Document:

EX-10.1

 Exhibit 10.1 

FIRST CITIZENS BANC CORP. 

2014 INCENTIVE PLAN 
 SECTION 1.
PURPOSE AND EFFECTIVE DATE.  
 1.1
Purpose. The purpose of the First Citizens Banc Corp. 2014 Incentive Plan (the “Plan”) is to provide a means through which the Company and its Subsidiaries may attract and retain Employees and Non-Employee Directors, to
provide incentives that align their interests with those of the Company’s shareholders, and to promote the success of the Company’s business. 

1.2 Effective Date. The Plan will become effective on the later of the date on which the Plan is approved by the Board or by the
Company’s stockholders (“Effective Date”).  
 SECTION 2. DEFINITIONS. 

As used in the Plan, the following terms shall have the meanings set forth below: 

2.1 “Annual Bonus Award” means an Award to Employees who are Participants pursuant to Section 10 consisting
of the right to receive a cash payment on an annual basis. 
 2.2 “Award” means, individually or
collectively, any award or benefit, to an Employee or Non-Employee Director permitted and granted under the Plan, including Stock Options, Stock Awards, Stock Units, Stock Appreciation Rights, Annual Bonus Awards, and Long-Term Incentive Awards.

 2.3 “Award Agreement” means any agreement, document, or other instrument (which may be in written or
electronic form) evidencing an Award granted under the Plan and specifying the terms, conditions, and restrictions thereof, including, without limitation, a Stock Option Agreement, Stock Award Agreement, Stock Unit Agreement, and Stock Appreciation
Right Agreement. 
 2.4 “Board” means the Board of Directors of the Company. 

2.5 “Cause” means the definition of “Cause” set forth in an Employee’s employment agreement or
in a Participant’s Award Agreement, or in the absence thereof, “Cause” means: 
 (a) a Participant’s
willful engagement in misconduct in the performance of his or her duties that causes material harm to the Company or any Subsidiary; or 

(b) a Participant’s conviction of a criminal violation involving fraud or dishonesty or the illegal use of drugs; or 

(c) a Participant’s violation of any confidentiality or other Agreement with the Company or any Subsidiary; or 

 (d) a Participant’s engagement in any intentional misconduct which would cause the
Company or any Subsidiary to violate any state or federal law relating to sexual harassment or age, sex or other prohibitive discrimination, or intentional violation of any written policy of the Company or any Subsidiary adopted with respect to any
such law; or 
 (e) a Participant’s engagement in any act involving the misappropriation of money or other property of the
Company or any of its Subsidiaries; 
 in each case is determined by the Committee in its discretion, which determination shall be final and binding upon
each Participant. 
 2.6 “Change in Control” has the meaning set forth in Section 12.2 of the Plan;
provided, however, if an Award is deferred compensation subject to Section 409A, the Award Agreement may, as determined by the Committee, include an amended definition of “Change in Control” as necessary to comply with Section
409A. 
 2.7 “Code” means the Internal Revenue Code of 1986, as amended from time to time. 

2.8 “Committee” means the Compensation Committee of the Board or such other committee or subcommittee
(including a subcommittee thereof if required with respect to actions taken to comply with Section 162(m) in respect of Awards to Covered Employees) as may be designated by the Board from time to time to administer the Plan. 

2.9 “Common Stock” means the common stock, no par value, of the Company. 

2.10 “Company” means First Citizens Banc Corp., an Ohio corporation, or any successor thereto. 

2.11 “Covered Employee” has the meaning given the term in Code Section 162(m)(3) as interpreted by
Internal Revenue Service Notice 2007-49. 
 2.12 “Director” means a member of the Board of Directors
of the Company. 
 2.13 “Disability” means that the Participant is unable
to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment; provided, however, for purposes of determining the term of an Incentive Stock Option, the term Disability shall have the
meaning ascribed to it under Section 22(e)(3) of the Code. The determination of whether an individual has a Disability shall be determined under procedures established by the Committee. Except in situations where the Committee is determining
Disability for purposes of the term of an Incentive Stock Option within the meaning of Section 22(e)(3) of the Code, the Committee may rely on any determination that a Participant is disabled for purposes of benefits under any long-term
disability plan maintained by the Company or any Subsidiary in which a Participant participates. 
 2.14 “Effective
Date” has the meaning set forth in Section 1.2. 

  
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 2.15 “Eligible Person” means any Employee or Non-Employee Director
(and such other individuals designated by the Committee to become Employees or Non-Employee Directors upon or after the receipt of Awards). 

2.16 “Employee” means any individual classified as an employee of the Company or any Subsidiary by the Company
on its payroll system; provided, however, that with respect to Incentive Stock Options, the term “Employee” means any individual who is considered an employee of the Company or any Subsidiary for purposes of United States Treasury
Regulation Section 1.421-1(h) (or any successor provision thereof).  
 2.17 “Employee Award”
means any Award granted to an Employee. 
 2.18 “Exchange Act” means the Securities Exchange Act of
1934, as amended from time to time, and any successor thereto, and the rules and regulations promulgated thereunder. 
 2.19
“Fair Market Value” means, on a particular date,  
 (a) (i) if Common Stock is listed on a
national securities exchange, the closing price per share of such Common Stock on the consolidated transaction reporting system for the principal national securities exchange on which shares of Common Stock are listed on that date, or, if there
shall have been no such sale so reported on that date, on the last preceding date on which such a sale was so reported, (ii) if Common Stock is not so listed but is quoted on the NASDAQ National Market, the mean between the highest and
lowest sales price per share of Common Stock reported by the NASDAQ National Market on that date, or, if there shall have been no such sale so reported on that date, on the last preceding date on which such a sale was so reported,
(iii) if Common Stock is not so listed or quoted, the mean between the closing bid and asked price on that date, or, if there are no quotations available for such date, on the last preceding date on which such quotations shall be
available, as reported by the NASDAQ Stock Market, or, if not reported by the NASDAQ Stock Market, by the National Quotation Bureau, Incorporated, or (iv) if Common Stock is not publicly traded, the most recent value determined by an
independent appraiser appointed by the Company for such purpose, or  
 (b) if applicable, the price per share as
determined by the Committee in good faith (which determination shall be conclusive and binding on all persons); provided, however, that with respect to any Award that is intended to be exempt from the requirements of Section 409A, a
value determined by the reasonable application of a reasonable valuation method as defined in Section 409A (and, with respect to ISOs, in accordance with Section 422 of the Code and the regulations thereunder). 

2.20 “Good Reason” means, in the case of a Participant who is an Employee, the definition of “Good
Reason” set forth in the Employee’s employment agreement or in the Employee’s Award Agreement, or in the absence thereof, “Good Reason” means: 

(a) a material change in the nature or scope of the Participant’s authority or duties; or 

(b) a material reduction in the Participant’s rate of base salary; or 

  
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 (c) the Company changes by fifty (50) miles or more the principal location in which
the Participant is required to perform services; or 
 (d) the Company terminates or materially amends, or terminates or materially
restricts the Participant’s participation in, any equity, bonus or equity-based compensation plans or qualified or supplemental retirement plans so that, when considered in the aggregate with any substitute plan or plans, the plans in which the
Participant is participating materially fail to provide him or her with a level of benefits provided in the aggregate by such plans prior to such termination or amendment; or 

(e) the Company materially breaches the provisions of an Award Agreement. 

