Document:

EXHIBIT
10.1

 

EMPLOYMENT
AGREEMENT

 

THIS
EMPLOYMENT AGREEMENT (the “Agreement”) is effective as of September 13, 2018 between FIRST CHOICE BANK, a California
state banking corporation, (the “Bank”), FIRST CHOICE BANCORP (the “Bancorp”), a California corporation
(collectively referred to as the “Company”) with their principal offices at 17785 Center Court Drive, Suite
750, Cerritos, California 90703 (hereinafter “Bank”), and LYNN M. HOPKINS (hereinafter “Executive”) whose
present residence address is 6210 Parima Street, Long Beach, CA 90803 (Bank, Bancorp and Executive are each sometimes referred
to herein as a “Party” and collectively as the “Parties”). Executive may be carried on the records of
the Bank as an employee and Executive’s compensation shall be paid by the Bank, subject to the Bank’s right of reimbursement
from the Bancorp under other agreements to which the Executive is not a party.

 

A.
TERM OF EMPLOYMENT

 

The
Bank hereby employs Executive, and Executive hereby accepts employment with Bank, for the two (2) year period (the “Term”)
commencing on September 13, 2018 (the “Effective Date”), through September 12, 2020, subject however to prior termination
as hereinafter provided. Where used herein, “Term” shall refer to the entire period of the employment of Executive
by Bank hereunder, for the period provided above, or whether terminated earlier as hereinafter provided.

 

B.
DUTIES OF EXECUTIVE

 

1.
Duties. Executive’s duties under this Employment Agreement include all ordinary and reasonable duties customarily
performed by the full-time Executive Vice President and Chief Financial Officer of a bank holding company and a state-chartered
bank located in California, subject to the powers by law vested in the Board of Directors of the Bank and in the Bank’s
shareholders, and Executive shall report to and be directed by the Bank’s President and Chief Executive Officer. Executive
shall render her services to the Bank and shall exercise such corporate responsibilities as Executive may be directed by the Board
of Directors and the Bank’s President and Chief Executive Officer, and Executive shall perform her duties faithfully, diligently
and to the best of her ability, consistent with the highest and best standards of the banking industry and in compliance with
applicable laws and the Bank’s Articles of Incorporation and Bylaws.

 

2.
Conflicts of Interest. Executive expressly agrees as a condition to the performance by Bank of its obligations herein that
during the term of her Agreement and of any renewals hereof, she will not, directly or indirectly, render any services of an advisory
nature or otherwise to or become employed by or participate or engage in any business competitive with any businesses of the Bank,
without the prior written consent of the Bank, however, that nothing herein shall prohibit Executive from owning stock or other
securities of a competitor which are relatively insubstantial to the total outstanding stock of such competitor, and so long as
she in fact does not have the power to control or direct the management or policies of such competitor and does not serve as a
director or officer of, and is not otherwise associated with, any competitor except as consented to by the Bank. Nothing contained
herein shall preclude substantially passive investments by Executive during the Term that may require nominal amounts of her time,
energies and interest. The Bank and the Bancorp specifically acknowledge that Executive is a board member of the National MPS
Society, PO Box 14686, Durham, NC 27709-4686. Executive agrees to manage her affairs with the National MPS Society so that they
do not unduly interfere with Executive’s responsibilities to the Bank and Bancorp.

 

3.
Performance. Except as provided in paragraph J.2. herein, Executive after the Effective Date shall devote substantially
her full energies, interests, abilities, and productive time to the business of the Bank. Executive shall at all times loyally
and conscientiously perform all of these duties and obligations hereunder and shall at all times strictly adhere to and obey and
instruct and require all that work under and with her strictly to adhere and obey, all applicable federal and state laws, statutes,
rules and regulations to the end that the Bank shall at all times be in full compliance with such laws, statutes, rules and regulations.

 

    	 

    	 

    

 

C.
COMPENSATION

 

1.
Salary. In consideration of the performance by Executive of all of her obligations under this Agreement, the Bank agrees
to pay Executive during the Term hereof a base annual salary of $310,000. The Board of Directors may elect to adjust upward the
base annual salary and other compensation of Executive from time to time, at its sole discretion. The Executive’s salary
shall be reviewed at least annually by the Board of Directors, with the initial review to occur in the first quarter of 2020,
which may, but shall not be required to, increase the salary during the Employment Term.

 

2.
Bonuses. During the term of this Agreement, Executive may receive an annual target bonus opportunity, in the form of cash
and/or stock grants, with such percentage initially set at 50% of base annual salary and subject to the approval by the board
of directors or such additional bonuses, if any, in the form of cash and/or stock grants as the Board of Directors of the Bank
in its sole discretion shall determine (collectively, the “Annual Target Bonus”).

 

3.
Stock Options/Awards. Upon commencement of the Term, Bancorp shall grant to Executive a restricted stock award (the “Restricted
Stock Award”) of 10,000 shares which is intended to vest in equal amounts over five (5) years from the date of grant, subject
to acceleration in specified circumstances. The terms and conditions of the Restricted Stock Award shall be governed by the Bancorp’s
2013 Omnibus Stock Incentive Plan and Executive’s Restricted Stock Award Agreement.

 

4.
Claw-back Provisions. Notwithstanding any other provisions in this Agreement to the contrary, any incentive-based compensation,
or any other compensation, paid to the Executive pursuant to this Agreement or any other agreement or arrangement with the Company
which is subject to recovery under any law, government regulation or stock exchange listing requirement, will be subject to such
deductions and claw-back as may be required to be made pursuant to such law, government regulation or stock exchange listing requirement
or any policy adopted by the Company.

 

D.
EXECUTIVE BENEFITS

 

1.
Personal Days. Executive shall be entitled to twenty-five (25) personal days per year during the Term. Executive further
agrees that she will not take the entire twenty-five (25) days of personal days consecutively, and that she will not take any
personal days at times which would be detrimental to the interests of the Bank and/or the Bancorp. Executive shall be entitled
to accrue personal days up to two times the annual personal days entitlement described above, at which time the personal time
will stop accruing until personal time is taken by Executive. This is subject to any and all California laws and regulatory requirements.

 

2.
Automobile Allowance. Executive shall be entitled to payment of an automobile allowance in the amount of $1,000 per month
during the Term. During the Term hereunder, the Board of Directors would be willing to reanalyze the benefit if Executive’s
actual and reasonable costs are significantly in excess of the reimbursement rate.

 

3.
Group Medical and Life Insurance Benefits. The Bank will provide Executive and Executive’s direct and immediate family
with, and pay for, participation in medical, dental, vision, accident and health benefits, appropriate life and disability insurance,
and an annual physical examination. Said coverage shall be in existence or shall take effect as of the Effective Date hereof and
shall continue throughout the Term. The Bank’s or First Choice Bancorp’s liability to Executive for any breach of
this paragraph shall be limited to the amount of premiums payable by the Bank to obtain the coverage contemplated herein.

 

4.
Salary Continuation Plan and Other Plans. During the Term, Executive shall be eligible to participate in any pension or
profit-sharing plan, deferred compensation plan, salary continuation plan, stock purchase plan, or similar benefit or retirement
program of the Bank, including the Bank’s 401k Plan, as approved by the Board of Directors now or hereafter existing, to
the extent that she is eligible under the provisions thereof and commensurate with Executive’s position in relationship
to other participants.

 

    	 

    	 

    

 

E.
REIMBURSEMENT FOR BUSINESS EXPENSES

 

Executive
shall be entitled to reimbursement by the Bank for any ordinary and necessary business expenses incurred by Executive in the performance
of Executive’s duties and in acting for the Bank during the Term, which type of expenditures shall be determined by the
Board of Directors, provided that:

 

(a)
Each such expenditure is of a nature qualifying it as a proper deduction on the federal and state income tax returns of the Bank
as a business expense and not as deductible compensation to Executive; and

 

(b)
Executive furnishes to the Bank adequate records and other documentary evidence required by federal and state statutes and regulations
issued by the appropriate taxing authorities for the substantiation of such expenditures as deductible business expenses of the
Bank and not as deductible compensation to Executive.

 

Upon
timely presentation to the Bank of necessary and proper documentation in accordance with the Regulations of the Internal Revenue
Service, the Bank will reimburse Executive for any necessary, usual, customary and reasonable business expenses incurred by Executive
in connection with her position or for the Bank’s benefit, including the costs of cellular phone service related to the
Bank’s business.

 

Any
expenses of Executive for her activities in industry association groups, or other business, industry, civic, or charitable organizations
that are not reimbursed by those organizations will be reimbursed by the Bank to Executive upon presentation of proper documentation.

 

F.
TERMINATION

 

Notwithstanding
any and all other provisions of this Agreement to the contrary, Executive’s employment hereunder may be terminated:

 

1.
Without Cause. In the sole and absolute discretion of the Board of Directors for any cause whatsoever; provided, however,
that if such termination occurs during the Term, and is for any cause other than any more particularly described in Sections F.2.
or F.3. hereof, Executive shall receive a severance payment in the amount of twelve (12) months of Executive’s then current
annual salary, plus the amount of Executive’s Annual Target Bonus that Executive would have been eligible to receive for
the year in which Executive’s employment is terminated, had Executive remained employed and the Annual Target Bonus criteria
had been met (the “Bonus Severance Payment Amount”), payable in equal installments on the normal payroll dates of
the Bank, in full and complete satisfaction of any and all rights which Executive may enjoy hereunder other than the right, if
any, to exercise any of the Options vested prior to such termination. In addition, Bank will, for twelve (12) months after the
date of termination, pay all premiums and costs necessary to permit Executive to continue receiving those benefits provided hereunder
that Executive was receiving as of Executive’s date of termination and which Executive is eligible to receive post termination
under the applicable plans or COBRA (the “Benefits Severance Payment Amount”); provided, however, if such Benefits
cannot be provided by the Company, then the Company will pay Executive the amount on an after-tax basis equal to the premiums
for the twelve (12) month period. In order to qualify for the severance benefit, Executive must execute a general release in favor
of the Bank, First Choice Bancorp and its officers, directors, employees, shareholders, attorneys, and agents, and all other related
parties. Such payments will be made (or begin if installments payments are made by the Bank) on the 60th day following
termination if the release referred to in Section F.5 is executed and not revoked by that day. Executive agrees and acknowledges
that Executive will not be entitled to receive any unvested portion of the Restricted Stock Award.

 

2.
Disability or Death. Upon Executive’s physical or mental disability to continue her duties hereunder as the Chief
Financial Officer of the Bank; provided, however, that if such termination occurs as a result of such disability, Executive shall
receive a severance payment in an amount equal to twelve (12) months of Executive’s annual base salary in effect hereunder
at the date of such termination, in full and complete satisfaction of any and all rights which Executive might enjoy hereunder,
other than the right, if any, to retain any shares that have vested pursuant to the Restricted Stock Award prior to such termination,
or which Executive is otherwise entitled to receive pursuant to Bancorp’s 2013 Omnibus Stock Incentive Plan or Executive’s
Restricted Stock Award Agreement, less any payments received from any Bank provided benefit, including worker’s compensation,
FICA or disability insurance. For purposes of this Agreement, physical or mental disability shall be defined as Executive being
unable to fully perform under this Agreement for a continuous period of 90 days and reasonably accommodate for that disability
as required by the Americans with Disability Act of 1990.

 

    	 

    	 

    

 

Upon
Executive’s death; provided, however, Executive’s estate shall receive the payment in an amount equal to six (6) months
of Executive’s annual base salary in effect hereunder at the date of such termination, in full and complete satisfaction
of any and all rights which Executive might enjoy hereunder other than the right, to retain any shares that have vested pursuant
to the Restricted Stock Award prior to such termination, or which Executive’s estate is otherwise entitled to receive pursuant
to Bancorp’s 2013 Omnibus Stock Incentive Plan or Executive’s Restricted Stock Award Agreement.

 

3.
For Cause. The Bank may terminate immediately this Agreement without any further obligation or liability whatsoever to
Executive, if:

 

(a)
Executive engages in misconduct, including fraudulent acts, acts that would substantially harm the reputation of the Bank or the
Company, or is negligent in the performance of her material duties hereunder and fails to cure such negligence within thirty (30)
days after written notice thereof to Executive; or

 

(b)
Executive is convicted of or pleads guilty or nolo contendere to any felony or a crime that constitutes a misdemeanor involving
moral turpitude; or

 

(c)
Bank is required to remove or replace Executive by formal order or formal or informal instruction, including a requested consent
order or agreement, from the Department of Business Oversight, Federal Deposit Insurance Corporation (“FDIC”), the
Federal Reserve Bank, or any other regulatory authority having jurisdiction; or

 

(d)
Executive has failed to perform or habitually neglected Executive’s duties after written notice thereof to Executive and
a thirty (30) day cure period; or

 

(e)
Executive has willfully and materially failed to follow any valid and material legal written policies of the Board of Directors,
any resolutions of the Board adopted at a duly called meeting or any instructions from the Board of Directors, or follow any other
material policies, rules, regulations or statutes of the Bank or Company, or to which the Bank or Company is subject, as promulgated
from time to time; or

 

(f)
Due to Executive’s lack of care or negligence, the Bank receives a Section 8(a) Order from the FDIC, a Section 8(b) Order
from the FDIC, an order from the Department of Business Oversight or the Federal Reserve Bank, or an informal regulatory enforcement
action from any of the agencies named above; or

 

(g)
Executive’s engagement in dishonesty or illegal conduct directly related to Executive’s employment; or

 

(h)
Executive’s willful unauthorized disclosure of Confidential Information (as defined below); or

 

(i)
Executive’s breach of any material obligation under this Agreement or any other written agreement between the Executive
and the Company after written notice thereof to Executive and a thirty (30) day cure period, if capable of cure; or

 

(j)
Executive is directly responsible for the failure of the Bank and the Company, or otherwise maintain the Bank and the Company
in good standing.

