Document:

BLHB EX-10.7 12/31/08

Exhibit 10.7

AMENDED AND RESTATED

SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN

FOR THE

CHIEF EXECUTIVE OFFICER OF BERKSHIRE BANK

Article 1

Description, Purpose and Definitions

1.1 Name. The name of this Plan is the “Berkshire Bank Supplemental Executive Retirement
Plan.”

1.2 Purpose. The purpose of the Plan is to promote the retention of Michael P. Daly, the
Chief Executive Officer of the Company, by providing an additional source of retirement income to
supplement that available to him from other sources.

1.3 Definitions. For purposes of the Plan, the following words and phrases shall have the
meanings indicated, unless the context clearly indicates otherwise.

“Bank” means Berkshire Bank, Pittsfield, Massachusetts.

“Cause” means termination of employment because of Executive’s personal dishonesty, willful
misconduct, breach of fiduciary duty involving personal profit, intentional failure to perform
stated duties, willful violation of any law, rule or regulation (other than traffic violations or
similar infractions) or a final cease-and-desist order.

“Change in Control” means an event of a nature that: (i) would be required to be reported in
response to Item 1(a) of the current report on Form 8-K, as in effect on the date hereof, pursuant
to Section 13 or 15(d) of the Securities Exchange Act of 1934 (the “Exchange Act”); or (ii) results
in a Change in Control of the Bank or the Company within the meaning of the Bank Change in Control
Act and the Rules and Regulations promulgated by the Federal Deposit Insurance Corporation (“FDIC”)
at 12 C.F.R. § 303.4(a) with respect to the Bank and the Board of Governors of the Federal Reserve
System (“FRB”) at 12 C.F.R. § 225.41(b) with respect to the Company, as in effect on the date
hereof; or (iii) results in a transaction requiring prior FRB approval under the Bank Holding
Company Act of 1956 and the regulations promulgated thereunder by the FRB at 12 C.F.R. § 225.11, as
in effect on the date hereof except for the Company’s acquisition of the Bank; or (iv) without
limitation such a Change in Control shall be deemed to have occurred at such time as (A) any
“person” (as the term is used in Sections 13(d) and 14(d) of the Exchange Act) is or becomes the
“beneficial owner” (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of
securities of the Bank or the Company representing 20% or more of the Bank’s or the Company’s
outstanding securities except for any securities of the Bank purchased by the Company in connection
with the conversion of the Bank to the stock form and any securities purchased by any tax-qualified
employee benefit plan of the Bank; or (B) individuals who constitute the Board of Directors on the
date hereof (the “Incumbent Board”) cease for any reason to constitute at least a majority thereof,
provided that any person becoming a director subsequent to the date hereof whose election was
approved by a vote of at least three-quarters (3/4) of the directors comprising the
Incumbent Board, or whose nomination for election by the Company’s stockholders was approved by the
same Nominating Committee serving under an Incumbent Board, shall be, for purposes of this clause
(B), considered as though he were a member of the Incumbent Board; or (C) a plan of reorganization,
merger, consolidation, sale of all or substantially all the assets of the Bank or the Company or
similar transaction occurs in which the Bank or Company is not the resulting entity; or (D)
solicitations of shareholders of the Company, by someone other than the current management of the
Company, seeking stockholder approval of a plan of reorganization, merger or consolidation of the
Company or Bank or similar transaction with one or more corporations as a result of which the
outstanding shares of the class of securities then subject to the plan or transaction are exchanged
for or converted into cash or property or securities not issued by the Bank or the Company shall be
distributed; or (E) a tender offer is made for 20% or more of the voting securities of the Bank or
the Company.

 

 

 

“Company” means Berkshire Hills Bancorp, Inc., a Delaware corporation.

“Disability” means Executive’s absence from employment which: (i) is due to his inability to
engage in any substantial gainful activity by reason of any medically determinable physical or
mental impairment which can be expected to result in death or can be expected to last for a
continuous period of not less than twelve (12) months; or (ii) results from a medically
determinable physical or mental impairment which can be expected to result in death or can be
expected to last for a continuous period of not less than twelve (12) months, and causes Executive
to receive income replacement benefits for a period of not less than three (3) months under an
accident and health plan covering the Bank’s employees; or (iii) is based on a determination by the
Social Security Administration that Executive is totally disabled.

“Executive” means Michael P. Daly, Chief Executive Officer of the Bank.

“Final Average Earnings” means the highest average of the total salary and bonus paid to
executive for any three consecutive completed calendar years preceding termination.

“Separation from Service” shall mean the Executive has experienced a termination of employment
with the Bank and its affiliates due to death, Disability, retirement or other termination of
employment. Executive will not be deemed to have experienced a Separation from Service if he is on
military leave, sick leave, or other bona fide leave of absence, to the extent such leave doe not
exceed a period of six months or, if longer, such longer period of time as is protected by either
statute or contract. For purposes of this Plan, Executive will be presumed to have a Separation
from Service where the level of services performed by the Executive is less than 50 percent of the
average level of services performed during the immediately preceding 36-month period. For all
purposes hereunder, whether the Executive has had a Separation from Service will be determined in
accordance with Treasury Regulation Section 1.409A-1(h) and subsequent guidance.

“Specified Employee” shall have the meaning required under Treasury Regulation Section
1.409A-1(b)(i).

 

2

 

Article 2

Eligibility

2.1 Entitlement to Benefits. Except to the extent provided in Sections 3.2, 3.3 and 3.4,
Executive shall become entitled to receive a benefit under the Plan only if his employment with the
Bank terminates for reasons other than Cause after he has attained age 62. Notwithstanding
anything in this Plan to the contrary, no benefit shall be payable to Executive if his employment
is terminated for Cause.

Article 3

Supplemental Retirement Benefits

3.1 Basic Benefit. Subject to the succeeding provisions of this Article, Executive shall be
entitled to an annual benefit equal to 46.6% of his Final Average Earnings upon his separation from
service (other than for Cause) at or after attaining age 62.

3.2 Early Retirement Benefit. If Executive’s separation from service occurs prior to the
date he attains age 62 but after attaining age 55, other than by reason of his death or Disability
or following a Change in Control, he shall be entitled to a percentage of the basic benefit
determined under Section 3. The percentage of Executive’s benefit under this Section 3.2 shall be
determined as follows:

	 	(i)	 	If he retires during the calendar year in which he attains age
55, the benefit otherwise determined under Section 3.1 shall be reduced by 50%.

	 	(ii)	 	If he retires during the calendar year in which he attains age
56, the benefit otherwise determined under Section 3.1 shall be reduced by 40%.

	 	(iii)	 	If he retires during the calendar year in which he attains age
57, the benefit otherwise determined under Section 3.1 shall be reduced by 30%.

	 	(iv)	 	If he retires during the calendar year in which he attains age
58, the benefit otherwise determined under Section 3.1 shall be reduced by 20%.

	 	(v)	 	If he retires during the calendar year in which he attains age
59, the benefit otherwise determined under Section 3.1 shall be reduced by 15%.

	 	(vi)	 	If he retires during the calendar year in which he attains age
60, the benefit otherwise determined under Section 3.1 shall be reduced by 10%.

	 	(vii)	 	If he retires during the calendar year in which he attains age
61, the benefit otherwise determined under Section 3.1 shall be reduced by 5%.

Such benefit shall be paid in accordance with Executive’s election under Section 3.5 at the
time specified in Section 3.6.

 

3

 

3.3 Death and Disability Benefits.

	 	A.	 	If Executive dies while employed by the Bank or his separation
from service occurs by reason of his Disability, there shall be paid to him or
his designated beneficiary an amount equal to the benefit he would have
received under Section 3.1 if he had retired on the date immediately preceding
his date of death or termination of employment and, as of such date, was deemed
to satisfy the age requirement of Section 3.1. Such benefit shall be paid in
accordance with his election under Section 3.5 at the time specified in Section
3.6.

	 	B.	 	If Executive dies after his entitlement to a benefit has been
established by reason of his termination of employment but prior to the time
that benefit payment(s) have commenced, such payment(s) shall be made to his
beneficiary in accordance with his election.