A termination of the Participant’s employment shall not be deemed to be for Good Reason unless (i) the Participant gives notice to the
Company of the existence of the event or condition constituting Good Reason within thirty (30) days after such event or condition initially occurs or exists, (ii) the Company fails to cure such event or condition within thirty
(30) days after receiving such notice, and (iii) the Participant’s termination occurs not later than ninety (90) days after such event or condition initially occurs or exists, in each case without the Participant’s
written consent. 
 2.21 “Incentive Stock Option” or “ISO” means a Stock Option
granted under Section 6 of the Plan that meets the requirements of Section 422(b) of the Code or any successor provision. 

2.22 “Long-Term Incentive Award” means an Award to Employees who are Participants pursuant to Section 11
consisting of the right to receive a payment in cash and/or in shares of Common Stock to the extent Performance Goals are achieved and/or other requirements are met. 

2.23 “Non-Employee Director” means a Director, or a member of the board of directors of a Subsidiary, who is
not an Employee. 
 2.24 “Nonqualified Performance Award” means a Performance Award that is not
intended to be a Qualified Performance Award. 
 2.25 “Nonqualified Stock Option” or
“NSO” means a Stock Option granted under Section 6 of the Plan that is not an Incentive Stock Option. 

2.26 “Participant” means any Eligible Person selected to receive an Award under the Plan. 

2.27 “Performance Award” means an Award, other than an ISO, NSO, or SAR, that is subject to the attainment of
one or more Performance Goals. 

  
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 2.28 “Performance Goals” means, with respect to a Qualified
Performance Award (and if the Committee so decides, with respect to a Nonqualified Performance Award) one (1) or more (either alone or in combination) of the following performance factors or business criteria which may be established by the
Committee with respect to the Company or any one or more of its Subsidiaries or other business units: 
  

	 	(a)	net earnings or net income, before or after taxes (including, but not limited to, net income, net income available to common shareholders, and income before taxes); 

 

	 	(b)	earnings before or after taxes, interest, depreciation and/or amortization; 

  

	 	(c)	earnings per share or earnings per diluted common share; 

  

	 	(d)	revenue growth; 

  

	 	(e)	net operating profit; 

  

	 	(f)	pre-tax, pre-credit costs income; 

  

	 	(g)	net interest margin; 

  

	 	(h)	return measures (including, but not limited to, return on average assets, capital, invested capital, or average equity); 

  

	 	(i)	cash flow (including, but not limited to, operating cash flow, free cash flow, cash generation, cash flow return on equity, and cash flow return on investment). 

 

	 	(j)	gross or operating margins; 

  

	 	(k)	productivity ratios (including, but not limited to, efficiency ratio); 

  

	 	(l)	capital ratios; 

  

	 	(m)	liquidity ratios; 

  

	 	(n)	share price (including, but not limited to, growth measures and total shareholder return); 

  

	 	(o)	expense targets; 

  

	 	(p)	margins; 

  

	 	(q)	operating efficiency; 

  

	 	(r)	market share (including, but not limited to, deposit market share or loan market share); 

  

	 	(s)	loan and/or deposit growth; 

  

	 	(t)	customer satisfaction; 

  

	 	(u)	unit volume; 

  
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	 	(v)	working capital targets and change in working capital; 

  

	 	(w)	economic value added (including, but not limited to, net operating profit after tax minus the sum of capital multiplied by the cost of capital); 

 

	 	(x)	asset growth; 

  

	 	(y)	non-interest expenses as a percentage of total expense; 

  

	 	(z)	loan charge-offs as a percentage of total loans; 

  

	 	(aa)	risk and asset quality measures (including, but not limited to, net charge-off ratio, non-performing assets ratio, and classified assets ratio); 

 

	 	(bb)	regulatory compliance; and 

  

	 	(cc)	successful negotiation or renewal of contracts with new or existing customers or new or existing service providers. 

As to each Performance Goal, the relevant measurement of performance shall be computed in accordance with United States generally
accepted accounting principles to the extent applicable, but, unless otherwise determined and specified by the Committee will exclude the effects of the following: (i) charges or expenses for reorganizing and restructuring;
(ii) discontinued operations; (iii) asset write-downs; (iv) gains or losses on the disposition of a business; (v) changes in tax or accounting principles, regulations or laws; (vi) mergers,
acquisitions or dispositions; (vii) restatements and accounting charges; (viii) impacts on interest expense, preferred dividends and share dilution as a result of debt and capital transactions; and
(ix) extraordinary, unusual and/or non-recurring items of income, expense, gain or loss, or charges that, in case of each of the foregoing, the Company identifies in its financial statements, including notes to the final statements. 

 In addition, the Committee may appropriately adjust any evaluation of performance under a Performance Goal to exclude any of
the following events that occurs during a performance period: (aa) litigation, claims, judgments or settlements; (bb) the effects of changes in other laws or regulations affecting reported results; and (cc) accruals of any
amounts for payment under the Plan or any other compensation arrangements maintained by the Company; provided that such adjustment was specified in the Award during the initial ninety (90) days of an applicable performance period if the Award
is subject to Section 409A. Performance Goals may be specified in absolute terms, in percentages, or in terms of growth from period to period or growth rates over time, as well as measured relative to the performance of a group of comparator
companies, or a published or special index, or a stock market index, that the Committee, in its discretion, deems appropriate. The Performance Goals may include a threshold level of performance below which no payment will be made (or no vesting will
occur), levels of performance at which specified payments will be paid (or specified vesting will occur), and a maximum level of performance above which no additional payment will be made (or at which full vesting will occur). In addition, in the
case of Awards that will not be Qualified Performance Awards, the Committee may establish other Performance Goals and provide for other exclusions or adjustments not listed in this Section 2.27. 

  
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 2.29 “Plan” means this First Citizens Banc Corp. 2014 Incentive
Plan, as it may be amended from time to time. 
 2.30 “Proceeding” has the meaning set forth in
Section 18 of the Plan. 
 2.31 “Qualified Performance Award” means an Employee Award that is a
Performance Award to a Covered Employee that is intended to qualify as performance-based compensation under Section 162(m). 

2.32 “Restriction Period” means the period during which an Award may be earned by a Participant. 

2.33 “Restricted Stock” means an Award of Common Stock that is subject to forfeiture until vesting conditions
are satisfied. 
 2.34 “Section 162(m)” means Code Section 162(m) and the regulatory and other
guidance issued thereunder by the United States Department of the Treasury and/or Internal Revenue Service. 
 2.35
“Section 409A” means Section 409A of the Code and the regulatory and other guidance issued thereunder by the United States Department of the Treasury and/or Internal Revenue Service. 

2.36 “Stock Appreciation Right” or “SAR” means a right granted under Section 9 of
the Plan. 
 2.37 “Stock Award” means a grant of shares of Common Stock under Section 7 of the
Plan, which grant may be a grant of Restricted Stock. 
 2.38 “Stock Option” means an Incentive Stock
Option or a Nonqualified Stock Option granted under Section 6 of the Plan. 
 2.39 “Stock Unit”
means a right granted to a Participant to receive shares of Common Stock or cash or a combination of shares of Common Stock and cash under Section 8 of the Plan. 