 

    	 

    	 

    

 

Any
termination under this paragraph F.3 shall not prejudice any remedy which Bank may otherwise have at law, in equity, or under
this Agreement.

 

4.
Change of Control

 

(a)
Except for termination for Cause (pursuant to Section F.3 hereof), disability or death (pursuant to Section F.2 hereof), after
the occurrence of a Change in Control (as defined below), if Executive’s employment with the Bank is materially adversely
altered or Executive is not retained by the Bank or the surviving bank or company, Executive shall be entitled to receive a severance
payment in the amount of twelve (12) months of Executive’s then current monthly salary and the Benefits Severance Payment
Amount. In addition, all unvested shares issued pursuant to the Restricted Stock Award and any other unvested Award, as defined
by Bancorp’s 2013 Omnibus Stock Incentive Plan and evidenced by an Award Agreement, granted to Executive, with or without
performance objectives, will immediately vest in accordance with the terms and conditions of the Bancorp’s 2013 Omnibus
Stock Incentive Plan and Executive’s Restricted Stock Award Agreement and other Award Agreement, if any.

 

A
material adverse alteration in employee status would mean (i) a material breach by the Bank of its obligations under this Agreement,
(ii) a change in Executive’s status or position or responsibilities as Executive Vice President and Chief Financial Officer
of the Bank which represents a demotion from her status, title, position and responsibilities, or the assignment to her of any
significant duties which are inconsistent with such status, title or position, or (iii) a reduction by the Bank in Executive’s
base annual salary, or (iv) a relocation of Executive’s principal office to a location that is more than twenty-five (25)
miles from the Bank’s headquarters office currently located in Cerritos, California. . Such payments will be made (or begin
if installments payments are made by the Bank) on the 60th day following termination if the release referred to in
Section F.5 is executed and not revoked by that day.

 

The
Executive cannot terminate her employment for a material adverse alteration in employee status unless she has provided written
notice to the Company of the existence of the circumstances providing grounds for termination for a material adverse alteration
in employee status within thirty (30) days of the initial existence or occurrence of such grounds and the Company has had at least
(30) days from the date on which such notice is provided to cure such circumstances. If the Executive does not terminate her employment
for a material adverse alteration in employee status within seventy-five (75) days after the first occurrence of the applicable
grounds, then the Executive will be deemed to have waived her right to terminate for a material adverse alteration in employee
status with respect to such grounds.

 

(b)
A “Change in Control” shall be deemed to have occurred if the conditions set forth in any one of the following paragraphs
shall have been satisfied:

 

(i)
any “person” (as such term is used in Sections 13(d) and 14(d) of the Securities Exchange Act of 1934 (the “Exchange
Act”) (other than the Company; any trustee or other fiduciary holding securities under an employee benefit plan of the Company;
any entity owned, directly or indirectly, by the stockholders of the Company in substantially the same proportions as their ownership
of the stock of the Company) is or becomes the “beneficial owner” (as defined in Rule 13d-3 under the Exchange Act),
directly or indirectly, of securities of the Company (not including in the securities beneficially owned by such Person any securities
acquired directly from the Company or its affiliates) representing 25% or more of the combined voting power of the Company’s
then outstanding securities; or

 

(ii)
the stockholders of the Company approve a merger or consolidation of the Company with any other corporation, other than (A) a
merger or consolidation which would result in the voting securities of the Company outstanding immediately prior thereto continuing
to represent (either by remaining outstanding or by being converted into voting securities of the surviving entity), in combination
with the ownership of any trustee or other fiduciary holding securities under an employee benefit plan of the Company, at least
25% of the combined voting power of the voting securities of the Company or such surviving entity outstanding immediately after
such merger or consolidation, or (B) a merger or consolidation effected to implement a recapitalization of the Company (or similar
transaction) in which no person acquires more than 25% of the combined voting power of the Company’s then outstanding securities;
or

 

    	 

    	 

    

 

(iii)
the stockholders of the Company approve a plan of complete liquidation of the Company or an agreement for the sale or disposition
by the Company of all or substantially all the Company’s assets.

 

Notwithstanding
the foregoing, a Change in Control shall not include (A) any event, circumstances or transaction that results from the action
of any entity or group that includes, is affiliated with, or is wholly or partly controlled by Executive (e.g., a management-led
buyout), or (B) the repurchase by the Company or the redemption directly or indirectly, of securities of the Company representing
25% or more of the combined voting power of the Company’s then outstanding securities.

 

Notwithstanding
the foregoing, such an occurrence shall constitute a “Change in Control” only if the occurrence is a “change
in ownership,” a “change in effective control” or a “change in the ownership of a substantial portion
of the assets” (as such terms are defined for purposes of Section 409A of the Internal Revenue Code of 1986, as amended
(“Section 409A”)) of the Company.

 

5.
Release and Resignation. As a condition to Executive receiving any payments pursuant to Sections F.1, F.2, and F.4 hereof,
Executive will execute and deliver a general release to the Company, releasing the company, its employees, officers, directors,
stockholders and agents, and each person who controls any of them within the meaning of Section 15 of the Securities Act of 1933,
as amended, from any and all claims (other than claims with respect to payments pursuant to such Sections) from the beginning
of time to the date of termination.

 

Upon
termination of Executive’s employment with the Bank, Executive, if she is then serving as a director of the Company, agrees
to immediately resign her position as a director of the Company, unless otherwise agreed, by providing written notice of her resignation
to the Board of Directors of the Company.

 

6.
Supervisory Matters.

 

(a)
If the Executive is suspended and/or temporarily prohibited from participating in the conduct of the Bank’s or the Bancorp’s
affairs by notice served under Section 8(e)(3) or 8(g)(1) of the Federal Deposit Insurance Act (12 U.S.C. Section 1818(e)(3) and
(g)(1)), the obligations of the Company under this Agreement shall be suspended as of the date of service, unless stayed by appropriate
proceedings. If the charges in the notice are dismissed, the Company may, in its discretion: (i) pay the Executive all or part
of the compensation withheld while its obligations under this Agreement were suspended; and (ii) reinstate (in whole or in part)
any of its obligations which were suspended. If the Executive is removed and/or permanently prohibited from participating in the
conduct of the Bank’s or the Bancorp’s affairs by an order issued under Section 8(e) (3) or 8(g)(1) of the Federal
Deposit Insurance Act (12 U.S.C. Section 1818(e)(3) or (g)(1)), all obligations of the Company under this Agreement shall terminate
as of the effective date of the order, but vested rights of the parties shall not be affected. If the Company is in default (as
defined in Section 3(x)(1) of the Federal Deposit Insurance Act (12 U.S.C. Section 1813(x)(1)), all obligations under this Agreement
shall terminate as of the date of default, but vested rights of the parties shall not be affected. All obligations under this
Agreement shall be terminated, except to the extent that it is determined that continuation of the Agreement is necessary for
the continued operation of the Company; (i) by the Federal Deposit Insurance Corporation at the time that the Federal Deposit
Insurance Corporation enters into an agreement to provide assistance to or on behalf of the Bank under the authority contained
in Section 11 of the Federal Deposit Insurance Act (12 U.S.C. Section 1821); or (ii) by the Federal Deposit Insurance Corporation
or the Federal Reserve Board, at the time that the Federal Deposit Insurance Corporation or the Federal Reserve Board approves
a supervisory merger to resolve problems related to the operation of the Bancorp or when the Company is in an unsafe or unsound
condition. All rights of the parties that have already vested, however, shall not be affected by such action.

 

Notwithstanding
anything to the contrary contained herein, the obligation to make payment of any severance benefits as provided herein (including
without limitation, any payment contemplated under Section F.4), is conditioned upon (i) the Company and/or Bank obtaining any
necessary approval from the Board of Governors of the Federal Reserve System and/or the Federal Deposit Insurance Corporation,
and (ii) compliance with applicable law, including 12 C.F.R. Part 359. In addition, the Executive covenants and agrees that the
Company and its successors and assigns shall have the right to demand the return of any “golden parachute payments”
(as defined in 12 C.F.R. Part 359) in the event that any of them obtain information indicating that the Executive committed, is
substantially responsible for, or has violated, the respective acts or omissions, conditions, or offenses contained in 12 C.F.R.
§ 359.4(a)(4), and the Executive shall promptly return any such “golden parachute payment” upon such demand.

 

    	 

    	 

    

 

(7)
Section 280G.

 

(i)
If any of the payments or benefits received or to be received by the Executive (including, without limitation, any payment or
benefits received in connection with a Change in Control or the Executive’s termination of employment, whether pursuant
to the terms of this Agreement or any other plan, arrangement or agreement, or otherwise) (all such payments collectively referred
to herein as the “280G Payments”) constitute “parachute payments” within the meaning of Section
280G of the Code and would, but for this Section F.(7), be subject to the excise tax imposed under Section 4999 of the Code (the
“Excise Tax”), then such 280G Payments shall be reduced (by the minimum possible amounts), a manner
determined by the Company that is consistent with the requirements of Section 409A, until no amount payable to the Executive will
be subject to the Excise Tax. If two economically equivalent amounts are subject to reduction but are payable at different times,
the amounts shall be reduced (but not below zero) on a pro rata basis.

 

(ii)
All calculations and determinations under this Section F.(7) shall be made by an independent accounting firm or independent tax
counsel appointed by the Company (the “Tax Counsel”) whose determinations shall be conclusive and binding
on the Company and the Executive for all purposes. For purposes of making the calculations and determinations required by this
Section F.(7), the Tax Counsel may rely on reasonable, good faith assumptions and approximations concerning the application of
Section 280G and Section 4999 of the Code. The Company and the Executive shall furnish the Tax Counsel with such information and
documents as the Tax Counsel may reasonably request in order to make its determinations under this Section F.(7). The Company
shall bear all costs the Tax Counsel may reasonably incur in connection with its services.

 

G.
Confidential Information Defined.

 

(a)
Definition.

 

For
purposes of this Agreement, “Confidential Information” includes, but is not limited to, all information not generally
known to the public, in spoken, printed, electronic or any other form or medium, relating directly or indirectly to: business
processes, practices, methods, policies, plans, documents, operations, services, strategies, agreements, contracts, terms of agreements,
transactions, potential transactions, negotiations, trade secrets, policy manuals, records, vendor information, financial information,
results, accounting records, legal information, marketing information, pricing information, credit information, payroll information,
staffing information, personnel information, employee lists, supplier lists, vendor lists, reports, internal controls, security
procedures, market studies, sales information, revenue, costs, notes, communications, product plans, ideas, customer information,
customer lists, of the Company or its businesses or any existing or prospective customer, supplier, investor or other associated
third party, or of any other person or entity that has entrusted information to the Company in confidence.

 

The
Executive understands that the above list is not exhaustive, and that Confidential Information also includes other information
that is marked or otherwise identified as confidential or proprietary, or that would otherwise appear to a reasonable person to
be confidential or proprietary in the context and circumstances in which the information is known or used.

 

The
Executive understands and agrees that Confidential Information includes information developed by her in the course of her employment
by the Company as if the Company furnished the same Confidential Information to the Executive in the first instance. Confidential
Information shall not include information that: (i) is generally available to and known by the public at the time of disclosure
to the Executive; provided that, such disclosure is through no direct or indirect fault of the Executive or person(s) acting on
the Executive’s behalf; (ii) becomes available on a non-confidential basis from a source other than a party to this Agreement
or a representative of a party to this Agreement, provided that such source is not bound by a confidentiality agreement with a
party or otherwise prohibited from transmitting the information by a contractual, legal or fiduciary obligation, (iii) is disclosed
in accordance with an order of a court of competent jurisdiction or applicable law.

 

    	 

    	 

    

 

(b)
Company Creation and Use of Confidential Information.

 

The
Executive understands and acknowledges that the Company has invested, and continues to invest, substantial time, money and specialized
knowledge into developing its resources, creating a customer base, generating customer and potential customer lists, training
its employees, and improving its product offerings in the field of financial services. The Executive understands and acknowledges
that as a result of these efforts, the Company has created, and continues to use and create Confidential Information. This Confidential
Information provides the Company with a competitive advantage over others in the marketplace.

 

(c)
Disclosure and Use Restrictions.

