Document:

Exhibit 10.7

 

VTV THERAPEUTICS INC. 

2015 OMNIBUS EQUITY INCENTIVE PLAN  

NONQUALIFIED

OPTION AWARD AGREEMENT

 

THIS NONQUALIFIED OPTION AWARD AGREEMENT
(the “Agreement”), is entered into as of [______] (the “Date of Grant”), by and between vTv
Therapeutics Inc., a Delaware corporation (the “Company”), and [______] (the “Participant”).

 

WHEREAS, the Company has adopted the vTv
Therapeutics Inc. 2015 Omnibus Equity  Incentive Plan (the “Plan”), pursuant to which Options may be granted; and

 

WHEREAS, the  Committee
has determined that it is in the best interests of the Company and its stockholders to grant the Option provided for herein to
the Participant subject to the terms set forth herein.

 

NOW, THEREFORE, for and in consideration
of the premises and the covenants of the parties contained in this Agreement, and for other good and valuable consideration, the
receipt of which is hereby acknowledged, the parties hereto, for themselves, their successors and assigns, hereby agree as follows:

 

1.             Grant
of Option.

 

(a)               
Grant. The Company hereby grants to the Participant an Option (the “Option”) to purchase [______]
shares of Class A Common Stock (such shares, the “Option Shares”), on the terms and conditions set forth in
this Agreement and as otherwise provided in the Plan. The Option is not intended to qualify as an Incentive Stock Option. The Options
shall vest in accordance with Section 2. The Exercise Price shall be $[______] per Option Share.

 

(b)              
Incorporation by Reference. The provisions of the Plan are incorporated herein by reference. Except as otherwise
expressly set forth herein, this Agreement shall be construed in accordance with the provisions of the Plan and any interpretations,
amendments, rules and regulations promulgated by the Committee from time to time pursuant to the Plan. Any capitalized terms not
otherwise defined in this Agreement shall have the definitions set forth in the Plan. The Committee shall have final authority
to interpret and construe the Plan and this Agreement and to make any and all determinations under them, and its decision shall
be binding and conclusive upon the Participant and his legal representative in respect of any questions arising under the Plan
or this Agreement. The Participant acknowledges that he or she has received a copy of the Plan and has had an opportunity to review
the Plan and agrees to be bound by all the terms and provisions of the Plan.

 

2.             Vesting. Except as may otherwise be provided herein or as otherwise provided in an employment agreement, consulting
agreement or other written agreement between the Participant and the Company or any of its Affiliates, subject to the Participant’s
continued employment or service with the Company or an Affiliate, the Options shall become vested and exercisable in equal installments
[on each of the first [___] anniversaries of] [over [___] months after]1
the Date of Grant (each such date, a “Vesting Date”) [; provided, that, if the Company does not consummate an initial public offering of Class A Common Stock within six (6) months after the Date of Grant, then no Option Shares shall vest]. Any fractional Option Shares resulting from the application
of the vesting schedule shall be aggregated and the Option Shares resulting from such aggregation shall vest on the final Vesting
Date.

 

		1	Awards for non-employee directors are expected to vest on a monthly basis.

 

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3.             Termination of Employment or Service.

 

(a)               
Except as otherwise provided herein or as otherwise provided in an employment agreement, consulting agreement or other written
agreement between the Participant and the Company or any of its Affiliates, if the Participant’s employment or service with
the Company and its Affiliates terminates for any reason [other than as set forth in Section 3(c) hereof], the unvested portion of the Option shall be cancelled immediately,
and the Participant shall immediately forfeit any rights to the Option Shares subject to such unvested portion.

 

(b)              
[For purpose hereof, the term “Good Reason” shall have the meaning ascribed to such term (or term of
similar meaning and import) in any employment, consulting, or other written agreement between the Participant and the Company or
an Affiliate in effect at the time of such termination or, in the absence of any such agreement or in the absence of any definition
of good reason in such agreement, then Good Reason shall mean the occurrence of any of the following events without the Participant’s
written consent: (i) any material diminution of base salary and target bonus opportunity, or (ii) any relocation of principal place
of employment to a location more than 50 miles from the Participant’s principal place of employment as of the date hereof
that increases the Participant’s one-way commute. Notwithstanding the foregoing, Good Reason shall not exist unless (x) within
ten (10) days after the occurrence of the event that the Participant asserts constitutes an event described in clause (i) or (ii)
above, the Participant notifies the Company’s senior human resources officer in writing of such event and the circumstances
that the Participant asserts give rise to Good Reason, (y) the Company fails to cure such circumstances within thirty (30) days
following such notice (the “Cure Period”), and (z) no later than two (2) days after the expiration of the Cure
Period, the Participant resigns from employment, such resignation to be effective ten (10) days following expiration of the Cure
Period; provided, that the Company, in its sole discretion, may waive all or any part of the Cure Period, and the Company
may assert that, notwithstanding such resignation, the Participant did not terminate for Good Reason within the meaning of this
Agreement.

