a Restricted Stock Award, the Participant shall be required to file promptly
a copy of such election with the Company.

 

7.3
Transferability. Except as otherwise provided in this Article 7, and subject to any additional terms in the grant thereof,
Shares of Restricted Stock granted herein may not be sold, transferred, pledged, assigned, or otherwise alienated or hypothecated
until fully vested.

 

7.4
Restrictions. The Restricted Stock shall be subject to such vesting terms, including the achievement of Performance Goals
(as described in Section 8.6), as may be determined by the Committee. Unless otherwise provided by the Committee, to the extent
Restricted Stock is subject to any condition to vesting, if such condition or conditions are not satisfied by the time the period
for achieving such condition has expired, such Restricted Stock shall be forfeited. The Committee may impose such other conditions
and/or restrictions on any Shares of Restricted Stock granted pursuant to the Plan as it may deem advisable including but not
limited to a requirement that Participants pay a stipulated purchase price for each Share of Restricted Stock and/or restrictions
under applicable Federal or state securities laws; and may legend the certificates representing Restricted Stock to give appropriate
notice of such restrictions. The Committee may also grant Restricted Stock without any terms or conditions in the form of vested
Stock Awards.

 

The
Company shall also have the right to retain the certificates representing Shares of Restricted Stock in the Company’s possession
until such time as the Shares are fully vested and all conditions and/or restrictions applicable to such Shares have been satisfied.

 

7.5
Removal of Restrictions. Except as otherwise provided in this Article 7 or otherwise provided in the grant thereof, Shares
of Restricted Stock covered by each Restricted Stock grant made under the Plan shall become freely transferable by the Participant
after completion of all conditions to vesting, if any. However, the Committee, in its sole discretion, shall have the right to
immediately vest the shares and waive all or part of the restrictions and conditions with regard to all or part of the Shares
held by any Participant at any time.

 

7.6
Voting Rights, Dividends and Other Distributions. Participants holding Shares of Restricted Stock granted hereunder may
exercise full voting rights and shall receive all dividends and distributions paid with respect to such Shares. The Committee
may require that dividends and other distributions, other than regular cash dividends, paid to Participants with respect to Shares
of Restricted Stock be subject to the same restrictions and conditions as the Shares of Restricted Stock with respect to which
they were paid. If any such dividends or distributions are paid in Shares, the Shares shall automatically be subject to the same
restrictions and conditions as the Shares of Restricted Stock with respect to which they were paid.

 

    	 	11	 

     

    

 

7.7
Termination of Employment Due to Death or Disability. In the event of the Participant’s Termination of Employment
by reason of death or Disability, unless otherwise determined by the Committee, all restrictions imposed on outstanding Shares
of Restricted Stock held by the Participant shall immediately lapse and the Restricted Stock shall immediately become fully vested
as of the date of Termination of Employment.

 

7.8
Termination of Employment for Other Reasons. Unless otherwise provided by the Committee, in the event of the Participant’s
Termination of Employment for any reason other than those specifically set forth in Section 7.7 herein, all Shares of Restricted
Stock held by the Participant which are not vested as of the effective date of Termination of Employment immediately shall be
forfeited and returned to the Company.

 

7.9
Restricted Stock Units. In lieu of or in addition to Restricted Stock, the Committee may grant Restricted Stock Units under
such terms and conditions as shall be determined by the Committee. Restricted Stock Units shall be subject to the same terms and
conditions under the Plan as Restricted Stock except as otherwise provided in the Plan or as otherwise provided by the Committee.
Except as otherwise provided by the Committee, the award shall be settled and paid out promptly upon vesting (to the extent permitted
by Section 409A of the Code), and the Participant holding such Restricted Stock Units shall receive, as determined by the Committee,
Shares (or cash equal to the Fair Market Value of the number of Shares as of the date the Award becomes payable) equal to the
number of such Restricted Stock Units. Restricted Stock Units shall not be transferable, shall have no voting rights, and shall
not receive dividends, but shall, unless otherwise provided by the Committee, receive Dividend Equivalents at the time and at
the same rate as dividends are paid on Shares with the same record and pay dates. Upon a Participant’s Termination of Employment
due to death or Disability, the Committee will determine whether there should be any acceleration of vesting.