	 	C.	 	Executive may, on a form prescribed by and filed with the
Administrator, designate a beneficiary to receive any death benefit payable
under this section. If no effective beneficiary designation is on file at the
time of his death, the death benefit under this section shall be paid as
follows:

	 	(1)	 	To his surviving spouse; or

	 
	 	(2)	 	If no spouse survives, to his surviving
children in equal shares, with the descendants of a child who has
predeceased him taking such child’s share by representation; or

	 
	 	(3)	 	If none of his spouse and descendants is
living, to the representative of his estate.

	 	D.	 	The automatic beneficiaries set forth in Subsection C and,
except as otherwise provided in Executive’s duly filed beneficiary designation,
the beneficiaries named in such designation, shall become fixed at his death so
that if a beneficiary survives him but dies before final payment of the death
benefit, any remaining death benefits shall be paid to the representative of
such beneficiary’s estate.

3.4 Change in Control Benefit

If Executive experiences a Separation from Service with the Bank following a Change in Control
(other than for Cause) and such Change in Control also satisfies the requirements for a Change in
Control within the meaning of Treasury Regulation Section 1.409A-3(i)(5), there shall be paid to
him an amount equal to the benefit he would have received if he had retired on the date immediately
preceding his date of termination of employment and, as of such date, was deemed to satisfy the age
requirements of Section 3.1. If Executive’s Separation from Service occurs within
two (2) years of the Change in Control, such benefit shall be paid in a single lump sum within ten
(10) days following Separation from Service, provided however, that if Executive is considered a
Specified Employee at the time such payment is due, the lump sum benefit shall be delayed and shall
be paid on the first day of the seventh (7th) month following such Separation from
Service. If Executive’s Separation from Service occurs more than 2 years following the occurrence
of a Change in Control, or if it occurs within 2 years of a Change in Control but the Change in
Control does not also satisfy the requirements of Treasury Regulation Section 1.409A-3(i)(5),
Executive’s benefit shall be paid in accordance with Executive’s election under Section 3.5. To
the extent necessary to avoid a penalty under Section 409A of the Code, all or a portion of
Executive’s benefit shall be delayed and paid on the first day of the seventh month following
Executive’s Separation from Service.

 

4

 

3.5 Form of Benefit.

		A	 	
Upon Executive’s entitlement to a benefit under this Plan, his
benefit shall be paid in the form of (i) a single life annuity with twenty (20)
annual payments guaranteed or (ii) a lump sum which is actuarially equivalent
to the annuity form of payment in (i), as designated by Executive on an
election form provided by the Bank for such purpose. The election form
contemplated by this Section 3.5-A must be completed by Executive no later than
December 31, 2008. If Executive has made an election prior to December 31,
2008 and wishes to change such election, Executive can change such election
prior to December 31, 2008, without complying with the additional requirements
of Section 3.5-B hereof, so long as Executive’s election does not: (i) cause a
payment to be made to Executive in 2008 which otherwise would have been made in
a later year, or (ii) delay a payment that would otherwise be made to Executive
in 2008 and cause such payment to be made in a later year.

	 	B.	 	Executive may, while employed by the Bank, change the form in
which his benefits shall be paid by filing a revised election indicating such
change, provided that the election complies with this Section 3.5-B. Such
election shall (i) not take effect until at least 12 months after the date on
which the election is made, (ii) in the case of an election related to a
payment made for reasons other than due or death or Disability, the election
must defer the payment date by at least five (5) years beyond the previously
scheduled commencement date (or in the case of a life annuity or installment
payments treated as a single payment, five (5) years from the date the first
amount was scheduled to be paid), and (iii) with respect to an election related
to a payment at a specified time or pursuant to a fixed schedule (as described
in Treasury Regulation Section 1.409A-3(a)(4)), the election must be made not
less than 12 months before the date the payment is scheduled to be paid (or in
the case of a life annuity or installment payments treated as a single payment,
five (5) years from the date the first amount was scheduled to be paid). No
changes in the form of benefit payment shall be permitted following his
termination of employment.

 

5

 

3.6 Time of Payment/Calculation of Lump Sum.

	 	A.	 	Benefit payments made to Executive or Executive’s beneficiary
pursuant to Sections 3.1, 3.2 or 3.3 shall commence in accordance with his
election under Section 3.5 not later than 60 days following his separation from
service.

	 	B.	 	For purposes of this Plan, any lump sum calculation shall be
made assuming a mortality age using the 1994 Group Annuity Reserve (GRA) table
and a discount rate of six percent (6%).

3.7 Payment in the Event of Incapacity or Minority. If the Bank, in its discretion,
determines that any person entitled to receive any payment under this Plan is physically, mentally
or legally incapable of receiving or acknowledging receipt of payment, and no legal representative
has been appointed for such person, the Administrator in its discretion may (but shall not be
required to) cause any sum otherwise payable to such person to be paid to one or more legal
person(s) as may be chosen by the Administrator from among the following: the institution
maintaining such person, such person’s spouse, children, parents or other relatives by blood or
marriage, a custodian under any applicable Uniform Transfers to Minors Act or any other person
determined by the Administrator to have incurred expense for such person. The Administrator’s
payment, based upon its good faith determination of the incapacity of the person otherwise entitled
to payments under this Plan and the existence of any other person specified above, shall be
conclusive and binding on all persons. Any such payment shall be a complete discharge of the
liabilities of the Company under this Plan to the extent of such payment.

3.8 Specified Employee. Notwithstanding any other provision of this Article 3, in the event
Executive is a Specified Employee, as defined in accordance with Section 409A of the Internal
Revenue Code of 1986, as amended (the “Code”) and any regulations issued thereunder, payment of
Executive’s Basic Benefit or Early Retirement Benefit, as applicable, shall not commence until six
(6) months after Executive’s Separation from Service.

Article 4

Source of Benefits

4.1 Employer Funds. This Plan is unfunded, and all benefits payable to Executive and his
beneficiaries shall be payable solely from the general assets of the Bank. Executive shall not be
required or permitted to make any contribution to the Plan.

4.2 Trust Fund. The Bank may establish a trust from which part or all of the benefits under
the Plan are to be paid. If a trust is established, all of the principal and income of such trust
shall remain subject to the claims of the Bank’s creditors until applied to the payment of
benefits.

 

6

 

4.3 Executive’s Right to Funds. This Plan constitutes a mere promise by the Bank to make
benefit payments in the future. Beneficial ownership of any assets, whether cash or
investments, that the Bank may earmark or place in trust to pay Executive’s benefits under this
Plan shall at all times remain in the Bank, and neither Executive nor his beneficiaries shall have
any property interest in any specific assets of the Bank. To the extent Executive or any other
person acquires a right to receive payments from the Bank under this Plan, such right shall be no
greater than the right of any unsecured general creditor of the Bank.

Article 5

Administration

5.1 Administrator. The Board of Directors of the Bank shall be the Administrator of the Plan.
The Board may delegate any of its administrative functions to another person, subject to the
revocation of such delegation at any time.

5.2 Discretion. The Administrator shall also have the discretionary power and authority,
which it shall exercise in good faith, to determine whether Executive is entitled to a benefit
under the Plan, the identity of Executive’s beneficiaries, and the amount and form of the benefit
payable to Executive or his beneficiary. The Administrator shall have the discretion and authority
to interpret the Plan and to make such rules and regulations as it deems necessary for the
administration of the Plan and to carry out its purposes. The determinations of the Administrator
shall be conclusive and binding on all persons.

5.3 Determination of Benefit. The Administrator’s good faith determination of the benefits to
which Executive or his beneficiaries are entitled under this Plan shall be conclusive and binding
on all persons; provided, however, that this provision shall not preclude the Administrator’s
correcting any error the Administrator determines to have been made in the computation of any
benefit. The Administrator shall be entitled to recover from any Participant or beneficiary, or
from his estate, the amount of any overpayment of benefits and may reduce the amount of future
benefits payable to any individual by the amount of any overpayment made with respect to Executive.