 

(c)               
Notwithstanding Section 3(a), if the Participant’s employment or service with the Company and its Affiliates is terminated
by the Company or its Affiliates without Cause (other than for death or disability) or by the Participant for Good Reason in each
case on or within twelve months following a Change-in-Control, then any unvested Options then outstanding shall become vested upon
the date of such termination.]

 

4.             Expiration.

 

(a)               
In no event shall all or any portion of the Option be exercisable after the tenth annual anniversary of the Date of Grant
(such ten-year period, the “Option Period”); provided, that if the Option Period would expire at a time
when trading in the shares of Class A Common Stock is prohibited by the Company’s securities trading policy (or Company-imposed
“blackout period”), the Option Period shall be automatically extended until the 30th day following the expiration
of such prohibition (but not to the extent any such extension would otherwise violate Section 409A of the Code).

 

(b)              
Except as otherwise provided in an employment agreement, consulting agreement or other written agreement between the Participant
and the Company or any of its Affiliates, if, prior to the end of the Option Period, the Participant’s employment or services
with the Company and all Affiliates is terminated by the Company without Cause or by the Participant for any reason,  the Option
shall expire on the earlier of the last day of the Option Period or the date that is 90 days after the date of such termination.
In the event of a termination described in this subsection (b), the Option shall remain exercisable by the Participant until its
expiration only to the extent the Option was exercisable at the time of such termination.

 

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(c)               
Except as otherwise provided in an employment agreement, consulting agreement or other written agreement between the Participant
and the Company or any of its Affiliates, if (x) the Participant’s employment or service is terminated prior to the end of
the Option Period on account of his or her Disability, (y) the Participant dies while still in the employ of, or while providing services to, the Company or an
Affiliate or (z) the Participant dies following a termination described in subsection (b) above but prior to the expiration of
an Option, the Option shall expire on the earlier of the last day of the Option Period or the date that is one year after
the date of death or termination on account of Disability of the Participant, as applicable. In such event, the Option shall remain
exercisable by the Participant or his beneficiary, as applicable, until its expiration only to the extent the Option was exercisable
by the Participant at the time of such event.

 

(d)              
If the Participant ceases employment or service with the Company or any Affiliates due to a termination for Cause or a termination
for any reason at a time when grounds to terminate the Participant’s employment or services for Cause exist, the Option (including any
vested portion of the Option) shall expire immediately upon such termination.

 

5.             Method of Exercise and Form of Payment. No Option Shares shall be delivered pursuant to any exercise of the Option until
payment in full is made to the Company of the Exercise Price and an amount equal to any U.S. federal, state, local and non-U.S.
income and employment taxes required to be withheld is withheld. The Option may be exercised by delivery of written or electronic
notice of exercise to the Company or its designee (including a third party administrator) in accordance with the terms hereof.
The Exercise Price and all applicable required withholding taxes shall be payable (i) in cash, check, cash equivalent (including
bank or certified check or wire transfer) and/or in shares of Class A Common Stock (or any combination of the foregoing) valued
at the Fair Market Value at the time the Option is exercised (including, pursuant to procedures approved by the Committee, by means
of attestation of ownership of a sufficient number of shares of Class A Common Stock in lieu of actual delivery of such shares
to the Company); provided, that, such shares of Class A Common Stock are not subject to any pledge or other security interest;
or (ii) by such other method as the Committee may permit, including without limitation: (A) in other property having a fair market
value equal to the Exercise Price and all applicable required withholding taxes or (B) if there is a public market for the shares
of Class A Common Stock at such time, by means of a broker-assisted “cashless exercise” pursuant to which the Company
is delivered a copy of irrevocable instructions to a stockbroker to sell the shares of Class A Common Stock otherwise deliverable
upon the exercise of the Option and to deliver promptly to the Company an amount equal to the Exercise Price and all applicable
required withholding taxes; or (C) by means of a “net exercise” procedure effected by withholding the minimum number
of shares of Class A Common Stock otherwise deliverable in respect of an Option that are needed to pay for the Exercise Price and
all applicable required withholding taxes. Any fractional shares of Class A Common Stock shall be settled in cash.