 

Article
8

Performance-Based
Awards

 

8.1
Purpose. The purpose of this Article 8 is to provide the Committee the ability to qualify Awards other than Options and
SARs and that are granted pursuant to Articles 7 and 9 (other than SARs awarded under Section 9.5) as Qualified Performance-Based
Compensation. If the Committee, in its discretion, decides to grant a Performance-Based Award to a Covered Employee, the provisions
of this Article 8 shall control over any contrary provision contained in Articles 7 or 9; provided, however, that the Committee
may in its discretion grant Awards to Covered Employees that are based on Performance Criteria or Performance Goals but that do
not satisfy the requirements of this Article 8.

 

8.2
Applicability. This Article 8 shall apply only to those Covered Employees selected by the Committee to receive Performance-Based
Awards. The designation of a Covered Employee as a Participant for a Performance Period shall not in any manner entitle the Participant
to receive an Award for the period. Moreover, designation of a Covered Employee as a Participant for a particular Performance
Period shall not require designation of such Covered Employee as a Participant in any subsequent Performance Period and designation
of one Covered Employee as a Participant shall not require designation of any other Covered Employees as a Participant in such
period or in any other period.

 

    	 	12	 

     

    

 

8.3
Procedures with Respect to Performance-Based Awards. To the extent necessary to comply with the Qualified Performance-Based
Compensation requirements of Section 162(m) of the Code, with respect to any Award granted under Articles 7 and 9 which may be
granted to one or more Covered Employees, no later than ninety (90) days following the commencement of any fiscal year in question
or any other designated fiscal period or period of service, and not later than after twenty-five percent (25%) of such period
has elapsed (or such other time as may be required or permitted by Section 162(m) of the Code), the Committee shall, in writing,
(a) designate one or more Covered Employees, (b) select the Performance Criteria applicable to the Performance Period, (c) establish
the Performance Goals, and amounts of such Awards, as applicable, which may be earned for such Performance Period, and (d) specify
the relationship between Performance Criteria and the Performance Goals and the amounts of such Awards, as applicable, to be earned
by each Covered Employee for such Performance Period. Following the completion of each Performance Period, the Committee shall
certify in writing whether the applicable Performance Goals have been achieved for such Performance Period. In determining the
amount earned by a Covered Employee, the Committee shall have the right to reduce or eliminate (but not to increase) the amount
payable at a given level of performance to take into account additional factors that the Committee may deem relevant to the assessment
of individual or corporate performance for the Performance Period.

 

8.4
Payment of Performance-Based Awards. Unless otherwise provided in the applicable Award Agreement, a Participant must be
employed by the Company or a Subsidiary on the day a Performance-Based Award for such Performance Period is paid to the Participant.
Furthermore, a Participant shall be eligible to receive payment pursuant to a Performance-Based Award for a Performance Period
only if the Performance Goals for such period are achieved.

 

8.5
Performance Period. The Performance Period is set by the Committee for each Award.

 

8.6
Performance Goals. For each Performance-Based Award, the Committee shall establish (and may establish for other Awards)
performance objectives (“Performance Goals”) for the Company, its Subsidiaries, and/or divisions of any of foregoing,
using the Performance Criteria and other factors set forth in (a) and (b), below. It may also use other criteria or factors in
establishing Performance Goals in addition to or in lieu of the foregoing. A Performance Goal may be stated as an absolute value
or as a value determined relative to an index, budget, prior period, similar measures of a peer group of other companies or other
standard selected by the Committee. Performance Goals shall include payout tables, formulas or other standards to be used in determining
the extent to which the Performance Goals are met, and, if met, the number of Performance Shares and/or Performance Stock Units
which would be converted into Stock and/or cash (or the rate of such conversion) and distributed to Participants in accordance
with Section 8.6. Unless previously canceled or reduced, Performance Shares and Performance Stock Units which may not be converted
because of failure in whole or in part to satisfy the relevant Performance Goals or for any other reason shall be canceled at
the time they would otherwise be distributable.