5.4 Benefit Claim Procedure. Within a reasonable period of time following Executive’s
termination of employment, the Administrator will inform Executive or his beneficiary of the amount
of benefits, if any, payable from the Plan. Not later than 30 days after receipt of such
notification, Executive or his beneficiary may file with the Administrator a written claim
objecting to the amount of benefits payable under the Plan. The Administrator, not later than 90
days after receipt of such claim, will render a written decision to the claimant on the claim. If
the claim is denied, in whole or in part, such decision will include the reason or reasons for the
denial, a reference to the Plan provision that is the basis for the denial, a description of
additional material or information, if any, necessary for the claimant to perfect the claim, an
explanation as to why such information or material is necessary and an explanation of the Plan’s
claim procedure. The claimant may file with the Administrator, not later than 60 days after
receiving the Administrator’s written decision, a written notice of request for review of the
decision, and the claimant or the claimant’s representative may review Plan documents which relate
to the claim and may submit written comments to the Administrator. Not later than 60 days after
receipt of such review request, the Administrator will render a written decision on the claim,
which decision will include the specific reasons for the decision, including a reference to
the Plan’s specific provisions where appropriate. The foregoing 90- and 60-day periods during which
the Administrator must respond to the claimant may be extended by up to an additional 90 or 60
days, respectively, if special circumstances beyond the Administrator’s control so require.

 

7

 

5.5 Indemnification. The Bank shall indemnify the Administrator and each other person to whom
administrative functions are delegated against any and all liabilities that may arise out of their
administration of the Plan, except those that are imposed on account of such person’s willful
misconduct.

5.6 Limitation of Authority. No person performing any administrative functions with respect
to the Plan shall exercise, or participate in the exercise of, any discretion with respect to his
own benefit under the Plan. This provision shall not preclude such person from exercising
discretionary authority with respect to the generally applicable provisions of the Plan, even
though such person’s benefit may be affected by such exercise.

Article 6

Miscellaneous

6.1 Actuarial Equivalency. Except as otherwise provided for in Section 3.7C, whenever an
actuarial equivalent must be determined under this Plan, it shall be determined using reasonable
actuarial factors elected by the Administrator.

6.2 Termination of Employment. Executive shall be deemed to have terminated employment for
purposes of this Plan when he or she has ceased to provide service to the Bank as an employee.

6.3 Effective Date. This Plan is restated effective as of January 1, 2008.

6.4 No Employment Rights. Nothing contained in this Plan shall be construed as conferring
upon Executive the right to continue in the employ of the Bank.

6.5 No Compensation Guarantees. Nothing contained in this Plan shall be construed as
conferring upon Executive the right to receive any specific level of compensation; nor shall the
Bank be prevented in any way from modifying the manner or form in which Executive is to be
compensated.

6.6 Effect on Benefit Plans. Neither benefits accrued by Executive under this Plan nor
amounts paid pursuant to the Plan following his termination of employment shall be deemed to be
salary or other compensation to him for the purpose of computing benefits to which he or she may be
entitled under any pension plan or other employee benefit plan or arrangement sponsored by the
Bank, except to the extent such other plan expressly provides otherwise.

6.7 Rights and Benefits Not Assignable. The rights and benefits of Executive and any other
person or persons to whom payments may be made pursuant to this Plan are personal and, except for
payments made to the representative of a person’s estate which may be assigned to the persons
entitled to such estate, shall not be subject to any voluntary or involuntary
anticipation, alienation, sale, assignment, pledge, transfer, encumbrance, attachment, garnishment
by creditors of Executive or such person or other disposition.

 

8

 

6.8 Amendment and Termination.

	 	A.	 	The Board of Directors of the Bank may amend this Plan in such
manner as it deems advisable, provided that no amendment shall reduce the
accrued benefit of Executive, determined as of the date of the adoption of such
amendment.

	 	B.	 	The Bank may terminate this Plan at any time. No person shall
accrue any additional benefits under the Plan following the date of its
termination. However, the termination of the Plan shall not affect Executive’s
right to receive payment of his accrued benefit (determined as of the date of
the Plan’s termination) upon termination of employment; provided Executive
would have been entitled to a benefit upon termination of employment if the
Plan had not been terminated.

6.9 Governing Law. Except to the extent preempted by federal law, this Plan shall be
construed in accordance with, and governed by, the laws of the Commonwealth of Massachusetts
without regard to rules relating to choice of law.

6.10 Entire Agreement. This Plan constitutes the entire understanding between the Bank and
each Participant as to the subject matter hereof. No rights are granted to Executive by virtue of
this Agreement other than those specifically set forth herein.

6.11 Section 409A Compliance. Notwithstanding any other provision of the Plan or any
administrative form related to the Plan, this Plan shall be interpreted in accordance with, and
incorporate the terms and conditions required by, Section 409A of the Code, together with any
Department of Treasury regulations and other guidance issued thereunder, including without
limitation, any regulations or other guidance that may be issued after the date hereof. The Board
of Directors, in its discretion, may adopt any amendments to the Plan or modify any related
administrative form or adopt other policies and procedures (including amendments, policies and
procedures with retroactive effect), or take any other actions the Board of Director determines to
be necessary or appropriate to comply with the requirements of Section 409A of the Code.

 

9Exhibit 10.1

Exhibit 10.1

 

HEALTH GRADES, INC.

2006 EQUITY COMPENSATION PLAN

 

1

 

HEALTH GRADES, INC.

2006 EQUITY COMPENSATION PLAN

The purpose of the Health Grades, Inc. 2006 Equity
Compensation Plan (the “Plan”) is to provide (i) designated employees of Health Grades, Inc. (the
“Company”) and its subsidiaries, (ii) certain consultants and advisors who perform services for the
Company or its subsidiaries and (iii) non-employee members of the Board of Directors of the Company with the
opportunity to receive grants of incentive stock options, nonqualified stock options, stock appreciation rights, stock
awards and other stock-based awards. The Company believes that the Plan will encourage the participants to contribute
materially to the growth of the Company, thereby benefitting the Company’s stockholders, and will align the
economic interests of the participants with those of the stockholders.

The Plan is an amendment and restatement of the Health Grades,
Inc. 2006 Equity Compensation Plan. The purpose of this amendment and restatement is to bring the Plan into compliance
with Code section 409A. Outstanding grants previously issued under the 2006 Equity Compensation Plan will continue
in effect according to their terms.

Section 1. Definitions

The following terms shall have the meanings set forth below
for purposes of the Plan:

(a) “Board” shall mean the Board of Directors
of the Company.

(b) “Cause” shall mean, except to the extent
specified otherwise by the Committee, a finding by the Committee that the Grantee (i) has breached his or her
employment or service contract with the Employer, (ii) has engaged in disloyalty to the Company, including,
without limitation, fraud, embezzlement, theft, commission of a felony or proven dishonesty, (iii) has disclosed
trade secrets or confidential information of the Employer to persons not entitled to receive such information,
(iv) has breached any written non-competition or non-solicitation agreement between the Grantee and the Employer
or (v) has engaged in such other behavior detrimental to the interests of the Employer as the Committee determines.

(c) “Change of Control” shall be deemed to
have occurred in accordance with the Grant Instrument or, if no definition of Change of Control is contained in the
Grant Instrument, if:

(i) After the Effective Date, any “person”
(as such term is used in Sections 13(d) and 14(d) of the Exchange Act) becomes a “beneficial owner” (as
defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of securities of the Company representing
20% or more of the voting power of the then outstanding securities of the Company, except where the acquisition is
approved by the Board; provided that, with respect to any stockholder that, as of the Effective Date, is such a
beneficial owner of more than 10% of the voting outstanding securities of the Company, a change of control shall be
deemed to occur if such stockholder becomes a beneficial owner, directly or indirectly, of securities of the Company
representing 35% of the then outstanding securities of the Company, except where the acquisition is approved by the
Board;

-1-

2

 

(ii) The consummation of (i) a merger or
consolidation of the Company with another corporation where the stockholders of the Company, immediately prior to the
merger or consolidation, will not beneficially own, immediately after the merger or consolidation, and on a pro rata
basis substantially equivalent to their respective beneficial ownership of voting securities immediately prior to the
merger or consolidation, shares entitling such stockholders to a majority of all votes to which all stockholders of the
surviving corporation would be entitled in the election of directors, or where the members of the Board, immediately
prior to the merger or consolidation, would not, immediately after the merger or consolidation, constitute a majority
of the board of directors of the surviving corporation, (ii) a sale or other disposition of all or substantially
all of the assets of the Company, or (iii) a liquidation or dissolution of the Company;

(iii) Any person has commenced a tender offer or
exchange offer for 10% or more of the voting power of the then outstanding shares of the Company; or

(iv) After the Effective Date, directors are elected
such that a majority of the members of the Board shall have been members of the Board for less than two years, unless
the election or nomination for election of each new director who was not a director at the beginning of such two-year
period was approved by a vote of at least two-thirds of the directors then still in office who were directors at the
beginning of such period.