 

The
Executive agrees and covenants: (i) to treat all Confidential Information as strictly confidential; (ii) not to directly or indirectly
disclose, publish, communicate or make available Confidential Information, or allow it to be disclosed, published, communicated
or made available, in whole or part, to any entity or person whatsoever (including other employees of the Company) not having
a need to know and authority to know and use the Confidential Information in connection with the business of the Company and,
in any event, not to anyone outside of the direct employ of the Company except as required in the performance of the Executive’s
authorized employment duties to the Company in each instance (and then, such disclosure shall be made only within the limits and
to the extent of such duties; and (iii) not to access or use any Confidential Information, and not to copy any documents, records,
files, media or other resources containing any Confidential Information, or remove any such documents, records, files, media or
other resources from the premises or control of the Company, except as required in the performance of the Executive’s authorized
employment duties to the Company acting on behalf of the Company in each instance (and then, such disclosure shall be made only
within the limits and to the extent of such duties). Nothing herein shall be construed to prevent disclosure of Confidential Information
as may be required by applicable law or regulation, or pursuant to the valid order of a court of competent jurisdiction or an
authorized government agency, provided that the disclosure does not exceed the extent of disclosure required by such law, regulation
or order. The Executive shall promptly provide written notice of any such order to the Company’s General Counsel.

 

The
Executive understands and acknowledges that her obligations under this Agreement with regard to any particular Confidential Information
shall commence immediately upon the Executive first having access to such Confidential Information (whether before or after she
began employment by the Company) and shall continue during and after her employment by the Company until such time as such Confidential
Information has become public knowledge other than as a result of the Executive’s breach of this Agreement or breach by
those acting in concert with the Executive or on the Executive’s behalf.

 

H.
Security.

 

(a)
Security and Access. The Executive agrees and covenants (a) to comply with all Company security policies and procedures
as in force from time to time including, without limitation, those regarding computer equipment, telephone systems, voicemail
systems, facilities access, monitoring, key cards, access codes, Company intranet, internet, social media and instant messaging
systems, computer systems, e-mail systems, computer networks, document storage systems, software, data security, encryption, firewalls,
and passwords (“Facilities Information Technology and Access Resources”); (b) not to access or use any Facilities
Information Technology and Access Resources except as authorized by the Company; and (iii) not to access or use any Facilities
Information Technology and Access Resources in any manner after the termination of the Executive’s employment by the Company,
whether termination is voluntary or involuntary. The Executive agrees to notify the Company promptly in the event she learns of
any violation of the foregoing by others, or of any other misappropriation or unauthorized access, use, reproduction or reverse
engineering of, or tampering with any Facilities Information Technology and Access Resources or other Company property or materials
by others.

 

(b)
Exit Obligations. Upon (a) voluntary or involuntary termination of the Executive’s employment or (b) the Company’s
request at any time during the Executive’s employment, the Executive shall (i) provide or return to the Company any and
all Company property, including keys, key cards, access cards, identification cards, security devices, employer credit cards,
network access devices, computers, cell phones, smartphones, PDAs, pagers, fax machines, equipment, manuals, reports, files, books,
compilations, e-mail messages, recordings, disks, thumb drives or other removable information storage devices, hard drives, data
and all Company documents and materials belonging to the Company and stored in any fashion, including but not limited to those
that constitute or contain any Confidential Information, that are in the possession or control of the Executive, whether they
were provided to the Executive by the Company or any of its business associates or created by the Executive in connection with
her employment by the Company; and (ii) delete or destroy all copies of any such documents and materials not returned to the Company
that remain in the Executive’s possession or control, including those stored on any non-Company devices, networks, storage
locations and media in the Executive’s possession or control.

 

    	 

    	 

    

 

I.
Publicity. The Executive hereby irrevocably consents to any and all uses and displays, by the Company and its agents, representatives
and licensees, of the Executive’s name, voice, likeness, image, appearance and biographical information in, on or in connection
with any pictures, photographs, audio and video recordings, digital images, websites, television programs and advertising, other
advertising and publicity, sales and marketing brochures, books, magazines, other publications, CDs, DVDs, tapes and all other
printed and electronic forms and media throughout the world, at any time during or after the period of her employment by the Company,
for all legitimate commercial and business purposes of the Company (“Permitted Uses”) without further consent from
or royalty, payment or other compensation to the Executive. The Executive hereby forever waives and releases the Company and its
directors, officers, employees and agents from any and all claims, actions, damages, losses, costs, expenses and liability of
any kind, arising under any legal or equitable theory whatsoever at any time during or after the period of her employment by the
Company, arising directly or indirectly from the Company’s and its agents’, representatives’ and licensees’
exercise of their rights in connection with any Permitted Uses.

 

J.
GENERAL PROVISIONS

 

1.
Trade Secrets. During the Term, Executive will have access to and become acquainted with what Executive and the Bank acknowledge
are trade secrets, to wit, knowledge or data concerning the Bank, including its operations and business, and the identity of customers
of the Bank, including knowledge of their financial conditions, their financial needs, as well as their methods of doing business.
Executive shall not disclose any of the aforesaid trade secrets, directly or indirectly, or use them in any way, except as required
in the course of Executive’s employment with the Bank.

 

2.
Covenant Not to Solicit Customers or Fellow Employees. If the Bank or the Executive terminates this Agreement for any reason,
Executive agrees that for a one-year period, Executive shall not solicit the banking business of any customer with whom the Bank
has done business during the preceding eighteen (18) month period. Executive further agrees not to solicit the services of any
officer or employee of the Bank during such period.

 

The
covenants contained in this Section J.2 shall be considered as a series of separate covenants, one for each political subdivision
of California, and one for each entity or individual with respect to whom solicitation is prohibited. Except as provided in the
previous sentence, each such separate covenant shall be deemed identical in terms to the covenant contained in this Section J.2.
If in any judicial proceeding a court refuses to enforce any of such separate covenants (or any part thereof), then such unenforceable
covenant (or such part) shall be eliminated from this Agreement to the extent necessary to permit the remaining separate covenants
(or portions thereof) to be enforced. In the event that a provision of this Section J.2 or any such separate covenant or portion
thereof, is determined to exceed the time, geographic or scope limitations permitted by applicable law, then such provision shall
be reformed to the maximum time, geographic or scope limitations, as the case may be, permitted by applicable law. Executive hereby
consents, to the extent Executive may lawfully do so, to the judicial modification of this Agreement as described in this Section
J.2.

 

In
the event of a merger, where Bank is not the surviving corporation, or in the event of a consolidation, in the event of a transfer
of all or substantially all of the assets of Bank, or in the event that the majority of the Bank’s Board of Directors, as
it exists as of the date of this Agreement, does not have control, the Executive shall be unconditionally released from all of
her duties and obligations under this paragraph.

 

    	 

    	 

    

 

3.
Indemnification. The Bank shall use its most diligent and best efforts to obtain and maintain during and after the Term,
a Directors and Officers Liability Insurance Policy in the largest amount available or reasonably affordable. In addition, to
the fullest extent allowed by law, the Bank shall indemnify Executive for any and all of her actions, or forbearance of any action,
as an employee and Director of the Bank, carried out or undertaken in good faith in the course of her duties, even if such is
held to be negligent. The Bank will indemnify Executive, defend, and bear the cost of defense with regard to any action or threatened
action brought by a third party against the Executive (whether or not the Bank is joined or included as a party defendant) and/or
the Bank. This indemnification shall include not only the costs of defense, but also any other expenses, judgments, fines, settlements,
and other amounts actually and reasonably incurred. This indemnification does not and will not include illegal acts knowingly
and willfully carried out by the Executive, but will include all actions carried out by the Executive acting in good faith and
in a manner the Executive reasonably believed to be in the best interest of the Bank. Such indemnification shall also apply to
any and all subsidiaries of the Bank and organizations with which the Bank requests Executive to serve, and as regards the actions
of Executive and her involvement and actions within or regarding those subsidiaries or organizations. The indemnification rights
of Executive herein are in addition to any rights of indemnification under applicable law, contract, or the articles of incorporation
or bylaws of the Bank.

 

4.
Return of Documents. Executive expressly agrees that all manuals, documents, files, reports, studies, instruments or other
materials used and/or developed by Executive during the Term are solely the property of the Bank, and that Executive has no right,
title or interest therein. Upon termination of this Agreement, Executive or Executive’s representative shall promptly deliver
possession of all of said property to the Bank in good condition.

 

5.
Notices. Any notice, request, demand or other communication required or permitted hereunder shall be deemed to be properly
given when personally served in writing, when deposited in the United States mail, postage prepaid, or when communicated to a
public telegraph address appearing at the beginning of this Agreement. Either party may change its address by written notice in
accordance with this paragraph.

 

6.
California Law. This Agreement is to be governed by and construed under the laws of the State of California.

 

7.
Captions and Paragraph Headings; Interpretation. Captions and paragraph headings used herein are for convenience only and
are not a part of this Agreement and shall not be used in construing it. The parties have participated jointly in the negotiation
and drafting of this Agreement. In the event an ambiguity or question of intent or interpretation arises, this Agreement will
be construed as if drafted jointly by the parties and no presumption or burden of proof will arise favoring or disfavoring any
party by virtue of the authorship of any of the provisions of this Agreement.

 

8.
Invalid Provisions. Should any provision of this Agreement for any reason be declared invalid, the validity and binding
effect of any remaining portion shall not be affected, and the remaining portions of this Agreement shall remain in full force
and effect as if this Agreement had been executed with said provision eliminated.

 

9.
Entire Agreement. This Agreement contains the entire agreement of the parties. It supersedes any and all other agreements,
either oral or in writing, between the parties hereto with respect to the employment of Executive by the Bank. Each party to this
Agreement acknowledges that no representations, inducements, promises, or agreements, oral or otherwise, have been made by any
party, or anyone acting on behalf of any party, which are not embodied herein, and that no other agreement, statement, or promise
not contained in this Agreement shall be valid or binding. This Agreement may not be modified or amended by oral agreement, but
only by an agreement in writing signed by the Bank and Executive.

 

10.
Receipt of Agreement. Each of the parties hereto acknowledges that it or she has read this Agreement in its entirety and
does hereby acknowledge receipt of a fully executed copy thereof. A fully executed copy shall be an original for all purposes,
and is a duplicate original.

 

    	 

    	 

    

 

11.
Dispute Resolution Procedures. In the event of any dispute, claim or controversy between the Executive and the Bank (or
its directors, officers, employees or agents) arising out of this Agreement or the Executive’s employment with the Bank,
both Parties agree to submit such dispute, claim or controversy to final and binding arbitration under the Federal Arbitration
Act, in conformity with the procedures of the California Arbitration Act (Cal. Code Civ. Proc. sec. 1280 et seq.). The arbitration
will be conducted before JAMS (“JAMS”) in accordance with the JAMS Employment Arbitration Rules and Procedures. These
rules are available at the JAMS web site at: http://www.jamsadr.com. The claims governed by this arbitration provision include,
but are not limited to, claims for wages and other compensation, claims for breach of contract (express or implied), claims for
violation of public policy, wrongful termination, wrongful demotion, tort claims, claims for fraud and misrepresentation, claims
for unlawful discrimination, harassment, and/or retaliation to the extent allowed by law, and claims for violation of any federal,
state, or other government law, statute, regulation, or ordinance. The claims which are to be arbitrated under this Agreement
include claims under Title VII of the Civil Rights Act of 1964, the Americans with Disabilities Act, the Age Discrimination in
Employment Act, the California Fair Employment and Housing Act and the California Labor Code.

 

(a)
The arbitration shall be conducted by a single arbitrator selected either by mutual agreement of the Executive and the Bank or,
if they cannot agree, from an odd-numbered list of experienced employment law arbitrators provided by JAMS. Each Party shall strike
one arbitrator from the list alternately until only one arbitrator remains.

 

(b)
Each Party shall have the right to conduct reasonable discovery, as determined by the arbitrator.

 

(c)
The arbitrator shall have all powers conferred by law and a judgment may be entered on the award by a court of law having jurisdiction.
The arbitrator shall render a written arbitration award that contains the essential findings and conclusions on which the award
is based. The award and judgment shall be binding and final on both Parties, subject to such review as is authorized by law.

 

(d)
Either Party may bring an action to confirm the arbitration award in a court of competent jurisdiction. To the maximum extent
permitted by law, the decision of the arbitrator shall be final and binding on the Parties to this Agreement and shall be subject
to judicial review only to the extent provided by law.

 

(e)
The Parties shall share equally the costs of the arbitrator and the arbitration forum unless a different fee payment arrangement
is otherwise required by applicable law to preserve the enforceability of this arbitration provision. Company will pay the costs
of the arbitrator and the arbitration forum to the extent required by applicable law to preserve the enforceability of this arbitration
provision.

 

(f)
In the event litigation, mediation, or arbitration is commenced to enforce or construe any of the provisions of this Agreement,
to recover damages for breach of any of the provisions of this Agreement, or to obtain declaratory relief in connection with any
of the provisions of this Agreement, the prevailing Party shall, to the extent permitted by law without impairing the enforceability
of the arbitration provision hereinabove, be entitled to recover reasonable attorneys’ fees and costs. In the event this
Agreement is asserted, in any litigation, mediation, or arbitration, as a defense to any liability, claims, demands, actions,
causes of action, or rights herein released or discharged, the prevailing Party on the issue of that defense shall, to the extent
permitted by law without impairing the enforceability of the arbitration provision hereinabove, be entitled to recover reasonable
attorneys’ fees and costs.

