Document:

Exhibit 10.1

 

Confidential
and Without Prejudice

 

Amendment Agreement

 

THIS AMENDMENT
AGREEMENT (this “Amendment”) is made the 24th day of March 2022

 

 BETWEEN:

 

		(1)	Verona Pharma plc, a company incorporated
                                            under the laws of England and Wales, under company registration number 05375156 whose
                                            registered office is at One Central Square, Cardiff, CF10 1FS, United Kingdom (“Verona”);
                                            and

 

		(2)	Ligand UK Development Limited, a company
                                            incorporated under the laws of England and Wales, under company registration number
                                            02600483 whose registered office is at C/O Legalinx Limited, 3rd Floor, 207 Regent
                                            Street, London, W1B 3HH, United Kingdom (“Ligand”).

 

Verona and Ligand are each a “Party”
and together the “Parties”.

 

 BACKGROUND:

 

		(A)	Ligand (then called Vernalis Development Limited)
                                            and Rhinopharma Ltd entered into an intellectual property assignment and licence agreement
                                            on 7 February 2005, which agreement was amended by a codicil dated 13 July 2006
                                            (together, the “Licence Agreement”).

 

		(B)	Rhinopharma Ltd assigned the Licence Agreement
                                            to Verona on 19 September 2006.

 

		(C)	Verona entered into a collaboration and licence
                                            agreement with Nuance Pharma Limited with an effective date of 9 June 2021 (the “Nuance
                                            Agreement”) pursuant to which Nuance Pharma Limited paid Verona the sum of twenty
                                            five million United States dollars ($25,000,000) cash and equity worth fifteen million United
                                            States dollars ($15,000,000) in Nuance Biotech, Nuance Pharma Limited’s parent company.

 

		(D)	Ligand alleged to Verona that under Clause 5.4
                                            of the Licence Agreement, Verona was required to pay to Ligand the sum of ten million United
                                            States dollars ($10,000,000), being 25% of the cash and non-cash consideration that Nuance
                                            Pharma Limited paid Verona.

 

		(E)	Verona has denied that such payment is due
                                            to Ligand under Clause 5.4 of the Licence Agreement in relation to the Nuance Agreement.

 

		(F)	Ligand and Verona wish to settle the dispute
                                            described at Recitals (D) and (E) above (the “Dispute”) and
                                            amend the Licence Agreement to reflect developments in their commercial relationship in accordance
                                            with and subject to the provisions of this Amendment.

 

THE PARTIES
AGREE AS FOLLOWS:

 

		1.	DEFINITIONS

 

		1.1	Capitalised terms used but not otherwise defined
                                            in this Amendment shall have the meaning given to them in the Licence Agreement as amended
                                            by this Amendment.

 

    

    

    

 

Confidential and Without
Prejudice

 

		2.	SETTLEMENT

 

		2.1	This Amendment constitutes full and final
                                            settlement of the Dispute.

 

		2.2	Each Party releases and forever discharges
                                            all and any actions, rights, claims, counterclaims, demands, set offs, liabilities and obligations
                                            whether in law or in equity that it (or its Affiliates) ever had, may have or hereafter can,
                                            shall or may have against the other Party (or its Affiliates) whether or not currently contemplated
                                            by the Parties (or their Affiliates) or currently sustainable at law arising out of or relating
                                            in any manner to the Dispute. Without prejudice to the generality of the foregoing, Ligand
                                            shall not assert or claim that Verona has not complied with clause 4.1 of the Licence Agreement
                                            in relation to the Nuance Agreement.

 

		2.3	Each Party shall not (and shall procure that
                                            its Affiliates shall not) directly or indirectly initiate, file, finance, participate, aid,
                                            or otherwise assist in any action, suit or other proceeding concerning the Dispute, in England
                                            or in any other jurisdiction.

 

		2.4	For clarity, Clauses 2.2 and 2.3 shall not
                                            apply to, and the Dispute shall not include, any claims in respect of any breach of this
                                            Amendment.

 

		2.5	This Amendment is entered into in connection
                                            with the settlement of the Dispute. It is not, and shall not be represented or construed
                                            by either Party as, an admission against interest or an admission of liability or wrongdoing
                                            on the part of the other Party to this Amendment or any other person or entity.

 

		2.6	Each Party shall bear its own costs, solicitors’
                                            fees, attorneys’ fees, counsels’ fees and other professional fees in relation
                                            to the Dispute and all its own costs in relation to this Amendment and its implementation.

 

		3.	PAYMENTS

 

		3.1	Within five (5) business days of the
                                            date of this Amendment , Verona shall pay to Ligand the sum of two million United States
                                            dollars (US$2,000,000) by way of bank transfer to Ligand’s UK bank account details
                                            of which Ligand shall provide to Verona promptly after signature of this Amendment.

 

		3.2	Within thirty (30) days from the earlier of
                                            the date of the first commercial sale by Verona or the receipt by Verona of a written report
                                            or other written notification of the first sale by a Sub-licensee to a Third Party of the
                                            first Licensed Product in a country in the Territory after required Regulatory Approvals
                                            have been granted by the applicable Regulatory Authority, but excluding Licensed Product
                                            sales for clinical study purposes, sales between Verona and its Sub-licensees or compassionate,
                                            named patient or similar use, Verona shall pay to Ligand the sum of fifteen million United
                                            States dollars (US$15,000,000) in cash, or at Verona’s discretion, by issuing to Ligand
                                            shares in Verona of equivalent value based on the volume-weighted average price (“VWAP”)
                                            of Verona’s American Depositary Shares on the Nasdaq Global Market over the ten (10) trading
                                            days including and prior to the date of the first commercial sale. For clarity, such payment
                                            shall be payable once only and be made on the first occurrence of a sale of the first Licensed
                                            Product as described in the foregoing sentence and not on subsequent occurrences of the same
                                            in relation to other Licensed Products or countries in the Territory. Any cash payment shall
                                            be by way of bank transfer to Ligand’s UK bank account details of which Ligand shall
                                            provide to Verona.

 

    

    

    

 

Confidential and Without
Prejudice

 

		4.	AMENDMENTS
                                            TO THE LICENCE AGREEMENT

 

		4.1	The Licence Agreement is hereby amended as
                                            set out in Clauses 4.2 to 4.18 below with effect from the date of this Amendment as written
                                            above.

 

		4.2	The section at the head of the Licence Agreement
                                            defining the two parties is hereby replaced with the following wording:

 

		“(1)	Verona Pharma plc, a company incorporated
under the laws of England and Wales, under company registration number 05375156 whose registered office is at One Central Square, Cardiff,
CF10 1FS, United Kingdom (Verona); and

 

		(2)	Ligand UK Development Limited,
                                            a company incorporated under the laws of England and Wales, under company registration number
                                            02600483 whose registered office is at C/O Legalinx Limited, 3rd Floor, 207 Regent Street,
                                            London, W1B 3HH, United Kingdom (Ligand).”

 

		4.3	In the Licence Agreement, where appropriate,
                                            all references to ‘Vernalis’ shall be read as ‘Ligand’ and all references
                                            to ‘Rhinopharma’ shall be read as ‘Verona’.

 

		4.4	The following definitions are hereby added
                                            to Clause 1.1:

 

“Nuance
Agreement means the collaboration and licence agreement entered into between Verona and Nuance Pharma Limited with the effective
date 9 June 2021;”

 

“Expiry
Date means 24 March 2042;”

 

"Sub-licensee
means a Third Party to whom Verona grants a licence and/or sub-licence (as the case may be) to manufacture and sell and/or to purchase
and sell one or more Licensed Products in the Field of Use in the Territory. Notwithstanding the foregoing, Sub-licensee shall not include
a Third Party that is contracted by Verona or its Affiliates to (i) carry out contract research and development for or on behalf
of Verona or its Affiliates; (ii) manufacture Licensed Products on behalf of Verona, its Affiliates or its Sub-Licensees solely
for supply to Verona, its Affiliates or its Sub-Licensees; (iii) distribute Verona’s Licensed Products; (iv) be Verona’s
agent for the marketing or selling of the Licensed Products; or (v) co-market or co-promote Verona’s Licensed Products;”

 

		4.5	Clause 4.1(c) is hereby replaced with
                                            the following wording:

 

“any sub-licence
shall automatically and immediately terminate on the termination of this agreement, provided that, upon termination, Ligand shall, at
the request of any Sub-licensee that is then in compliance in all material respects with its obligations to Verona under such Sub-licensee’s
sublicense agreement with Verona where non-compliance would have caused Verona to be in breach of its obligations to Ligand under this
agreement, enter into a direct agreement with the Sub-licensee licensing directly to the Sub-licensee, for the Sub-licensee’s territory
as had been stated in the sublicense agreement, the Programme IP (inclusive of any rights assigned or transferred to Verona pursuant
to clause 3.1, and inclusive, without limitation, of the Improvements), on (or as near as possible to) the same economic and other terms
as the Sub-Licensee’s sublicense agreement with Verona, and reflecting explicitly any provisions of this agreement which had expressly
or by reference been made applicable to such sublicense agreement.  Any such direct agreement shall also require the Sub-licensee
to pay forthwith to Ligand any sums payable by the Sub-licensee under the Sub-Licensee’s sublicense agreement as at the time of
termination of this agreement that had not already been paid in full by the Sub-licensee.”

 

    

    

    

 

Confidential and Without
Prejudice

 

		4.6	Clause 5.1 is hereby replaced with the following
                                            wording:

 

“Within
forty-five (45) days after achievement of the first approval of a Regulatory Authority for the Commercialisation of any Licensed Product
anywhere in the Territory, Verona shall pay to Ligand the sum of five million pounds (£5,000,000) in cash, or at Verona’s
discretion, by issuing to Ligand shares in Verona of equivalent value based on the volume-weighted average price (“VWAP”)
of Verona’s shares on the Nasdaq Global Market over the ten (10) trading days including and prior to the date on which the
Regulatory Authority grants approval.”

 

		4.7	Clause 5.3 is hereby replaced with the following
                                            wording:

 

“For each
Licensed Product that is not Covered by a Programme Patent at the time of First Commercial Sale of that Licensed Product by Verona or
any Sub-licensee of Verona, during the applicable Royalty Term and prior to the Royalty Term in respect of any named patient sales, Verona
shall pay Ligand royalties on the Net Sales Value of such Licensed Products at the royalty rate of 3% (three per cent).”

 

		4.8	Clause 5.4 is hereby replaced with the
                                            following wording:

 

“Verona
shall pay Ligand 25% (twenty-five per cent.) of all cash and non-cash consideration (excluding royalties which are payable separately
under clauses 5.2 and 5.3) paid to Verona by its Sub-licensees . For the avoidance of doubt, (i) all cash and non-cash consideration
paid to Verona under sections 8.02 and 8.03 of the Nuance Agreement shall be subject to this clause and (ii) all cash and non-cash
consideration paid to Verona under section 8.01 of the Nuance Agreement shall not be subject to this clause.”