2.40 “Subsidiary” means an entity of which the Company is the direct or indirect (in an unbroken chain of
entities beginning with the Company) beneficial owner of not less than fifty percent (50%) of all issued and outstanding equity interests of such entity, including entities acquired after the Effective Date. As of the Effective Date, the
Subsidiaries are The Citizens Banking Company, First Citizens Insurance Agency Inc., First Citizen Investments, Inc., First Citizens Capital LLC, and Water Street Properties and FC Refund Solutions, Inc. 

2.41 “Substitute Awards” means shares of Common Stock subject to Awards granted in assumption, substitution or
exchange for previously granted stock-based awards under a stockholder-approved plan of a company acquired by the Company. 

  
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 SECTION 3. ADMINISTRATION. 

3.1 The Committee. Except as otherwise provided herein, this Plan shall be administered by the Committee. Any Award that is
intended to be a Qualified Performance Award shall be issued by the Committee or a subcommittee consisting solely of members of the Board who are “outside directors” under Section 162(m). 

3.2 Authority of the Committee. 

(a) Subject to the provisions hereof, the Committee shall have full and exclusive power and authority to administer this Plan and to
take all actions that are specifically contemplated hereby or are necessary or appropriate in connection with the administration hereof. The Committee shall also have full and exclusive power to interpret this Plan and adopt such rules, regulations
and guidelines to carrying out this Plan as it may deem necessary or proper, all of which power shall be exercised in the best interests of the Company and in keeping with the objectives of this Plan. The Committee may, in its discretion, provide
for the extension of the exercisability of an Employee Award, accelerate the vesting or exercisability of an Employee Award, eliminate or make less restrictive any restrictions applicable to an Employee Award, waive any restriction or other
provision of this Plan (insofar as such provision relates to Employee Awards) or an Employee Award or otherwise amend or modify an Employee Award in any manner that is either (i) not adverse to the Participant to whom such Employee Award was
granted or (ii) consented to by such Participant. The Committee may correct any defect or supply any omission or reconcile any inconsistency in this Plan or in any Award in the manner and to the extent the Committee deems necessary or desirable
to further the Plan purposes. Any decision of the Committee, with respect to Employee Awards, in the interpretation and administration of this Plan shall lie within its sole and absolute discretion and shall be final, conclusive and binding on all
parties concerned. 
 (b) The Committee shall have the independent authority and discretion over the appointment, compensation and
oversight of the services of advisors to the Committee, including compensation consultants and legal counsel, provided such advisors meet the standards for independence as established by the exchange on which the Common Stock is traded. The Company
shall pay the compensation and expenses of such advisors. The Committee may engage or authorize the engagement of a third party administrator to carry out administrative functions under the Plan. 

(c) No member of the Committee shall be liable for any action taken or determination made hereunder in good faith. Service on the
Committee shall constitute service as a Director so that the members of the Committee shall be entitled to indemnification and reimbursement as Directors of the Company pursuant to the Company’s articles or certificate of incorporation and
regulations or by-laws. 
 3.3 Performance Goals. 

(a) The Committee may, in its discretion, provide that any Award granted under the Plan shall be subject to the attainment of
Performance Goals. Performance Goals may be absolute in their terms or measured against or in relationship to the performance of other 

  
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companies or indices selected by the Committee. In addition, as provided in Section 2.28, Performance Goals may be adjusted for any events or occurrences, as may be determined by the
Committee. Performance Goals may be particular to one or more lines of business or Subsidiaries or may be based on the performance of the Company and its Subsidiaries as a whole. 

(b) As provided in Sections 2.28 and 3.3(a), with respect to each performance period established by the Committee, (i) the
Committee shall establish such Performance Goals relating to one or more of the business criteria selected pursuant to Sections 2.28 and 3.3(a), and (ii) the Committee shall establish targets for Participants for achievement of Performance
Goals. The Performance Goals and performance targets established by the Committee may be identical for all Participants for a given performance period or, at the discretion of the Committee, may differ among Participants. Following the completion of
each performance period, the Committee shall determine the extent to which Performance Goals for that performance period have been achieved and shall authorize the award of shares of Common Stock or cash, as applicable, to the Participant for whom
the targets were established, in accordance with the terms of the applicable Award Agreements. 
 SECTION 4. ELIGIBILITY
AND AWARDS. 
 4.1 Participants. Participants shall consist of all Eligible Persons whom the
Committee may designate from time to time to receive Awards under the Plan; provided, however, that Awards of Incentive Stock Options may only be made to an Employee who is considered an employee of the Company or any Subsidiary for purposes of
United States Treasury Regulation Section 1.421-1(h) or any successor provision related thereto. 
 4.2 Awards.
Subject to the terms of the Plan, any type of Awards may be granted by the Committee to any Participant, but only Employees may receive Awards of Incentive Stock Options. Awards may be granted alone, or in addition to, in tandem with, or (subject to
the prohibition on repricing set forth in Section 16.3) in substitution or any other Award (or any other award granted under another plan of the Company or any Subsidiary, including the plan of an acquired entity). 

4.3 Award Agreements. Each Award shall be evidenced by an Award Agreement specifying the terms and conditions of the Award. In
the sole discretion of the Committee, the Award Agreement may condition the grant of an Award upon the Participant’s entering into one or more of the following agreements with the Company: (a) an agreement not to compete with, or
solicit the customers or employees of, the Company and its Subsidiaries which shall become effective as of the date of the grant of the Award and remain in effect for a specified period of time following termination of the Participant’s
employment with the Company; (b) an agreement to cancel any employment agreement, fringe benefit or compensation arrangement in effect between the Company and the Participant; and (c) an agreement to retain the
confidentiality of certain information. Such Award Agreement or other agreement may contain such other terms and conditions as the Committee shall determine, including provisions for the Participant’s forfeiture of an Award or the return of
vested shares of Common Stock received in connection with an Award in the event of the Participant’s noncompliance with the provisions of, or as otherwise provided in, such Award Agreement or other agreement. If the Participant shall fail to
 

  
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enter into any such agreement at the request of the Committee and within any period specified by the Committee, then the Award granted or to be granted to such Participant shall be forfeited
and cancelled. The applicable Award Agreement shall specify the termination provisions of an Award upon a Participant’s termination of employment or service with the Company and its Subsidiaries. 

4.4 Performance Awards. Without limiting the type or number of Awards that may be made under the other provisions of this Plan,
an Award may be in the form of a Performance Award. The terms, conditions and limitations applicable to any Performance Awards granted to Participants pursuant to this Plan shall be determined by the Committee; provided that any
Stock Award which is a Performance Award shall have a minimum Restriction Period of one year from the Grant Date; provided further that the Committee may provide for earlier vesting in an Employee Award upon a termination of
employment by reason of death, Disability or retirement after age sixty (60). The Committee shall set Performance Goals in its discretion which, depending on the extent which they are met, will determine the value, vesting and/or amount of
Performance Awards that will be paid out. 
 (a) Nonqualified Performance Awards. Nonqualified Performance
Awards granted to Participants shall be based on achievement of such Performance Goals and be subject to such terms, conditions and restrictions as the Committee shall determine. 