 

(g)
The Executive and the Company understand that by signing this Agreement, they give up their right to a civil trial in a court
of law and their right to a trial by jury.

 

(h)
This agreement to arbitrate does not apply to disputes or claims related to workers’ compensation benefits, disputes or
claims related to unemployment insurance benefits, unfair labor practice charges under the National Labor Relations Act, or disputes
or claims that are expressly excluded from arbitration by statute or are expressly required to be arbitrated under a different
procedure pursuant to an employee benefit plan.

 

(i)
This agreement to arbitrate does not prevent Executive from filing a charge or complaint with the California Department of Fair
Employment and Housing, or the U.S. Equal Opportunity Commission. It also does not prevent Executive from participating in any
investigation or proceeding conducted by an agency. However, if one of these agencies issues a right to sue notice, binding arbitration
under this agreement will be Executive’s sole remedy.

 

    	 

    	 

    

 

(j)
This agreement to arbitrate shall continue during the Term and thereafter regarding any employment-related disputes.

 

Any
controversy or claim arising out of, or relating to this Agreement or the breach thereof, shall be settled by arbitration in the
County of Los Angeles, State of California, in accordance with the rules of JAMS, and a judgment upon the award rendered may be
entered is any court having jurisdiction thereof.

 

12.
Section 409A. This Agreement is intended to comply with Section 409A or an exemption thereunder and shall be construed
and administered in accordance with Section 409A. Notwithstanding any other provision of this Agreement, payments provided under
this Agreement may only be made upon an event and in a manner that complies with Section 409A or an applicable exemption. Any
payments under this Agreement that may be excluded from Section 409A either as separation pay due to an involuntary separation
from service or as a short-term deferral shall be excluded from Section 409A to the maximum extent possible. For purposes of Section
409A, each installment payment provided under this Agreement shall be treated as a separate payment. For purposes of determining
the timing of any payments to be made under this Agreement by reference to Executive’s termination of employment, “termination”
and “termination of employment” shall refer to Executive’s “separation from service” as defined
for purposes of Section 409A. Notwithstanding the foregoing, the Company makes no representations that the payments and benefits
provided under this Agreement comply with Section 409A and in no event shall the Company be liable for all or any portion of any
taxes, penalties, interest or other expenses that may be incurred by the Executive on account of non-compliance with Section 409A.

 

Notwithstanding
any other provision of this Agreement, if any payment or benefit provided to the Executive in connection with her termination
of employment is determined to constitute “nonqualified deferred compensation” within the meaning of Section 409A
and the Executive is determined to be a “specified employee” as defined in Section 409A(a)(2)(b)(i), then such payment
or benefit shall be paid on the first payroll date to occur following the six-month anniversary of the Termination Date (the “Specified
Employee Payment Date”). The aggregate of any payments that would otherwise have been paid before the Specified Employee
Payment Date shall be paid to the Executive in a lump sum on the Specified Employee Payment Date and thereafter, any remaining
payments shall be paid without delay in accordance with their original schedule.

 

Signature
Page to Follow

 

    	 

    	 

    

 

IN
WITNESS WHEREOF, the Bank has caused this Agreement to be executed by its duly authorized officer or representative and Executive
has executed this Agreement to be effective as of the day and year first written above.

 

	 	FIRST CHOICE BANK
	 	 	 
	 	By:	/s/
    Pravin     Pranav
	 	 	Pravin Pranav,
	 	 	Chairman, Compensation Committee

 

	 	By:	/s/
    Phillip Thong
	 	 	Phillip Thong,
	 	 	Secretary

 

	 	FIRST CHOICE BANCORP
	 	 	 
	 	By:	/s/
    Pravin Pranav
	 	 	Pravin Pranav,
	 	 	Chairman, Compensation
	 	 	Committee

 

	 	By:	/s/
    Phillip Thong
	 	 	Phillip Thong,
	 	 	Secretary

 

	 	EXECUTIVE
	 	 
	 	/s/
    Lynn M. Hopkins
	 	Lynn M. HopkinsExhibit

AMENDED AND RESTATED HARTE HANKS 2013 OMNIBUS INCENTIVE PLAN
 
ARTICLE I
 
INTRODUCTION
 
1.1 Establishment. Harte Hanks, Inc. (the “Company”) adopted the 2013 Omnibus Incentive Plan (the “Plan”) effective as of the Effective Date. The Plan is hereby amended and restated effective as of the Amendment Effective Date. The Plan permits the granting of stock options, restricted stock, performance awards, dividend equivalents, restricted stock units, common stock equivalents, stock appreciation rights, and other stock-based awards.
 
1.2 Purpose. The purpose of the Plan is to provide employees, directors and consultants selected for participation in the Plan with added incentives to continue in the service of the Company and its affiliates and to create in such employees, directors and consultants a more direct interest in the future success of the operations of the Company and its Affiliated Corporations by relating incentive compensation to the achievement of long-term corporate economic objectives. The Plan is also designed to attract employees, directors and consultants and to retain and motivate participating employees, directors and consultants by providing an opportunity for equity investment in the Company.
 
1.3 Effect on Other Awards. The provisions of the Plan shall have no effect on options or awards granted pursuant to any other plans of the Company, which shall continue to be governed by the terms and provisions of the agreements and the plans governing such grants, as applicable. Awards granted prior to the Amendment Effective Date shall continue to be governed by the applicable Award Agreements and the terms of the Plan, without giving effect to changes made pursuant to this amendment and restatement that materially impair the rights of Participants, and the Committee shall administer such Awards in accordance with the Plan, without giving effect to changes made pursuant to this amendment and restatement that materially impair the rights of Participants. Notwithstanding the foregoing, in no event shall any changes made pursuant to this amendment and restatement apply to an Award that was outstanding on November 2, 2017 and intended to qualify as performance-based compensation as described under Section 162(m) of the Internal Revenue Code to the extent such change would constitute a material modification of the Award.
 
ARTICLE II
 
DEFINITIONS
 
2.1 Definitions. The following terms shall have the meanings set forth below:
 
(a) “Affiliated Corporation” means any corporation that is either a parent corporation with respect to the Company or a subsidiary corporation with respect to the Company (within the meaning of Sections 424(e) and (f), respectively, of the Internal Revenue Code).
 
(b) “Amendment Effective Date” means the effective date of the Plan, as set forth in Section 21.1 hereof.
 
(c) “Award” means any award under this Plan of any Stock Option, Restricted Stock Award, Performance Award, Dividend Equivalent, Restricted Stock Unit, Stock Award, Stock Appreciation Right, or any other award established pursuant to the Plan that may be awarded or granted under the Plan (collectively, “Awards”).
 
(d) “Award Agreement” means a written agreement executed by an authorized officer of the Company (and, if required, by the Participant) which shall contain such terms and conditions with respect to an Award as the Committee shall determine, consistent with the Plan.
 
(e) “Board” means the Board of Directors of the Company.
 
(f) “Bonus Payment” means a payment to a Participant pursuant to a Bonus Plan of the Company.
 
(g) “Bonus Plan” means a performance-based bonus plan of the Company as established by the Board or the Committee from time to time, pursuant to which Bonus Payments are made from time to time in the manner and under the conditions established by the Board or the Committee.
 
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(h) “Cause” means deficiencies in performance or conduct, as determined in the sole discretion of the Company or Affiliated Corporation, resulting in termination of employment, or termination of employment for “cause” as defined in any agreement governing the employment of a Participant with the Company or an Affiliated Corporation.
 
(i) “Change of Control” means the occurrence of any one or more of the following events:
 
(i) the acquisition of any outstanding voting securities by any person, after which such person (as the term is used for purposes of Section 13(d) or 14(d) of the Exchange Act has beneficial ownership (within the meaning of Rule 13d-3 promulgated under the Exchange Act) of 50% or more of the then outstanding voting securities of the Company; provided, however, that, for purposes of this definition, the following acquisitions shall not constitute a Change of Control: (I) any acquisition directly from the Company, (II) any acquisition by the Company, (III) any acquisition by any employee benefit plan (or related trust) sponsored or maintained by the Company or any company controlled by, controlling or under common control with the Company or (IV) any acquisition by any corporation pursuant to a transaction that complies with Sections (iii)(A) and (iii)(B) of this definition;
 
(ii) individuals who, as of the date hereof, constitute the Board (the “Incumbent Board”) cease for any reason to constitute at least a majority of the Board; provided, however, that any individual becoming a director subsequent to the date hereof, whose election, or nomination for election by the Company’s stockholders, was approved by a vote of at least a majority of the directors then comprising the Incumbent Board shall be considered as though such individual were a member of the Incumbent Board, but excluding, for this purpose, any such individual whose initial assumption of office occurs as a result of an actual or threatened election contest with respect to the election or removal of directors or other actual or threatened solicitation of proxies or consents by or on behalf of a Person other than the Board;
 
(iii) consummation of a reorganization, merger, statutory share exchange or consolidation or similar corporate transaction involving the Company or any of its subsidiaries, a sale or other disposition of all or substantially all of the assets of the Company, or the acquisition of assets or stock of another entity by the Company or any of its subsidiaries (each, a “Business Combination”), in each case unless, (A) the shareholders of the Company immediately prior to such Business Combination beneficially own, directly or indirectly, more than 50% of the combined voting power of the outstanding voting securities of the entity resulting from such Business Combination (including, without limitation, an entity that, as a result of such transaction, owns the Company or all or substantially all of the Company’s assets either directly or through one or more subsidiaries), and (B) at least a majority of the members of the board of directors of the corporation resulting from such Business Combination were members of the Incumbent Board at the time of the execution of the initial agreement or of the action of the Board providing for such Business Combination; or
 
(iv) consummation of a complete liquidation or dissolution of the Company.
 
Notwithstanding anything in the Plan to the contrary, any Award that is subject to Section 409A shall not be distributable or payable upon a Change of Control unless such Change of Control also meets the definition of “Change of Control” under Section 409A.
 
(j) “Committee” means a committee designated by the Board to administer the Plan, which committee shall be comprised of two or more persons each of whom is a “non-employee director” as defined by Rule 16b-3. Committee members shall also be appointed in such a manner as to satisfy applicable laws and stock exchange requirements.
 
(k) “Common Stock” means the Company’s $1.00 par value per share voting common stock.
 
(l) “Consultant” means any person who is not an Employee or Director and who is a consultant or adviser to the Company, any Affiliated Corporation, or any division thereof, if (i) the consultant or adviser renders bona fide services to the Company; (ii) the services rendered by the consultant or adviser are not in connection with the offer or sale of securities in a capital-raising transaction and do not directly or indirectly promote or maintain a market for the Company’s securities; and (iii) the consultant or adviser is a natural person who has contracted directly with the Company to render such services.
 
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(m) “Director” means a member of the Board.
 
(n) “Dividend Equivalent” shall mean a right to receive the equivalent value (in cash or Common Stock) of dividends paid on Common Stock, awarded under Section 12.2 of the Plan.
 
(o) “Effective Date” means the effective date of the Plan, as set forth in Section 21.1 hereof.
 
(p) “Eligible Employees” means those Employees designated as eligible to participate in the Plan by the Committee.
 
(q) “Employee” means a natural person who is deemed an employee (including, without limitation, an officer or director who is also an employee, or a person who would be deemed an employee if such person were subject to U.S. income taxes) of the Company, or any Affiliated Corporation, in accordance with the rules contained in Section 3401(c) of the Internal Revenue Code and the regulations thereunder.
 
(r) “Exchange Act” shall mean the Securities Exchange Act of 1934, as amended.
 
(s) “Fair Market Value” means with respect to Common Stock, as of any date, the closing price of a share of Common Stock on the New York Stock Exchange for the last trading day prior to that date. If no such prices are reported, then Fair Market Value shall mean the average of the high and low sale prices for the Common Stock (or if no sale prices are reported, the average of the high and low bid prices) as reported by the principal regional stock exchange, or if not so reported, as reported by Nasdaq or a quotation system of general circulation to brokers and dealers; provided, however, that with respect to same day sales occurring under Section 6.1(c)(ii)(B) of the Plan, Fair Market Value shall mean the per share price actually paid for shares of Common Stock in connection with such sale.
 
(t) “Incentive Stock Option” means the right to purchase Common Stock granted to an Employee pursuant to Section 6.2, which constitutes an incentive stock option within the meaning of Section 422 of the Internal Revenue Code.
 
(u) “Internal Revenue Code” means the Internal Revenue Code of 1986 and the regulations thereunder, each as in effect from time to time.
 
(v) “Non-Employee Director” means a Director who is not an Employee.
 
(w) “Non-Qualified Option” means a right to purchase Common Stock granted to a Participant pursuant to Section 6.3, which does not qualify as an Incentive Stock Option or which is designated as a Non-Qualified Option.
 
(x) “Participant” means an Eligible Employee, Non-Employee Director or Consultant designated by the Committee from time to time during the term of the Plan to receive one or more Awards provided under the Plan.
 
(y) “Performance Award” shall mean a bonus that is paid in cash, Common Stock, in the form of an Award provided for under the Plan or any combination thereof that is awarded under Article XI of the Plan.
 