 

The
Performance Criteria which the Committee is authorized to use, in its sole discretion, are any of the following criteria or any
combination thereof, including but not limited to the offset against each other of any combination of the following criteria:

 

(a)
Financial performance of the Company (on a consolidated basis), of one or more of its Subsidiaries, and/or a division of any of
the foregoing. Such financial performance may be based on net income, economic value added (as determined by the Committee), EBITDA
(earnings before interest, taxes, depreciation and amortization), revenues, sales, expenses, costs, gross margin, operating margin,
profit margin, pre-tax profit, market share, volumes of a particular product or service or category thereof, including but not
limited to a product’s life cycle (for example, products introduced in the last two years), number of customers, number
of products for sale, return on net assets, return on assets, return on capital, return on invested capital, cash flow, free cash
flow, operating cash flow, operating revenues, operating expenses, operating income, and/or completion of capital raising transaction.

 

    	 	13	 

     

    

 

(b)
Service performance of the Company (on a consolidated basis), of one or more of its Subsidiaries, and/or of a division of any
of the foregoing.

 

(c)
Employee satisfaction, employee retention, product development, completion of a joint venture or other corporate transaction,
completion of an identified special project, and effectiveness of management.

 

(d)
The Company’s Stock price, return on shareholders’ equity, total shareholder return (Stock price appreciation plus
dividends, assuming the reinvestment of dividends), and/or earnings per Share.

 

(e)
Impacts of acquisitions, dispositions, or restructurings, on any of the foregoing.

 

Unless
otherwise provided by the Committee at any time, no such adjustment shall be made for a current or former executive officer to
the extent such adjustment would cause an Award to fail to satisfy the performance based exemption of Section 162(m) of the Code.

 

If
the material terms of the Performance Criteria are not changed, they will be disclosed to and reported to the shareholders no
later than the first shareholder meeting that occurs in the fifth year following the year in which shareholders previously approved
the Performance Criteria.

 

8.7
Additional Limitations. Notwithstanding any other provision of the Plan, any Award which is granted to a Covered Employee
and is intended to constitute Qualified Performance-Based Compensation shall be subject to any additional limitations set forth
in Section 162(m) of the Code that are requirements for qualification as qualified performance-based compensation as described
in Section 162(m) of the Code, and the Plan shall be deemed amended to the extent necessary to conform to such requirements.

 

8.8
Termination of Employment for Cause. In the event of the Termination of Employment of a Participant by the Company for
Cause, all Performance Stock Units and Performance Shares shall be forfeited by the Participant to the Company.

 

8.9
Nontransferability. Performance Stock Units and Performance Shares may not be sold, transferred, pledged, assigned, or
otherwise alienated or hypothecated, other than in accordance with Article 10 or pursuant to a domestic relations order.

 

Article
9

Other
Types of Awards

 

9.1
Performance Share Awards. Any Participant selected by the Committee may be granted one or more Performance Share awards
which shall be denominated in a number of shares of Stock and which may be linked to any one or more of the Performance Criteria
or other specific performance criteria determined appropriate by the Committee, in each case on a specified date or dates or over
any period or periods determined by the Committee. In making such determinations, the Committee shall consider (among such other
factors as it deems relevant in light of the specific type of award) the contributions, responsibilities and other compensation
of the particular Participant.

 

    	 	14	 

     

    

 

9.2
Performance Stock Units. Any Participant selected by the Committee may be granted one or more Performance Stock
Unit awards which shall be denominated in units of value including dollar value of shares of Stock and which may be linked to
any one or more of the Performance Criteria or other specific performance criteria determined appropriate by the Committee, in
each case on a specified date or dates or over any period or periods determined by the Committee. In making such determinations,
the Committee shall consider (among such other factors as it deems relevant in light of the specific type of award) the contributions,
responsibilities and other compensation of the particular Participant.

 

9.3
Dividend Equivalents.

 

(a)
Any Participant selected by the Committee may be granted Dividend Equivalents based on the dividends declared on the shares of
Stock that are subject to any Award, to be credited as of dividend payment dates, during the period between the date the Award
is granted and the date the Award is exercised, vests or expires, as determined by the Committee. Such Dividend Equivalents shall
be converted to cash or additional shares of Stock by such formula and at such time and subject to such limitations as may be
determined by the Committee, in a matter consistent with the rules of Section 409A of the Code.

 

(b)
Dividend Equivalents granted with respect to Options or SARs shall be payable, with respect to pre-exercise periods, regardless
of whether such Option or SAR is subsequently exercised.