(d) “Code” shall mean the Internal Revenue
Code of 1986, as amended.

(e) “Committee” shall mean the Board or the
committee that administers the Plan, as described in Section 2.

(f) “Company” shall mean Health Grades, Inc.
and shall include its successors.

(g) “Company Stock” shall mean a share of common
stock of the Company.

(h) “Disability” or “Disabled”
shall mean the Grantee’s becoming disabled within the meaning of section 22(e)(3) of the Code, within the meaning
of the Employer’s long-term disability plan applicable to the Grantee, or as otherwise determined by the
Committee.

(i) “Effective Date” shall mean July 24,
2006, the date on which the stockholders approved the Company’s 2006 Equity Compensation Plan. The Effective Date
of this amended and restated 2006 Equity Compensation Plan shall be January 1, 2008.

-2-

3

 

(j) “Employee” shall mean an employee of the
Company or a subsidiary of the Company.

(k) “Employed by, or providing service to, the
Employer” shall mean employment or service as an Employee, Key Advisor or member of the Board (so that, for
purposes of exercising Options and SARs and satisfying conditions with respect to other Grants, a Grantee shall not be
considered to have terminated employment or service until the Grantee ceases to be an Employee, Key Advisor or member
of the Board), unless the Committee determines otherwise with respect to a Key Advisor.

(l) “Employer” shall mean the Company and its
subsidiaries and other related entities, as determined by the Committee.

(m) “Exchange Act” shall mean the Securities
Exchange Act of 1934, as amended.

(n) “Executive Officer” shall have the same
meaning as under Rule 3b-7 of the Exchange Act.

(o) “Exercise Price” shall mean the purchase
price of Company Stock subject to an Option.

(p) “Fair Market Value” shall
mean:

(i) If Company Stock is publicly traded, then the Fair
Market Value per share shall be determined as follows: (x) if the principal trading market for the Company Stock is a
national securities exchange or Nasdaq, the last reported sale price thereof on the relevant date or, if there were no
trades on that date, the latest preceding date upon which a sale was reported, or (y) if the Company Stock is not
listed on a national securities exchange or Nasdaq, the last reported sale price on the OTC Bulletin Board on the
relevant date or, if there were no trades on that date, the latest preceding date (but no earlier than five days
preceding the relevant date) upon which a sale was reported, or (z) if the Company Stock is not listed on a
national securities exchange or Nasdaq, and if transaction information is not available on the OTC Bulletin Board, the
mean between the last reported high and low selling prices of Company Stock on the relevant date, as reported on Pink
Sheets LLC’s Electronic Quotation System or, if not so reported, as reported in a recognized financial reporting
service, as applicable and as the Committee determines.

(ii) If Fair Market Value for Company Stock cannot be
determined pursuant to Section 1(p)(i), the Fair Market Value per share shall be as determined by the Committee
based on an independent appraisal that meets the requirements of Code section 401(a)(28)(C) and the applicable
regulations as of a date that is no more than twelve (12) months before the relevant transaction to which the
valuation is applied.

-3-

4

 

(q) “Grant” shall mean a grant of Options,
SARs, Stock Awards or Other Stock-Based Awards under the Plan.

(r) “Grant Instrument” shall mean the
agreement that sets forth the terms of a Grant, including any amendments.

(s) “Grantee” shall mean an Employee,
Non-Employee Director or Key Advisor who receives a Grant under the Plan.

(t) “Incentive Stock Option” shall mean an
option to purchase Company Stock that is intended to meet the requirements of section 422 of the Code.

(u) “Key Advisor” shall mean a consultant or
advisor of the Company or a subsidiary of the Company.

(v) “1996 Plan” means the Health Grades, Inc.
1996 Equity Compensation Plan, as in effect before the Effective Date of the amendment and restatement of the 1996 Plan
which was renamed the Health Grades, Inc. 2006 Equity Compensation Plan.

(w) “Non-Employee Director” shall mean a
member of the Board who is not an Employee.

(x) “Non-Executive Officer Grant Committee”
shall mean the Committee described in Section 2(d).

(y) “Nonqualified Stock Option” shall mean an
option to purchase Company Stock that is not intended to meet the requirements of section 422 of the Code.

(z) “Option” shall mean an Incentive Stock
Option or Nonqualified Stock Option granted under the Plan, as described in Section 6.

(aa) “Other Stock-Based Award” shall mean any
Grant based on, measured by or payable in Company Stock, as described in Section 9.

(bb) “SAR” shall mean a stock appreciation
right with respect to a share of Company Stock, as described in Section 8.

(cc) “Stock Award” shall mean an award of a
share of Company Stock, with or without restrictions, as described in Section 7.

-4-

5

 

Section 2. Administration

(a) Committee. The Plan shall be administered and
interpreted by the Board or by one or more committees appointed by the Board. To the extent that the Board or a
committee makes or administers Grants, as applicable, references in the Plan to the “Committee” shall be
deemed to refer to such Board or committee. The Board shall approve and administer all Grants made to Non-Employee
Directors. The Committee that administers the Plan with respect to Grants to executive officers of the Company shall
consist solely of two or more Board members who are “non-employee directors” as defined in Rule 16b-3
under the Exchange Act. The Committee that administers the Plan with respect to Grants that are intended to comply with
the requirements of section 162(m) of the Code shall consist of two or more Board members who are “outside
directors” as defined in section 162(m) of the Code. The Board may appoint a separate Non-Executive Officer Grant
Committee, as described in subsection (d) below, to make some or all Grants to persons who are not members of the
Board or executive officers, and which are not intended to comply with the requirements of section 162(m) of the Code.
The Non-Executive Officer Grant Committee shall have only the authority set forth in subsection (d), and references in
the Plan to the “Committee” shall include the Non-Executive Officer Grant Committee only with respect to
the approval of Grants as described in subsection (d). The Board may ratify or approve any Grants as it deems
appropriate.

(b) Committee Authority. Subject to subsection
(d) below, the Committee shall have the sole authority to (i) determine the individuals to whom Grants shall
be made under the Plan, (ii) determine the type, size and terms of the Grants to be made to each such individual,
(iii) determine the time when the Grants will be made and the duration of any applicable exercise or restriction
period, including the criteria for exercisability and the acceleration of exercisability, (iv) amend the terms of
any previously issued Grant, subject to the provisions of Section 16 below, and (v) deal with any other
matters arising under the Plan.

(c) Committee Determinations. The Committee shall
have full power and express discretionary authority to administer and interpret the Plan, to make factual
determinations and to adopt or amend such rules, regulations, agreements and instruments for implementing the Plan and
for the conduct of its business as it deems necessary or advisable, in its sole discretion. The Committee’s
interpretations of the Plan and all determinations made by the Committee pursuant to the powers vested in it hereunder
shall be conclusive and binding on all persons having any interest in the Plan or in any awards granted hereunder. All
powers of the Committee shall be executed in its sole discretion, in the best interest of the Company, not as a
fiduciary, and in keeping with the objectives of the Plan and need not be uniform as to similarly situated individuals.

(d) Non-Executive Officer Grant Committee. The
Board may establish a Non-Executive Officer Grant Committee, which shall have the power, solely with respect to
Employees who are not executive officers of the Company, to make Grants under the Plan, subject to the following terms
and limitations:

-5-

6

 

(i) The Non-Executive Officer Grant Committee may make
Grants only in connection with the hiring of new Employees who are not executive officers of the Company or in
connection with the promotion of employees to non-executive officer positions.

(ii) The maximum number of shares of Company Stock
underlying Grants made to any individual Employee by the Non-Executive Officer Grant Committee may not exceed 75,000
shares in any calendar year, subject to adjustment as described in Section 4(d).

(iii) When granting Options, the Non-Executive Officer
Grant Committee shall grant Incentive Stock Options to the extent permissible under the Code; otherwise, such Options
shall be Nonqualified Stock Options.

(iv) The Non-Executive Officer Grant Committee may set
such vesting terms with respect to Grants as it deems appropriate.

(v) The Exercise Price per share of any Options granted
by the Non-Executive Officer Grant Committee shall be at least equal to the Fair Market Value of a share of Company
Stock on the date of grant.

(vi) The Non-Executive Officer Grant Committee may
provide for an Option term shorter than ten years.