(z) “Performance Criteria” means any measurable criteria using an approach, such as balanced score card, which is tied to the Company’s success that the Committee may determine, including but not limited to net order dollars, net profit dollars, net profit growth, net revenue dollars, revenue growth, total stockholder return, cash flow, earnings or earnings per share, growth in earnings or earnings per share, return on equity or average stockholders’ equity, stock price, total stockholder return, return on capital, return on assets or net assets, return on investment, revenue, income or net income, operating income or net operating income, operating profit or net operating profit, operating margin, return on operating revenue, market share, overhead or other expense reduction, credit rating, strategic plan development and implementation, succession plan development and implementation, customer satisfaction indicators, and/or employee metrics. These criteria may be measured on an absolute basis or relative to a peer group or index and can be measured at the corporate or business unit level. The Committee is authorized to make adjustments in the method of calculating attainment of Performance Criteria in recognition of: (i) extraordinary or non-recurring items, (ii) changes in tax laws, (iii) changes in generally accepted accounting principles or changes in accounting
 
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policies, (iv) charges related to restructured or discontinued operations, (v) restatement of prior period financial results, and (vi) any other unusual, non-recurring gain or loss that is separately identified and quantified in the Company’s financial statements.
 
(aa) “Restricted Stock” means Common Stock granted to a Participant pursuant to Section 8.1 that is subject to certain restrictions imposed in accordance with the provisions of such Section.
 
(bb) “Restricted Stock Award” means an award of shares of Restricted Stock.
 
(cc) “Restricted Stock Unit” means an award denominated in shares of Common Stock that represents the right to receive payment for the value of such shares pursuant to Section 8.2.
 
(dd) “Rule 16” and subsections thereof mean Rule 16b and the relevant subsections promulgated under the Exchange Act, as such Rule may be amended from time to time.
 
(ee) “Section 409A” means Section 409A of the Internal Revenue Code, and any related regulations.
 
(ff) “Stock Appreciation Right” means a right granted to a Participant pursuant to Article VII to receive payment from the Company equal to the difference between the Fair Market Value of one or more shares of Common Stock and the exercise price of such shares under the terms of such Stock Appreciation Right.
 
(gg) “Stock Award” means an award that represents the right to receive shares of Common Stock pursuant to Article X.
 
(hh) “Stock Option” means an Incentive Stock Option or a Non-Qualified Option.
 
2.2 Gender and Number. Except when otherwise indicated by the context, the masculine gender shall also include the feminine gender, and the definition of any term herein in the singular shall also include the plural.
 
ARTICLE III
 
PLAN ADMINISTRATION
 
3.1 Administration Generally. The Plan shall be administered by the Committee. In accordance with the provisions of the Plan, the Committee shall have the authority, in its sole discretion, to:
 
(a) select the Participants from Eligible Employees, Non-Employee Directors and Consultants;
 
(b) determine the number of shares of Common Stock to be subject to Awards granted pursuant to the Plan;
 
(c) determine the number of shares of Common Stock to be issued as Bonus Payments;
 
(d) determine the time at which such Awards and Bonus Payments are to be granted;
 
(e) fix the exercise price, period and manner in which a Stock Option becomes exercisable;
 
(f) establish the duration and nature of Award restrictions, subject to the limitations set forth in Section 3.3;
 
(g) determine the Fair Market Value of the Common Stock, in accordance with Section 2.1(s) of the Plan;
 
(h) determine whether and under what circumstances, if any, an Award may be settled in cash instead of Common Stock;
 
(i) modify or amend the terms and conditions of any Award, subject to Article XIX of the Plan;
 
(j) authorize any person to execute on behalf of the Company any Award Agreement or other instrument required to effect the grant of an Award to be granted or previously granted by the Committee; and
 
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(k) establish such other terms and requirements of the various compensation incentives under the Plan as the Committee may deem necessary or desirable and consistent with the terms of the Plan.
 
The Committee shall determine the form or forms of the Award Agreements, which shall evidence the particular provisions, terms, conditions, rights and duties of the Company and the Participants with respect to Awards granted pursuant to the Plan, which provisions need not be identical except as may be provided herein. The Committee may from time to time adopt such rules and regulations for carrying out the purposes of the Plan as it may deem proper and in the best interests of the Company. The Committee may correct any defect or supply any omission or reconcile any inconsistency in the Plan or in any agreement entered into hereunder in the manner and to the extent it shall deem expedient to carry the Plan into effect, and it shall be the sole and final judge of such expediency. No member of the Committee shall be liable for any action or determination made in good faith. The determinations, interpretations and other actions of the Committee pursuant to the provisions of the Plan shall be binding and conclusive for all purposes and on all persons, subject only to the review of, and consultation with, the Board on all Plan matters except selection of Participants. All Awards shall be made conditional upon the Participant’s acknowledgment, in writing or by on-line or other acceptance of the Award, that all decisions and determinations of the Committee shall be made in its sole discretion and shall be final and binding on the Participant, the Participant’s beneficiaries and any other person having or claiming an interest under such Award.
 
3.2 No Repricing. Except in connection with a corporate transaction involving the Company (including, without limitation, any stock split, recapitalization, reclassification, reorganization, merger, consolidation, split-up, spinoff, combination, or exchange of shares), the Company may not, without obtaining stockholder approval, (a) amend the terms of outstanding Stock Options or Stock Appreciation Rights to reduce the exercise price of such outstanding Stock Options or Stock Appreciation Rights, (b) cancel outstanding Stock Options or Stock Appreciation Rights in exchange for Stock Options or Stock Appreciation Rights or other awards with an exercise price that is less than the exercise price of the original Stock Options or Stock Appreciation Rights or (c) cancel outstanding Stock Options or Stock Appreciation Rights with an exercise price above the current stock price in exchange for cash, Common Stock or other securities.
 
3.3 Vesting Restrictions. Awards granted under the Plan shall include vesting schedules that provide that no portion of an Award will vest earlier than one year from the date of grant. In addition, subject to any adjustments made in accordance with Article XVII below, up to 5% of the shares of Common Stock subject to the share reserve set forth in Section 4.1 as of the Amendment Effective Date may be granted without regard to the minimum vesting requirement. Notwithstanding anything to the contrary herein, no dividends or Dividend Equivalent rights granted with respect to any Award granted hereunder will vest unless and until the underlying Award vests.
 
3.4 Majority Rule; Unanimous Written Consent. The Committee shall act by a majority of its members in attendance at a meeting at which a quorum is present or by a memorandum or other written instrument signed by all members of the Committee.
 
3.5 Compensation; Professional Assistance; Good Faith Actions. Members of the Committee shall receive such compensation, if any, for their services as members as may be determined by the Board. All expenses and liabilities which members of the Committee incur in connection with the administration of the Plan shall be borne by the Company. The Committee may, with the approval of the Board, employ attorneys, consultants, accountants, appraisers, brokers or other persons. The Committee, the Company and the Company’s officers and Directors shall be entitled to rely upon the advice, opinions or valuations of any such persons. All actions taken and all interpretations and determinations made by the Committee or the Board in good faith shall be final and binding upon all Participants, the Company and all other interested persons. No members of the Committee or Board shall be personally liable for any action, determination or interpretation made in good faith with respect to the Plan or Awards, and all members of the Committee and the Board shall be fully protected by the Company in respect of any such action, determination or interpretation.
 
3.6 Delegation of Authority to Grant Awards. The Committee may, but need not, delegate from time to time some or all of its authority to grant Awards under the Plan to a committee consisting of one or more members of the Committee, one or more members of the Board who are not members of the Committee, or one or more officers of the Company; provided, however, that the Committee may not delegate its authority to grant Awards to individuals (a) who are subject on the date of the grant to the reporting rules under Section 16(a) of the Exchange Act, or (b) who are officers of the Company who are delegated authority by the Committee hereunder. Any delegation hereunder shall be subject to the restrictions and limits that the Committee specifies at the time of such delegation of authority and may be rescinded at any time by the Committee. At all times, any committee appointed under this Section 3.6 shall serve in such capacity at the pleasure of the Committee.
 
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3.7 Committee Composition. Once a Committee has been appointed pursuant to this Article III, such Committee shall continue to serve in its designated capacity until otherwise directed by the Board. From time to time the Board may increase the size of the Committee and appoint additional members thereof, remove members (with or without cause) and appoint new members in substitution therefor, fill vacancies (however caused) or remove all members of the Committee and thereafter directly administer the Plan, all to the extent permitted by applicable laws and to the extent permitted by Rule 16b-3 as it applies to transactions intended to qualify thereunder as exempt transactions.
 
3.8 Grants to Non-Employee Directors. Notwithstanding any provision of the Plan to the contrary, with respect to Awards made to Non-Employee Directors, the Plan shall be administered by the Board, which shall have all powers the Committee would otherwise have with respect to such Awards.
 
ARTICLE IV
 
STOCK SUBJECT TO THE PLAN
 
4.1 Number of Shares. Subject to adjustments made in accordance with Sections 4.2 and 17.1 hereof, the maximum aggregate number of shares of Common Stock that may be issued pursuant to Awards granted under this Plan on or after the Amendment Effective Date, is 553,673 shares of Common Stock, which is calculated as follows: (a) 400,000 new shares, plus (b) the number of shares that remained available for Awards under this Plan as of June 15, 2018 (153,673 shares. The number of shares under subsection (b) above shall be reduced by the number of shares subject to Awards that are granted under the Plan after June 15, 2018 and before the Amendment Effective Date, if any. The share reserve represents an increase of 400,000 shares under this amendment and restatement. The authorization may be increased with the approval of the Board and the stockholders of the Company. Shares of Common Stock issued under the Plan may be authorized and unissued or treasury shares, as determined by the Committee.
 
4.2 Accounting for Awards. If an Award entitles the holder thereof to receive or purchase shares of Common Stock, the number of shares covered by such Award or to which such Award relates shall be counted on the date of grant of such Award against the aggregate number of shares available for issuance under the Plan. If and to the extent Stock Options or Stock Appreciation Rights granted under the Plan (including Stock Options or Stock Appreciation Rights granted under the Plan in effect prior to this amendment and restatement) terminate, expire, or are canceled, forfeited, exchanged or surrendered without having been exercised, and if and to the extent that any Stock Awards, Stock Units, or Dividend Equivalents granted under the Plan (including Stock Awards, Stock Units, or Dividend Equivalents granted under the Plan in effect prior to this amendment and restatement) payable in shares of Common Stock are forfeited or terminated, or otherwise are not paid in full, the shares reserved for such Awards shall again be available for purposes of the Plan. Shares of Common Stock which are delivered by the Participant or withheld by the Company upon the exercise or payment of any Award under the Plan (including Awards granted under the Plan prior to this amendment and restatement), in payment of the exercise price thereof or tax withholding thereon, shall not again be available for granting Awards under the Plan. If Stock Appreciation Rights (including any Stock Appreciation Rights granted under the Plan prior to this amendment and restatement) are exercised and settled in Common Stock, the full number of shares subject to the Stock Appreciation Rights shall be considered issued under the Plan, without regard to the number of shares issued upon settlement of the Stock Appreciation Rights. To the extent that Awards are designated in an Award Agreement to be paid in cash, and not in shares of Common Stock (including Awards granted under the Plan prior to this amendment and restatement), such Awards shall not count against the share limits in this Article IV. Notwithstanding the provisions of this Section 4.2, no shares of Common Stock may again be optioned, granted or awarded (i) if such action would cause an Incentive Stock Option to fail to qualify as an incentive stock option under Section 422 of the Internal Revenue Code, or (ii) if prohibited by applicable laws, regulations or exchange rules.
 
ARTICLE V
 
PARTICIPATION
 
5.1 Eligibility and Participation; Award Agreements.
 
(a) Participants in the Plan shall be those Eligible Employees, Non-Employee Directors and Consultants designated by the Committee from time to time during the term of the Plan to receive one or more Awards provided under the Plan, which Awards may, in the discretion of the Committee, be granted either alone or in addition to, in tandem with or in substitution for any other Award. Participants who are Employees may be granted from time to time one or more Incentive Stock Options, and Participants (whether or not they are Employees) may be granted one or more Awards that are not Incentive Stock Options; provided, however, that the grant of each such Award shall be separately approved by the Committee, and receipt of one Award shall not result in automatic receipt of, or entitlement to, any other Award. Upon determination by the Committee that an Award is to be granted to a Participant, written notice shall be given to such person, specifying the terms, conditions, rights and duties related thereto.
 
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(b) Each Award shall be evidenced by an Award Agreement. Award Agreements evidencing Incentive Stock Options shall contain such terms and conditions as may be necessary to meet the applicable provisions of Section 422 of the Internal Revenue Code. Awards shall be deemed to be granted as of the date specified in the grant resolution of the Committee, which date shall be the effective date of any related Award Agreement with the Participant. In the event of any inconsistency between the provisions of the Plan and any Award Agreement entered into hereunder, the provisions of the Plan shall govern.
 
5.2 Limitations.
 
(a) No Employee or Consultant shall be granted, in any fiscal year of the Company, Awards in the aggregate covering more than 150,000 shares of Common Stock.
 