 

6.             Rights as a Stockholder. The Participant shall not be deemed for any purpose to be the owner of any shares of Class
A Common Stock subject to this Option unless, until and to the extent that (i) this Option shall have been exercised pursuant
to its terms, (ii) the Company shall have issued and delivered to the Participant the Option Shares and (iii) the Participant’s
name shall have been entered as a stockholder of record with respect to such Option Shares on the books of the Company. The Company
shall cause the actions described in clauses (ii) and (iii) of the preceding sentence to occur promptly following settlement as
contemplated by this Agreement, subject to compliance with applicable laws.

 

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7.             Compliance with Legal Requirements.

 

(a)               
Generally. The granting and exercising of the Option, and any other obligations of the Company under this Agreement,
shall be subject to all applicable U.S. federal, state and local laws, rules and regulations, all applicable non-U.S. laws, rules
and regulations and to such approvals by any regulatory or governmental agency as may be required. The Participant agrees to take
all steps the Committee or the Company determines are reasonably necessary to comply with all applicable provisions of U.S. federal
and state securities law and non-U.S. securities law in exercising his or her rights under this Agreement.

 

(b)              
Tax Withholding. Any exercise of the Option shall be subject to the Participant satisfying any applicable U.S. federal,
state and local tax withholding obligations and non-U.S. tax withholding obligations. The Company shall have the right and is hereby
authorized to withhold from any amounts payable to the Participant in connection with the Option or otherwise the amount of any
required withholding taxes in respect of the Option, its exercise or any payment or transfer of the Option or under the Plan and
to take any such other action as the Committee or the Company deem necessary to satisfy all obligations for the payment of such
withholding taxes. The Committee, may in its sole discretion permit the Participant to satisfy, in whole or in part, the tax obligations
by withholding shares of Class A Common Stock that would otherwise be received upon exercise of the Option with a Fair Market Value
equal to such withholding liability (but no more than the minimum required statutory withholding liability).2

 

8.             Clawback. Notwithstanding anything to the contrary contained herein, the Committee may cancel the Option award if the
Participant, without the consent of the Company, has engaged in or engages in activity that is in conflict with or adverse to the
interest of the Company or any Affiliate while employed by or providing services to the Company or any Affiliate, including fraud
or conduct contributing to any financial restatements or irregularities, or violates a non-competition, non-solicitation, non-disparagement
or non-disclosure covenant or agreement with the Company or any Affiliate, as determined by the Committee. In such event, the Participant
will forfeit any compensation, gain or other value realized thereafter on the vesting or exercise of the Option, the sale or other
transfer of the Option, or the sale of shares of Class A Common Stock acquired in respect of the Option, and must promptly repay
such amounts to the Company. If the Participant receives any amount in excess of what the Participant should have received under
the terms of the Option for any reason (including without limitation by reason of a financial restatement, mistake in calculations
or other administrative error), all as determined by the Committee, then the Participant shall be required to promptly repay any
such excess amount to the Company. To the extent required by applicable law and/or the rules and regulations of NASDAQ or any other
securities exchange or inter-dealer quotation system on which the Class A Common Stock is listed or quoted, or if so required pursuant
to a written policy adopted by the Company, the Option shall be subject (including on a retroactive basis) to clawback, forfeiture
or similar requirements (and such requirements shall be deemed incorporated by reference into this Agreement).

 

9.             Restrictive Covenants. In the event that the Participant violates any restrictive covenants applicable to the Participant,
in addition to any other remedy which may be available at law or in equity, the Option shall be forfeited effective as of the date
on which such violation first occurs, unless otherwise determined by the Committee. The foregoing rights and remedies are in addition
to any other rights and remedies that may be available to the Company and shall not prevent (and the Participant shall not assert
that they shall prevent) the Company from bringing one or more actions in any applicable jurisdiction to recover damages as a result
of the Participant’s breach of such restrictive covenants.

 

		2	Tax Witholding provision modified, as needed, to the extent that Participant is classified as an independent contractor to the Company.

 

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10.           Miscellaneous.