(vii) In all other respects, the Grants made by the
Non-Executive Officer Grant Committee shall be governed by the terms of the Grant Instruments in the form then
authorized by the Committee that otherwise administers the Plan.

(viii) The Non-Executive Officer Grant Committee’s
powers shall be as enumerated in this Section. The Non-Executive Officer Grant Committee shall not otherwise perform
the functions of the Committee under this Plan.

(ix) The Committee that otherwise administers the Plan
may also make Grants to non-executive officer Employees in accordance with the provisions of the Plan.

(x) The maximum number of shares underlying Grants made
by the Non-Executive Officer Grant Committee in any calendar quarter shall not exceed 300,000 shares, subject to
adjustment as described in Section 4(d).

(xi) The Non-Executive Officer Grant Committee may not
make Grants that are intended to be exempt from the tax deduction limitation of section 162(m) of the Code as
“performance-based compensation.”

-6-

7

 

Section 3. Grants

Awards under the Plan may consist of grants of Options as
described in Section 6, Stock Awards as described in Section 7, SARs as described in Section 8, and
Other Stock-Based Awards as described in Section 9. All Grants shall be subject to the terms and conditions set
forth herein and to such other terms and conditions consistent with this Plan as the Committee deems appropriate and as
are specified in writing by the Committee to the individual in the Grant Instrument. All Grants shall be made
conditional upon the Grantee’s acknowledgement, in writing or by acceptance of the Grant, that all decisions and
determinations of the Committee shall be final and binding on the Grantee, his or her beneficiaries and any other
person having or claiming an interest under such Grant. Grants under a particular Section of the Plan need not be
uniform as among the Grantees.

Section 4. Shares Subject to the Plan

(a) Shares Authorized. Subject to adjustment as
described in subsection (d) below, the aggregate number of shares of Company Stock that may be issued or
transferred under the Plan is 13,000,000 shares. The maximum number of authorized shares includes shares to be issued
or transferred pursuant to outstanding grants under the Plan as of the Effective Date, but does not include shares
issued pursuant to the exercise of grants under the 1996 Plan that occur prior to the Effective Date.

(b) Source of Shares; Share Counting. Shares
issued or transferred under the Plan may be authorized but unissued shares of Company Stock or reacquired shares of
Company Stock, including shares purchased by the Company on the open market for purposes of the Plan. If and to the
extent Options or SARs granted under the Plan terminate, expire, or are canceled, forfeited, exchanged or surrendered
without having been exercised, and if and to the extent any Stock Awards or Other Stock-Based Awards are forfeited,
terminated or otherwise not paid in full, the shares subject to such Grants shall again be available for purposes of
the Plan.

(c) Individual Limits. All Grants under the Plan
shall be expressed in shares of Company Stock. The maximum aggregate number of shares of Company Stock that may be
subject to Grants of Options or SARs made under the Plan to any individual during any calendar year shall be 750,000
shares, subject to adjustment as described in subsection (d) below. The individual limits of this subsection
(c) shall apply without regard to whether the Grants are to be paid in Company Stock or cash. All cash payments
shall equal the Fair Market Value of the shares of Company Stock to which the cash payments relate on or immediately
before the date of payment.

-7-

8

 

(d) Adjustments. If there is any change in the
number or kind of shares of Company Stock outstanding (i) by reason of a stock dividend, spinoff, recapitalization,
stock split, or combination or exchange of shares, (ii) by reason of a merger, reorganization or consolidation,
(iii) by reason of a reclassification or change in par value, or (iv) by reason of any other extraordinary or
unusual event affecting the outstanding Company Stock as a class without the Company’s receipt of consideration,
or if the value of outstanding shares of Company Stock is substantially reduced as a result of a spinoff or the
Company’s payment of an extraordinary dividend or distribution, the maximum number of shares of Company Stock
available for issuance under the Plan, the maximum number of shares of Company Stock for which any individual may
receive Grants in any year, the maximum number of shares of Company Stock underlying Options that may be granted by the
Non-Executive Officer Grant Committee per calendar year to any individual or in the aggregate per calendar quarter, the
number of shares covered by outstanding Grants, the kind of shares issued under the Plan, and the price per share or
the applicable market value of such Grants may be appropriately adjusted by the Committee in accordance with the rules
governing modifications, extensions, substitutions and assumptions of stock rights described in Treasury Regulation
section 1.409A-1(b)(5)(v)(D) to reflect any increase or decrease in the number of, or change in the kind or value of,
issued shares of Company Stock to preclude, to the extent practicable, the enlargement or dilution of rights and
benefits under such Grants; provided, however, that any fractional shares resulting from such adjustment shall be
eliminated. Any adjustments determined by the Committee shall be final, binding and conclusive.

Section 5. Eligibility for Participation

(a) Eligible Persons. All Employees and
Non-Employee Directors shall be eligible to participate in the Plan. Key Advisors shall be eligible to participate in
the Plan if the Key Advisors render bona fide services to the Company or its subsidiaries, the services are not in
connection with the offer and sale of securities in a capital-raising transaction and the Key Advisors do not directly
or indirectly promote or maintain a market for the Company’s securities.

(b) Selection of Grantees. The Committee shall
select the Employees, Non-Employee Directors and Key Advisors to receive Grants and shall determine the number of
shares of Company Stock subject to each Grant.

Section 6. Options

The Committee may grant Options to an Employee, Non-Employee
Director or Key Advisor, upon such terms as the Committee deems appropriate. The following provisions are applicable to
Options:

(a) Number of Shares. The Committee shall
determine the number of shares of Company Stock that will be subject to each Grant of Options to Employees,
Non-Employee Directors and Key Advisors. The number of shares subject to the Option shall be fixed on the original date
of Grant of the Option.

-8-

9

 

(b) Type of Option and Price.

(i) The Committee may grant Incentive Stock Options or
Nonqualified Stock Options or any combination of the two, all in accordance with the terms and conditions set forth
herein. Incentive Stock Options may be granted only to Employees of the Company or its subsidiary corporations, as
defined in section 424 of the Code. No Incentive Stock Options may be granted after the date that is the day before the
10th anniversary of the Effective Date. Nonqualified Stock Options may be granted to Employees, Non-Employee
Directors and Key Advisors.

(ii) The Exercise Price of Company Stock subject to an
Option shall be determined by the Committee and shall be equal to or greater than the Fair Market Value of a share of
Company Stock on the date the Option is granted. If an Incentive Stock Option is granted to an Employee who, at the
time of grant, owns stock possessing more than 10% of the total combined voting power of all classes of stock of the
Company or any subsidiary of the Company, as defined in section 424 of the Code, the Exercise Price per share may not
be less than 110% of the Fair Market Value of Company Stock on the date of grant.

(c) Option Term. The Committee shall determine the
term of each Option, which shall not exceed ten years from the date of grant. However, an Incentive Stock Option that
is granted to an Employee who, at the time of grant, owns stock possessing more than 10% of the total combined voting
power of all classes of stock of the Company, or any subsidiary of the Company, as defined in section 424 of the Code,
may not have a term that exceeds five years from the date of grant.

(d) Exercisability of Options. Options shall
become exercisable in accordance with such terms and conditions, consistent with the Plan, as may be determined by the
Committee and specified in the Grant Instrument. The Committee may accelerate the exercisability of any or all
outstanding Options at any time for any reason.

(e) Grants to Non-Exempt Employees.
Notwithstanding the foregoing, Options granted to persons who are non-exempt employees under the Fair Labor Standards
Act of 1938, as amended, may not be exercisable for at least six months after the date of grant (except that such
Options may become exercisable, as determined by the Committee, upon the Grantee’s death, Disability or
retirement, or upon a Change of Control or other circumstances permitted by applicable regulations).

(f) Termination of Employment, Disability or Death.

(i) Except as provided below, an Option may only be
exercised while the Grantee is employed by, or providing service to, the Employer as an Employee, Key Advisor or member
of the Board.

-9-

10

 

(ii) In the event that a Grantee ceases to be employed
by, or provide service to, the Employer for any reason other than Disability, death, or termination for Cause, any
Option which is otherwise exercisable by the Grantee shall terminate unless exercised within 90 days after the
date on which the Grantee ceases to be employed by, or provide service to, the Employer (or within such other period of
time as may be specified by the Committee), but in any event no later than the date of expiration of the Option term.
Except as otherwise provided by the Committee, any of the Grantee’s Options that are not otherwise exercisable as
of the date on which the Grantee ceases to be employed by, or provide service to, the Employer shall terminate as of
such date.