(b) Qualified Performance Awards. Qualified Performance Awards granted to Covered Employees under the Plan shall be paid,
vested or otherwise deliverable solely on account of the attainment of one or more Performance Goals established by the Committee prior to the earlier to occur of (x) ninety (90) days after the commencement of the period of service to
which the Performance Goal relates, or (y) the lapse of 25% of the period of service (as scheduled in good faith at the time the goal is established) to which the Performance Goal relates, and in any event while the outcome of the Performance
Award is substantially uncertain. In interpreting Plan provisions applicable to Performance Goals and Qualified Performance Awards, it is the intent of the Plan to conform with the standards of Section 162(m), as to grants to Covered Employees
and those Employees whose compensation is likely to be subject to Section 162(m), and the Committee shall be guided by such provisions in establishing such goals. Prior to the payment of any compensation relating to Qualified Performance Awards
based on the achievement of Performance Goals, the Committee must certify in writing that applicable Performance Goals and any of the material terms thereof were, in fact, satisfied. Subject to the foregoing provisions, the terms, conditions and
limitations applicable to any Qualified Performance Awards made pursuant to this Plan shall be determined by the Committee. No Qualified Performance Awards shall be granted unless the Performance Goals have been approved by the shareholders of the
Company within five (5) years of the commencement of the performance period to which such Performance Goals relate. The Committee, in determining the actual amount of a Qualified Performance Award, may reduce or eliminate (but not increase) the
amount of the Qualified Performance Award payout through the use of negative discretion provided that the exercise of such negative discretion does not cause the Qualified Performance Award to fail to qualify as performance-based compensation under
Section 162(m). 

  
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 SECTION 5. SHARES OF COMMON STOCK
SUBJECT TO PLAN. 
 5.1 Total Number of Shares. 

(a) Subject to adjustment as provided in Section 5.3, the total number of shares of Common Stock that may be subject to Awards
granted under the Plan shall be Three Hundred Seventy-Five Thousand (375,000) shares. The number of shares of Common Stock available for grant under the Plan shall be reduced by (i) one (1) for each share subject to a Stock
Option or SAR; and (ii) one (1) share for each share subject to a Stock Award, a Stock Unit or a Long-Term Incentive Award. Shares of Common Stock subject to Awards granted under the Plan may be either authorized but unissued shares
or treasury shares, and shall be adjusted in accordance with the provisions of Section 5.3 of the Plan. Substitute Awards do not reduce the shares of Common Stock available for Awards under the Plan. 

(b) Any shares of Common Stock subject to an Award that is cancelled, forfeited or expires prior to exercise or realization, either in
full or in part, shall again become available for issuance under the Plan. Any shares of Common Stock that again become available for future grants pursuant to this Section 5.1(b) shall be added back as one (1) share if such shares were
subject to Options or Stock Appreciation Rights, and as one (1) share if such shares were subject to other Awards. Notwithstanding anything to the contrary contained herein, shares of Common Stock subject to an Award under the Plan shall not
again be made available for issuance or delivery under the Plan if such shares are (i) shares tendered in payment of an Option, (ii) shares delivered to or withheld by the Company to satisfy any tax withholding obligation, or
(iii) shares covered by a stock-settled Stock Appreciation Right or other Awards that were not issued upon the settlement of the Award. 

5.2 Limitations. Subject to adjustment as provided in Section 5.3: 

(a) Of the total shares of Common Stock authorized for issuance under the Plan pursuant to Section 5.1, the maximum number of
shares of Common Stock under the Plan that shall be available for (i) Awards of Incentive Stock Options is Three Hundred Seventy-Five Thousand (375,000) shares of Common Stock; and (ii) Awards of Nonqualified Stock
Options and Stock Appreciation Rights is Three Hundred Seventy-Five Thousand (375,000) shares of Common Stock. 
 (b) No
Participant shall be granted, during any one (1) calendar year period, Options and Stock Appreciation Rights with respect to more than Twenty Thousand (20,000) shares of Common Stock in the aggregate, or any other Awards with respect to
more than Twenty Thousand (20,000) shares of Common Stock in the aggregate. If an Award is to be settled in cash, the number of shares of Common Stock on which the Award is based shall not count towards the individual share limit set forth in
this Section 5.2(b). 
 (c) The maximum number of shares of Common Stock subject to a Qualified Performance Award that may be
granted under the Plan in any one (1) calendar year to a Participant is Twenty Thousand (20,000) shares of Common Stock. 

  
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 (d) During any one (1) calendar year, no Non-Employee Director may receive Awards
with an aggregate grant date Fair Market Value in excess of Twenty Thousand Dollars ($20,000). 
 5.3 Adjustment. In
the event of any reorganization, recapitalization, stock split, stock distribution, stock dividend, merger, consolidation, split-up, spin-off, combination, subdivision, consolidation or exchange of shares, any change in the capital structure of the
Company or any similar corporate transaction, the Committee shall make such adjustments as are necessary and appropriate to preserve the benefits or intended benefits of the Plan and Awards granted under the Plan. Such adjustments may include:
(a) adjustment in the number and kind of shares of Common Stock reserved for issuance under the Plan; (b) adjustment in the number and kind of shares of Common Stock covered by outstanding Awards; (c) adjustment
in the exercise price of outstanding Stock Options or Stock Appreciation Rights, or the price of other Awards under the Plan; (d) adjustments to the share limitations set forth in Section 5.2 of the Plan; and (e) any
other changes that the Committee determines to be equitable under the circumstances. Notwithstanding the foregoing, previously granted Stock Options and SARs are subject only to such adjustments as are necessary to maintain the relative
proportionate interest the Stock Options and SARs represented immediately prior to such event and to preserve, without exceeding, the value of Stock Options and SARs in accordance with Code Section 422 and Section 409A. 

SECTION 6. STOCK OPTIONS. 

6.1 Grant. Subject to the terms of the Plan, the Committee may from time to time grant Stock Options to Participants. Stock
Options granted under the Plan to Non-Employee Directors shall be NSOs. Unless otherwise expressly provided at the time of the grant to be Awards of ISOs, Stock Options granted under the Plan to Employees shall be NSOs. 

6.2 Stock Option Agreement. The grant of each Stock Option shall be evidenced by a written Award Agreement sometimes referred to
herein as a “Stock Option Agreement” specifying the type of Stock Option granted, the exercise period, the exercise price, the terms for payment of the exercise price, the expiration date of the Stock Option, the number of shares of Common
Stock to be subject to each Stock Option, how the Stock Option will be exercised, and such other terms and conditions established by the Committee, in its sole discretion, not inconsistent with the Plan. With respect to a Stock Option, in no event
shall a Participant be entitled to amounts equivalent to cash dividends, stock dividends or other property dividends on the shares of Common Stock subject to the Stock Option. 

6.3 Exercise Price and Period. With respect to each Stock Option granted to a Participant: 

(a) Except as provided in Section 6.4(b), Section 16.3, or in the case of Substituted Awards, the per share exercise price of
each Stock Option shall be the one hundred percent (100%) of the Fair Market Value of the Common Stock subject to the Stock Option on the date on which the Stock Option is granted. 

  
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 (b) Each Stock Option shall become exercisable as set forth in the Stock Option Agreement.
Notwithstanding the foregoing sentence, the Committee shall have the discretion to accelerate the date as of which any Stock Option shall become exercisable in the event of the Employee’s termination of employment with the Company or any
Subsidiary, or a Non-Employee Director’s termination of service on the Board or on the board of directors of a Subsidiary, without Cause. 