 

(a)               
Transferability. The Option may not be assigned, alienated, pledged, attached, sold or otherwise transferred or encumbered
(a “Transfer”) by the Participant other than by will or by the laws of descent and distribution, pursuant to
a qualified domestic relations order or as otherwise permitted under Section 15(b) of the Plan. Any attempted Transfer of the Option
contrary to the provisions hereof, and the levy of any execution, attachment or similar process upon the Option, shall be null
and void and without effect.

 

(b)              
Waiver. Any right of the Company contained in this Agreement may be waived in writing by the Committee. No waiver
of any right hereunder by any party shall operate as a waiver of any other right, or as a waiver of the same right with respect
to any subsequent occasion for its exercise, or as a waiver of any right to damages. No waiver by any party of any breach of this
Agreement shall be held to constitute a waiver of any other breach or a waiver of the continuation of the same breach.

 

(c)               
Section 409A. The Option is not intended to be subject to Section 409A of the Code. Notwithstanding the foregoing
or any provision of the Plan or this Agreement, if any provision of the Plan or this Agreement contravenes Section 409A of the
Code or could cause the Participant to incur any tax, interest or penalties under Section 409A of the Code, the Committee may,
in its sole discretion and without the Participant’s consent, modify such provision to (i) comply with, or avoid being subject
to, Section 409A of the Code, or to avoid the incurrence of taxes, interest and penalties under Section 409A of the Code, and/or
(ii) maintain, to the maximum extent practicable, the original intent and economic benefit to the Participant of the applicable
provision without materially increasing the cost to the Company or contravening the provisions of Section 409A of the Code. This
Section 10(c) does not create an obligation on the part of the Company to modify the Plan or this Agreement and does not guarantee
that the Option or the Option Shares will not be subject to interest and penalties under Section 409A.

 

(d)              
Notices. Any notices provided for in this Agreement or the Plan shall be in writing and shall be deemed sufficiently
given if either hand delivered or if sent by fax, pdf/email or overnight courier, or by postage paid first class mail. Notices
sent by mail shall be deemed received three (3) business days after mailing but in no event later than the date of actual receipt.
Notices shall be directed, if to the Participant, at the Participant’s address indicated by the Company’s records,
or if to the Company, to the attention of the Chief Financial Officer of the Company at the Company’s principal executive
office.

 

(e)               
Severability. The invalidity or unenforceability of any provision of this Agreement shall not affect the validity
or enforceability of any other provision of this Agreement, and each other provision of this Agreement shall be severable and enforceable
to the extent permitted by law.

 

(f)               
No Rights to Employment or Service. Nothing contained in this Agreement shall be construed as giving the Participant
any right to be retained, in any position, as an employee, consultant or director of the Company or its Affiliates or shall interfere
with or restrict in any way the rights of the Company or its Affiliates, which are hereby expressly reserved, to remove, terminate
or discharge the Participant at any time for any reason whatsoever.

 

(g)               
Fractional Shares. In lieu of issuing a fraction of a share of Class A Common Stock resulting from any exercise of
the Option or an adjustment of the Option pursuant to Section 12 of the Plan or otherwise, the Company shall be entitled to
pay to the Participant an amount in cash equal to the Fair Market Value of such fractional share.

 

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(h)              
Beneficiary. The Participant may file with the Committee a written designation of a beneficiary on such form as may
be prescribed by the Committee and may, from time to time, amend or revoke such designation.

 

(i)                
Successors. The terms of this Agreement shall be binding upon and inure to the benefit of the Company and its successors
and assigns, and of the Participant and the beneficiaries, executors, administrators, heirs and successors of the Participant.

 

(j)                
Entire Agreement. This Agreement and the Plan contain the entire agreement and understanding of the parties hereto
with respect to the subject matter contained herein and supersede all prior communications, representations and negotiations in
respect thereto. No change, modification or waiver of any provision of this Agreement shall be valid unless the same be in writing
and signed by the parties hereto, except for any changes permitted without consent under Section 12 or 14 of the Plan.

 

(k)              
Governing Law and Venue. This Agreement shall be construed and interpreted in accordance with the laws of the State
of Delaware, without regard to principles of conflicts of laws thereof, or principles of conflicts of laws of any other jurisdiction
which could cause the application of the laws of any jurisdiction other than the State of Delaware.