 

9.4
Deferred Stock. Any Participant selected by the Committee may be granted an award of Deferred Stock in the manner determined
from time to time by the Committee. The number of shares of Deferred Stock shall be determined by the Committee and may be linked
to the Performance Criteria or other specific performance criteria determined to be appropriate by the Committee, in each case
on a specified date or dates or over any period or periods determined by the Committee. Stock underlying a Deferred Stock Award
will not be issued until the Deferred Stock Award has vested, pursuant to a vesting schedule or performance criteria set by the
Committee. Unless otherwise provided by the Committee, a Participant awarded Deferred Stock shall have no rights as a Company
shareholder with respect to such Deferred Stock until such time as the Deferred Stock Award has vested and the Stock underlying
the Deferred Stock Award has been issued.

 

9.5
Stock Appreciation Rights. Any Participant selected by the Committee may be granted one or more SARs. SARs may be granted
alone or in tandem with Options. With respect to SARs granted in tandem with Options, the exercise of either such Options or such
SARs shall result in the simultaneous cancellation of the same number of tandem SARs or Options, as the case may be. The exercise
price per share of Stock covered by a SAR granted pursuant to the Plan shall be equal to or greater than Fair Market Value on
the date the SAR was granted. The term of each SAR shall be determined by the Committee in its sole discretion, but in no event
shall the term exceed ten (10) years from the date of grant. SARs may be settled in the form of cash, shares of Stock or a combination
of cash and shares of Stock, as determined by the Committee.

 

9.6
Other Stock-Based Awards. Any Participant selected by the Committee may be granted one or more Awards that provide Participants
with shares of Stock or the right to purchase shares of Stock or that have a value derived from the value of, or an exercise or
conversion privilege at a price related to, or that are otherwise payable in shares of Stock and which may be linked to any one
or more of the Performance Criteria or other specific performance criteria determined appropriate by the Committee, in each case
on a specified date or dates or over any period or periods determined by the Committee. In making such determinations, the Committee
shall consider (among such other factors as it deems relevant in light of the specific type of Award) the contributions, responsibilities
and other compensation of the particular Participant.

 

9.7
Performance Bonus Awards. Any Participant selected by the Committee may be granted one or more Performance-Based Awards
in the form of a cash bonus (a “Performance Bonus Award”) payable upon the attainment of Performance Goals
that are established by the Committee and relate to one or more of the Performance Criteria, in each case on a specified date
or dates or over any period or periods determined by the Committee. Any such Performance Bonus Award paid to a Covered Employee
shall be based upon objectively determinable bonus formulas established in accordance with Article 8. The maximum amount of any
Performance Bonus Award payable to a Covered Employee with respect to any fiscal year of the Company shall not exceed $500,000.00.

 

    	 	15	 

     

    

 

9.8
Term. Except as otherwise provided herein, the term of any Award of Performance Shares, Performance Stock Units, Dividend
Equivalents, Deferred Stock, Restricted Stock Units or Other Stock-Based Award shall be set by the Committee in its discretion.

 

9.9
Exercise or Purchase Price. The Committee may establish the exercise or purchase price, if any, of any Award of Performance
Shares, Performance Stock Units, Deferred Stock, Restricted Stock Units or Other Stock-Based Award; provided, however, that such
price shall not be less than the par value of a share of Stock on the date of grant, unless otherwise permitted by applicable
state law.

 

9.10
Exercise Upon Termination of Employment. An Award of Performance Shares, Performance Stock Units, Dividend Equivalents,
Deferred Stock, Restricted Stock Units and Other Stock-Based Award shall only be exercisable or payable prior to or concurrent
with a Participant’s Termination of Employment unless otherwise provided by the Committee in its sole and absolute discretion;
provided, however, that any such provision with respect to Performance Shares or Performance Stock Units shall be subject to the
requirements of Section 162(m) of the Code that apply to Qualified Performance-Based Compensation.

 

9.11
Form of Payment. Payments with respect to any Awards granted under this Article 9 shall be made in cash, in Stock or a
combination of both, as determined by the Committee.

 

9.12
Award Agreement. All Awards under this Article 9 shall be subject to such additional terms and conditions as determined
by the Committee and shall be evidenced by a written Award Agreement.