(c) Except as provided in Section 6.4(b), each Stock Option that has not terminated earlier as provided in the Stock Option
Agreement shall expire, and all rights to purchase shares of Common Stock thereunder shall expire, on the date ten (10) years after the date of grant. 

6.4 Required Terms and Conditions of ISOs. In addition to the foregoing, each ISO granted to an Employee shall be subject to the
following specific rules: 
 (a) The aggregate Fair Market Value (determined with respect to each ISO at the time such Option
is granted) of the shares of Common Stock with respect to which ISOs are exercisable for the first time by an Employee during any calendar year (under all incentive stock option plans of the Company and its Subsidiaries) shall not exceed One Hundred
Thousand Dollars ($100,000). If the aggregate Fair Market Value (determined at the time of grant) of the Common Stock subject to an ISO which first becomes exercisable in any calendar year exceeds the limitation of this Section 6.4(a), so much
of the ISO that does not exceed the applicable dollar limit shall be an ISO and the remainder shall be a NSO; but in all other respects, the original Stock Option Agreement shall remain in full force and effect. 

(b) Notwithstanding anything herein to the contrary, if an ISO is granted to an Employee who owns stock possessing more than ten
percent (10%) of the total combined voting power of all classes of stock of the Company (or its parent or subsidiaries within the meaning of Section 422(b)(6) of the Code): (i) the purchase price of each share of Common Stock subject
to the ISO shall be not less than one hundred ten percent (110%) of the Fair Market Value of the Common Stock on the date the ISO is granted; and (ii) the ISO shall expire, and all rights to purchase shares of Common Stock thereunder shall
expire, no later than the fifth (5th) year anniversary of the date the ISO was granted. 
 (c) No ISOs shall be granted
under the Plan after the ten (10) year anniversary of the Effective Date. 
 6.5 Exercise of Stock
Options. 
 (a) A Participant entitled to exercise a Stock Option may do so by delivering written notice
to that effect specifying the number of shares of Common Stock with respect to which the Stock Option is being exercised and any other information the Committee may prescribe. All notices or requests provided for herein shall be delivered to the
Secretary of the Company or such party as the Secretary of the Company may designate. 

  
 13 

 (b) The Committee in its sole discretion may make available one or more of the following
alternatives for the payment of the Stock Option exercise price and specified in the Award Agreement: 
 (i) in cash;

 (iii) by directing the Company to withhold the number of shares of Common Stock otherwise issuable in connection with the
exercise of the Stock Option that have an aggregate Fair Market Value equal to the exercise price; 
 (iv) by delivering
previously acquired shares of Common Stock that are acceptable to the Committee and that have an aggregate Fair Market Value on the date of exercise equal to the Stock Option exercise price. 

The Committee shall have the sole discretion to establish the terms and conditions applicable to any alternative made available for payment of the Stock
Option exercise price; however, such terms shall be specified in the Award Agreement effective at the date of grant. 
 (c) The
Company shall, subject to compliance with the Exchange Act and other applicable laws, issue, in the name of the Participant, stock certificates representing the total number of shares of Common Stock issuable pursuant to the exercise of any Stock
Option as soon as reasonably practicable after such exercise. 
 SECTION 7. STOCK AWARDS.

 7.1 Grant. The Committee may, in its discretion, (a) grant shares of Common Stock under the Plan to any Participant
without payment of consideration by such Participant, (b) grant shares of Restricted Stock to any Participant, or (c) sell shares of Common Stock under the Plan to any Participant for such amount of cash, Common Stock or other
consideration as the Committee deems appropriate. 
 7.2 Stock Award Agreement. Each share of Common Stock issued to a
Participant under this Section 7 shall be evidenced by a written Award Agreement sometimes referred to herein as a “Stock Award Agreement”, which shall specify whether the shares of Common Stock are granted or sold to the Participant
and such other restrictions, terms and conditions (including the attainment of Performance Goals) established by the Committee in its sole discretion, not inconsistent with the Plan and the following provisions: 

(a) The restrictions to which the shares of Common Stock awarded hereunder are subject shall lapse as set forth in the Stock Award
Agreement. The Committee shall have the discretion to accelerate the date as of which the restrictions lapse with respect to a Stock Award in the event of an Employee’s termination of employment with the Company or any Subsidiary, or a
Non-Employee Director’s termination of service on the Board or on the board of directors of a Subsidiary, without Cause, after giving consideration to Section 409A. 

(b) Except as provided in this subsection (b) and unless otherwise provided in the Stock Award Agreement, the Participant
receiving a grant of or purchasing Common Stock shall thereupon be a stockholder with respect to all of the shares of Common Stock subject to the Stock Award and shall have the rights of a stockholder with respect to such shares, including the right
to vote such shares and to receive dividends and other distributions paid with respect to such shares. Notwithstanding the preceding sentence, in the case of a Stock Award that provides  

  
 14 

 
for the right to receive dividends or distributions: (i) if such Stock Award is Restricted Stock, the Company may accumulate and hold such dividends or distributions. In either such case,
the accumulated dividends or other distributions shall be paid to the Participant only upon the lapse of the restrictions to which the Stock Award is subject, and any such dividends or distributions attributable to the portion of a Stock Award for
which the restrictions do not lapse shall be forfeited. 
 (c) The Company shall, subject to compliance with the Exchange Act and
other applicable laws, issue, in the name of the Participant, stock certificates representing the total number of shares of Common Stock granted or sold to the Participant, as soon as may be reasonably practicable after such grant or sale, which, in
the case of Restricted Stock, may be held by the Secretary of the Company until such time as the Common Stock is forfeited or the restrictions lapse. 

SECTION 8. STOCK UNITS. 

8.1 Grant. The Committee may, in its discretion, grant Stock Units to any Participant. Each Stock Unit shall entitle the
Participant to receive, on the date or upon the occurrence of an event (including the attainment of Performance Goals) as described in the Stock Unit Agreement, one share of Common Stock or cash equal to the Fair Market Value of a share of Common
Stock on the date of such event, as provided in the Stock Unit Agreement. 
 8.2 Stock Unit Agreement. Each grant of
Stock Units to a Participant under this Section 8 shall be evidenced by a written Award Agreement sometimes referred to herein as a “Stock Unit Agreement”, which shall specify the restrictions, terms and conditions established by the
Committee in its sole discretion, not inconsistent with the Plan and the following provisions: 
 (a) The restrictions to
which the Stock Units awarded hereunder are subject shall lapse as set forth in the Stock Unit Agreement. The Board shall have the discretion to accelerate the date as of which the restrictions lapse in the event of an Employee’s termination of
employment with the Company or any Subsidiary, or a Non-Employee Director’s termination of service on the Board or on the board of directors of a Subsidiary, without Cause, after giving consideration to Section 409A. 

(b) Except as provided in this subsection (b), and unless otherwise provided in the Stock Unit Agreement, a Participant shall have no
rights of a stockholder, including voting or dividend or other distribution rights, with respect to any Stock Units prior to the date they are settled in shares of Common Stock. A Stock Unit Agreement may provide that, until the Stock Units are
settled in shares of Common Stock or cash, the Participant shall receive, on each dividend or distribution payment date applicable to the Common Stock, an amount equal to the dividends or distributions that the Participant would have received had
the Stock Units held by the Participant as of the related record date been actual shares of Common Stock. Notwithstanding the preceding sentence, in the case of a Stock Unit Award that provides for the right to receive amounts related to dividends
or distributions: (i) if such Stock Unit Award is subject to performance-based restrictions as described in Section 3.3, the Company shall accumulate and hold such amounts, and (ii) in the case of all other such Stock Unit Awards, the
 

  
 15 

 
Committee shall have the discretion to cause the Company to accumulate and hold such amounts. In either such case, the accumulated amounts shall be paid to the Participant only upon the lapse of
the restrictions to which the Stock Unit Award is subject and any such amounts attributable to the portion of a Stock Unit Award for which the restrictions do not lapse shall be forfeited. 