 

(i)                
Dispute Resolution; Consent to Jurisdiction. All disputes between or among any Persons arising out of or in any way
connected with the Plan, this Agreement or the Option shall be solely and finally settled by the Committee, acting in good faith,
the determination of which shall be final. Any matters not covered by the preceding sentence shall be solely and finally settled
in accordance with the Plan, and the Participant and the Company consent to the personal jurisdiction of the United States Federal
and state courts sitting in Wilmington, Delaware as the exclusive jurisdiction with respect to matters arising out of or related
to the enforcement of the Committee’s determinations and resolution of matters, if any, related to the Plan or this Agreement
not required to be resolved by the Committee. Each such Person hereby irrevocably consents to the service of process of any of
the aforementioned courts in any such suit, action or proceeding by the mailing of copies thereof by registered or certified mail,
postage prepaid, to the last known address of such Person, such service to become effective ten (10) days after such mailing.

 

(ii)              
Waiver of Jury Trial. Each party hereto hereby waives, to the fullest extent permitted by applicable law, any right
it may have to a trial by jury in any legal proceeding directly or indirectly arising out of or relating to this Agreement or the
transactions contemplated (whether based on contract, tort or any other theory). Each party hereto (A) certifies that no representative,
agent or attorney of any other party has represented, expressly or otherwise, that such other party would not, in the event of
litigation, seek to enforce the foregoing waiver and (B) acknowledges that it and the other parties hereto have been induced to
enter into this Agreement by, among other things, the mutual waivers and certifications in this section.

 

(l)                
Headings; Gender. The headings of the Sections hereof are provided for convenience only and are not to serve as a
basis for interpretation or construction, and shall not constitute a part, of this Agreement. Masculine pronouns and other words
of masculine gender shall refer to both men and women as appropriate.

 

(m)            
Counterparts. This Agreement may be executed in one or more counterparts (including via facsimile and electronic
image scan (pdf)), each of which shall be deemed to be an original, but all of which together shall constitute one and the same
instrument and shall become effective when one or more counterparts have been signed by each of the parties and delivered to the
other parties.

 

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(n)              
Electronic Signature and Delivery. This Agreement may be accepted by return signature or by electronic confirmation.
By accepting this Agreement, the Participant consents to the electronic delivery of prospectuses, annual reports and other information
required to be delivered by U.S. Securities and Exchange Commission rules (which consent may be revoked in writing by the Participant
at any time upon three (3) business days’ notice to the Company, in which case subsequent prospectuses, annual reports and
other information will be delivered in hard copy to the Participant).

 

(o)      
Electronic Participation in Plan. The Company may, in its sole discretion, decide to deliver any documents
related to current or future participation in the Plan by electronic means. The Participant hereby consents to receive such documents
by electronic delivery and agrees to participate in the Plan through an on-line or electronic system established and maintained
by the Company or a third party designated by the Company.

 

 

 

 

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IN WITNESS WHEREOF, this Agreement has
been executed by the Company and the Participant as of the day first written above.

 

	 	VTV THERAPEUTICS INC.
	 	 	 
	 	By:	 
	 	 	Name:
	 	 	Title:

 

 

 

 

	 	 
	 	 	 
	 	 
	 	[PARTICIPANT]
	 	 	 

 

 

 

 

 

 

 

 

[Signature Page to [last name] option
agreement]Exhibit 10.2

 

As adopted by the Board of Directors on

July 28, 2015

 

 

NON-AFFILIATED DIRECTOR COMPENSATION PROGRAM

AND

STOCK OWNERSHIP GUIDELINES

 

	
 

Non-Affiliated   Director
    	
 

For purposes   of this program, a “Non-Affiliated Director”   is any director of the Company that is not also an employee of the Company or   any of its subsidiaries.

 
    
	
 

Cash Compensation
    	
 

Annual Retainers

·            Board Member

$90,000

·            Chair of the Audit   Committee

$40,000

·            Chair of the Compensation   Committee

$40,000

·            Chair of the Nominating   and Corporate Governance Committee

$30,000

·            Audit Committee Member   (other than the Chair)

$11,000

·            Compensation Committee   Member (other than the Chair)

$5,500

·            Nominating and Corporate   Governance Committee Member (other than the Chair)

$5,500

 

Special Assignment Fees

·                 Per day for special assignments required in   connection with board duties (including, without limitation,   litigation-related matters, but excluding days on which a director is   required to travel to attend meetings)

$5,500

 

Payment Terms

·            All cash retainers will   generally be paid in arrears in equal quarterly installments no later than   the 60th day following the last date of the   applicable quarter; provided, however, that in no event shall fees be paid later than   the date that is 21⁄2 months following the last date of the Company’s fiscal   year for which the retainer relates.