 

9.13
Termination of Employment for Cause. In the event of the Termination of Employment of a Participant by the Company for
Cause, all Awards under this Article 9 shall be forfeited by the Participant to the Company.

 

9.14
Nontransferability. Unless otherwise provided by the Committee, all Awards under this Article 9 may not be sold, transferred,
pledged, assigned, or otherwise alienated or hypothecated, other than in accordance with Article 10 or pursuant to a domestic
relations order.

 

Article
10

Beneficiary
Designation

 

Notwithstanding
Section 6.10, 7.3, 7.9, 8.9 and 9.14, a Participant may, in the manner determined by the Committee, designate a beneficiary to
exercise the rights of the Participant and to receive any distribution with respect to any Award upon the Participant’s
death. A beneficiary, legal guardian, legal representative, or other person claiming any rights pursuant to the Plan is subject
to all terms and conditions of the Plan and any Award Agreement applicable to the Participant, except to the extent the Plan and
Award Agreement otherwise provide, and to any additional restrictions deemed necessary or appropriate by the Committee. If the
Participant is married and resides in a community property state, a designation of a person other than the Participant’s
spouse as his or her beneficiary with respect to more than fifty percent (50%) of the Participant’s interest in the Award
shall not be effective without the prior written consent of the Participant’s spouse. If no beneficiary has been designated
or survives the Participant, payment shall be made to the person entitled thereto pursuant to the Participant’s will or
the laws of descent and distribution. Subject to the foregoing, a beneficiary designation may be changed or revoked by a Participant
at any time provided the change or revocation is filed with the Committee.

 

    	 	16	 

     

    

 

Article
11

Employee
Matters

 

11.1
Employment Not Guaranteed. Nothing in the Plan shall interfere with or limit in any way the right of the Company or any
Subsidiary to terminate any Participant’s Employment at any time, nor confer upon any Participant any right to continue
in the employ of the Company or one of its Subsidiaries.

 

11.2
Participation. No Employee shall have the right to be selected to receive an Award under the Plan, or, having been so selected,
to be selected to receive a future Award.

 

11.3
Reimbursement of Company for Unearned or Ill-gotten Gains. Unless otherwise specifically provided in an Award Agreement,
and to the extent permitted by Applicable Law, if the Company is required to prepare an accounting restatement due to the material
noncompliance of the Company with any financial reporting requirement under the securities laws, the Committee may, without obtaining
the approval or consent of the Company’s shareholders or of any Participant, require that any Participant who personally
engaged in one of more acts of fraud or misconduct that have caused or partially caused the need for such restatement or any current
or former chief executive officer, chief financial officer, or executive officer, regardless of their conduct, to reimburse the
Company in a manner consistent with Section 409A of the Code, if the Award constitutes “Non-Qualified Deferred Compensation,”
for all or any portion of any Awards granted or settled under the Plan (with each such case being a “Reimbursement”),
or the Committee may require the Termination or Rescission of, or the Recapture associated with, any Award, in excess of the amount
the Participant would have received under the accounting restatement.

 

Article
12

Change
in Control

 

Unless
the Committee provides otherwise prior to the grant of an Award, upon the occurrence of a Change in Control, the following shall
apply to such Award:

 

(a)
Any and all Options granted hereunder to a Participant immediately shall become vested and exercisable upon the Termination of
Employment of such Participant by the Company for any reason other than for Cause or by any Participant that is an Employee for
“Good Reason”;

 

(b)
Any restriction periods and all restrictions imposed on Restricted Stock and Restricted Stock Units shall lapse and they shall
immediately become fully vested upon the Termination of Employment of the Participant by the Company for any reason other than
for Cause or by any Participant that is an Employee for “Good Reason”, provided that Restricted Stock Units shall
be settled in accordance with the terms of the grant without regard to the Change in Control unless the Change in Control constitutes
a “change in control event” within the meaning of Section 409A of the Code and such Termination of Employment occurs
within one (1) year following such Change in Control, in which case the Restricted Stock Units shall be settled and paid out with
such Termination of Employment;

 

    	 	17	 

     

    

 

(c)
Unless otherwise determined by the Committee, the payout of Performance Stock Units and Performance Shares shall be determined
exclusively by the attainment of the Performance Goals established by the Committee, which may not be modified after the Change
in Control, and the Company shall not have the right to reduce the Awards for any other reason;