(c) Upon settlement of Stock Units in Common Stock, the Company shall, subject to compliance with the Exchange Act and other applicable
laws, issue, in the name of the Participant, stock certificates representing a number of shares of Common Stock equal to the number of Stock Units being settled.  

SECTION 9. STOCK APPRECIATION RIGHTS (SARS). 

9.1 Grant. The Committee may, in its discretion, grant an SAR under the Plan to any Participant who is an Employee. Each SAR
granted to a Participant shall entitle the Participant to receive an amount (payable in cash or in shares of Common Stock, or a combination thereof, determined by the Committee and set forth in the related Stock Appreciation Right Agreement) equal
to the excess of (a) the Fair Market Value per share of Common Stock on the date of exercise of such SAR, over (b) the exercise price of the SAR, multiplied by the number of shares of the Common Stock with respect to which the SAR is being
exercised. 
 9.2 Stock Appreciation Right Agreement. Each SAR granted under this Section 9 shall be evidenced by
a written Award Agreement sometimes referred to herein as a “Stock Appreciation Right Agreement”, specifying the conditions for exercise, the exercise period, the exercise price, the expiration date, the number of shares of Common Stock
subject to each SAR, whether the SAR is to be settled in shares of Common Stock or cash and such other terms and conditions established by the Board in its sole discretion, not inconsistent with the Plan and the following provisions: 

(a) Except in the case of Substituted Awards and Section 16.3, the per share exercise price of each SAR shall be one hundred
percent (100%) of the Fair Market Value of the Common Stock subject to the SAR on the date on which the SAR is granted. 
 (b)
Each SAR shall become exercisable as set forth in the Stock Appreciation Right Agreement. The Committee shall have the discretion to accelerate the date as of which any SAR shall become exercisable in the event of a Participant’s
termination of employment with the Company or any Subsidiary without Cause. 
 (c) Unless a shorter period is provided in the
Stock Appreciation Right Agreement, each SAR shall expire on the date ten (10) years after the date of grant. 
 (d) Upon
exercise of an SAR settled in Common Stock, the Company shall, subject to compliance with the Exchange Act and other applicable laws, issue, in the name of the Participant, stock certificates representing the total number of shares of Common Stock
issuable to the Participant.  

  
 16 

 With respect to a Stock Appreciation Right, in no event shall a Participant be entitled to amounts equivalent to
cash dividends, stock dividends or other dividends on the shares of Common Stock subject to the SAR. 
 SECTION 10. ANNUAL
BONUS AWARDS. 
 Subject to the terms of the Plan, the Committee will
determine all terms and conditions of an Annual Bonus Award, including but not limited to, whether or not the Annual Bonus Award will be solely a discretionary Annual Bonus Award, any Performance Goals, performance period, the potential payable, and
the timing and form of payment, subject to the following if the Committee determines that the Annual Bonus Award shall be a Performance Award (instead of a discretionary Annual Bonus Award): (a) the Committee must require that payment of
all or any portion of the amount subject to the Annual Bonus Award is contingent on the achievement of one or more Performance Goals during the performance period the Committee specifies, although the Committee may specify that all or a portion of
the Performance Goals subject to an Award is deemed achieved upon a Participant’s death, Disability or retirement, or such other circumstances as the Committee may specify; and (b) the performance period must relate to a period of
one (1) fiscal year of the Company except that, if the Award is made in the year this Plan becomes effective, at the time of commencement of employment with the Company or on the occasion of a promotion, then the Award may relate to a period
shorter than one (1) fiscal year. 
 SECTION 11. LONG-TERM INCENTIVE
AWARDS. 
 Subject to the terms of the Plan, the Committee will determine all terms and
conditions of a Long-Term Incentive Award, including but not limited to the Performance Goals, performance period, the potential amount payable, and the timing and form of payment, subject to the following: (a) the Committee must require
that payment of all or any portion of the amount subject to the Long-Term Incentive Award is contingent on the achievement of one or more Performance Goals during the performance period the Committee specifies, although the Committee may specify
that all or a portion of the Performance Goals subject to an Award is deemed achieved upon a Participant’s death, Disability or retirement, or such other circumstances as the Committee may specify; and (b) the performance period
must relate to a period of more than one (1) fiscal year of the Company. Dividend equivalents shall not be paid until and to the extent that the Performance Goals are met. 

SECTION 12. CHANGE IN CONTROL. 

12.1 Effect of Change in Control. Except as otherwise provided in any Award Agreement, notwithstanding any provision of the Plan
to the contrary upon a Change in Control of the Company (as defined in Section 12.2) all NSOs, ISOs, and SARs shall become immediately exercisable with respect to one hundred percent (100%) of the shares of Common Stock subject to such
NSOs, ISOs, and SARs; with respect to all Performance Awards, all Performance Goals and vesting criteria will be deemed achieved at one hundred percent (100%) of target levels, the Restriction Period shall immediately expire, and all other
terms and conditions shall be deemed met; and with respect to all other Awards, any Restriction Period  

  
 17 

 
shall immediately expire, such Awards shall become one hundred percent (100%) vested, and all other terms and conditions will be deemed met. Notwithstanding the foregoing, upon the
occurrence of a Change in Control, the Committee, in its sole discretion (which exercise of discretion shall be conclusive and binding upon each Participant without the need for any amendment to the Plan or to any Award Agreement), may take the
following action with respect to any NSOs, ISOs, or SARs that are outstanding immediately prior to such Change in Control: cancel outstanding NSOs, ISOs, and/or SARs in exchange for a cash payment in an amount equal to the excess, if any, of the
Fair Market Value of the Common Stock underlying the unexercised portion of the NSO, ISO, or SAR as of the date of the Change in Control over the exercise price or grant price, as the case may be, of such portion, provided that any NSO, ISO, or SAR
with an exercise price or grant price, as the case may be, that equals or exceeds the Fair Market Value of the Common Stock on the date of such Change in Control shall be cancelled with no payment due the Participant. 