(b) Incentive Stock Options may not be granted to Non-Employee Directors or to Consultants. The maximum number of shares of Common Stock that may be issued under the Plan with respect to Incentive Stock Options granted on or after the Amendment Effective Date is equal to the aggregate number of shares of Common Stock that may be issued under this Plan as determined in accordance with Section 4.1.
 
(c) The maximum grant date value of shares of Common Stock subject to Awards granted to any single Non-Employee Director during any fiscal year of the Company, taken together with any cash fees payable to such Non-Employee Director for services rendered in such capacity during such fiscal year, shall not exceed $250,000 in total value. For purposes of this limit, the value of such Awards shall be calculated based on the grant date fair value of such Awards for financial reporting purposes.
 
5.3 Limitations Applicable to Section 16 Persons. Notwithstanding any other provision of the Plan, the Plan, and any Awards granted to Participants who are subject to Section 16 of the Exchange Act, must comply with the applicable provisions of Rule 16b-3 and shall be subject to any additional limitations set forth in any applicable exemptive rule under Section 16 of the Exchange Act (including any amendment to Rule 16b-3 of the Exchange Act) that are requirements for the application of such exemptive rule (whether or not set forth in an Award Agreement). To the extent permitted by applicable law, the Plan and Awards granted or awarded hereunder shall be deemed amended to the extent necessary to conform to such applicable exemptive rule.
 
ARTICLE VI
 
STOCK OPTIONS
 
6.1 General Provisions.
 
(a) Grant of Stock Options. Coincident with or following designation for participation in the Plan, a Participant may be granted one or more Stock Options. The Committee in its sole discretion may designate whether a Stock Option granted to an Employee is to be considered an Incentive Stock Option or a Non-Qualified Option. The Committee may grant both an Incentive Stock Option and a Non-Qualified Option to the same Employee at the same time or at different times. Incentive Stock Options and Non-Qualified Options, whether granted at the same or different times, shall be deemed to have been awarded in separate grants, shall be clearly identified, and in no event will the exercise of one Stock Option affect the right to exercise any other Stock Option or affect the number of shares of Common Stock for which any other Stock Option may be exercised. All Stock Options granted to Participants who are not Employees shall be Non-Qualified Options. A Stock Option shall be subject to such terms and conditions not inconsistent with the Plan (including, without limitation, the limitations set forth in Section 3.3) as the Committee shall impose and shall be evidenced by an Award Agreement.
 
(b) Manner of Stock Option Exercise. A Stock Option may be exercised by a Participant in whole or in part from time to time, subject to the conditions contained herein, (i) by delivery of written notice of exercise to the persons specified by the Company from time to time, in person or through mail, facsimile, electronic mail or other electronic transmission, or by delivery of notice of exercise in such other method as has been approved by the Committee, and (ii) by paying in full, with the written notice of exercise or at such other time as the Committee may establish, the total exercise price under the Stock Option for the shares being purchased. Such notice shall be in a form satisfactory to the Committee and shall specify the particular Stock Option (or portion thereof) that is being exercised and the number of shares with respect to which the Stock Option is being exercised. The exercise of the Stock Option shall be deemed effective upon receipt of such notice and
 
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payment to the Company. As soon as practicable after the effective exercise of the Stock Option, and upon satisfaction of all applicable withholding requirements pursuant to Article XIII of the Plan, the Participant, or the Participant’s nominee, shall be recorded on the stock transfer books of the Company as the owner of the shares purchased. The Company may, but is not required to, deliver to the Participant one or more duly issued and executed stock certificates evidencing such ownership.
 
(c) Payment of Stock Option Exercise Price. At the time of the exercise of a Stock Option, payment of the total Stock Option exercise price for the shares to be purchased shall be made in the manner specified in the Award Agreement relating to such Stock Option, which may include any or all of the following methods of payment:
 
(i) at the Participant’s election, either:
 
(A) in cash or by check; or
 
(B) by transfer from the Participant to the Company of shares of Common Stock (other than shares of Common Stock that the Committee determines by rule may not be used to exercise Stock Options) that the Participant has held for more than six months with a then-current aggregate Fair Market Value equal to the total Stock Option exercise price; or
 
(ii) at the Company’s election or at the election of the Participant if such a Participant election is contemplated in the Award Agreement:
 
(A) by the Company retaining a number of shares of Common Stock deliverable upon exercise of a Stock Option whose aggregate Fair Market Value is equal to the exercise price to be paid in connection with such exercise; or
 
(B) to the extent permissible under applicable law, by delivery to the Company of: (I) a properly executed exercise notice, (II) irrevocable instructions to a broker to sell a sufficient number of the shares being exercised to cover the exercise price and to promptly deliver to the Company (on the same day that the shares of Common Stock issuable upon exercise are delivered) the amount of sale proceeds required to pay the exercise price and any required tax withholding relating to the exercise, and (III) such other documentation as the Committee and the broker shall require to effect a same-day exercise and sale.
 
(d) Stockholder Privileges. No Participant shall have any rights as a stockholder with respect to any shares of Common Stock covered by a Stock Option until the Participant or its nominee becomes the holder of record of such Common Stock, and no adjustments shall be made for dividends or other distributions or other rights as to which there is a record date preceding the date such Participant or its nominee becomes the holder of record of such Common Stock.
 
6.2 Incentive Stock Options.
 
(a) Incentive Stock Option Exercise Price. The per share price to be paid by a Participant at the time an Incentive Stock Option is exercised shall be determined by the Committee at the time an Incentive Stock Option is granted (or deemed to have been granted under applicable tax rules), but in no event shall such exercise price be less than:
 
(i) the Fair Market Value, on the date the Incentive Stock Option is granted (or deemed to have been granted under applicable tax rules), of one share of the stock to which such Stock Option relates; or
 
(ii) 110% of the Fair Market Value, on the date the Incentive Stock Option is granted (or deemed to have been granted under applicable tax rules), of one share of the stock to which such Stock Option relates if, at the time the Incentive Stock Option is granted, the Participant owns, directly or indirectly (as determined pursuant to Section 424(d) of the Internal Revenue Code), 10% or more of the total combined voting power of all classes of stock of the Company or of any Affiliated Corporation (such a Participant is referred to as a “10% Holder”).
 
(b) Number of Option Shares. The number of shares of Common Stock subject to an Incentive Stock Option shall be designated by the Committee at the time the Committee decides to grant an Incentive Stock Option.
 
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(c)   Aggregate Limitation of Stock Exercisable Under Options. To the extent the aggregate Fair Market Value, determined as of the time an Incentive Stock Option is granted, of the shares of Common Stock with respect to which Incentive Stock Options are exercisable for the first time by a Participant in any calendar year under the Plan or otherwise, granted by the Company and Affiliated Corporations, exceeds $100,000, such excess shall be treated as a Non-Qualified Option.
 
(d) Duration of Incentive Stock Options. The period during which an Incentive Stock Option may be exercised shall be fixed by the Committee, but in no event shall such period be more than ten years from the date the Stock Option is granted, or, in the case of Participants who are 10% Holders as described in Section 6.2(a)(ii), five years from the date the Stock Option is granted. Upon the expiration of such exercise period, the Incentive Stock Option, to the extent not then exercised, shall terminate. Except as otherwise provided in Article XIV, all Incentive Stock Options granted to a Participant hereunder shall terminate and may no longer be exercised if the Participant ceases to be an Employee.
 
(e) Restrictions on Exercise of Incentive Stock Options. Incentive Stock Options may be granted subject to such restrictions as to the timing of exercise of all or various portions thereof as the Committee may determine at the time it grants Incentive Stock Options to Participants.
 
(f) Disposition of Stock Acquired Pursuant to the Exercise of Incentive Stock Options. In the event that a Participant makes a disposition (as defined in Section 422(c) of the Internal Revenue Code) of any Common Stock acquired pursuant to the exercise of an Incentive Stock Option prior to the expiration of two years from the date on which the Incentive Stock Option was granted or prior to the expiration of one year from the date on which the Stock Option was exercised, the Participant shall send written notice to the Company at its corporate headquarters (Attention: Corporate Secretary) of the date of such disposition, the number of shares disposed of, the amount of proceeds received from such disposition and any other information relating to such disposition as the Company may reasonably request. The Participant shall, in the event of such a disposition, make appropriate arrangements with the Company to provide for the amount of any additional withholding required by federal, state and local income and other tax laws.
 
6.3 Non-Qualified Options.
 
(a) Option Exercise Price. The per share price to be paid by the Participant at the time a Non-Qualified Option is exercised shall be determined by the Committee at the time the Stock Option is granted or amended, but in no event shall such exercise price per share be less than the Fair Market Value of one share of Common Stock on the date the Stock Option is granted or amended.
 
(b) Number of Option Shares. The number of shares of Common Stock subject to a Non-Qualified Option shall be designated by the Committee at the time the Committee decides to grant a Non-Qualified Option.
 
(c) Duration of Non-Qualified Options; Restrictions on Exercise. The period during which a Non-Qualified Option may be exercised, and the installment restrictions on option exercise during such period shall be fixed by the Committee, subject to the limitations set forth in Section 3.3, but in no event shall such period be more than ten years from the date the Stock Option is granted. Upon the expiration of such exercise period, the Non-Qualified Option, to the extent not then exercised, shall terminate. Except as otherwise provided in Article XIV, all Non-Qualified Options granted to a Participant hereunder shall terminate and may no longer be exercised if the Participant ceases to be an Employee, Non-Employee Director or Consultant.
 
ARTICLE VII
 
STOCK APPRECIATION RIGHTS
 
7.1 Grant of Rights. A Stock Appreciation Right may be granted to any Participant selected by the Committee. A Stock Appreciation Right shall be subject to such terms and conditions not inconsistent with the Plan as the Committee shall impose and shall be evidenced by an Award Agreement.
 
7.2 Stock Appreciation Rights. The period during which a Stock Appreciation Right may be exercised, and the installment restrictions on option exercise during such period shall be fixed by the Committee, subject to the limitations set forth in Section 3.3, but in no event shall such period be more than ten years from the date the Stock Appreciation Right is granted. A Stock Appreciation Right shall cover such number of shares of Common Stock as the Committee may
 
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determine. The exercise price per share of Common Stock subject to each Stock Appreciation Right shall be set by the Committee, but shall not be less than the Fair Market Value of a share of Common Stock on the date on which the Stock Appreciation Right is granted. Upon exercise of a Stock Appreciation Right, the Participant shall be entitled to receive the economic value of such Stock Appreciation Right determined in the manner prescribed in Section 7.3.
 
7.3 Exercise of Stock Appreciation Rights. Stock Appreciation Rights shall be subject to such terms and conditions consistent with other provisions of the Plan as may be determined from time to time by the Committee and shall include the following:
 
(a) Manner of Exercise. A Stock Appreciation Right shall be exercised by the giving of notice in the same manner in which a Stock Option may be exercised.
 
(b) Payment Upon Exercise. Upon the exercise of a Stock Appreciation Right, a Participant shall be entitled to receive the economic value thereof, which shall be equal to (i) the excess of the then Fair Market Value of one share of Common Stock on the date of exercise over the exercise price per share specified in the Stock Appreciation Right, multiplied by (ii) the number of shares in respect of which the Stock Appreciation Right is being exercised (the “SAR Value”).
 
(c) Form of Payment. A Participant may receive the SAR Value in cash or in shares of Common Stock at the discretion of the Committee.
 
7.4 Stockholder Privileges. No Participant shall have any rights as a stockholder with respect to any shares of Common Stock covered by a Stock Appreciation Right until the Participant becomes the holder of record of such Common Stock, and no adjustments shall be made for dividends or other distributions or other rights as to which there is a record date preceding the date such Participant becomes the holder of record of such Common Stock.
 
ARTICLE VIII
 
RESTRICTED AWARDS
 
8.1 Restricted Stock Awards
 
(a) Awards Granted by Committee. Coincident with or following designation for participation in the Plan, a Participant may be granted one or more Restricted Stock Awards consisting of shares of Common Stock. The number of shares granted as a Restricted Stock Award shall be determined by the Committee. To the extent required by applicable law, a Participant shall be required to pay to the Company an amount equal to the par value of the Common Stock subject to the Restricted Stock Award as a condition precedent to the issuance of Common Stock to the Participant.
 
(b) Restrictions. A Participant’s right to retain a Restricted Stock Award granted to him or her under Section 8.1(a) shall be subject to restrictions on disposition by the Participant and an obligation to forfeit and surrender shares to the Company under certain circumstances set forth in the Award Agreement, including but not limited to the Participant’s continuous status as an Employee, Non-Employee Director or Consultant for a restriction period specified by the Committee, or the attainment of any one or more of the Performance Criteria or other specific performance criteria determined appropriate by the Committee with respect to such Award, subject to the limitations set forth in Section 3.3. The Committee may in its sole discretion require different periods of employment, director service or consulting service or different performance criteria with respect to different Participants, to different Restricted Stock Awards or to separate, designated portions of the Common Stock shares constituting a Restricted Stock Award, subject to the limitations set forth in Section 3.3 above. Subject to the provisions of Section 3.3 and Articles XVI and XIX, if a Participant’s continuous status as an Employee, Non-Employee Director or Consultant terminates prior to the end of such restriction period or the attainment of such performance criteria as may be specified by the Committee, the Restricted Stock Award shall be forfeited and all shares of Common Stock related thereto shall be immediately returned to the Company.
 