 

		4.9	The last sentence of Clause 5.8 is hereby
                                            replaced with the following wording:

 

“Sums payable
by Verona under this agreement shall be paid in United States dollars by wire transfer to any UK bank account that Ligand may notify
to Verona in writing from time to time.”

 

		4.10	Clause 5.9 is hereby replaced with the
                                            following wording:

 

“For the
purpose of converting any royalty payments that are due to Ligand into United Stated dollars from the local currency, the rate of exchange
to be applied shall be the published exchange rate in the Financial Times on the date when the relevant payment first becomes due.”

 

		4.11	Clause 6.3(b) is hereby deleted.

 

		4.12	Clause 10.1 is hereby replaced with the following
                                            wording:

 

This agreement
shall come into effect on the execution of this agreement and shall continue in force until the Expiry Date, unless terminated earlier
by either party in accordance with clauses 10.2, 10.3 or 10.4. Neither party shall have any right to terminate this agreement (including
under common law rights), except in accordance with Clauses 10.2, 10.3 and 10.4.

 

    

    

    

 

Confidential and Without
Prejudice

 

		4.13	Clause 10.3 is hereby replaced with the following
                                            wording:

 

“Ligand
shall have the right to terminate this agreement immediately by written notice to Verona if Ligand obtains a final judgment of the English
High Court declaring that Verona is in material breach of an obligation to pay money to Ligand under this agreement and Verona fails
to remedy such material breach within thirty (30) days of the date of the final written judgment. Verona shall have the right to terminate
this agreement immediately by written notice to Ligand if Verona obtains a final judgment of the English High Court declaring that Ligand
is in material breach of any of its obligations under this agreement and Ligand fails to remedy that breach within thirty (30) days of
the date of the final written judgment.”

 

		4.14	Clause 10.4(a) is hereby deleted and
                                            Clauses 10.4(b) and 10.4(c) shall be re-numbered as 10.4(a) and 10.4(b) respectively.

 

		4.15	Clause 10.6 is hereby replaced with the following
                                            wording:

 

“Any termination
of this agreement shall not affect any accrued rights or liabilities of either party, nor shall it affect the coming into force or the
continuance in force of any provision of this agreement which is expressly or by implication intended to come into force or continue
in force on or after termination. On expiry of this agreement pursuant to clause 10.1, each party’s rights and obligations under
this agreement shall cease except that (i) clause 12 shall continue in full force and effect , and (ii) Verona shall have
a non-exclusive, worldwide, royalty-free, perpetual, irrevocable, sub-licensable and transferrable licence under the Programme Know-How
to Develop, Manufacture and Commercialise (or any of those activities) Licensed Products in the Field of Use in the Territory.”

 

		4.16	The first sentence of Clause 11.1 is hereby
                                            replaced with the following wording:

 

“Upon termination (but not,
for the avoidance of doubt, expiry) of this agreement and subject to clause 11.2, Verona shall, and shall procure that Verona's Affiliates
shall:”

 

		4.17	Clause 14 is hereby replaced with the following
                                            wording:

 

“14.1 Any notice or other document
to be served under this agreement may be delivered or sent by post by or by hand to the party to be served at its address set out below:

 

	(a)	to Ligand at:	(b)	to Verona at:
	 	3911 Sorrento Valley Boulevard,

 Suite 110, San Diego, CA 92121	 	One Central Square, Cardiff,
 CF10 1FS 
 United Kingdom
	 	 	 and to:
	 	 	Shakespeare Martineau 

60 Gracechurch Street, London, 

EC3V 0HR, United Kingdom
	 	 
	 	Marked for attention of the

 Company Secretary	 	One copy marked for attention of

 the General Counsel and another

 copy marked for attention of the 

Chief Financial Officer  

 

    

    

    

 

Confidential and
Without Prejudice

 

or at any other
address or addressee as it may have notified to the other party in accordance with this clause 14.1 or at the company registered
office of the other party. Any notice or other document sent by post shall be sent by prepaid first class recorded delivery post (if
both parties’ addresses for service are within the United Kingdom) or by prepaid airmail (if elsewhere).

 

14.2 In proving
service of a notice or document it shall be sufficient to prove that delivery by post was made and recorded, as the case may be.”

 

		4.18	Schedule 3 is hereby replaced with the schedule
                                            set out in the Appendix to this Amendment.

 

		5.	warranties

 

		5.1	Each Party represents and warrants to the
                                            other Party that as at the date of this Amendment, it has the full power and authority to
                                            enter into and perform this Amendment without obtaining the consent of any third party and
                                            has taken all necessary action to authorise the execution, delivery and performance of this
                                            Amendment.

 

		6.	GENERAL

 

		6.1	The Licence Agreement remains in full force
                                            and effect with the amendments set out in this Amendment.

 

		6.2	The provisions of Clause 12 (Confidentiality
                                            and Announcements), Clause 16 (General), Clause 18 (Jurisdiction) and Clause 19
                                            (Governing Law) of the Licence Agreement shall be deemed to be incorporated into this Amendment
                                            by reference, and each reference to “this agreement” in such incorporated provisions
                                            shall be deemed to be a reference to this Amendment.

 

		6.3	The provisions and circumstances of this Amendment,
                                            including, without limitation, Clauses 2 and 3 and the background information in recitals
                                            (D) to (F), shall be considered the Confidential Information of each Party under Clause 12
                                            of the Licence Agreement.

 

    

    

    

 

Confidential and Without
Prejudice

 

Appendix

 

Schedule 3

 

Net
Sales Value Definition

 

Net Sales Value means, with respect to
any Licensed Product, the aggregate gross amount invoiced by Verona, its Affiliates, Sub-licensees and agents (each a “Selling
Party”) to Third Parties (including distributors), or received by a Selling Party despite the absence of an invoice, for sales
of Licensed Products, less the sum of the following, each to be determined based on reasonable estimates (without duplication) determined
in accordance with US GAAP or International Financial Reporting Standards (IFRS), consistently applied, as applicable for the Selling
Party:

 

		(a)	trade, cash, quantity and prompt settlement discounts;

 

		(b)	taxes on sales (such as sales, value added, or use taxes) and
customs and excise duties and other taxes or duties to the extent added to the sale price and set forth separately as such in the total
amount invoiced (but not including taxes assessed against the income derived from sales);

 

		(c)	freight, insurance, and other transportation charges, as well
as any fees for services provided by wholesalers and warehousing chains to the extent related to the distribution of the Licensed Products;

 

		(d)	allowances or credits given on account of returns, rejections,
defects or recalls (including due to spoilage, damage or expiration of useful life);

 

		(e)	price reductions, write-offs (retroactive or otherwise including
for bad debt), shelf stock adjustments on customer inventories following price changes, chargeback payments, reimbursements, and rebates
actually given, paid, accrued or credited in connection with the sale of the Licensed Products, including amounts repaid or credited
to (if) end users pursuant to rebate or discount programs, (ii) governmental entities or (iii) managed care organizations;
provided, however, that if any amounts are written off, but subsequently collected, such subsequent collections shall be included in
Net Sales Value in the reporting period in which such subsequent collections are made;

 

		(f)	the portion of administrative fees paid or accrued during the
relevant time period to group purchasing organizations or pharmaceutical benefit managers relating to the Licensed Products;

 

		(g)	distribution fees to the extent payable for the distribution
of the Licensed Products; and

 

		(h)	any other similar and customary deductions that are consistent
with US GAAP or IFRS, as applicable for the Selling Party.

 

To the extent
any of the foregoing are based upon estimates in any reporting period, any changes in such estimates shall be applied in the reporting
period in which such changes are made, in accordance with US GAAP or IFRS, as applicable for the Selling Party.

 

    

    

    

 

Confidential and Without
Prejudice

 

Notwithstanding
the foregoing, Net Sales Value shall not include, and shall be deemed zero with respect to, (i) the distribution of promotional
samples of the Licensed Products, or (ii) Licensed Products provided for clinical study or research purposes, or compassionate,
named patient or similar use; provided, however that if such Licensed Products provided for clinical study or research purposes, or compassionate,
named patient or similar use result in sales accounted for as revenue by the Selling Party, such sales shall be included in Net Sales
Value.

 

In the case of
any sale of a Licensed Product between or among Verona and its Affiliates, Sub-licensees or agents for resale, Net Sales Value shall
be calculated as above only on the first arm's length sale by Verona or its Affiliate, Sub-licensee or agent to a Third Party.

 

In the event that
a Licensed Product is commercialized “bundled” with one or more products and/or with one or more services which are themselves
not Licensed Products for a mutually related price (e.g., buy one and get a discount on or a coupon for the other) or for a single price,
the Net Sales Value for such Licensed Product shall be calculated by multiplying the gross amount invoiced for such “bundled”
sale by the fraction A/(A+B), where A is the average sales price during the applicable reporting period generally achieved for the Licensed
Product in the country in which such sale occurred when such Licensed Product is sold alone and not with other pharmaceutical products
or services, and B is the average sales price during the applicable reporting period generally achieved for the other product(s) and/or
service(s) in the “bundled” sale in the country in which such sale occurred when such product(s) and/or service(s) are
sold alone and not with other pharmaceutical products or services, and allocating applicable “Net Sales Value” deductions
in the same proportion.

 

In the event that
one or more of the product(s) and/or service(s) in the “bundled” sale are not sold separately, the parties shall
confer in good faith to determine a fair market price that shall equitably compensate the Net Sales Value for the value of the Licensed
Product(s) within the “bundled” sale.

 

Upon any sale
or other disposal of any Licensed Product for any consideration other than an exclusively monetary consideration on bona fide arm's length
terms, then for the purposes of calculating the Net Sales Value under this agreement, such Licensed Product shall be deemed to be sold
exclusively for money at the average sales price during the applicable reporting period generally achieved for the Licensed Product in
the country in which such sale or other disposal occurred when such Licensed Product is sold alone and not with other pharmaceutical
products or services.