12.2 Definition of Change in Control. “Change in Control” shall mean (except as otherwise provided in an Award
Agreement) the occurrence, at any time during the specified term of an Award granted under the Plan, of any of the following events: 

(a) any individual, partnership, firm, corporation, association, trust, unincorporated organization or other entity (other than the
Company or a trustee or other fiduciary holding securities under an employee benefit plan of the Company), or any syndicate or group deemed to be a person under Section 14(d)(2) of the Exchange Act, is or becomes the “beneficial
owner” (as defined in Rule 13d-3 of the General Rules and Regulations under the Exchange Act, whether or not the Company is subject to the Exchange Act), directly or indirectly, of securities of the Company representing fifty percent
(50%) or more of the combined voting power of the Company’s then outstanding securities entitled to vote generally in the election of directors; 

(b) the Company is party to a merger, consolidation, reorganization or other similar transaction with another corporation or other
legal person unless, following such transaction, more than fifty percent (50%) of the combined voting power of the outstanding securities of the surviving, resulting or acquiring corporation or person or its parent entity entitled to vote
generally in the election of directors (or persons performing similar functions) is then beneficially owned, directly or indirectly, by all or substantially all of the individuals and entities who were the beneficial owners of the Company’s
outstanding securities entitled to vote generally in the election of directors immediately prior to such transaction, in substantially the same proportions as their ownership, immediately prior to such transaction; 

(c) the Company sells all or substantially all of its business and/or assets to another corporation or other legal person unless,
following such sale, more than fifty percent (50%) of the combined voting power of the outstanding securities of the acquiring corporation or person or its parent entity entitled to vote generally in the election of directors (or persons
performing similar functions) is then beneficially owned, directly or indirectly, by all or substantially all of the individuals and entities who were the beneficial owners of the Company’s outstanding securities entitled to vote generally in
the election of directors immediately prior to such sale, in substantially the same proportions as their ownership, immediately prior to such sale, of the Company’s outstanding securities entitled to vote generally in the election of directors;
or 

  
 18 

 (d) during any period of two (2) consecutive years or less, individuals who at the
beginning of such period constituted the Board (and any new Directors, whose appointment or election by the Board or nomination for election by the Company’s stockholders was approved by a vote of at least two-thirds (2/3) of the Directors
then still in office who either were Directors at the beginning of the period or whose appointment, election or nomination for election was so approved) cease for any reason to constitute a majority of the Board. 

SECTION 13. SECURITIES LAW RESTRICTIONS. 

The Committee may impose such restrictions on Awards and shares of Common Stock or any other benefits underlying Awards hereunder as it may
deem advisable, including without limitation restrictions under the Code and federal securities laws, the requirements of any stock exchange or similar organization, and any blue sky, state, or foreign securities laws applicable to such securities.
Notwithstanding any other Plan provision to the contrary, the Committee shall not be obligated to issue, deliver, or transfer shares of Common Stock under the Plan, make any other distribution of benefits under the Plan, or take any other action,
unless such delivery, distribution, or action is in compliance with all applicable laws, rules, and regulations (including but not limited to the requirements of the Code and the securities acts). The Committee may cause a restrictive legend to be
placed on any shares of Common Stock issued pursuant to an Award hereunder in such form as may be prescribed from time to time by applicable laws and regulations or as may be advised by legal counsel. The term of an Award shall not be extended, and
neither the Committee, nor the Company nor its Directors or officers shall have any obligation or liability to a Participant, the Participant’s successor or any other person with respect to any shares of Common Stock as to which the Award shall
lapse because of such restrictions. 
 SECTION 14. PAYMENT OF TAXES. 

In connection with any Award, and as a condition to the issuance or delivery of any shares of Common Stock or cash amount to the Participant in
connection therewith, the Company may require the Participant to pay the Company an amount equal to the minimum amount of the tax the Company or any Subsidiary may be required to withhold to obtain a deduction for federal, state or local income tax
purposes as a result of such Award or to comply with applicable law. The Committee in its sole discretion may make available one or more of the following alternatives for the payment of such taxes: 

(a) in cash; 

(b) by directing the Company to withhold the number of shares of Common Stock otherwise issuable in connection with the Award that have
an aggregate Fair Market Value equal to the minimum amount of tax required to be withheld; or 

  
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 (c) by delivering previously acquired shares of Common Stock of the Company that are
acceptable to the Committee that have an aggregate Fair Market Value equal to the amount required to be withheld. 
 The Committee
shall have the sole discretion to establish the terms and conditions applicable to any alternative made available for payment of the required withholding taxes. 

Notwithstanding the foregoing, neither the Committee nor the Company makes any representation to any Participant or beneficiary of a
Participant as to the tax consequences of any Awards made pursuant to the Plan, and the Committee and the Company shall have no liability or other obligation to indemnity or hold harmless any Participant or any beneficiary of a Participant for any
tax, additional tax, interest or penalties that any Participant or any beneficiary of a Participant may incur as a result of the grant, vesting, or payment of an Award under the Plan. 

SECTION 15. NONTRANSFERABILITY. 

Awards granted under the Plan, and any rights and privileges pertaining thereto, may not be transferred, assigned, pledged or hypothecated in
any manner, or be subject to execution, attachment or similar process, by operation of law or otherwise, other than: 
 (a) by last
will and testament or by the laws of descent and distribution; 
 (b) pursuant to the terms of a qualified domestic relations
order to which the Participant is a party that meets the requirements of any relevant provisions of the Code; or 
 (c) as
permitted by the Committee with respect to a NSO transferable by the Participant during his or her lifetime for no consideration to (i) the Participant’s spouse or lineal descendant, (ii) the trustee of a trust
established for the primary benefit of the Participant’s spouse or lineal descendant, (iii) a partnership or other entity of which the Participant’s spouse and lineal descendants are the only partners or equity owners, or
(iv) a tax-exempt organization as described in Code Section 501(c)(3). 
 In each case, the transfer shall be for no value, and the other
terms and conditions applicable to the transferability of the Award shall be established by the Committee. 
 SECTION 16. TERMINATION
OR AMENDMENT OF PLAN AND AWARD AGREEMENTS. 

16.1 Termination or Amendment of Plan. Except as described in Section 16.3 below, the Board may terminate, suspend, or amend
the Plan, in whole or in part, from time to time, without the approval of the stockholders of the Company, unless such approval is required by applicable law, regulation or rule of any stock exchange on which the shares of Common Stock are listed.
No amendment or termination of the Plan shall adversely affect the right of any Participant under any outstanding Award in any material way without the written consent of the Participant, unless such amendment or termination is required by
applicable law, regulation or rule of any stock exchange on which the shares of Common Stock are listed. Subject to the foregoing, the Board may correct any defect or supply an omission or reconcile any inconsistency in the Plan or in any Award
granted hereunder in the manner and to the extent it shall deem desirable, in its sole discretion, to effectuate the Plan. 

  
 20 

 16.2 Amendment of Award Agreements. The Committee shall have the authority to amend
any Award Agreement at any time; provided however, that no such amendment shall adversely affect the right of any Participant under any outstanding Award Agreement in any material way without the written consent of the Participant, unless such
amendment is required by applicable law, regulation or rule. 
 16.3 No Repricing of Stock Options or SARs.
Notwithstanding the foregoing, any amendment to the Plan or any outstanding Stock Option Agreement or SAR Agreement that results in the repricing of Stock Options or SARs shall not be effective without prior approval of the stockholders of the
Company, except with respect to adjustments in accordance with Section 5.2. For this purpose, repricing includes a reduction in the exercise price of a Stock Option or SAR or the cancellation of a Stock Option or SAR in exchange for cash, Stock
Options or SARs with an exercise price less than the exercise price of the cancelled Stock Options or SARs, other Awards or any other consideration provided by the Company. 

SECTION 17. NO CONTRACT OF EMPLOYMENT. 

Neither the adoption of the Plan nor the grant of any Award under the Plan shall be deemed to obligate the Company or any Subsidiary to
continue the employment or service of any Participant for any particular period. 
 SECTION 18. APPLICABLE LAW.