 

(d)
For purposes of the Plan, “Good Reason” means in connection with a Termination of Employment by an Employee within
one (1) year following a Change in Control, (a) a material adverse alteration in the Employee’s position or in the nature
or status of the Employee’s responsibilities from those in effect immediately prior to the Change in Control, or (b) any
material reduction in the Employee’s base salary rate or target annual bonus, in each case as in effect immediately prior
to the Change in Control, or (c) the relocation of the Employee’s principal place of employment to a location that is more
than fifty (50) miles from the location where the Employee was principally employed at the time of the Change in Control or materially
increases the time of the Employee’s commute as compared to the Employee’s commute at the time of the Change in Control
(except for required travel on the Company’s business to an extent substantially consistent with the Employee’s customary
business travel obligations in the ordinary course of business prior to the Change in Control).

 

In
order to invoke a Termination of Employment for Good Reason, an Employee must provide written notice to the Company or such Subsidiary
employing the Employee of the existence of one or more of the conditions constituting Good Reason within ninety (90) days following
the Employee’s knowledge of the initial existence of such condition or conditions, specifying in reasonable detail the conditions
constituting Good Reason, and the Company or such Subsidiary shall have thirty (30) days following receipt of such written notice
(the “Cure Period”) during which it may remedy the condition. In the event that the Company or such Subsidiary fails
to remedy the condition constituting Good Reason during the applicable Cure Period, the Employee’s “separation from
service” (within the meaning of Section 409A of the Code) must occur, if at all, within one (1) year following such Cure
Period in order for such termination as a result of such condition to constitute a Termination of Employment for Good Reason.

 

Article
13

Amendment,
Modification, and Termination

 

13.1
Amendment, Modification, and Termination. With the approval of the Board, at any time and from time to time, the Committee
may terminate, amend or modify the Plan; provided, however, that (a) to the extent necessary and desirable to comply with any
applicable law, regulation, or stock exchange rule, the Company shall obtain shareholder approval of any Plan amendment in such
a manner and to such a degree as required, and (b) shareholder approval is required for any amendment to the Plan that (i) increases
the number of shares available under the Plan (other than any adjustment as provided by Section 4.3), (ii) permits the Committee
to grant Options with an Exercise Price that is below Fair Market Value on the date of grant, (iii) permits the Committee to extend
the exercise period for an Option beyond ten (10) years from the date of grant, (iv) results in a material increase in benefits
or a change in eligibility requirements, (v) changes the granting corporation or (vi) changes the type of stock. Notwithstanding
any provision in the Plan to the contrary, absent approval of the shareholders of the Company, no Option may be amended to reduce
the per share Exercise Price of the shares subject to such Option below the per share exercise price as of the date the Option
is granted and, except as permitted by Section 4.3, no Option may be granted in exchange for, or in connection with, the cancellation
or surrender of an Option having a higher per share Exercise Price.

 

    	 	18	 

     

    

 

13.2
Awards Previously Granted. No termination, amendment, or modification of the Plan or any Award (other than Performance
Shares or Performance Stock Units) shall adversely affect in any material way any Award previously granted under the Plan, without
the written consent of the Participant holding such Award; provided, however, that any such modification made for the purpose
of complying with Section 409A of the Code may be made by the Company without the consent of any Participant.

 

13.3
Delay in Payment. To the extent required in order to avoid the imposition of any interest and/or additional tax under Section
409A(a)(1)(B) of the Code, any amount that is considered deferred compensation under the Plan or Agreement and that is required
to be postponed pursuant to Section 409A of the Code, following a Participant’s Termination of Employment shall be delayed
for six (6) months if a Participant is deemed to be a “specified employee” as defined in Section 409A(a)(2)(i)(B)
of the Code; provided that, if the Participant dies during the postponement period prior to the payment of the postponed amount,
the amounts withheld on account of Section 409A of the Code shall be paid to the executor or administrator of the decedent’s
estate within 60 days following the date of his death. A “Specified Employee” means any Participant who is a “key
employee” (as defined in Section 416(i) of the Code without regard to paragraph (5) thereof), as determined by the Company
in accordance with its uniform policy with respect to all arrangements subject to Section 409A of the Code, based upon the twelve
(12) month period ending on each December 31st (such twelve (12) month period is referred to below as the “identification
period”). All Participants who are determined to be key employees under Section 416(i) of the Code (without regard to paragraph
(5) thereof) during the identification period shall be treated as Specified Employees for purposes of the Plan during the twelve
(12) month period that begins on the first day of the 4th month following the close of such identification period.