 

    

    

    

 

Confidential and Without
Prejudice

 

AGREED
by the Parties through their duly authorised representatives on the date written at the start of this Amendment:

 

	For and on behalf of 
 Verona Pharma plc	 	For and on behalf of 
 Ligand UK Development Limited
	 	 	 
	Signed	/s/
David Zaccardelli	 	Signed	/s/ Charles Berkman
	 	 	 
	Full Name	David Zaccardelli	 	Full Name	Charles Berkman
	 	 	 
	Title	CEO & President	 	Title	SVP, General Counsel & SecretaryExhibit 4.9
LILIUM N.V.
2021 EQUITY INCENTIVE PLAN
1.Purposes of the Plan.  The purposes of this Plan are (a) to attract and retain the best available personnel to ensure the Company’s success and accomplish the Company’s goals; (b) to incentivize Service Providers with equity-based compensation to align their interests with the Company’s stockholders; and (c) to promote the success of the Company’s business.
2.Definitions.  As used herein, the following definitions will apply:
(a)“Accounting Rules” means Financial Accounting Standards Board Accounting Standards Codification Topic 718, or any successor provision.
(b)“Administrator” means the Committee, except with respect to such matters that are not delegated to the Committee by the Board to the extent permitted by Applicable Laws (whether pursuant to committee charter or otherwise).  The Committee (or the Board, with respect to such matters over which it retains authority under the Plan or otherwise) may delegate (i) to one or more of its members (or one or more other members of the Board) such of its duties, powers and responsibilities as it may determine; (ii) to one or more officers of the Company the power to grant Awards to the extent permitted by Applicable Law; and (iii) to such Service Providers or other persons as it determines such ministerial tasks as it deems appropriate.  For purposes of the Plan, the term “Administrator” will include the Board, the Committee, and the person or persons delegated authority under the Plan, to the extent of such delegation as applicable.
(c)“Affiliate” means a Parent, a Subsidiary or any corporation or other entity that, directly or indirectly through one or more intermediaries, controls, or is controlled by, or is under common control with, the Company.
(d)“Applicable Laws” means all applicable laws, rules, regulations and requirements, including, but not limited to, all applicable U.S. federal or state laws, rules and regulations, the rules and regulations of any stock exchange or quotation system on which the Shares are listed or quoted, and the applicable laws, rules and regulations of any other country or jurisdiction where Awards are, or will be, granted under the Plan or Participants reside or provide services to the Company or any Subsidiary or Affiliate, as such laws, rules, and regulations shall be in effect from time to time.
(e)“Award” means, individually or collectively, a grant under the Plan of Options, Stock Appreciation Rights, Restricted Stock, Stock Units (including without limitation Restricted Stock Units), or Stock Bonuses.
(f)“Award Agreement” means the written or electronic agreement setting forth the terms and provisions applicable to each Award granted under the Plan.  The Award Agreement is subject to the terms and conditions of the Plan.
(g)“Board” means the board of directors (bestuur) of the Company.
(h)“Business Combination Agreement” means the Business Combination Agreement by and among the Company (at that time named: Qell DutchCo B.V.), Queen Cayman Merger LLC, Qell Acquisition Corp., and Lilium GmbH dated as of March 30, 2021.
​
​

1

(i)“Cause” means in the case of a Participant who is party to a currently effective employment, consulting, advisory, separation, severance of other agreement with the Company or any of its Subsidiaries or Affiliates in which “Cause” is defined, the occurrence of any circumstance constituting “Cause” (or such similar term pursuant to the terms of such agreement).  In every other case, “Cause” means the occurrence of any of the following, as determined by the Administrator in its sole discretion:  (i) the Participant’s material failure to perform (other than by reason of disability), or substantial negligence or misconduct in the performance of, the Participant’s duties and responsibilities for the Company or any of its Subsidiaries or Affiliates; (ii) the Participant’s breach of any confidentiality, invention assignment, non-competition, non-solicitation, no-hire, non-disparagement or other restrictive covenant obligation set forth in any written agreement by and between the Participant and the Company or any of its Subsidiaries or Affiliates; (iii) the Participant’s material breach of any other provision of any written agreement by and between the Participant and the Company or any of its Subsidiaries or Affiliates; (iv) the Participant’s material violation of any applicable policy, rule or code of conduct of the Company or any of its Subsidiaries or Affiliates; (v) the Participant’s indictment for or commission of, or plea of guilty or nolo contendere to, any felony or any crime involving moral turpitude; (vi) the Participant’s repeated failure to follow reasonable and lawful instructions from the Board or Chief Executive Officer; or (vii) other conduct by the Participant that is or reasonably could be expected to be harmful to the business interests or reputation of the Company or any of its Subsidiaries or Affiliates; provided, that if the Administrator determines, following termination of the Participant’s employment or other service for any reason other than Cause, that such termination could have been for Cause, then the Participant’s employment or other service will be deemed to have been terminated for Cause for all purposes hereunder, retroactive to the date of such Participant’s termination of employment or other service. The foregoing definition does not in any way limit the Company’s ability (or that of any Subsidiary, any Affiliate or any successor thereto, as appropriate) to terminate a Participant’s employment, consulting or other service relationship at any time, subject to Applicable Laws.  For purposes of clarity, a termination without “Cause” does not include any termination that occurs solely as a result of Participant’s death or disability.
(j)“Change in Control” means the occurrence of any of the following events:
(i)any “person” (as such term is used in Sections 13(d) and 14(d) of the Exchange Act), excluding (1) a trustee or other fiduciary holding securities under an employee benefit plan of the Company or any of its Subsidiaries or Affiliates, (2) a corporation or other entity owned directly or indirectly by the stockholders of the Company in substantially the same proportions as their ownership of the Shares of the Company, (3) the Company and (4) a corporation or other entity of which at least a majority of its combined voting power is owned directly or indirectly by 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 more than fifty percent (50%) of the total voting power of the Company’s then outstanding voting securities;
(ii)the consummation by the Company of a merger or consolidation of the Company with any other corporation, other than a merger or consolidation that 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) more than fifty percent (50%) of the total voting power of the voting securities of the Company or such surviving entity outstanding immediately after such merger or consolidation (in
​