(iii) In the event the Grantee ceases to be employed by,
or provide service to, the Company on account of a termination for Cause by the Employer, any Option held by the
Grantee shall terminate as of the date the Grantee ceases to be employed by, or provide service to, the Employer. In
addition, notwithstanding any other provisions of this Section 6, if the Committee determines that the Grantee has
engaged in conduct that constitutes Cause at any time while the Grantee is employed by, or providing service to, the
Employer or after the Grantee’s termination of employment or service, any Option held by the Grantee shall
immediately terminate and the Grantee shall automatically forfeit all shares underlying any exercised portion of an
Option for which the Company has not yet delivered the share certificates, upon refund by the Company of the Exercise
Price paid by the Grantee for such shares. Upon any exercise of an Option, the Company may withhold delivery of share
certificates pending resolution of an inquiry that could lead to a finding resulting in a forfeiture.

(iv) In the event the Grantee ceases to be employed by,
or provide service to, the Employer because the Grantee is Disabled, any Option which is otherwise exercisable by the
Grantee shall terminate unless exercised within one year after the date on which the Grantee ceases to be employed by,
or provide service to, the Employer (or within such other period of time as may be specified by the Committee), but in
any event no later than the date of expiration of the Option term. Except as otherwise provided by the Committee, any
of the Grantee’s Options which are not otherwise exercisable as of the date on which the Grantee ceases to be
employed by, or provide service to, the Employer shall terminate as of such date.

(v) If the Grantee dies while employed by, or providing
service to, the Employer or within 90 days after the date on which the Grantee ceases to be employed or provide
service on account of a termination specified in Section 6(f)(i) above (or within such other period of time as may
be specified by the Committee), any Option that is otherwise exercisable by the Grantee shall terminate unless
exercised within one year after the date on which the Grantee ceases to be employed by, or provide service to, the
Employer (or within such other period of time as may be specified by the Committee), but in any event no later than the
date of expiration of the Option term. Except as otherwise provided by the Committee, any of the Grantee’s
Options that are not otherwise exercisable as of the date on which the Grantee ceases to be employed by, or provide
service to, the Employer shall terminate as of such date.

-10-

11

 

(g) Exercise of Options. A Grantee may exercise an
Option that has become exercisable, in whole or in part, by delivering a notice of exercise to the Company. The Grantee
shall pay the Exercise Price for an Option as specified by the Committee (w) in cash, (x) with the approval
of the Committee, by delivering shares of Company Stock owned by the Grantee (including Company Stock acquired in
connection with the exercise of an Option, subject to such restrictions as the Committee deems appropriate) and having
a Fair Market Value on the date of exercise equal to the Exercise Price or by attestation (on a form prescribed by the
Committee) to ownership of shares of Company Stock having a Fair Market Value on the date of exercise equal to the
Exercise Price, (y) payment through a broker in accordance with procedures permitted by Regulation T of the
Federal Reserve Board, or (z) by such other method as the Committee may approve. Shares of Company Stock used to
exercise an Option shall have been held by the Grantee for the requisite period of time to avoid adverse accounting
consequences to the Company with respect to the Option. Payment for the shares pursuant to the Option, and any required
withholding taxes, must be received by the time specified by the Committee depending on the type of payment being made,
but in all cases prior to the issuance of the Company Stock.

(h) Limits on Incentive Stock Options. Each
Incentive Stock Option shall provide that, if the aggregate Fair Market Value of the Company Stock on the date of the
grant with respect to which Incentive Stock Options are exercisable for the first time by a Grantee during any calendar
year, under the Plan or any other stock option plan of the Company or a subsidiary, as defined in section 424 of the
Code, exceeds $100,000, then the Option, as to the excess, shall be treated as a Nonqualified Stock Option. An
Incentive Stock Option shall not be granted to any person who is not an Employee of the Company or subsidiary, as
defined in section 424 of the Code.

Section 7. Stock Awards

The Committee may issue or transfer shares of Company Stock to
an Employee, Non-Employee Director or Key Advisor under a Stock Award, upon such terms as the Committee deems
appropriate. The following provisions are applicable to Stock Awards:

(a) General Requirements. Shares of Company Stock
issued or transferred pursuant to Stock Awards may be issued or transferred for consideration or for no consideration,
and subject to restrictions or no restrictions, as determined by the Committee. The Committee may, but shall not be
required to, establish conditions under which restrictions on Stock Awards shall lapse over a period of time or
according to such other criteria as the Committee deems appropriate, including, without limitation, restrictions based
upon the achievement of specific performance goals. The period of time during which the Stock Awards will remain
subject to restrictions will be designated in the Grant Instrument as the “Restriction Period.”

(b) Number of Shares. The Committee shall
determine the number of shares of Company Stock to be issued or transferred pursuant to a Stock Award.

-11-

12

 

(c) Requirement of Employment or Service. If the
Grantee ceases to be employed by, or provide service to, the Employer during a period designated in the Grant
Instrument as the Restriction Period, or if other specified conditions are not met, the Stock Award shall terminate as
to all shares covered by the Grant as to which the restrictions have not lapsed, and those shares of Company Stock must
be immediately returned to the Company. The Committee may, however, provide for complete or partial exceptions to this
requirement as it deems appropriate.

(d) Restrictions on Transfer and Legend on Stock
Certificate. During the Restriction Period, a Grantee may not sell, assign, transfer, pledge or otherwise dispose
of the shares of a Stock Award except to a successor under Section 12(a). Each certificate for a share of a Stock
Award shall contain a legend giving appropriate notice of the restrictions in the Grant. The Grantee shall be entitled
to have the legend pertaining to the restrictions in the Grant removed from the stock certificate covering shares
subject to restrictions when the applicable restrictions on such shares have lapsed. The Committee may determine that
the Company will not issue certificates for Stock Awards until the restrictions on such shares have lapsed, or that the
Company will retain possession of certificates for shares of Stock Awards until the restrictions on such shares have
lapsed.

(e) Right to Vote and to Receive Dividends. Unless
the Committee determines otherwise, during the Restriction Period, the Grantee shall have the right to vote shares of
Stock Awards and to receive any dividends or other distributions paid on such shares, subject to any restrictions
deemed appropriate by the Committee, including, without limitation, the achievement of specific performance goals.

(f) Lapse of Restrictions. All restrictions
imposed on Stock Awards shall lapse upon the expiration of the applicable Restriction Period and the satisfaction of
all conditions imposed by the Committee. The Committee may determine, as to any or all Stock Awards, that the
restrictions shall lapse without regard to any Restriction Period.

Section 8. Stock Appreciation Rights

The Committee may grant stock appreciation rights
(“SARs”) to an Employee, Non-Employee Director or Key Advisor. The following provisions are applicable to
SARs:

(a) General Requirements. The Committee may grant
SARs to an Employee, Non-Employee Director or Key Advisor. The Committee shall establish the base amount of the SAR at
the time the SAR is granted. The base amount of each SAR shall be equal to or greater than the Fair Market Value of a
share of Company Stock as of the date of grant of the SAR.

(b) Exercisability. An SAR shall be exercisable
during the period specified by the Committee in the Grant Instrument and shall be subject to such vesting and other
restrictions as may be specified in the Grant Instrument. The Committee may accelerate the exercisability of any or all
outstanding SARs at any time for any reason. SARs may only be exercised while the Grantee is employed by, or providing
service to, the Employer or during the applicable period after termination of employment or service as described in
Section 6(f).

-12-

13

 

(c) Grants to Non-Exempt Employees.
Notwithstanding the foregoing, SARs granted to persons who are non-exempt employees under the Fair Labor Standards Act
of 1938, as amended, may not be exercisable for at least six months after the date of grant (except that such SARs may
become exercisable, as determined by the Committee, upon the Grantee’s death, Disability or retirement, or upon a
Change of Control or other circumstances permitted by applicable regulations).

(d) Value of SARs. When a Grantee exercises SARs,
the Grantee shall receive in settlement of such SARs an amount equal to the value of the stock appreciation for the
number of SARs exercised. The stock appreciation for an SAR is the amount by which the Fair Market Value of the
underlying Company Stock on the date of exercise of the SAR exceeds the base amount of the SAR as established by the
Committee pursuant to Section 8(a) above.