 

Article
14

Withholding

 

14.1
Tax Withholding. Unless otherwise provided by the Committee, the Company shall deduct or withhold any amount needed to
satisfy any foreign, federal, state, or local tax (including but not limited to the Participant’s employment tax obligations)
required by law to be withheld with respect to any taxable event arising or as a result of the Plan (“Withholding Taxes”).

 

14.2
Share Withholding. Unless otherwise provided by the Committee, upon the exercise of Options, the lapse of restrictions
on Restricted Stock, the vesting of Restricted Stock Units, the distribution of Performance Shares in the form of Stock, or any
other taxable event hereunder involving the transfer of Stock to a Participant, the Company shall withhold Stock equal in value,
using the Fair Market Value on the date determined by the Company to be used to value the Stock for tax purposes, to the Withholding
Taxes applicable to such transaction.

 

Any
fractional Share of Stock payable to a Participant shall be withheld as additional Federal withholding, or, at the option of the
Company, paid in cash to the Participant.

 

Unless
otherwise determined by the Committee, when the method of payment for the Exercise Price is from the sale by a stockbroker pursuant
to Section 6.8(c), herein, of the Stock acquired through the Option exercise, then the tax withholding shall be satisfied out
of the proceeds. For administrative purposes in determining the amount of taxes due, the sale price of such Stock shall be deemed
to be the Fair Market Value of the Stock.

 

If
permitted by the Committee, prior to the end of any Performance Period a Participant may elect to have a greater amount of Stock
withheld from the distribution of Performance Shares to pay withholding taxes; provided, however, the Committee may prohibit or
limit any individual election or all such elections at any time.

 

    	 	19	 

     

    

 

Alternatively,
or in combination with the foregoing, the Committee may require Withholding Taxes to be paid in cash by the Participant or by
the sale of a portion of the Stock being distributed in connection with an Award, or by a combination thereof.

 

The
withholding of taxes is intended to comply with the requirements of Rule 10b5-1(c)(1)(i)(B) of the Exchange Act to the extent
permitted by law.

 

Article
15

Successors

 

All
obligations of the Company under the Plan, with respect to Awards granted hereunder, shall be binding on any successor to the
Company, whether the existence of such successor is the result of a direct or indirect purchase, merger, consolidation, or otherwise,
of all or substantially all of the business and/or assets of the Company.

 

Article
16

Legal
Construction

 

16.1
Gender and Number. Except where otherwise indicated by the context, any masculine term used herein also shall include the
feminine; the plural shall include the singular and the singular shall include the plural.

 

16.2
Severability. In the event any provision of the Plan shall be held illegal or invalid for any reason, the illegality or
invalidity shall not affect the remaining parts of the Plan, and the Plan shall be construed and enforced as if the illegal or
invalid provision had not been included.

 

16.3
Requirements of Law. The granting of Awards and the issuance of Shares under the Plan shall be subject to Applicable Law
and to such approvals by any governmental agencies or national securities exchanges as may be required.

 

16.4
Errors. At any time the Company may correct any error made under the Plan without prejudice to the Company. Such corrections
may include, among other things, changing or revoking an issuance of an Award.

 

16.5
Elections and Notices. Notwithstanding anything to the contrary contained in the Plan, all elections and notices of every
kind shall be made on forms prepared by the Company or the Secretary or Assistant Secretary, or their respective delegates or
shall be made in such other manner as permitted or required by the Company or the Secretary or Assistant Secretary, or their respective
delegates, including but not limited to elections or notices through electronic means, over the Internet or otherwise. An election
shall be deemed made when received by the Company (or its designated agent, but only in cases where the designated agent has been
appointed for the purpose of receiving such election), which may waive any defects in form. The Company may limit the time an
election may be made in advance of any deadline.