-2-

substantially the same proportions relative to each other as immediately prior to the transaction);
(iii)the consummation of a sale or disposition by the Company of all or substantially all of the Company’s assets (it being understood that the sale or spinoff of one or more divisions of the Company will not necessarily constitute the sale or disposition of all or substantially all of the Company’s assets); or
(iv) a change in the effective control of the Company which occurs on the date that a majority of members of the Board is replaced during any twelve (12) month period by Directors whose appointment or election is not endorsed by a majority of the members of the Board prior to the date of the appointment or election.
Further, for the avoidance of doubt, a transaction will not constitute a Change of Control if: (y) its sole purpose is to change the state of the Company’s incorporation; or (z) its sole purpose is to create a holding company that will be owned in substantially the same proportions by the persons who held the Company’s securities immediately before such transaction.  In addition, if any “person” (as defined above) is considered to be in effective control of the Company, the acquisition of additional control of the Company by the same Person will not be considered to cause a Change in Control.  If required for compliance with Section 409A of the Code, in no event will a Change in Control be deemed to have occurred if such transaction is not also a “change in the ownership or effective control of” the Company or “a change in the ownership of a substantial portion of the assets of” the Company as determined under Treasury Regulation Section 1.409A-3(i)(5) (without regard to any alternative definition thereunder).
(k)“Code” means the Internal Revenue Code of 1986, as amended.  Reference to a specific section of the Code or regulation thereunder shall include such section or regulation, any valid regulation promulgated under such section, and any comparable provision of any future legislation or regulation amending, supplementing or superseding such section or regulation.
(l)“Committee” means the compensation committee of the Board.
(m) “Company” means Lilium N.V., a Dutch public limited liability company (naamloze vennootschap), or any successor thereto.
(n)“Date of Adoption” means the earlier of the date the Plan was approved by the Company’s stockholders or adopted by the Board, as determined by the Committee.
(o)“Director” means a member of the Board.
(p)“Disability” means total and permanent disability as defined in Section 22(e)(3) of the Code, provided that in the case of Awards other than Incentive Stock Options, the Administrator in its discretion may determine whether a permanent and total disability exists in accordance with uniform and non-discriminatory standards adopted by the Administrator from time to time; provided further, that if the Participant resides outside of the United States, “Disability” shall have such meaning as is required by Applicable Laws.
(q)“Exchange Act” means the Securities Exchange Act of 1934, as amended.
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(r)“Exchange Program” means a program under which outstanding Awards are amended to provide for a lower exercise price or surrendered or cancelled in exchange for (i) Awards with a lower exercise price, (ii) a different type of Award or awards under a different equity incentive plan, (iii) cash, or (iv) a combination of (i), (ii) and/or (iii).  Notwithstanding the preceding, the term Exchange Program does not include (A) any action described in Section 15 or any action taken in connection with a Change in Control transaction nor (B) any transfer or other disposition permitted under Section 14. For the purpose of clarity, each of the actions described in the prior sentence, none of which constitute an Exchange Program, may be undertaken (or authorized) by the Administrator in its sole discretion without approval by the Company’s stockholders.
(s)“Fair Market Value” means, as of any date, the value of Shares determined as follows:
(i)If the Shares are listed on any established stock exchange or a national market system, its Fair Market Value will be the closing sales price for such stock (or the closing bid, if no sales were reported) as quoted on such exchange or system on the day of determination, as reported in such source as the Administrator deems reliable;
(ii)If the Shares are regularly quoted by a recognized securities dealer but selling prices are not reported, the Fair Market Value of a Share will be the mean between the high bid and low asked prices for the Shares on the day of determination, as reported in such source as the Administrator deems reliable; or
(iii)In the absence of an established market for the Shares, the Fair Market Value will be determined in good faith by the Administrator in compliance with Applicable Laws and regulations and in a manner that complies with Section 409A of the Code.
(t)“Fiscal Year” means the fiscal year of the Company.
(u)“Incentive Stock Option” means an Option that by its terms qualifies and is intended to qualify as an incentive stock option within the meaning of Section 422 of the Code and the regulations promulgated thereunder.
(v)“Insider” means an officer or director of the Company or any other person whose transactions in Shares are subject to Section 16 of the Exchange Act.
(w)“ISO Participant” means any Service Provider who is eligible to receive Incentive Stock Options pursuant to Section 5.
(x)“Legacy ESOP” means the Employee Stock Option Program Conditions established by Lilium GmbH, as in effect immediately prior to the consummation of the Business Combination Agreement.
(y)“Legacy Option” means an option to purchase a Company ordinary share issued pursuant to the Legacy ESOP.
(z)“Non-statutory Stock Option” means an Option that by its terms does not qualify or is not intended to qualify as an Incentive Stock Option.
(aa)“Option” means a stock option granted pursuant to the Plan.
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(bb)“Outside Director” means a Director who is not an employee.  Neither service as an Outside Director nor payment of a director’s fee by the Company will be sufficient to constitute “employment” by the Company.
(cc)“Parent” means any corporation (other than the Company) in an unbroken chain of corporations ending with the Company if each of the corporations other than the Company owns stock possessing fifty percent (50%) or more of the total combined voting power of all classes of stock in one of the other corporations in such chain.  A corporation that attains the status of a Parent on a date after the adoption of the Plan shall be considered a Parent commencing as of such date.
(dd)“Participant” means the holder of an outstanding Award.
(ee)“Performance Goal” means a formula or standard determined by the Administrator with respect to each Performance Period based on one or more of the following criteria and any adjustment(s) thereto established by the Administrator: (1) sales or non-sales revenue; (2) return on revenues; (3) operating income; (4) income or earnings including operating income; (5) income or earnings before or after taxes, interest, depreciation and/or amortization; (6) income or earnings from continuing operations; (7) net income; (8) pre-tax income or after-tax income; (9) net income excluding amortization of intangible assets, depreciation and impairment of goodwill and intangible assets and/or excluding charges attributable to the adoption of new accounting pronouncements; (10) raising of financing or fundraising; (11) project financing; (12) revenue backlog; (13) gross margin; (14) operating margin or profit margin; (15) capital expenditures, cost targets, reductions and savings and expense management; (16) return on assets (gross or net), return on investment, return on capital, or return on stockholder equity; (17) cash flow, free cash flow, cash flow return on investment (discounted or otherwise), net cash provided by operations, or cash flow in excess of cost of capital; (18) performance warranty and/or guarantee claims; (19) stock price or total stockholder return; (20) earnings or book value per share (basic or diluted); (21) economic value created; (22) pre-tax profit or after-tax profit; (23) strategic business criteria, consisting of one or more objectives based on meeting specified market penetration or market share, completion of strategic agreements such as licenses, joint ventures, acquisitions, and the like, geographic business expansion, objective customer satisfaction or information technology goals, intellectual property asset metrics; (24) objective goals relating to divestitures, joint ventures, mergers, acquisitions and similar transactions; (25) objective goals relating to staff management, results from staff attitude and/or opinion surveys, staff satisfaction scores, staff safety, staff accident and/or injury rates, compliance, headcount, performance management, completion of critical staff training initiatives; (26) objective goals relating to projects, including project completion, timing and/or achievement of milestones, project budget, technical progress against work plans; and (27) enterprise resource planning.  Awards issued to Participants may take into account other criteria (including subjective criteria).  Performance Goals may differ from Participant to Participant, Performance Period to Performance Period and from Award to Award.  Any criteria used may be measured, as applicable, (i) in absolute terms, (ii) in relative terms (including, but not limited to, any increase (or decrease) over the passage of time and/or any measurement against other companies or financial or business or stock index metrics particular to the Company), (iii) on a per share and/or share per capita basis, (iv) against the performance of the Company as a whole or against any Subsidiary(ies) or Affiliate(s), or a particular segment(s), a business unit(s) or a product(s) of the Company or individual project company, (v) on a pre-tax or after-tax basis, (vi) on a GAAP or non-GAAP basis, and/or (vii) using an actual foreign exchange rate or on a foreign exchange neutral basis.
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(ff)“Performance Period” means the time period during which the Performance Goals or other vesting provisions must be satisfied for Awards.  Performance Periods may be of varying and overlapping duration, at the sole discretion of the Administrator.
(gg)“Period of Restriction” means the period during which the transfer of Shares of Restricted Stock is subject to restrictions and therefore, the Shares are subject to a substantial risk of forfeiture.  Such restrictions may be based on the passage of time, the achievement of target levels of performance, or the occurrence of other events as determined by the Administrator.
(hh)“Plan” means this 2021 Equity Incentive Plan as amended and/or amended and restated from time to time.
(ii) “Restricted Stock” means Shares issued pursuant to a Restricted Stock Award under Section 7 of the Plan.
(jj)“Restricted Stock Unit” means a Stock Unit subject to lapse restrictions, granted pursuant to Section 8.
(kk)“Rule 16b-3” means Rule 16b-3 of the Exchange Act or any successor to Rule 16b-3, as in effect when discretion is being exercised with respect to the Plan.
(ll)“Section 16(b)” means Section 16(b) of the Exchange Act.
(mm)“Service” or “Service Relationship” means a Participant’s employment or other service relationship with the Company or any of its Subsidiaries or Affiliates. Service will be deemed to continue, unless the Administrator otherwise determines, so long as the Participant is employed by, or otherwise is providing services in a capacity described in Section 5 to, the Company or any of its Subsidiaries or Affiliates.  If a Participant’s employment or other service relationship is with any Subsidiary or Affiliate of the Company and that entity ceases to be a Subsidiary or Affiliate of the Company, the Participant’s employment or other service relationship will be deemed to have terminated when the entity ceases to be a Subsidiary or Affiliate of the Company unless the Participant transfers Service to the Company or one of its remaining Subsidiaries or Affiliates.  Notwithstanding the foregoing, in construing the provisions of any Award relating to the payment of “nonqualified deferred compensation” (subject to Section 409A) upon a termination or cessation of Service, references to termination or cessation of employment, separation from service, retirement or similar or correlative terms will be construed to require a “separation from service” (as that term is defined in Treasury Regulation § Section 1.409A-1(h), after giving effect to the presumptions contained therein) from the Company and from all other corporations and trades or businesses, if any, that would be treated as a single “service recipient” with the Company under Treasury Regulation § 1.409A-1(h)(3).  The Company may, but need not, elect in writing, subject to the applicable limitations under Section 409A, any of the special elective rules prescribed in Treasury Regulation § 1.409A-1(h) for purposes of determining whether a “separation from service” has occurred.  Any such written election will be deemed a part of the Plan.
(nn)“Service Provider” means (i) a person who has a Service Relationship with the Company or any of its Subsidiaries or Affiliates, other than an Outside Director  or (ii) an Outside Director.
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(oo)“Share” means a Class A ordinary share of the Company, as adjusted in accordance with Section 15 of the Plan.
(pp)“Stock Appreciation Right” means an Award, granted alone or in connection with an Option, that pursuant to Section 9 is designated as a Stock Appreciation Right.
(qq)“Stock Bonus Award” means an Award granted pursuant to Section 10 of the Plan.
(pp)“Stock Unit” means a bookkeeping entry representing an amount equal to the Fair Market Value of one Share, granted pursuant to Section 8.  Each Stock Unit represents an unfunded and unsecured obligation of the Company.
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(qq)“Subsidiary” means any corporation (other than the Company) in an unbroken chain of corporations beginning with the Company if each of the corporations other than the last corporation in the unbroken chain owns stock possessing fifty percent (50%) or more of the total combined voting power of all classes of stock in one of the other corporations in such chain.  A corporation that attains the status of a Subsidiary on a date after the adoption of the Plan shall be considered a Subsidiary commencing as of such date.
(rr)“Tax-Related Items” means income tax, social insurance or other social contributions, national insurance, social security, payroll tax, fringe benefits tax, payment on account or other tax-related items.
3.Stock Subject to the Plan.