(c) Privileges of a Stockholder; Transferability. A Participant shall have all voting, dividend (subject to the limitations set forth in Section 3.3), liquidation and other rights with respect to Common Stock in accordance with its terms received by him or her as a Restricted Stock Award under this Article VIII upon becoming the holder of record of such Common Stock; provided however, that the Participant’s right to sell, encumber, or
 
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otherwise transfer such Common Stock (and any other securities issued in respect of such shares of Common Stock as a stock dividend, stock split or the like) shall be subject to the limitations of Section 16.3 hereof.
 
(d)   Enforcement of Restrictions. In the event a Participant receives a stock certificate evidencing the grant of Restricted Stock, the Committee may in its sole discretion require one or more of the following methods of enforcing the restrictions referred to in Sections 8.1(b) and 8.1(c):
 
(i) Placing a legend on the stock certificates referring to the restrictions;
 
(ii) Requiring the Participant to keep the stock certificates, duly endorsed, in the custody of the Company while the restrictions remain in effect; or
 
(iii) Requiring that the stock certificates, duly endorsed, be held in the custody of a third party while the restrictions remain in effect.
 
8.2 Restricted Stock Units. Coincident with or following designation for participation in the Plan, a Participant may be granted one or more Restricted Stock Units. The number of shares of Restricted Stock Units shall be determined by the Committee on the date of grant of such Award and may be linked to the Performance Criteria or other specific performance criteria determined to be appropriate by the Committee, in each case on a specified date or dates or over any period or periods determined by the Committee, subject to the limitations set forth in Section 3.3. Unless otherwise specified (a) in the Award Agreement relating to the Restricted Stock Unit or (b) in writing by the Committee, a Participant shall receive the payment for the Restricted Stock Unit in shares of Common Stock. Payment for a Restricted Stock Unit will not be made until the Award has vested, pursuant to a vesting schedule established by the Committee and set forth in the Award Agreement, subject to the limitations set forth in Section 3.3. In the event payment for an Award of Restricted Stock Units is made in a form other than in shares of Common Stock pursuant to the terms of this Section 8.2, such payment shall be in an amount equal to the product of (i) Fair Market Value of a share of Common Stock with respect to the relevant vesting date, multiplied by (ii) the number of Restricted Stock Units vesting on such date. Holders of Restricted Stock Units shall have no rights as Company stockholders with respect to such Award.
 
ARTICLE IX
 
NON-EMPLOYEE DIRECTOR STOCK
 
9.1 Non-Employee Director Stock. Each Non-Employee Director may receive all or a portion of his or her annual retainer and any meeting fees (which shall include any additional annual retainer or fees paid to a committee chair) in shares of Common Stock if elected by the Non-Employee Director. An election pursuant to this Section 9.1 must be made in writing on or before the first day of the first fiscal year to which the election relates and shall entitle the Non-Employee Director to a number of shares of Common Stock determined by dividing (a) the dollar amount of the portion of the retainer for a given quarterly fiscal period that is to be paid in shares of Common Stock by (b) the Fair Market Value of one share of Common Stock as of the last day of such fiscal period, rounded up to the next full number of shares. In the event any person becomes a Non-Employee Director other than at the beginning of an annual retainer period, such person may elect, within 30 days of the date on which such person becomes a Non- Employee Director, to receive his or her retainer and any meeting fees in shares of Common Stock as described above for the balance of such annual retainer period in accordance with the formula set forth in the preceding sentence. Any election pursuant to this Section 9.1 shall apply to the annual retainer and meeting fees for each subsequent fiscal year unless revoked or replaced in writing prior to the first day of the subsequent fiscal year.
 
9.2 Elections. The Committee shall determine the form of Non-Employee Director’s elections pursuant to this Article IX, which form shall evidence the particular provisions, terms, conditions, rights and duties of the Company and the Non-Employee Director with respect to Common Stock paid with respect to the Non-Employee Director’s annual retainer and any meeting fees.
 
ARTICLE X
 
STOCK AWARDS
 
Subject to the limitations set forth in Section 3.3, coincident with or following designation for participation in the Plan, a Participant may be granted one or more Stock Awards in the manner determined from time to time by the Committee. The number of shares shall be determined by the Committee and may be, but are not required to be, based upon the
 
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Performance Criteria or other specific performance criteria determined appropriate by the Committee, in each case on a specified date or dates or over any period or periods determined by the Committee. To the extent required by applicable law, a Participant shall be required to pay to the Company an amount equal to the par value of the Common Stock subject to the Stock Award as a condition precedent to the issuance of Common Stock to the Participant.
 
ARTICLE XI
 
PERFORMANCE AWARDS
 
11.1 Performance Awards.
 
(a) Subject to the limitations set forth in Section 3.3, coincident with or following designation for participation in the Plan, a Participant may be granted one or more Performance Awards. The value of such Performance Awards may be linked to any one or more of the Performance Criteria or other specific performance criteria determined appropriate by the Committee, in each case on a specified date or dates or over any period or periods determined by the Committee, subject to the limitations set forth in Section 3.3.
 
(b) The form of payment to a Participant in respect of a Performance Award may be cash, shares of Common Stock, any type of other Award under the Plan, or any combination of the foregoing, as determined by the Committee in its sole discretion.
 
ARTICLE XII
 
OTHER AWARDS
 
12.1 Awards in Lieu of Bonus.
 
(a)  Participant Election As to Bonus Payment. At such time as the Committee determines that a Participant has or may become eligible for a Bonus Payment pursuant to a Bonus Plan, the Committee may notify the Participant as to whether or not the Participant will be required by the Committee to, or will be given the right to elect to, accept all or a part of such Bonus Payment in the form of a Stock Award, subject to the limitations set forth in Section 3.3. If the Committee grants the Participant the right to elect whether to accept the Bonus Payment in Common Stock as a Stock Award, then the Participant shall have 10 business days after the receipt of such notice (or such longer period as may be stated in the notice) from the Committee to make such election. The Participant shall notify the Committee with respect to his or her election on such form as may be provided for this purpose by the Committee, setting forth thereon the dollar value of the portion of the Bonus Payment which he or she desires to receive in shares of Common Stock. If a Participant fails to make an election pursuant to this Section 12.1(a) with respect to the mode of payment of a Bonus Payment, the entire Bonus Payment shall be made in cash.
 
(b)   Determination of Number of Shares. The number of shares of Common Stock or other forms of Awards that shall be issued or credited as a Bonus Payment shall be determined by using a reasonable valuation method specified by the Committee in its sole discretion. No fractional shares of Common Stock or other forms of Awards shall be issued or credited as a part of a Bonus Payment and the value of any such fractional share that would otherwise be issued pursuant to the Participant’s election shall be paid in cash.
 
(c) Decision of Committee. The Committee shall have the sole discretion to either accept the Participant’s election with respect to the payment of a Bonus Payment, in whole or in part, in shares of Common Stock under a Stock Award or to determine that a lesser portion, or none, of the Bonus Payment will be made in shares of Common Stock, and the Committee’s determination in this regard shall be final and binding on the Participant.
 
12.2 Dividend Equivalents.
 
(a)   Coincident with or following designation for participation in the Plan, a Participant may be granted Dividend Equivalents based on the dividends declared on Common Stock, to be credited as of dividend payment dates, during the period between the date any Award denominated in shares of Common Stock is granted, and the date such Award is exercised, vests or expires, as determined by the Committee. Such Dividend Equivalents shall be converted to cash or additional shares of Common Stock by such formula and at such time and subject to such limitations as may be determined by the Committee, subject to the limitations set forth in the Section 3.3
 
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above. In no event shall payment of Dividend Equivalents be contingent, directly or indirectly, upon the exercise of a Stock Option.
 
(b)  Dividend Equivalents granted with respect to Stock Options shall be payable, with respect to pre-exercise periods, regardless of whether such Option is subsequently exercised. No Dividend Equivalents Awards shall be granted in connection with Restricted Stock Units.
 
12.3 Other Forms of Award. From time to time during the duration of the Plan, the Committee may, in its sole discretion, adopt one or more other forms of Awards for Eligible Employees, Non-Employee Directors or Consultants pursuant to which such Eligible Employees, Non-Employee Directors or Consultants may acquire shares of Common Stock or the economic equivalent thereof, whether by purchase, outright grant or otherwise. Any such arrangements shall be subject to the general provisions of the Plan and, to the extent required under applicable exchange rules, shareholder approval.
 
ARTICLE XIII
 
WITHHOLDING
 
13.1 Withholding Requirement. The Company’s obligations to deliver shares of Common Stock upon the exercise or receipt of any Award shall be subject to the Participant’s satisfaction of all applicable federal, state and local income and other tax withholding requirements.
 
13.2 Withholding With Common Stock. Participants shall pay all tax withholding obligations that result from Awards by the Company withholding from shares otherwise issuable to the Participant shares of Common Stock having a value equal to the amount required to be withheld; provided, however, that the Committee may in its discretion permit Participants to pay for such withholding obligations in cash. Any such withholding of shares of Common Stock shall be subject to such terms and conditions as the Company may, from time to time, establish.
 
ARTICLE XIV
 
EFFECT OF TERMINATION OF SERVICE ON AWARDS
 
Except as otherwise provided in a written agreement between the Company and a Participant, the provisions of this Article XIV will apply as follows:
 
14.1 Effect of Termination of Service on Stock Options and Stock Appreciation Rights. No Stock Option or Stock Appreciation Right may be exercised unless, at the time of such exercise, the Participant is an Employee, Non-Employee Director or Consultant, except as follows:
 
(a) Subject to Section 14.1(c), if such termination is due to the death of the Participant, or the Participant dies within three months after termination for a reason other than Cause or if such termination occurs after the Participant becomes disabled (within the meaning of Section 22(e)(3) of the Internal Revenue Code), the Stock Option or Stock Appreciation Right may be exercised, to the extent vested at the time of the Participant’s termination of employment, by the Participant (or, in the case of death, by the person to whom it is transferred by will of the laws of descent and distribution) within a period of one year after the date of death or disability (but in no event longer than the term of the Stock Option or Stock Appreciation Right).
 
(b) Subject to Section 14.1(c), if the Participant’s employment is terminated for any reason other than those reasons covered by Section 14.1(a), then the Stock Option or Stock Appreciation Right shall be exercisable, to the extent vested at the time of such termination, for a period of 120 days after the date of such termination.
 
(c) Notwithstanding the provisions of Sections 14.1(a) and (b) above, with respect to all grants of Stock Options or Stock Appreciation Rights, no such grants shall be exercisable after the date of termination of employment if either the termination was for Cause, or if the former Employee, Consultant or Non-Employee Director is then, in the sole judgment of the Company, in material breach of any contractual, statutory, fiduciary or other legal obligation to the Company.
 
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ARTICLE XV
 
NON-U.S. PARTICIPANTS
 
The Committee may grant awards to Employees, Consultants and Non-Employee Directors whose relationship with the Company or an Affiliated Corporation is subject to the laws of a foreign jurisdiction (a “Non-U.S. Participant”). However, no Award shall be granted that, as a result of the operation of the laws of a foreign jurisdiction, shall limit the authority, rights and powers of the Company, the Board or the Committee under the Plan, including without limitation, the authority of the Committee to determine whether Awards will be granted and under what circumstances Awards become exercisable, nonforfeitable or payable, unless such limitation is explicitly acknowledged by the Company in the relevant Award Agreement. Any grant of an Award that results in the imposition of any of the foregoing limitations shall be null and void ab initio. Subject to the limitations of this Article XV, the Committee may impose whatever requirements and provisions it deems necessary in its sole discretion to permit an Award to be made to a Non-U.S. Participant. The Committee shall have the authority to adopt such modifications, procedures and subplans as may be necessary or desirable to comply with provisions of the laws of foreign countries in which the Company or an Affiliated Corporation may operate to assure the viability of the benefits of Awards made to Participants employed in the such countries and to meet the intent of the Plan.
 
ARTICLE XVI
 
RIGHTS OF PARTICIPANTS
 
16.1 Employment, Directorship or Consulting Relationship. Nothing contained in the Plan or in any Award granted under the Plan shall confer upon any Participant any right with respect to the continuation of his or her employment, service as a director or consulting relationship with the Company or any Affiliated Corporation, or interfere in any way with the right of the Company or any Affiliated Corporation at any time to terminate such service or to increase or decrease the compensation of the Participant from the rate in existence at the time of the grant of an Award.
 
16.2 Meaning of Continuous Status. For all purposes of the Plan and unless otherwise specified in the Award Agreement, so long as a Participant is either an Employee or a Non-Employee Director or a Consultant, without a break in between any change in status, he or she shall be considered to be in continuous status as an Employee, Non-Employee Director or Consultant, even if the person is serving in one capacity when the award is granted and subsequently changes to service in a different capacity, such as terminating employment but continuing to serve as a Consultant.
 