 

Where
any notice or filing required or permitted to be given to the Company under the Plan, it shall be delivered to the principal office
of the Company, directed to the attention of the Secretary. Such notice shall be deemed given on the date of delivery.

 

Notice
to the Participant shall be deemed given when mailed (or sent by telecopy) to the Participant’s work or home address as
shown on the records of the Company or, at the option of the Company, to the Participant’s e-mail address as shown on the
records of the Company.

 

    	 	20	 

     

    

 

It
is the Participant’s responsibility to ensure that the Participant’s addresses are kept up to date on the records
of the Company. In the case of notices affecting multiple Participants, the notices may be given by general distribution at the
Participants’ work locations.

 

16.6
Governing Law. To the extent not preempted by Federal law, the Plan, and all awards and agreements hereunder, and any and
all disputes in connection therewith, shall be governed by and construed in accordance with the substantive laws of the State
of Minnesota, without regard to conflict or choice of law principles which might otherwise refer the construction, interpretation
or enforceability of the Plan to the substantive law of another jurisdiction.

 

16.7
Venue. The Company and the Participant to whom an award under the Plan is granted, for themselves and their successors
and assigns, irrevocably submit to the exclusive and sole jurisdiction and venue of the state or federal courts of Minnesota with
respect to any and all disputes arising out of or relating to the Plan, the subject matter of the Plan or any awards under the
Plan, including but not limited to any disputes arising out of or relating to the interpretation and enforceability of any awards
or the terms and conditions of the Plan. To achieve certainty regarding the appropriate forum in which to prosecute and defend
actions arising out of or relating to the Plan, and to ensure consistency in application and interpretation of the Governing Law
to the Plan, the parties agree that (a) sole and exclusive appropriate venue for any such action shall be an appropriate federal
or state court in Minnesota, and no other, (b) all claims with respect to any such action shall be heard and determined exclusively
in such Minnesota court, and no other, (c) such Minnesota court shall have sole and exclusive jurisdiction over the person of
such parties and over the subject matter of any dispute relating hereto and (d) that the parties waive any and all objections
and defenses to bringing any such action before such Minnesota court, including but not limited to those relating to lack of personal
jurisdiction, improper venue or forum non conveniens.

 

16.8
409A Compliance. Awards under the Plan may be structured to be exempt from or be subject to Section 409A of the Code. To
the extent that Awards granted under the Plan are subject to Section 409A of the Code, the Plan will be construed and administered
in a manner that enables the Plan and such Awards to comply with the provisions of Section 409A of the Code.

 

16.9
No Obligation to Notify. The Company shall have no duty or obligation to any holder of an Option to advise such holder
as to the time or manner of exercising such Option. Furthermore, the Company shall have no duty or obligation to warn or otherwise
advise such holder of a pending transaction or expiration of an Option or a possible period in which the Option may not be exercised.
The Company has no duty or obligation to minimize the tax consequences of an Option to the holder of such Option.

 

16.10
Indemnification. To the extent allowable pursuant to applicable law, each member of the Committee or of the Board shall
be indemnified and held harmless by the Company from any loss, cost, liability, or expense that may be imposed upon or reasonably
incurred by such member in connection with or resulting from any claim, action, suit, or proceeding to which he or she may be
a party or in which he or she may be involved by reason of any action or failure to act pursuant to the Plan and against and from
any and all amounts paid by him or her in satisfaction of judgment in such action, suit, or proceeding against him or her; provided
he or she gives the Company an opportunity, at its own expense, to handle and defend the same before he or she undertakes to handle
and defend it on his or her own behalf. The foregoing right of indemnification shall not be exclusive of any other rights of indemnification
to which such persons may be entitled pursuant to the Company’s Amended and Restated Articles of Incorporation or the Bylaws,
as a matter of law, or otherwise, or any power that the Company may have to indemnify them or hold them harmless.

 

16.11
Reporting. The Company will provide grantees who are awarded Incentive Stock Options with statements in accordance with
Section 6039(b) of the Code and will file a return with the Internal Revenue Service with respect to grantees who are awarded
Incentive Stock Options in accordance with Section 6039(a)(1) of the Code. The Company will provide grantees who are awarded Non-Qualified
Stock Options with a statement containing the information set forth in Treas. Reg. Section 1.61-15(c)(3).

 

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