(a)Stock Subject to the Plan.  Subject to the provisions of Sections 3(b) and 15 of the Plan, the maximum aggregate number of Shares that may be issued under the Plan is 24,880,272, increased by that number of Shares underlying Legacy Options that are unallocated under the Legacy Option Plan aggregate option pool (taking into account (i) any increases or adjustments to the Legacy Option Plan pool prior to, or at, the consummation of the transactions contemplated by the Business Combination Agreement (the “Effective Time”) and (ii) forfeitures of options previously issued under the Legacy Option Plan following the Effective Time), as adjusted for conversion into Shares on a fully diluted basis as of the Date of Adoption.  The Shares may be authorized, but unissued, or reacquired Shares.  Notwithstanding the foregoing, subject to the provisions of Section 15 below, in no event shall the maximum aggregate number of Shares that may be issued under the Plan pursuant to Incentive Stock Options exceed the number of Shares initially made available for issuance under the Plan pursuant to the first sentence of this Section 3(a), plus, to the extent allowable under Section 422 of the Code and the regulations promulgated thereunder, any Shares that again become available for issuance pursuant to Sections 3(b) and 3(c).
(b)Share Reserve Increases.  The number of Shares available for issuance under the Plan may be increased on the first day of each Fiscal Year beginning with the 2022 Fiscal Year by such number of Shares determined by the Board on or prior to the date of any increase that will not exceed five percent (5%) of the outstanding Shares on the last day of the immediately preceding Fiscal Year.
(c)Lapsed Awards.  To the extent an Award should expire or be forfeited or become unexercisable for any reason without having been exercised in full, or is surrendered
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pursuant to an Exchange Program, the unissued Shares that were subject thereto shall, unless the Plan shall have been terminated, continue to be available under the Plan for issuance pursuant to future Awards.  In addition, any Shares which are retained by the Company upon exercise of an Award in order to satisfy the exercise or purchase price for such Award or any withholding taxes due with respect to such Award shall be treated as not issued and shall continue to be available under the Plan for issuance pursuant to future Awards.  Shares issued under the Plan and later forfeited to the Company due to the failure to vest or repurchased by the Company at the original purchase price paid to the Company for the Shares (including, without limitation, upon forfeiture to or repurchase by the Company in connection with a Participant ceasing to be a Service Provider) shall again be available for future grant under the Plan.  To the extent an Award under the Plan is paid out in cash rather than Shares, such cash payment will not result in reducing the number of Shares available for issuance under the Plan.  The payment of dividend equivalents in cash in conjunction with any outstanding Awards shall not count against the share limit set forth in Section 3(a).
(d)Assumption or Substitution of Awards by the Company.  The Administrator, from time to time, may determine to substitute or assume outstanding awards granted by another company, whether in connection with an acquisition of such other company or otherwise, by either: (a) assuming such award under this Plan or (b) granting an Award under this Plan in substitution of such other company’s award.  Such assumption or substitution will be permissible if the holder of the substituted or assumed award would have been eligible to be granted an Award under this Plan if the other company had applied the rules of this Plan to such grant.  In the event the Administrator elects to assume an award granted by another company, subject to the requirements of Section 409A of the Code, the purchase price or the exercise price, as the case may be, and the number and nature of Shares issuable upon exercise or settlement of any such Award will be adjusted appropriately.  In the event the Administrator elects to grant a new Option in substitution rather than assuming an existing option, such new Option may be granted with a similarly adjusted exercise price.  Any awards that are assumed or substituted under this Plan shall not reduce the number of Shares authorized for grant under the Plan or authorized for grant to a Participant in any fiscal year. Notwithstanding any provision of the Plan to the contrary, substitute Awards may contain terms and conditions that are inconsistent with the terms and conditions specified.
(e)Limitation of Liability. The Administrator and each delegee thereof shall be entitled to, in good faith, rely or act upon any report or other information furnished thereto by any officer or employee of the Company or any Parent, Subsidiary or Affiliate, the Company’s legal counsel, independent auditors, consultants or any other agents assisting in the administration of the Plan.  Members of the Administrator and any officer or employee of the Company or any Parent, Subsidiary or Affiliate acting at the direction or on behalf of the Administrator shall not be personally liable for any action or determination taken or made in good faith with respect to the Plan, and shall, to the fullest extent permitted by law, be indemnified and held harmless by the Company with respect to any such action or determination.
4.Administration of the Plan.
(a)Procedure.
(i)Multiple Administrative Bodies.  The Committee (or the Board, as applicable) may delegate the authority to administer the Plan to other persons with respect to different groups of Service Providers.
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(ii)Rule 16b-3.  To the extent determined desirable by the Board to qualify transactions hereunder as exempt under Rule 16b-3, the transactions contemplated hereunder will be structured to satisfy the requirements for exemption under Rule 16b-3.
(iii)Other Administration.  Other than as provided above, the Committee, or any delegee, to the extent applicable, will be constituted to satisfy Applicable Laws.
(b)Powers of the Administrator.  Subject to the provisions of the Plan, the Administrator is granted the authority delegated by the Board, in its discretion:
(i)to determine the Fair Market Value in accordance with Section 2(t)(iii);
(ii)to select the Service Providers to whom Awards may be granted hereunder;
(iii)to determine the number of Shares to be covered by each Award granted hereunder;
(iv)to approve forms of Award Agreements for use under the Plan;
(v)to determine the terms and conditions, not inconsistent with the terms of the Plan, of any Award granted hereunder; such terms and conditions include, but are not limited to, the exercise price, the time or times when Awards may be exercised (which may be based on Performance Goals), any vesting acceleration or waiver of forfeiture restrictions, and any restriction or limitation regarding any Award or the Shares relating thereto, based in each case on such factors as the Administrator will determine, provided that no term of an Award will provide for automatic “reload” grants of additional Awards upon exercise of an Option or SAR;
(vi)to institute and determine the terms and conditions of an Exchange Program; provided however, that the Administrator shall not implement an Exchange Program without the approval of the holders of a majority of the Shares that are present in person or by proxy and entitled to vote at any annual or special meeting of the Company’s stockholders;
(vii)to construe and interpret the terms of the Plan and Awards granted pursuant to the Plan;
(viii)correct any defect, supply any omission or reconcile any inconsistency in this Plan, any Award or any Award Agreement;
(ix)to prescribe, amend and rescind rules and regulations relating to the Plan, including rules and regulations established for the purpose of satisfying non-U.S. Applicable Laws, for qualifying for favorable tax treatment under applicable non-U.S. Applicable Laws or facilitating compliance with non-U.S. Applicable Laws (sub-plans may be created for any of these purposes);
(x)to modify or amend each Award (subject to Section 22 of the Plan), including but not limited to the discretionary authority to extend the post-termination exercisability period of Awards, to accelerate vesting and to extend the maximum term of an Option (subject to Section 6(b) of the Plan regarding Incentive Stock Options);
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(xi)adjust Performance Goals to take into account changes in Applicable Laws or in accounting or tax rules, or such other extraordinary, unforeseeable, nonrecurring or infrequently occurring events or circumstances as the Administrator deems necessary or appropriate to avoid windfalls or hardships;
(xii)to allow Participants to satisfy tax withholding obligations in such manner as prescribed in Section 16 of the Plan;
(xiii)to authorize any person to execute on behalf of the Company any instrument required to effect the grant of an Award previously granted by the Administrator;
(xiv)to allow a Participant to defer the receipt of the payment of cash or the delivery of Shares that would otherwise be due to such Participant under an Award; and
(xv)to make all other determinations deemed necessary or advisable for administering the Plan.
(c)Effect of Administrator’s Decision.  The Administrator’s decisions, determinations and interpretations will be final and binding on all Participants and any other holders of Awards.
(d)Delegation.  To the extent permitted by applicable Law, the Committee (or the Board, as applicable)  may delegate the authority to do anything permitted by Applicable Law, including without limitation, delegating to the board of directors or the relevant equivalent body of a Subsidiary (“Subsidiary Board”) or an officer of the Company or a Subsidiary, the authority to grant Awards under the Plan on behalf of the Company or a Subsidiary and/or take any and all actions on behalf of the Board or Committee other than any actions that affect the amount or form of compensation of Insiders or persons who have been designated Senior Leadership Team members by the Board, or have material tax, accounting, financial, human resource or legal consequences to the Company or its Subsidiaries or Affiliates, unless so directed by the Committee (or the Board, as applicable); provided, however, that the Committee or Board resolutions regarding any delegation with respect to the grant of Awards under the Plan will specify (i) the total number of Shares that may be subject to the Awards granted by such Subsidiary Board or officer and (ii) that any officer may not grant an Award to himself or herself (even as a member of a Subsidiary Board, which has been delegated the authority to make grants) unless so directed by the Committee (or the Board, as applicable).  Any Awards will be granted on the form of Award Agreement most recently approved for use by the Board or Committee, unless otherwise provided in the resolutions approving the delegation authority.
(e)Administration of Awards Subject to Performance Goals.  The Administrator will, in its sole discretion, determine the Performance Goals, if any, applicable to any Award (including any adjustment(s) thereto that will be applied in determining the achievement of such Performance Goals).  The Performance Goals may differ from Participant to Participant and from Award to Award.  The Administrator shall determine and approve the extent to which such Performance Goals have been timely achieved and the extent to which the Shares subject to such Award have thereby been earned.
(f)Section 16 of the Exchange Act. Awards granted to Participants who are Insiders must be approved by two or more “non-employee directors” of the Board (as defined in the regulations promulgated under Section 16 of the Exchange Act).
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5.Award Eligibility.  The Administrator will select Participants from among Service Providers, provided that, any Service Provider of an Affiliate (other than any Parent or Subsidiary) shall be permitted to participate in the Plan only to the extent permitted under Applicable Laws.  Eligibility for Incentive Stock Options is limited to individuals described in the first sentence of this Section 5 who are employees of the Company or of a “parent corporation” or “Subsidiary corporation of the Company as those terms are defined in Section 424 of the Code.  With respect to any person whose grant is subject to Section 409A of the Code, the grant of Non-statutory Stock Options and Stock Appreciation Rights is limited to individuals described in the first sentence of this Section 5 who are providing direct services on the date of grant of the Award to the Company or to a Subsidiary of the Company that would be described in the first sentence of Treasury Regulations section 1.409A-1(b)(5)(iii)(E).
6.Stock Options.
(a)Limitations.  Each Option will be designated in the Award Agreement as either an Incentive Stock Option or a Non-statutory Stock Option.  However, notwithstanding such designation, to the extent that the aggregate Fair Market Value of the Shares with respect to which Incentive Stock Options are exercisable for the first time by the Participant during any calendar year (under all plans of the Company and any Subsidiary or Affiliate) exceeds one hundred thousand dollars ($100,000), such Options will be treated as Non-statutory Stock Options.  For purposes of this Section 6(a), Incentive Stock Options will be taken into account in the order in which they were granted.  The Fair Market Value of the Shares will be determined as of the date the Option with respect to such Shares is granted.  With respect to the Administrator’s authority in Section 4(b)(x), if, at the time of any such extension, the exercise price per Share of the Option is less than the Fair Market Value of a Share, the extension shall, unless otherwise determined by the Administrator, be limited to the earlier of (1) the maximum term of the Option as set by its original terms, or (2) ten (10) years from the grant date.  Unless otherwise determined by the Administrator, any extension of the term of an Option pursuant to this Section 6(a) shall comply with Section 409A of the Code to the extent applicable.
(b)Term of Option.  The term of each Option will be stated in the Award Agreement.  In the case of an Incentive Stock Option, the term will be ten (10) years from the date of grant or such shorter term as may be provided in the Award Agreement.  Moreover, in the case of an Incentive Stock Option granted to a Participant who, at the time the Incentive Stock Option is granted, owns stock representing more than ten percent (10%) of the total combined voting power of all classes of stock of the Company or any Subsidiary, the term of the Incentive Stock Option will be five (5) years from the date of grant or such shorter term as may be provided in the Award Agreement.
(c)Option Exercise Price and Consideration.
(i)Exercise Price.  The per share exercise price for the Shares to be issued pursuant to exercise of an Option will be determined by the Administrator, subject to the following:
(1)In the case of an Incentive Stock Option
(A)granted to an ISO Participant who, at the time the Incentive Stock Option is granted, owns stock representing more than ten percent (10%) of the voting power of all classes of stock of the Company or any Subsidiary, the per Share exercise
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price will be no less than one hundred ten percent (110%) of the Fair Market Value per Share on the date of grant.
(B)granted to any ISO Participant other than an ISO Participant described in paragraph (A) immediately above, the per Share exercise price will be no less than one hundred percent (100%) of the Fair Market Value per Share on the date of grant.
(2)In the case of a Non-statutory Stock Option, the per Share exercise price will be no less than one hundred percent (100%) of the Fair Market Value per Share on the date of grant.
(3)Notwithstanding the foregoing, Options may be granted with a per Share exercise price of less than one hundred percent (100%) of the Fair Market Value per Share on the date of grant (i) pursuant to a transaction described in, and in a manner consistent with, Section 424(a) of the Code, (ii) consistent with the application with Section 409A of the Code, in each case to the extent applicable or (iii) as permitted pursuant to other Applicable Law.
(ii)Waiting Period and Exercise Dates.  At the time an Option is granted, the Administrator will fix the period within which the Option may be exercised and will determine any conditions that must be satisfied before the Option may be exercised.  An Option may become exercisable upon completion of a specified period of service with the Company or a Subsidiary or Affiliate and/or based on the achievement of Performance Goals during a Performance Period as set out in advance in the Participant’s Award Agreement.  If an Option is exercisable based on the satisfaction of Performance Goals, then the Administrator will: (x) determine the nature, length and starting date of any Performance Period for such Option; (y) select the Performance Goals to be used to measure the performance; and (z) determine what additional vesting conditions, if any, should apply.
(iii)Form of Consideration.  The Administrator will determine the acceptable form of consideration for exercising an Option, including the method of payment.  In the case of an Incentive Stock Option, the Administrator will determine the acceptable form of consideration at the time of grant.  Such consideration for both types of Options may consist entirely of: (1) cash; (2) check; (3) promissory note, to the extent permitted by Applicable Laws, (4) other Shares, provided that such Shares have a Fair Market Value on the date of surrender equal to the aggregate exercise price of the Shares as to which such Option will be exercised and provided that accepting such Shares will not result in any adverse accounting consequences to the Company, as the Administrator determines in its sole discretion; (5) consideration received by the Company under a broker-assisted (or other) cashless exercise program (whether through a broker or otherwise) implemented by the Company in connection with the Plan; (6) by net exercise; (7) such other consideration and method of payment for the issuance of Shares to the extent permitted by Applicable Laws; or (8) any combination of the foregoing methods of payment.
(d)Exercise of Option.
(i)Procedure for Exercise; Rights as a Stockholder.  Any Option granted hereunder will be exercisable according to the terms of the Plan and at such times and under such conditions as determined by the Administrator and set forth in the Award Agreement.  An Option may not be exercised for a fraction of a Share.  An Option will be deemed exercised when the Company receives: (1) a notice of exercise (in such form as the Administrator may specify from time to time) from the person entitled to exercise the Option, and (2) full payment for the Shares with respect to which the Option is exercised (together with full payment of any
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applicable taxes or other amounts required to be withheld or deducted with respect to the Option).  Full payment may consist of any consideration and method of payment authorized by the Administrator and permitted by the Award Agreement and the Plan.  Shares issued upon exercise of an Option will be issued in the name of the Participant or, if requested by the Participant, in the name of the Participant and his or her spouse.  Until the Shares are issued (as evidenced by the appropriate entry on the books of the Company or of a duly authorized transfer agent of the Company), no right to vote or receive dividends or any other rights as a stockholder will exist with respect to the Shares subject to an Option, notwithstanding the exercise of the Option.  The Company will issue (or cause to be issued) such Shares promptly after the Option is exercised.  No adjustment will be made for a dividend or other right for which the record date is prior to the date the Shares are issued, except as provided in Section 15 of the Plan.
(ii)Termination of Relationship as a Service Provider.  If a Participant ceases to be a Service Provider, other than upon the Participant’s termination as the result of the Participant’s death, Disability or Cause, the Participant may exercise his or her Option within such period of time as is specified in the Award Agreement to the extent that the Option is vested on the date of termination (but in no event later than the expiration of the term of such Option as set forth in the Award Agreement).  In the absence of a specified time in the Award Agreement, the Option will remain exercisable for three (3) months following the Participant’s termination.  Unless otherwise provided by the Administrator, if on the date of termination, the Participant is not vested as to his or her entire Option, the Shares covered by the unvested portion of the Option will revert to the Plan.  If after termination the Participant does not exercise his or her Option within the time specified by the Administrator, the Option will terminate, and the Shares covered by such Option will revert to the Plan.
(iii)Disability of Participant.  If a Participant ceases to be a Service Provider as a result of the Participant’s Disability, the Participant may exercise his or her Option within such period of time as is specified in the Award Agreement to the extent the Option is vested on the date of termination (but in no event later than the expiration of the term of such Option as set forth in the Award Agreement).  In the absence of a specified time in the Award Agreement, the Option will remain exercisable for twelve (12) months following the Participant’s termination as a result of the Participant’s Disability.  Unless otherwise provided by the Administrator, if on the date of termination, the Participant is not vested as to his or her entire Option, the Shares covered by the unvested portion of the Option will revert to the Plan.  If after termination the Participant does not exercise his or her Option within the time specified herein, the Option will terminate, and the Shares covered by such Option will revert to the Plan.
(iv)Death of Participant.  If a Participant dies while a Service Provider, the Option may be exercised following the Participant’s death within such period of time as is specified in the Award Agreement to the extent that the Option is vested on the date of death (but in no event may the Option be exercised later than the expiration of the term of such Option as set forth in the Award Agreement), by the Participant’s designated beneficiary, provided such beneficiary has been designated prior to the Participant’s death in a form acceptable to the Administrator.  If no such beneficiary has been designated by the Participant, then such Option may be exercised by the personal representative of the Participant’s estate or by the person(s) to whom the Option is transferred pursuant to the Participant’s will or in accordance with the laws of descent and distribution.  In the absence of a specified time in the Award Agreement, the Option will remain exercisable for twelve (12) months following the Participant’s death.  Unless otherwise provided by the Administrator, if on the date of termination, the Participant is not vested as to his or her entire Option, the Shares covered by the unvested portion of the Option will revert to the
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Plan.  If the Option is not so exercised within the time specified herein, the Option will terminate, and the Shares covered by such Option will revert to the Plan.
(v)Termination for Cause.  If a Participant ceases to be a Service Provider as a result of being terminated for Cause, any outstanding Option (including any vested portion thereof) held by such Participant shall immediately terminate in its entirety.  All the Participant’s rights under any Option, including the right to exercise the Option, may be suspended pending an investigation of whether Participant’s Service will be, or has been, terminated for Cause.
7.Restricted Stock.
(a)Grant of Restricted Stock.  Subject to the terms and provisions of the Plan, the Administrator, at any time and from time to time, may grant Shares of Restricted Stock to Service Providers in such amounts as the Administrator, in its sole discretion, will determine.
(b)Agreement.  Each Award of Restricted Stock will be evidenced by an Award Agreement that will specify the Period of Restriction, if any, the number of Shares granted, and such other terms and conditions as the Administrator, in its sole discretion, will determine.  Unless the Administrator determines otherwise, the Company or an Affiliate as escrow agent will hold Shares of Restricted Stock until the restrictions on such Shares have lapsed.  These restrictions may lapse upon the completion of a specified period of service with the Company or a Subsidiary or Affiliate and/or based on the achievement of Performance Goals during a Performance Period as set out in advance in the Participant’s Award Agreement.  If the unvested Shares of Restricted Stock are being earned upon the satisfaction of Performance Goals, then the Administrator will: (x) determine the nature, length and starting date of any Performance Period for each unvested Share; (y) select the Performance Goals to be used to measure the performance; and (z) determine what additional vesting conditions, if any, should apply.
(c)Transferability.  Except as provided in this Section 7 or the Award Agreement, Shares of Restricted Stock may not be sold, transferred, pledged, assigned, or otherwise alienated or hypothecated until the end of the applicable Period of Restriction.
(d)Other Restrictions.  The Administrator, in its sole discretion, may impose such other restrictions on Shares of Restricted Stock as it may deem advisable or appropriate.
(e)Removal of Restrictions.  Except as otherwise provided in this Section 7, Shares of Restricted Stock covered by each Restricted Stock grant made under the Plan will be released from escrow as soon as practicable after the last day of the Period of Restriction or at such other time as the Administrator may determine.  The Administrator, in its discretion, may accelerate the time at which any restrictions will lapse or be removed.
(f)Voting Rights.  During the Period of Restriction, Service Providers holding Shares of Restricted Stock granted hereunder may exercise full voting rights with respect to those Shares, unless the Administrator determines otherwise.
(g)Dividends and Other Distributions.  During the Period of Restriction, Service Providers holding Shares of Restricted Stock will be entitled to receive all dividends and other distributions paid with respect to such Shares, unless the Administrator provides otherwise.  If any such dividends or distributions are paid in Shares, the Shares will be subject to the same restrictions, including, without limitation, restrictions on transferability and forfeitability, as the
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Shares of Restricted Stock with respect to which they were paid. During the Period of Restriction, such dividends or other distributions shall be subject to the same restrictions and risk of forfeiture as the shares of Restricted Stock with respect to which the dividends accrue and shall not be paid or distributed unless and until such related Shares have vested and been earned.
(h)Return of Restricted Stock to Company.  On the date set forth in the Award Agreement, the Restricted Stock for which restrictions have not lapsed will be cancelled and returned as unissued Shares to the Company and again will become available for grant under the Plan.
8.Stock Units.
(a)Grant.  Stock Units (including without limitation Restricted Stock Units) may be granted at any time and from time to time as determined by the Administrator.  After the Administrator determines that it will grant Stock Units under the Plan, it will advise the Participant in an Award Agreement of the terms, conditions, and restrictions (if any) related to the grant, including the number of Stock Units.
(b)Vesting Criteria and Other Terms.  The Administrator will set vesting criteria in its discretion, which, depending on the extent to which the criteria are met, will determine the number of Restricted Stock Units that will be paid out to the Participant.  A Restricted Stock Unit Award may vest upon completion of a specified period of service with the Company or a Subsidiary or Affiliate and/or based on the achievement of Performance Goals during a Performance Period as set out in advance in the Participant’s Award Agreement.  If Restricted Stock Units vest based upon satisfaction of Performance Goals, then the Administrator will: (x) determine the nature, length and starting date of any Performance Period for the Stock Units; (y) select the Performance Goals to be used to measure the performance; and (z) determine what additional vesting conditions, if any, should apply.
(c)Earning Restricted Stock Units.  Upon meeting the applicable vesting criteria, the Participant will be entitled to receive a payout as determined by the Administrator.  Notwithstanding the foregoing, at any time after the grant of Restricted Stock Units, the Administrator, in its sole discretion, may reduce or waive any vesting criteria that must be met to receive a payout.
(d)Dividend Equivalents.  The Administrator may, in its sole discretion, award dividend equivalents in connection with the grant of Stock Units that may be settled in cash, in Shares of equivalent value, or in some combination thereof. The Administrator may provide that such dividend equivalents shall be paid or distributed when accrued or at a later specified date and, if distributed at a later date, may be deemed to have been reinvested in additional Shares, Awards, or other investment vehicles or accrued in a bookkeeping account without interest, and subject to such restrictions on transferability and risks of forfeiture, as the Administrator may specify.  Absent a contrary provision in an Award Agreement, such dividend equivalents shall be subject to the same restrictions and risk of forfeiture as the Restricted Stock Units with respect to which the dividends accrue and shall not be paid or settled unless and until the related Restricted Stock Units have vested and been earned.  To the extent applicable, any such dividend equivalents will comply with Section 409A of the Code or other similar Applicable Law.