16.3 Nontransferability. Except as otherwise (a) approved by the Committee and set forth in the Award Agreement between the Company and the Participant or (b) required pursuant to a domestic relations order, no right or interest of any Participant in an Award prior to the completion of the restriction period applicable thereto shall be assignable or transferable during the lifetime of the Participant, either voluntarily or involuntarily, or subjected to any lien, directly or indirectly, by operation of law, or otherwise, including execution, levy, garnishment, attachment, pledge or bankruptcy. If permitted by applicable law (including Rule 16b-3, as amended from time to time), the Committee may (but need not) permit the transfer of Awards either generally, to a limited class of persons or on a case-by-case basis. In the event of a Participant’s death, a Participant’s rights and interest in any Awards shall be transferable by testamentary will or the laws of descent and distribution, and payment of any amounts due under the Plan shall be made to, and exercise of any Stock Options or Stock Appreciation Rights may be made by, the Participant’s legal representatives, heirs or legatees. If in the opinion of the Committee a person entitled to payments or to exercise rights with respect to the Plan is disabled from caring for his or her affairs because of mental condition, physical condition, or age, payment due such person may be made to, and such rights shall be exercised by, such person’s guardian, conservator or other legal personal representative upon furnishing the Committee or its designee with evidence satisfactory to the Committee or its designee of such status.
 
16.4 Other Benefits. The amount of any compensation deemed to be received by an Employee, Non-Employee Director or Consultant as a result of the receipt, vesting, exercise of an Award will not constitute “earnings” with respect to which any other benefits provided by the Company or an Affiliated Corporation to such person are determined, including without limitation benefits under any pension, profit sharing, life insurance or salary continuation plan.
 
16.5 Unfunded Plan. The Company’s obligation under this Plan shall not be funded or secured in any manner or at any time (including in connection with the change of the Company’s financial health), and the Company shall not be required or permitted to establish any special or separate fund or to make any other segregation of funds or assets to insure the payment of any Awards against the claims of general creditors. The Company may not set aside assets for the payment of any Awards in a trust or other arrangement that is located outside the United States.
 
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ARTICLE XVII
 
CHANGE IN CAPITAL STRUCTURE; CHANGE OF CONTROL
 
17.1 Change in Capital Structure. Subject to Section 17.4, in the event that the Board determines that any dividend or other distribution (whether in the form of cash, Common Stock, other securities or other property), recapitalization, reclassification, stock split, reverse stock split, reorganization, merger, consolidation, split-up, spin-off, combination, repurchase, liquidation, dissolution, or sale, transfer, exchange or other disposition of all or substantially all of the assets of the Company, or exchange of Common Stock or other securities of the Company, issuance of warrants or other rights to purchase Common Stock or other securities of the Company, or other similar corporate transaction or event including a Change of Control, in the Board’s sole discretion, affects the Common Stock such that an adjustment is determined by the Board to be appropriate in order to prevent dilution or enlargement of the benefits or potential benefits intended to be made available under the Plan or with respect to an Award, then the Board shall direct the Committee to, in such manner as it determines is equitable, adjust any or all of:
 
(a) The number and kind of shares of Common Stock (or other securities or property) with respect to which Awards may be granted or awarded (including, but not limited to, adjustments of the limitations in Article IV);
 
(b) The number and kind of shares of Common Stock (or other securities or property) subject to outstanding Awards;
 
(c) The grant or exercise price with respect to any Award; and
 
(d) And the performance criteria or other terms and conditions, as the Committee deems appropriate.
 
Any adjustment in Incentive Stock Options under this Section 17.1 shall be made only to the extent not constituting a “modification” within the meaning of Section 424(h)(3) of the Internal Revenue Code, except as otherwise determined by the Committee, and any adjustments under this Section 17.1 shall be made in a manner which does not adversely affect the exemption provided pursuant to Rule 16b-3 under the Exchange Act. Any adjustment to Nonqualified Stock Options or Stock Appreciation Rights shall be made in accordance with the requirements of Sections 409A and 424 of the Internal Revenue Code, as applicable.
 
17.2 Change of Control.
 
(a) Subject to Section 17.4, in the event of a Change of Control, the Board, in its sole and absolute discretion, and on such terms and conditions as it deems appropriate, either by the terms of the Award or by action taken prior to the occurrence of such transaction or event, is hereby authorized to direct the Committee to take any one or more of the following actions:
 
(i) To provide for the cancellation of the Award in exchange for an amount of cash equal to the amount that could have been attained upon the exercise of such Award or realization of the Participant’s rights had such Award been currently exercisable or payable or fully vested (including an amount equal to zero for Awards with respect to which no cash could have been so attained or realized);
 
(ii) To provide that the Award cannot vest, be exercised or become payable after a Change of Control;
 
(iii) To provide that such Award shall be vested, exercisable and nonforfeitable as to all shares covered thereby and that all restrictions with respect thereto shall lapse, notwithstanding anything to the contrary in the Plan or an Award Agreement, except as set forth in Sections 17.1(b) and (c) below;
 
(iv) To provide that such Award be assumed by the successor or survivor corporation, or a parent or subsidiary thereof, or shall be substituted for by similar options, rights or awards covering the stock of the successor or survivor corporation, or a parent or subsidiary thereof, with appropriate adjustments as to the number and kind of shares and prices.
 
(b) Notwithstanding any other provision of the Plan, in no event shall the acceleration of any Stock Option hereunder upon a Change of Control occur to the extent an “excess parachute payment” (as defined in Internal Revenue Code Section 280G) would result. If the Board or the Committee determines that such an excess parachute payment would result if any full acceleration under this Section 17.2 occurred (when added to any
 
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other payments or benefits contingent on a Change of Control under any other agreements, arrangements or plans) then the extent to which rights are accelerated shall be reduced so that total parachute payments do not exceed 299% of the Participant’s “base amount,” as defined in Internal Revenue Code Section 280G(b)(3).
 
(c) Notwithstanding any other provision of the Plan, to the extent that an Award that vests or becomes exercisable or nonforfeitable based on continued employment of or other service by the Participant (a “Time-Based Award”) is assumed by a successor or survivor corporation, or a parent or subsidiary thereof, or is substituted for by similar options, rights or awards covering the stock of the successor or survivor corporation, or a parent or subsidiary thereof, the time at which such Time-Based Award or its replacement vests or becomes exercisable or nonforfeitable shall not accelerate.
 
17.3 Rule 16b-3. No adjustment or action described in this Article XVII or in any other provision of the Plan shall be authorized to the extent that such adjustment or action would cause the Plan to violate Section 422(b)(1) of the Internal Revenue Code. Furthermore, no such adjustment or action shall be authorized to the extent such adjustment or action would result in short-swing profits liability under Section 16 or violate the exemptive conditions of Rule 16b-3 unless the Committee determines that the Award is not to comply with such exemptive conditions. Furthermore, no adjustment or action described in this Article XVII or in any other provision of the Plan shall be authorized to the extent such adjustment would cause an Award that constitutes a deferral of compensation under Section 409A to fail to satisfy the requirements of such Section 409A.
 
17.4 No Limitation on Company or Stockholders. The existence of the Plan, the Award Agreements and the Awards granted hereunder shall not affect or restrict in any way the right or power of the Company or the stockholders of the Company to make or authorize any adjustment, recapitalization, reorganization or other change in the Company’s capital structure or its business, any merger or consolidation of the Company, any issue of stock or of options, warrants or rights to purchase stock or of bonds, debentures, preferred or prior preference stocks whose rights are superior to or affect the Common Stock or the rights thereof or which are convertible into or exchangeable for Common Stock, or the dissolution or liquidation of the company, or any sale or transfer of all or any part of its assets or business, or any other corporate act or proceeding, whether of a similar character or otherwise.
 
ARTICLE XVIII
 
GENERAL RESTRICTIONS
 
18.1 Investment Representations. The Company may require any person to whom an Award is granted, as a condition of exercising or receiving such Award, to give written assurances in substance and form satisfactory to the Company and its counsel to the effect that such person is acquiring the Common Stock subject to the Award for his or her own account for investment and not with any present intention of selling or otherwise distributing the same, and to such other effects as the Company deems necessary or appropriate in order to comply with federal and applicable state securities laws.
 
18.2 Compliance with Securities Laws. Each Award shall be subject to the requirement that, if at any time counsel to the Company shall determine that the listing, registration or qualification of the shares subject to such Award upon any securities exchange or under any state or federal law, or the consent or approval of any governmental or regulatory body, is necessary as a condition of, or in connection with, the issuance or purchase of shares thereunder, such Award may not be delivered, accepted or exercised in whole or in part unless such listing, registration, qualification, consent or approval shall have been effected or obtained on conditions acceptable to the Committee. Nothing herein shall be deemed to require the Company to apply for or to obtain such listing, registration or qualification.
 
18.3 Clawback and Recoupment. All Awards made under the Plan shall be subject to any applicable clawback or recoupment policies (including, without limitation, any applicable clawback or recoupment policies required by applicable law or stock exchange rules), share trading policies and other policies that may be implemented by the Board from time to time.
 
ARTICLE XIX
 
PLAN AMENDMENT, MODIFICATION AND TERMINATION
 
19.1 Amendment or Termination. The Board, upon recommendation of the Committee or at its own initiative, at any time may terminate the Plan. The Committee, at any time and from time to time and in any respect, may amend or modify the Plan. No such amendment shall be effective unless, the Company shall obtain stockholder approval of any amendment to
 
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the extent necessary to comply with the requirements relating to the Plan under U.S. state corporate laws, U.S. federal and state securities laws, the Internal Revenue Code, any stock exchange or quotation system on which the Common Stock is listed or quoted and the applicable laws of any foreign country or jurisdiction where Awards are, or will be, granted under the Plan.
 
19.2 Effect of Amendment.
 
(a)   With regard to any Award that has been granted to a Participant, the terms and conditions of the Plan in effect on the date of such grant was made shall govern, notwithstanding subsequent amendments, unless otherwise agreed upon by the Participant; provided, however, that this sentence shall not impair the right of the Committee to take whatever action it deems appropriate under Section 18.2, Article XV or Article XVII or to amend an Award in a manner that does not materially impair any rights or obligations previously granted to the Participant under the Award, unless such right has been reserved in the Plan or Award Agreement.
 
(b)   Except as set forth in Section 19.2(a) hereof, the termination or any modification or amendment of the Plan shall not, without the consent of a Participant, affect his or her rights under an Award previously granted to him or her without the Participant’s consent. With the consent of the Participant affected, the Committee may amend outstanding Award Agreements in a manner not inconsistent with the Plan.
 
19.3 Preservation of Incentive Stock Options. The Board or the Committee shall have the right to amend or modify the terms and provisions of the Plan and of any outstanding Incentive Stock Options granted under the Plan to the extent necessary to qualify any or all such Stock Options for such favorable treatment as may be afforded Incentive Stock Options under Section 422 of the Internal Revenue Code.
 
ARTICLE XX
 
REQUIREMENTS OF LAW
 
20.1 Requirements of Law. The issuance of stock and the payment of cash pursuant to the Plan shall be subject to all applicable laws, rules and regulations.
 
20.2 Governing Law. The Plan and all Award Agreements hereunder shall be construed in accordance with and governed by the laws of the State of Delaware.
 
ARTICLE XXI
 
EFFECTIVE DATE OF THE PLAN
 
21.1 Effective Date. The Plan was originally effective May 29, 2013 (the “Effective Date”). This Amendment and Restatement of the Plan shall be effective as of August 16, 2018, subject to approval by the stockholders of the Company on such date (the “Amendment Effective Date”).
 
21.2 Duration of the Plan. The Plan shall terminate at midnight on the date that is the day before the tenth anniversary of the Amendment Effective Date, and may be terminated prior thereto by Board action; and no Award shall be granted after such termination. Awards outstanding at the time of the Plan termination may continue to be exercised, or become free of restrictions or payable, in accordance with their terms.
 
ARTICLE XXII
 
SECTION 409A
 
22.1 Deferred Compensation. The Plan is intended to comply with the requirements of Section 409A, to the extent applicable. All Awards shall be construed and administered such that the Award either (a) qualifies for an exemption from the requirements of Section 409A or (b) satisfies the requirements of Section 409A. If an Award is subject to Section 409A, (i) distributions shall only be made in a manner and upon an event permitted under Section 409A, (ii) payments to be made upon a termination of employment shall only be made upon a “separation from service” under Section 409A, (iii) unless the Award specifies otherwise, each installment payment shall be treated as a separate payment for purposes of Section 409A, and (iv) in no event shall a participant, directly or indirectly, designate the calendar year in which a distribution is made except in accordance with Section 409A.
 
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22.2 Six Month Delay. Notwithstanding anything to the contrary in this Plan, if a Participant constitutes a “specified employee” (as defined and applied in Section 409A), to the extent any payment under this Plan constitutes deferred compensation (after taking into account any applicable exemptions from Section 409A), and to the extent required by Section 409A, no payments due under this Plan as a result of the Participant’s “separation from service” (as defined in Section 409A) may be made until the earlier of: (i) the first day following the sixth month anniversary of the Participant’s separation from service, or (ii) the Participant’s date of death; provided, however, that any payments delayed during this six-month period shall be paid in the aggregate in a lump sum as soon as administratively practicable following the sixth month anniversary of the Participant’s separation from service.
 
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