 

·            Special Assignment Fees   will generally be paid in arrears in equal quarterly installments no later   than the 60th day following the last date of the   applicable quarter; provided, however, that in no event shall fees be paid later than   the date that is 21⁄2 months following the last date of the Company’s fiscal   year for which the retainer relates.

 

·            Fees will be prorated for   partial years of service, with partial months of service credited for full   months.

 
    

 

1

 

	
 

Restricted Stock   Units
    	
 

New Appointment/Election RSU Grant

·                                         Each newly   elected or appointed Non-Affiliated Director will receive a grant of RSUs   with a grant date value of $250,000 (the exact number of RSUs to be   determined by dividing $250,000 by the NASDAQ Official Closing Price of the   Company’s stock on the date of grant) upon initial election or appointment to   the Board.  If a Non-Affiliated   Director is newly elected or appointed at any time other than at the Board   meeting immediately following the annual meeting of shareholders, then the   $250,000 grant date value will be pro-rated by reference to the expected   amount of time from the date of such appointment or election until the   Company’s next annual meeting of stockholders.

 

Annual RSU Grant

·            Each Non-Affiliated Director will receive an   annual grant of RSUs with a grant date value of $250,000 (the exact number of   RSUs to be determined by dividing $250,000 by the NASDAQ Official Closing   Price of the Company’s stock on the date of grant) upon re-election to the   Board.

 

Grant Date

·            RSU grants will be approved by the Board promptly   following election, appointment or re-election to the Board and will be made   three business days following the date of the Board’s approval of such grant.

 

Vesting

·            All RSUs will vest ratably on a quarterly basis   over the one-year period from the date of grant.

 

·            A director must be in continuous active service on   each applicable vesting date.

 

·            Vesting will accelerate on the date of a   director’s cessation of service due to death or Disability.

 

Change of Control

·            In the event that the director ceases to serve as   a member of the Board of Directors pursuant to the terms of any business   combination or similar transaction involving the Company, the RSUs will   immediately vest as of the date on which the business combination or similar   transaction is consummated.

 

Dividend Equivalents

·            The RSUs will not be entitled to receive any   payment, payment-in-kind or any equivalent with regard to any cash or other   dividends that are declared and paid on the Company’s common stock.

 

Award Agreement

·            RSUs will be granted pursuant to the Company’s   2014 Incentive Plan and will be subject to the terms of the applicable   Non-Affiliated Director stock RSU agreement as in effect at the time of   grant.

 
    

 

2

 

	
 

Expenses
    	
 

Directors receive reimbursement of business and travel expenses from   time to time in accordance with Company policy.

 
    
	
 

Other Benefits
    	
 

As determined by the Board from time-to-time.

 
    
	
 

Affiliated   Directors
    	
 

Directors who are employees of the Company or any of its subsidiaries   will not be entitled to compensation as a director.

 
    
	
 

Plan Administration
    	
 

The human resources and the legal departments will administer the   Non-Affiliated Directors’ compensation program.

 
    
	
 

Non-Affiliated   Director Stock Ownership Guidelines
    	
 

·                                   Each Non-Affiliated   Director is required, within four years following his or her first election   to the Board, to beneficially own (within the meaning of Rule 13d-3   promulgated under the Securities Exchange Act of 1934, as amended) shares of   the Company’s common stock (including any restricted shares of common stock   or restricted share units payable in shares of the Company’s common stock)   having an aggregate value at least equal to five times the amount of the   annual cash Board retainer that we then pay such director for regular service   on the Board.

 

·                                   For purposes of   determining compliance with the share ownership guidelines, the aggregate   value of the shares owned by the director is    calculated as of January 2nd of each applicable year (or if such   date is not a trading date, the next trading date) based on the higher of:

 

o                the NASDAQ Official Closing Price of the   Company’s common stock on that day; and

 

o                the NASDAQ Official Closing Price of the Company’s   common stock on the date of grant (or if such date is not a trading date, the   next trading date), for any shares awarded to the director by the Company,   and the actual cost to the director, for any other shares (e.g., with respect   to shares acquired through the exercise of stock options, the exercise   price).

 

·                                   Non-Affiliated Directors   are subject to these guidelines for as long as they continue to serve on the   Board.

 
    

 

3

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