(e)Form and Timing of Payment.  Payment of earned Stock Units will be made upon the date(s) determined by the Administrator and set forth in the Award Agreement.  The
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Administrator, in its sole discretion, may only settle earned Stock Units in cash, Shares, or a combination of both.
(f)Cancellation.  On the date set forth in the Award Agreement, all Shares underlying any unvested, unlapsed unearned Restricted Stock Units will be forfeited to the Company for future issuance.
9.Stock Appreciation Rights.
(a)Grant of Stock Appreciation Rights.  Subject to the terms and conditions of the Plan, a Stock Appreciation Right may be granted to Service Providers at any time and from time to time as will be determined by the Administrator, in its sole discretion.
(b)Number of Shares.  The Administrator will have complete discretion to determine the number of Stock Appreciation Rights granted to any Service Provider.
(c)Exercise Price and Other Terms.  The per share exercise price for the Shares to be issued pursuant to exercise of a Stock Appreciation Right will be determined by the Administrator and will be no less than one hundred percent (100%) of the Fair Market Value per Share on the date of grant.  Otherwise, the Administrator, subject to the provisions of the Plan, will have complete discretion to determine the terms and conditions of Stock Appreciation Rights granted under the Plan.
(d)Stock Appreciation Right Agreement.  Each Stock Appreciation Right grant will be evidenced by an Award Agreement that will specify the exercise price, the term of the Stock Appreciation Right, the conditions of exercise, and such other terms and conditions as the Administrator, in its sole discretion, will determine.  A Stock Appreciation Right may become exercisable upon completion of a specified period of service with the Company or a Subsidiary or Affiliate and/or based on the achievement of Performance Goals during a Performance Period as set out in advance in the Participant’s Award Agreement.  If a Stock Appreciation Right is exercisable based on the satisfaction of Performance Goals, then the Administrator will: (x) determine the nature, length and starting date of any Performance Period for such Stock Appreciation Right; (y) select the Performance Goals to be used to measure the performance; and (z) determine what additional vesting conditions, if any, should apply.
(e)Expiration of Stock Appreciation Rights.  A Stock Appreciation Right granted under the Plan will expire upon the date determined by the Administrator, in its sole discretion, and set forth in the Award Agreement.  Notwithstanding the foregoing, the rules of Section 6(b) relating to the maximum term and Section 6(d) relating to exercise also will apply to Stock Appreciation Rights.
(f)Payment of Stock Appreciation Right Amount.  Upon exercise of a Stock Appreciation Right, a Participant will be entitled to receive payment from the Company in an amount determined by multiplying:
(i)The difference between the Fair Market Value of a Share on the date of exercise over the exercise price; times
(ii)The number of Shares with respect to which the Stock Appreciation Right is exercised.
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At the discretion of the Administrator, the payment upon Stock Appreciation Right exercise may be in cash, in Shares of equivalent value, or in some combination thereof.
10.Stock Bonus Awards.
(a)Awards of Stock Bonuses.  A Stock Bonus Award is an award of Shares to an eligible person without a purchase price that is not subject to any restrictions.  All Stock Bonus Awards may but are not required to be made pursuant to an Award Agreement.
(b)Terms of Stock Bonus Awards.  The Administrator will determine the number of Shares to be awarded to the Participant under a Stock Bonus Award.
(c)Form of Payment to Participant.  Payment may be made in the form of cash, whole Shares, or a combination thereof, based on the Fair Market Value of the Shares subject to the Stock Bonus Award on the date of payment, as determined in the sole discretion of the Administrator.
11.Outside Director Limitations.  Stock awards granted during a single fiscal year under the Plan, taken together with any cash fees paid during such fiscal year for services on the Board, shall not exceed $1,000,000 in total value for any Outside Director serving as the lead director of the Board or chair of the Board and $750,000 in total value for any other Outside Director (calculating the value of any such stock awards, in each case, based on the grant date fair value of such stock awards for financial reporting purposes).  Such applicable limit shall include the value of any stock awards that are received in lieu of all or a portion of any annual committee cash retainers or other similar cash-based payments.  Stock awards granted to an individual while he or she was serving in the capacity as a Service Provider but not an Outside Director will not count for purposes of the limitations set forth in this Section 11.
12.Leaves of Absence/Transfer Between Locations.  The Administrator shall have the discretion to determine at any time whether and to what extent the vesting of Awards shall be suspended during any leave of absence; provided, however, that in the absence of such determination, vesting of Awards shall continue during any paid leave and shall be suspended during any unpaid leave (unless otherwise required by Applicable Laws).  A Participant will not cease to be a Service Provider in the case of (i) any leave of absence approved by the Participant’s employer or (ii) transfers between locations of the Company or between the Company or any Subsidiary.  If an ISO Participant is holding an Incentive Stock Option and such leave exceeds three (3) months then, for purposes of Incentive Stock Option status only, such ISO Participant’s Service as a Service Provider shall be deemed terminated on the first (1st) day following such three (3) month period and the Incentive Stock Option shall thereafter automatically treated for tax purposes as a Non-statutory Stock Option in accordance with Applicable Laws, unless reemployment upon the expiration of such leave is guaranteed by contract or statute, or unless provided otherwise pursuant to a written Company policy.
13.Change in Time Commitment.  In the event a Participant’s regular level of time commitment in the performance of his or her services for the Company or any Subsidiary is reduced (for example, and without limitation, if the Participant is an employee of the Company and the employee has a change in status from full-time to part-time or takes an extended leave of absence) after the date of grant of any Award, the Committee or the Administrator, in that party’s sole discretion, may, subject to Applicable Laws, (x) make a corresponding reduction in the number of Shares or cash amount subject to any portion of such Award that is scheduled to vest or become payable after the date of such change in time commitment, and (y) in lieu of or in
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combination with such a reduction, extend the vesting schedule applicable to such Award (in accordance with Section 409A of the Code, as applicable).  In the event of any such reduction, the Participant will have no right with respect to any portion of the Award that is so amended.
14.Transferability of Awards.  Unless determined otherwise by the Administrator, an Award may not be sold, pledged, assigned, hypothecated, transferred, or disposed of in any manner other than by will or by the laws of descent or distribution and may be exercised, during the lifetime of the Participant, only by the Participant.  If the Administrator makes an Award transferable, such Award will contain such additional terms and conditions as the Administrator deems appropriate provided, however, that in no event may any Award be transferred for consideration to a third-party financial institution.
15.Adjustments; Dissolution or Liquidation; Merger or Change in Control.
(a)Adjustments.
(1)In the event of a stock dividend, stock split or combination of shares (including a reverse stock split), recapitalization or other change in the Company’s capital structure that constitutes an equity restructuring within the meaning of the Accounting Rules, the Administrator will make appropriate adjustments to the maximum number of shares of Stock specified in Section 3 that may be delivered under the Plan, and will make appropriate adjustments to the number and kind of shares of stock or securities underlying Awards then outstanding or subsequently granted, any exercise or purchase prices (or base values) relating to Awards and any other provision of Awards affected by such change.
(2)The Administrator may also make adjustments of the type described in Section 15(a) above to take into account distributions to stockholders other than those provided for in Sections 15(d) and 15(e), or any other event, if the Administrator determines that adjustments are appropriate to avoid distortion in the operation of the Plan or any Award.
(3)References in the Plan to shares of Stock will be construed to include any stock or securities resulting from an adjustment pursuant to this Section 15(a).
(b)Dissolution or Liquidation.  In the event of the proposed winding up, dissolution or liquidation of the Company, the Administrator will notify each Participant as soon as practicable prior to the effective date of such proposed transaction.  To the extent it has not been previously exercised or settled, an Award will terminate immediately prior to the consummation of such proposed action.
(c)Corporate Transaction.  In the event of (i) a transfer of all or substantially all of the Company’s assets, (ii) a merger, consolidation or other capital reorganization or business combination transaction of the Company with or into another corporation, entity or person, (iii) the consummation of a transaction, or series of related transactions, in which any “person” (as such term is used in Sections 13(d) and 14(d) of the Exchange Act) becomes the “beneficial owner” (as defined in Rule 13d-3 of the Exchange Act), directly or indirectly, of more than 50% of the Company’s then outstanding capital stock, or (iv) a Change in Control (each, a “Corporate Transaction”), each outstanding Award (vested or unvested) will be treated as the Administrator determines, which determination may be made without the consent of any
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Participant and need not treat all outstanding Awards (or portion thereof) in an identical manner.  Such determination, without the consent of any Participant, may provide (without limitation) for one or more of the following in the event of a Corporate Transaction: (A) the continuation of such outstanding Awards by the Company (if the Company is the surviving corporation); (B) the assumption of such outstanding Awards by the surviving corporation or its parent; (C) the substitution by the surviving corporation or its parent of new options or other equity awards for such Awards; (D) the cancellation of such Awards in exchange for a payment to the Participants equal to the excess of (1) the Fair Market Value of the Shares subject to such Awards as of the closing date of such Corporate Transaction over (2) the exercise price or purchase price paid or to be paid (if any) for the Shares subject to the Awards; provided further, that at the discretion of the Administrator, such payment may be subject to the same conditions that apply to the consideration that will be paid to holders of Shares in connection with the transaction; provided, however, that any payout in connection with a terminated award shall comply with Section 409A of the Code to the extent necessary to avoid taxation thereunder; (E) the full or partial acceleration of exercisability or vesting and accelerated expiration of an outstanding Award and lapse of the Company’s right to repurchase or re-acquire Shares acquired under an Award or lapse of forfeiture rights with respect to Shares acquired under an Award; (F) the opportunity for Participants to exercise their Options prior to the occurrence of the Corporate Transaction and the termination (for no consideration) upon the consummation of such Corporate Transaction of any Options not exercised prior thereto; or (G) the cancellation of outstanding Awards in exchange for no consideration.
(d)Change in Control.  An Award may be subject to additional acceleration of vesting and exercisability upon or after a Change in Control as may be provided in the Award Agreement for such Award or as may be provided in any other written agreement between the Company or any Subsidiary or Affiliate and the Participant, but in the absence of such provision, no such acceleration will occur.
16.Tax.
(a)Withholding Requirements.  Prior to the delivery of any Shares or cash pursuant to an Award (or exercise thereof) or prior to any time the Award or Shares are subject to taxation or other Tax-Related Items, the Company and/or the Participant’s employer will have the power and the right to deduct or withhold, or require a Participant to remit to the Company, an amount sufficient to satisfy any Tax-Related Items or other items that are required to be withheld or deducted or otherwise applicable with respect to such Award. The Company and/or the Designated Company may, but will not be obligated to, unless required by law, withhold from the Participant’s compensation or any other payments due the Participant the amount necessary to meet such withholding obligations, withholding a sufficient whole number of Shares issued following exercise having an aggregate value sufficient to pay the Tax-Related Items or withhold from the proceeds of the sale of Shares, either through a voluntary sale or a mandatory sale arranged by the Company or any other method of withholding that the Company and/or the Designated Company deems appropriate.  The Company and/or the Designated Company will have the right to take such other action as may be necessary in the opinion of the Company or a Designated Company to satisfy withholding and/or reporting obligations for such Tax-Related Items.  The Company shall not be required to issue any Shares under the Plan until such obligations are satisfied.
(b)Withholding Arrangements.  The Administrator, in its sole discretion and pursuant to such procedures as it may specify from time to time, may permit a Participant to satisfy such withholding or deduction obligations or any other Tax-Related Items, in whole or in