(e) Form of Payment. The Committee shall determine
whether the appreciation in an SAR shall be paid in the form of cash, shares of Company Stock, or a combination of the
two, in such proportion as the Committee deems appropriate. For purposes of calculating the number of shares of Company
Stock to be received, shares of Company Stock shall be valued at their Fair Market Value on the date of exercise of the
SAR. If shares of Company Stock are to be received upon exercise of an SAR, cash shall be delivered in lieu of any
fractional share.

Section 9. Other Stock-Based Awards

The Committee may grant Other Stock-Based Awards, which are
awards (other than those described in Sections 6, 7, and 8 of the Plan) that are based on, measured by or payable
in Company Stock to any Employee, Non-Employee Director or Key Advisor, on such terms and conditions as the Committee
shall determine. Other Stock-Based Awards shall be structured so that the exercise price shall never be less than the
Fair Market Value of the underlying stock on the date of Grant, the transfer or exercise of such awards shall be
subject to taxation under Code section 83, and the award does not include any feature for the deferral of compensation
beyond the date of exercise or vesting. Other Stock-Based Awards may be awarded subject to the achievement of
performance goals or other conditions and may be payable in cash, Company Stock or any combination of the two, as the
Committee shall determine.

Section 10. Qualified Performance-Based
Compensation

The Committee may determine that Stock Awards and Other
Stock-Based Awards granted to an Employee shall be considered “qualified performance-based compensation”
under section 162(m) of the Code, in which case the provisions of this Section 10 shall apply to such Grants. The
Committee may also grant Options and SARs under which the exercisability of the Options is subject to achievement of
performance goals as described in this Section 10 or otherwise. The following provisions shall apply to Grants of
Stock Awards and Other Stock-Based Awards that are to be considered “qualified performance-based
compensation” under section 162(m) of the Code:

-13-

14

 

(a) Performance Goals. When Stock Awards and Other
Stock-Based Awards that are to be considered “qualified performance-based compensation” are granted, the
Committee shall establish in writing (A) the objective performance goals that must be met, (B) the
performance period during which performance will be measured, (C) the maximum amounts that may be paid if the
performance goals are met, and (D) any other conditions that the Committee deems appropriate and consistent with
the Plan and section 162(m) of the Code. The Committee shall establish the performance goals in writing either before
the beginning of the performance period or during a period ending no later than the earlier of (i) 90 days
after the beginning of the performance period or (ii) the date on which 25% of the performance period has been
completed, or such other date as may be required or permitted under applicable regulations under section 162(m) of the
Code. The performance goals shall satisfy the requirements for “qualified performance-based compensation,”
including the requirement that the achievement of the goals be substantially uncertain at the time they are established
and that the goals be established in such a way that a third party with knowledge of the relevant facts could determine
whether and to what extent the performance goals have been met. The Committee shall not have discretion to increase the
amount of compensation that is payable upon achievement of the designated performance goals.

(b) Criteria Used for Performance Goals. The
Committee shall use objectively determinable performance goals based on one or more of the following criteria: stock
price, earnings per share, price-earnings multiples, net income, operating income, revenue, number of days sales
outstanding in accounts receivable, productivity, margin, EBITDA (earnings before interest, taxes, depreciation and
amortization), net capital employed, return on assets, stockholder return, return on equity, return on capital
employed, growth in assets, unit volume, sales, cash flow, market share, relative performance to a comparison group
designated by the Committee, or strategic business criteria consisting of one or more objectives based on meeting
specified revenue goals, market penetration goals, customer growth, geographic business expansion goals, cost targets
or goals relating to acquisitions or divestitures (which may include acquisitions or divestitures that involve a Change
of Control). The performance goals may relate to one or more business units or the performance of the Company as a
whole, or any combination of the foregoing. Performance goals need not be uniform as among Grantees.

(c) Certification of Results. The Committee shall
certify the performance results for each performance period after the announcement of the Company’s financial
results for the performance period. The Committee shall determine the amount, if any, to be paid pursuant to each Grant
under this Section 10 based on the achievement of the performance goals and the satisfaction of all other terms of
the Grant Instrument. If and to the extent that the Committee does not certify that the performance goals have been
met, the grants of Stock Awards and Other Stock-Based Awards for the performance period shall be forfeited or shall not
be made, as applicable.

(d) Death, Disability or Other Circumstances. The
Committee may provide in the Grant Instrument that Grants under this Section 10 shall be payable or restrictions
on such Grants shall lapse, in whole or in part, in the event of the Grantee’s death or Disability, a Change of
Control, or under other circumstances consistent with the Treasury regulations and rulings under section 162(m) of the
Code.

-14-

15

 

Section 11. Withholding of Taxes

(a) Required Withholding. All Grants under the
Plan shall be subject to applicable federal (including FICA), state and local tax withholding requirements. The
Employer may require that the Grantee or other person receiving or exercising Grants pay to the Employer the amount of
any federal, state or local taxes that the Employer is required to withhold with respect to such Grants, or the
Employer may deduct from wages paid by the Employer the amount of any withholding taxes due with respect to such Grants.

(b) Election to Withhold Shares. If the Committee
so permits, a Grantee may elect to satisfy the Employer’s tax withholding obligation with respect to Grants paid
in Company Stock by having shares withheld, at the time such Grants become taxable, up to an amount that does not
exceed the Grantee’s minimum applicable withholding tax rate for federal (including FICA), state and local tax
liabilities. The election must be in a form and manner prescribed by the Committee and may be subject to the prior
approval of the Committee.

Section 12. Transferability of Grants

(a) Restrictions on Transfers. Except as described
in subsection (b) below, only the Grantee may exercise rights under a Grant during the Grantee’s lifetime. A
Grantee may not transfer those rights except (i) by will or by the laws of descent and distribution or
(ii) with respect to Grants other than Incentive Stock Options, if permitted in any specific case by the
Committee, pursuant to a domestic relations order or otherwise as permitted by the Committee. When a Grantee dies, the
personal representative or other person entitled to succeed to the rights of the Grantee may exercise such rights. Any
such successor must furnish proof satisfactory to the Company of his or her right to receive the Grant under the
Grantee’s will or under the applicable laws of descent and distribution.

(b) Transfer of Nonqualified Stock Options.
Notwithstanding the foregoing, the Committee may provide, in a Grant Instrument, that a Grantee may transfer
Nonqualified Stock Options to family members, or one or more trusts or other entities for the benefit of or owned by
family members, consistent with the applicable securities laws, according to such terms as the Committee may determine;
provided that the Grantee receives no consideration for the transfer of an Option and the transferred Option shall
continue to be subject to the same terms and conditions as were applicable to the Option immediately before the
transfer.

Section 13. Consequences of a Change of Control

(a) Notice and Acceleration. Upon a Change of
Control, unless the Committee determines otherwise as set forth in subsection (b) below, (i) all outstanding
Options and SARs shall automatically accelerate and become fully exercisable, (ii) the restrictions and conditions
on all outstanding Stock Awards shall immediately lapse, and (iii) all Other Stock-Based Awards shall be paid at their
target value, or in such other amounts as the Committee may determine.

-15-

16

 

(b) Other Alternatives. Notwithstanding the
foregoing, in the event of a Change of Control, the Committee may take one or more of the following actions with
respect to any or all outstanding Grants: the Committee may (i) require that Grantees surrender their outstanding
Options and SARs in exchange for one or more payments by the Company, in cash or Company Stock as determined by the
Committee, in an amount equal to the amount by which the then Fair Market Value of the shares of Company Stock subject
to the Grantee’s unexercised Options and SARs exceeds the Exercise Price of the Options or the base amount of the
SARs, as applicable, (ii) after giving Grantees a period of at least ten days to exercise their outstanding
Options and SARs, terminate any or all unexercised Options and SARs at such time as the Committee deems appropriate,
(iii) determine that all outstanding Options and SARs that are not exercised shall be assumed by, or replaced with
comparable options or rights by, the surviving corporation (or a parent or subsidiary of the surviving corporation),
and other outstanding Grants that remain in effect after the Change of Control shall be converted to similar grants of
the surviving corporation (or a parent or subsidiary of the surviving corporation), or (iv) determine that
outstanding Grants shall remain in effect according to their terms, if the Company is the surviving corporation.