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part by (without limitation) (a) paying cash, (b) electing to have the Company withhold otherwise deliverable cash or Shares, (c) delivering to the Company already-owned Shares or (d) such other method as may be set forth in the Award Agreement; provided that, unless specifically permitted by the Company, any proceeds derived from a cashless exercise must be an approved broker-assisted cashless exercise or the cash or Shares withheld or delivered must be limited to avoid financial accounting charges under applicable accounting guidance or Shares must have been previously held for the minimum duration required to avoid financial accounting charges under applicable accounting guidance.  The Fair Market Value of the Shares to be withheld or delivered will be determined based on such methodology that the Company deems to be reasonable and in accordance with Applicable Laws.
(c)Compliance with Section 409A of the Code.  To the extent applicable, Awards will be designed and operated in such a manner that they are either exempt from the application of, or comply with, the requirements of Section 409A of the Code such that the grant, payment, settlement or deferral will not be subject to the additional tax or interest applicable under Section 409A of the Code.  The Plan and each Award Agreement under the Plan is intended to meet the requirements of Section 409A of the Code (or an exemption therefrom) and will be construed and interpreted in accordance with such intent, except as otherwise determined in the sole discretion of the Administrator.  To the extent that an Award or payment, or the settlement or deferral thereof, is subject to Section 409A of the Code the Award will be granted, paid, settled or deferred in a manner that will meet the requirements of Section 409A of the Code (or an exemption therefrom), such that the grant, payment, settlement or deferral will not be subject to the additional tax or interest applicable under Section 409A of the Code.  In no event will the Company be responsible for or reimburse a Participant for any taxes or other penalties incurred as a result of applicable of Section 409A of the Code.
17.No Effect on Employment or Service.  Neither the Plan nor any Award will confer upon a Participant any right with respect to continuing the Participant’s relationship as a Service Provider with the Company or any Subsidiary or Affiliate, nor will they interfere in any way with the Participant’s right or the Company’s or any Subsidiary’s or Affiliate’s right to terminate such relationship at any time, with or without cause, to the extent permitted by Applicable Laws.
18.Date of Grant.  The date of grant of an Award will be, for all purposes, the date on which the Administrator makes the determination granting such Award, or such other later date as is determined by the Administrator.  Notice of the determination will be provided to each Participant within a reasonable time after the date of such grant.
19.Corporate Records Control.  In the event that the corporate records (e.g., Board consents, resolutions or minutes) documenting the corporate action constituting the grant contain terms (e.g., exercise price, vesting schedule or number of Shares) that are inconsistent with those in the Award Agreement or related grant documents as a result of a clerical error in the papering of the Award Agreement or related grant documents, the corporate records will control and the Participant will have no legally binding right to the incorrect term in the Award Agreement or related grant documents.
20.Clawback/Recovery.  The Administrator may specify in an Award Agreement that the Participant’s rights, payments, and/or benefits with respect to an Award will be subject to reduction, cancellation, forfeiture, and/or recoupment upon the occurrence of certain specified events, in addition to any applicable vesting, performance or other conditions and restrictions of an Award.  Notwithstanding any provisions to the contrary under this Plan, an Award granted under the Plan shall be subject to the Company’s clawback policy as may be established and/or
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amended from time to time.  The Administrator may require a Participant to forfeit or return to and/or reimburse the Company for all or a portion of the Award and/or Shares issued under the Award, any amounts paid under the Award, and any payments or proceeds paid or provided upon disposition of the Shares issued under the Award, pursuant to the terms of such Company policy or as necessary or appropriate to comply with Applicable Laws.
21.Term of Plan.  Subject to Section 25 of the Plan, the Plan will become effective as of the Date of Adoption.  The Plan will continue in effect unless terminated under Section 22 of the Plan (or, with respect to Incentive Stock Options, until the date that is ten (10) years from the Date of Adoption); provided that previously granted Awards may continue beyond the date of termination in accordance with their terms.
22.Amendment and Termination of the Plan.  The Administrator may at any time or times amend the Plan or any outstanding Award for any purpose which may at the time be permitted by Applicable Law, and may at any time suspend or terminate the Plan as to any future grants of Awards; provided, however, that except as otherwise expressly provided in the Plan or the applicable Award Agreement, the Administrator may not, without the Participant’s consent, alter the terms of an Award so as to affect materially and adversely the Participant’s rights under the Award, unless the Administrator expressly reserved the right to do so in the applicable Award Agreement.  Any amendments to the Plan will be conditioned upon stockholder approval only to the extent, if any, such approval is required by Applicable Law (including the Code), regulations or stock exchange requirements, as determined by the Administrator.  For the avoidance of doubt, without limiting the Administrator’s rights hereunder, no adjustment to any Award pursuant to the terms of Section 15 or Section 32 will be treated as an amendment requiring a Participant’s consent.  Termination of the Plan will not affect the Administrator’s ability to exercise the powers granted to it hereunder with respect to Awards granted under the Plan prior to the date of such termination.
23.Conditions Upon Issuance of Shares.
(a)Legal Compliance.  Shares will not be issued pursuant to the exercise or vesting (as applicable) of an Award unless the exercise or vesting of such Award and the issuance and delivery of such Shares will comply with Applicable Laws and will be further subject to the approval of counsel for the Company with respect to such compliance.
(b)Investment Representations.  As a condition to the exercise of an Award, the Company may require the person exercising such Award to represent and warrant at the time of any such exercise that the Shares are being purchased only for investment and without any present intention to sell or distribute such Shares if, in the opinion of counsel for the Company, such a representation is required.
24.Inability to Obtain Authority.  The inability of the Company to obtain authority from any regulatory body having jurisdiction, which authority is deemed by the Company’s counsel to be necessary to the lawful issuance and sale of any Shares hereunder, will relieve the Company of any liability in respect of the failure to issue or sell such Shares as to which such requisite authority will not have been obtained.
25.Stockholder Approval.  The Plan will be subject to approval by the stockholders of the Company within twelve (12) months after the date the Plan is adopted by the Board.  Such stockholder approval will be obtained in the manner and to the degree required under Applicable Laws.
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26.Governing Law.  The Plan and all Awards hereunder shall be construed in accordance with and governed by the laws of the Netherlands, but without regard to its conflict of law provisions.  All disputes relating to this Plan and all Awards or agreements based on or pursuant to this Plan shall be submitted exclusively to the competent court in Amsterdam, the Netherlands.
27.Severability and Reformation.  If any provision of the Plan or any Award is or becomes or is deemed to be invalid, illegal, or unenforceable in any jurisdiction or as to any person or Award, or would unintentionally disqualify the Plan or any Award under any Applicable Laws, such provision shall be construed or deemed amended to conform to the Applicable Laws or, if it cannot be construed or deemed amended without, in the determination of the Administrator, materially altering the intent of the Plan or the Award, such provision shall be stricken as to such jurisdiction, person or Award and the remainder of the Plan and any such Award shall remain in full force and effect.  If any of the terms or provisions of the Plan or any Award Agreement conflict with the requirements of Rule 16b-3 (as those terms or provisions are applied to Participants who are subject to Section 16 of the Exchange Act) or Section 422 of the Code (with respect to Incentive Stock Options), then those conflicting terms or provisions shall be deemed inoperative to the extent they so conflict with the requirements of Rule 16b-3 or Section 422 of the Code (unless the Administrator has expressly determined that the Plan or such Award should not comply with Rule 16b-3 or Section 422 of the Code, as applicable), in each case, only to the extent Rule 16b-3 and Section 422 of the Code are applicable.  With respect to Incentive Stock Options, if the Plan does not contain any provision required to be included herein under Section 422 of the Code, that provision shall be deemed to be incorporated herein with the same force and effect as if that provision had been set out at length herein; provided that, to the extent any Option that is intended to qualify as an Incentive Stock Option cannot so qualify, that Option (to that extent) shall be deemed a Non-statutory Stock Option for all purposes of the Plan.
28.Unfunded Status of Awards; No Trust or Fund Created.  The Plan is intended to constitute an “unfunded” plan for certain incentive awards.  Neither the Plan nor any Award shall create or be construed to create a trust or separate fund of any kind or a fiduciary relationship between the Company or a Parent, Subsidiary or Affiliate and a Participant or any other person.  To the extent that any person acquires a right to receive payments from the Company or a Parent, Subsidiary or Affiliate pursuant to an Award, such right shall be no greater than the right of any general unsecured creditor of the Company or such Parent, Subsidiary or Affiliate.
29.Non-exclusivity of the Plan.  Neither the adoption of the Plan by the Board, nor its submission to the stockholders of the Company for approval, shall be construed as creating any limitations on the power of the Board or a committee thereof to adopt such other incentive arrangements as it may deem desirable.  Nothing contained in the Plan shall be construed to prevent the Company or a Parent, Subsidiary or Affiliate from taking any corporate action which is deemed by the Company or such Parent, Subsidiary or Affiliate to be appropriate or in its best interest, whether or not such action would have an adverse effect on the Plan or any Award made under the Plan. No Participant, beneficiary or other person shall have any claim against the Company or a Parent, Subsidiary or Affiliate as a result of any such action.
30.Other Compensation Arrangements.  The existence of the Plan or the grant of any Award will not affect the right of the Company or any of its Subsidiaries or Affiliates to grant any person bonuses or other compensation in addition to Awards under the Plan.  The Company, in establishing and maintaining the Plan as a voluntary and unilateral undertaking, expressly disavows the creation of any rights in Participants or others claiming entitlement under the Plan or any obligations on the part of the Company or any of its Subsidiaries or Affiliates, or the
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Administrator, except as expressly provided herein.  No Award will be deemed to be salary or compensation for the purpose of computing benefits under any employee benefit, severance, pension or retirement plan of the Company or any of its Subsidiaries or Affiliates, unless the Administrator determines otherwise, Applicable Law provides otherwise or the terms of such plan expressly include such compensation.
31.Waiver of Jury Trial.  To the extent applicable, by accepting or being deemed to have accepted an Award under the Plan, each Participant waives (or will be deemed to have waived), to the maximum extent permitted under Applicable Law, any right to a trial by jury in any action, proceeding or counterclaim concerning any rights under the Plan or any Award, or under any amendment, waiver, consent, instrument, document or other agreement delivered or which in the future may be delivered in connection therewith, and agrees (or will be deemed to have agreed) that any such action, proceedings or counterclaim will be tried before a court and not before a jury.  By accepting or being deemed to have accepted an Award under the Plan, each Participant certifies that no officer, representative, or attorney of the Company has represented, expressly or otherwise, that the Company would not, in the event of any action, proceeding or counterclaim, seek to enforce the foregoing waivers.  Notwithstanding anything to the contrary in the Plan, nothing herein is to be construed as limiting the ability of the Company and a Participant to agree to submit any dispute arising under the terms of the Plan or any Award to binding arbitration or as limiting the ability of the Company to require any individual to agree to submit such disputes to binding arbitration as a condition of receiving an Award hereunder.
32.Rules for Participants in Certain Jurisdictions.  The Administrator may at any time and from time to time (including before or after an Award is granted) establish, adopt or revise any rules and regulations as it may deem necessary or advisable for purposes of satisfying applicable securities, tax, blue sky, world sky or other laws of various jurisdictions, including by establishing one or more sub-plans, supplements or appendices under the Plan or any Award Agreement setting forth (i) such limitations on the Administrator’s discretion under the Plan and (ii) such additional or different terms and conditions, in each case, as the Administrator deems necessary or advisable.  Any such sub-plan, supplement, appendix, rule or regulation will be deemed to be a part of the Plan but will apply only to Participants within the applicable jurisdiction (as determined by the Administrator); provided, however, that no sub-plan, supplement, appendix, rule or regulation established pursuant to this provision will increase the Pool.
33.Status under ERISA.  It is the intent of the Company that the Plan shall not constitute an “employee benefit plan” for purposes of Section 3(3) of the Employee Retirement Income Security Act of 1974, as amended.

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