(c) Committee. If the Committee makes
determinations under this Section 13 following a Change of Control, the Committee making such determinations must
be comprised of the same members as those on the Committee immediately before the Change of Control. If the Committee
members do not meet this requirement, the Committee as in effect after the Change of Control shall not have discretion
to change the automatic provisions of subsection (a) or, if applicable, vary the determinations made by the
Committee under this Section 13 before the Change of Control (including any decision to follow the automatic
provisions of subsection (a)).

Section 14. Requirements for Issuance or Transfer of
Shares

No Company Stock shall be issued or transferred in connection
with any Grant hereunder unless and until all legal and self-regulatory organization requirements (including
registration, qualification and listing requirements) applicable to the issuance or transfer of such Company Stock have
been complied with to the satisfaction of the Committee. The Committee shall have the right to condition any Grant made
to any Grantee hereunder on such Grantee’s undertaking in writing to comply with such restrictions on his or her
subsequent disposition of such shares of Company Stock as the Committee shall deem necessary or advisable, and
certificates representing such shares may be legended to reflect any such restrictions. Certificates representing
shares of Company Stock issued or transferred under the Plan will be subject to such stop-transfer orders and other
restrictions as may be required by the Plan, the applicable Grant Instrument, or applicable laws, regulations and
interpretations, including any requirement that a legend be placed thereon. No Participant shall have any right as a
stockholder with respect to Company Stock covered by a Grant until shares have been issued pursuant to the Grant.

-16-

17

 

Section 15. Amendment and Termination of the Plan

(a) Amendment. The Board may amend or terminate
the Plan at any time; provided, however, that the Board shall not amend the Plan without stockholder approval if such
approval is required in order to comply with the Code or applicable laws, or to comply with applicable requirements of
a stock exchange or national securities association.

(b) No Repricing Without Stockholder Approval.
Notwithstanding anything in the Plan to the contrary, the Committee may not reprice Options granted under the Plan, nor
may the Board amend the Plan to permit repricing of Options granted under the Plan, unless the stockholders of the
Company provide prior approval for such repricing. Adjustments pursuant to Section 4 shall not be considered a
repricing.

(c) Stockholder Approval for “Qualified
Performance-Based Compensation.” If Stock Awards and Other Stock-Based Awards are granted as “qualified
performance-based compensation” under Section 10 above, the Plan must be reapproved by the stockholders no
later than the first stockholders meeting that occurs in the fifth year following the year in which the stockholders
previously approved the provisions of Section 10, if additional Grants are to be made under Section 10 and if
required by section 162(m) of the Code or the regulations thereunder.

(d) Termination of Plan. The Plan shall terminate
on the day immediately preceding the tenth anniversary of the Effective Date of the 2006 Plan, unless the Plan is
terminated earlier by the Board or is extended by the Board with the approval of the stockholders. On the Effective
Date, the amendment and restatement of the Health Grades, Inc. 1996 Equity Compensation Plan into the Health Grades,
Inc. 2006 Equity Compensation Plan shall be treated as a new plan for purposes of the Incentive Stock Option
requirements of Code section 422(b)(2) and Treas. Reg. section 1.422-2(a)(2)(ii).

(e) Termination and Amendment of Outstanding
Grants. A termination or amendment of the Plan that occurs after a Grant is made shall not materially impair the
rights of a Grantee unless the Grantee consents or unless the Committee acts under Section 16(f). The termination
of the Plan shall not impair the power and authority of the Committee with respect to an outstanding Grant. Whether or
not the Plan has terminated, an outstanding Grant may be terminated or amended under Section 16(f) or may be amended by
agreement of the Company and the Grantee consistent with the Plan.

-17-

18

 

Section 16. Miscellaneous

(a) Grants in Connection with Corporate Transactions
and Otherwise. Nothing contained in this Plan shall be construed to (i) limit the right of the Committee to
make Grants under this Plan in connection with the acquisition, by purchase, lease, merger, consolidation or otherwise,
of the business or assets of any corporation, firm or association, including Grants to employees thereof who become
Employees, or for other proper corporate purposes, or (ii) limit the right of the Company to grant stock options
or make other awards outside of this Plan. The Committee may make a Grant to an employee of another corporation who
becomes an Employee by reason of a corporate merger, consolidation, acquisition of stock or property, reorganization or
liquidation involving the Company in substitution for a stock option or stock awards grant made by such corporation.
Notwithstanding anything in the Plan to the contrary, the Committee may establish such terms and conditions of the
substitute grants as it deems appropriate, including setting the Exercise Price of Options at a price necessary to
retain for the Grantee the same economic value as the substituted Option provided that such substitution does not
result in violation of Code section 409A.

(b) Governing Document. The Plan shall be the
controlling document. No other statements, representations, explanatory materials or examples, oral or written, may
amend the Plan in any manner. The Plan shall be binding upon and enforceable against the Company and its successors and
assigns.

(c) Funding of the Plan; Limitation on Rights.
This Plan shall be unfunded. The Company shall not be required to establish any special or separate fund or to make any
other segregation of assets to assure the payment of any Grants under this Plan. Nothing contained in the Plan and no
action taken pursuant hereto shall create or be construed to create a fiduciary relationship between the Company and
any Grantee or any other person. No Grantee or any other person shall under any circumstances acquire any property
interest in any specific assets of the Company. To the extent that any person acquires a right to receive payment from
the Company hereunder, such right shall be no greater than the right of any unsecured general creditor of the Company.

(d) Rights of Participants. Nothing in this Plan
shall entitle any Employee, Key Advisor, Non-Employee Director or other person to any claim or right to be granted a
Grant under this Plan. Neither this Plan nor any action taken hereunder shall be construed as giving any individual any
rights to be retained by or in the employ of the Employer or any other employment rights.

(e) No Fractional Shares. No fractional shares of
Company Stock shall be issued or delivered pursuant to the Plan or any Grant. The Committee shall determine whether
cash, other awards or other property shall be issued or paid in lieu of such fractional shares or whether such
fractional shares or any rights thereto shall be forfeited or otherwise eliminated

-18-

19

 

(f) Compliance with Law. The Plan, the exercise of
Options and SARs and the obligations of the Company to issue or transfer shares of Company Stock under Grants shall be
subject to all applicable laws and to approvals by any governmental or regulatory agency as may be required. With
respect to persons subject to section 16 of the Exchange Act, it is the intent of the Company that the Plan and all
transactions under the Plan comply with all applicable provisions of Rule 16b-3 or its successors under the
Exchange Act. In addition, it is the intent of the Company that Incentive Stock Options comply with the applicable
provisions of section 422 of the Code, that Grants of “qualified performance-based compensation” comply
with the applicable provisions of section 162(m) of the Code and that, to the extent applicable, Grants comply with the
requirements of section 409A of the Code. To the extent that any legal requirement of section 422, 162(m) or 409A of
the Code as set forth in the Plan ceases to be required under section 422, 162(m) or 409A of the Code, that Plan
provision shall cease to apply. The Committee may revoke any Grant if it is contrary to law or modify a Grant to bring
it into compliance with any law or mandatory government regulation. The Committee may also adopt rules regarding the
withholding of taxes on payments to Participants. The Committee may, in its sole discretion, agree to limit its
authority under this Section.

(g) Changes in Accounting Rules. Except as
provided otherwise at the time of a Grant, notwithstanding any other provision of the Plan to the contrary, if, during
the term of the Plan, any changes in the financial or tax accounting rules applicable to Grants shall occur that, in
the sole judgment of the Committee, may have a material adverse effect on the reported earnings, assets or liabilities
of the Company, the Committee shall have the right and power to modify as necessary, any then outstanding and
unexercised Grants to address such changes.

(h) Employees Subject to Taxation Outside the United
States. With respect to Grantees who are subject to taxation in countries other than the United States, the
Committee may make Grants on such terms and conditions as the Committee deems appropriate to comply with the laws of
the applicable countries, and the Committee may create such procedures, addenda and subplans and make such
modifications as may be necessary or advisable to comply with such laws.

(i) Governing Law. The validity, construction,
interpretation and effect of the Plan and Grant Instruments issued under the Plan shall be governed and construed by
and determined in accordance with the laws of the state of Delaware, without giving effect to the conflict of laws
provisions thereof.

-19-

20

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00155-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00155-of-00352.parquet"}]]