 All questions pertaining to the validity, construction and administration of the Plan and all Awards granted under the Plan shall be
determined in conformity with the laws of the State of Ohio, without regard to the conflict of law provisions of any state, and with the relevant provisions of the Code and regulations issued thereunder. Any suit, action or proceeding with respect
to the Plan or any Award Agreement, or any judgment entered by any court of competent jurisdiction in respect of any thereof, shall be resolved only in the courts of the State of Ohio or the United States District Court for the Northern District of
Ohio and the appellate courts having jurisdiction of appeals in such courts. In that context, and without limiting the generality of the foregoing, the Company and each Participant and beneficiary of a Participant shall irrevocably and
unconditionally (a) submit in any proceeding relating to the Plan or any Award Agreement, or for the recognition and enforcement of any judgment in respect thereof (a “Proceeding”), to the exclusive jurisdiction of the courts
of the State of Ohio, the United States District Court for the Northern District of Ohio, and appellate courts having jurisdiction of appeals from any of the foregoing, and agree that all claims in respect of any such Proceeding shall be heard and
determined in such State of Ohio court or, to the extent permitted by law, in such federal court, (b) consent that any such Proceeding may and shall be brought in such courts and waives any objection that the Company and each Participant and
beneficiary of a Participant may now or thereafter have to the venue or jurisdiction of any such Proceeding in any such court or that such Proceeding was brought in an inconvenient court and agree not to plead or claim the same, (c) waive all
right to trial by jury in any Proceeding (whether based on contract, tort or 

  
 21 

 
otherwise) arising out of or relating to the Plan or any Award Agreement, (d) agree that service of process in any such Proceeding may be effected by mailing a copy of such process by
registered or certified mail, postage prepaid, to such party, in the case of a Participant (or the Participant’s beneficiary) at the Participant’s (or the Participant’s beneficiary’s) address shown in the books and records of the
Company or, in the case of the Company, at the Company’s principal offices, attention General Counsel, and (e) agree that nothing in the Plan shall affect the right to effect service of process in any other manner permitted by the laws of
the State of Ohio. 
 SECTION 19. TERM OF PLAN. 

19.1 Term of Plan. Notwithstanding anything to the contrary contained herein, no Awards shall be granted on or after the ten
(10) year anniversary of the Plan’s Effective Date; however, any Award theretofore granted may extend beyond such date. 

SECTION 20. MISCELLANEOUS. 

20.1 Unfunded Plan. The Plan is intended to constitute an “unfunded” plan for incentive and deferred compensation. With
respect to any payment as to which a Participant (or a Participant’s beneficiary) has a fixed and vested interest but which is not yet made to a Participant (or a Participant’s beneficiary) by the Company, nothing contained herein shall
give any such Participant (or such Participant’s beneficiary) any right that is greater than those of a general unsecured creditor of the Company. 

20.2 No Uniformity; No Future Rights. No Employee, Participant or other person shall have any claim to be granted any Award
under the Plan, and there is no obligation for uniformity or treatment of Employees, Participants, or holders or beneficiaries of Awards under the Plan. The terms and conditions of Awards need not be the same with respect to each recipient. Any
Award granted under the Plan shall be a one-time Award, and shall not constitute a promise of future grants. The Committee, in its sole discretion, maintains the right to make available future Awards hereunder. 

20.3 No Trust. Neither the Plan nor any Award shall create or be construed to create a trust or separate fund of any kind or a
fiduciary relationship between the Company, the Board, the Committee and a Participant or any other person. 
 20.4 Fractional
Shares. No fractional shares of Common Stock shall be issued or delivered pursuant to the Plan or any Award, and the Committee shall determine whether cash or other securities shall be paid or transferred in lieu of any fractional shares of
Common Stock, or whether such fractional shares of Common Stock or any rights thereto shall be canceled, terminated or otherwise eliminated. 

20.5 Section 409A. Notwithstanding any contrary provision in the Plan or Award Agreement, for purposes of an Award that is
subject to Section 409A, if a Participant’s termination of employment or service triggers the payment of “nonqualified deferred compensation” under such Award, then the Participant will not be deemed to have terminated employment
or service until the Participant incurs a “separation from service” within the meaning of Section 409A. 

  
 22 

 20.6 Clawback, etc. Notwithstanding any other provisions of the Plan or any Award
Agreement, by entering into Award Agreements or otherwise participating in the Plan, each Participant acknowledges and agrees to the provisions of this Section 20.6, and acknowledges and agrees that the provisions of this Section 20.6 may
be applied, without liability to any Participant (or any Participant’s beneficiary), by the Committee on a retroactive basis regardless of the Participant’s employment status with the Company or its Subsidiaries at the time of such
clawback or other action by the Committee. Notwithstanding anything contained in the Plan to the contrary, the Committee, in order for the Company or any Subsidiary to comply with applicable law, government regulation, or formal or informal guidance
(including, without limitation, the Dodd-Frank Wall Street Reform and Consumer Protection Act) and any risk management requirements and/or policies adopted by the Company in response to any such law or government regulation or guidance, retains the
right at all times to decrease or terminate all Awards and payments under the Plan, and any and all amounts payable under the Plan or paid under the Plan shall be subject to clawback, forfeiture, and reduction to the extent determined by the
Committee as necessary to comply with applicable law and/or policies adopted by the Company. 
 * * * 

  
 23Exhibit 10.8

 

EMPLOYMENT AGREEMENT

 

This Employment Agreement (this “Agreement”) is dated as of December 4, 2014 (the “Effective Date”) and is entered into by and between Todd L. Salmans (“Executive”) and Hilltop Holdings Inc., a Maryland corporation (the “Company”), on behalf of itself and all of its subsidiaries (collectively “Employer”).  As an inducement to continuing to render services to Employer, Executive and Employer agree as follows:

 

1.                                      Employment.  Upon the terms and subject to the conditions contained in this Agreement, Executive agrees to provide full-time services for Employer during the term of this Agreement.  Executive agrees to devote his best efforts to the business of Employer, and shall perform his duties in a diligent, trustworthy and business-like manner, all for the purpose of advancing the business of Employer.

 

2.                                      Duties.  The duties of Executive shall be those duties that can reasonably be expected to be performed by a person with the title of Chief Executive Officer of a national mortgage company and its subsidiaries.  Executive’s duties may, from time to time, be changed or modified at the discretion of the President and Chief Executive Officer of the Company.  Executive has received and is familiar with the Company’s and Employer’s employment, ethics and insider trading policies and procedures, and understands and agrees his duties include compliance with such policies and procedures, as amended from time to time.

 

3.                                      Salary and Benefits.

 

(a)                                 Base Salary.  Employer shall, during the term of this Agreement, pay Executive an annual base salary of Seven Hundred Fifty Thousand Dollars ($750,000).  Such salary shall be paid in semi-monthly installments less applicable withholding and salary deductions.  Base salary shall be reviewed at least annually by the Company, but may not be reduced.

 

(b)                                 Sign-on Cash Bonus.  Employer shall pay Executive a sign-on bonus of Two Hundred Sixty Thousand Dollars ($260,000), less applicable withholding and salary deductions, payable as soon as administratively practicable following the Effective Date, but in no event later than thirty (30) days following the Effective Date, provided that Executive is employed by Employer on such date.

 

(c)                                  Annual Bonus.  Executive shall be eligible to participate in an annual incentive bonus program adopted by the Compensation Committee (the “Compensation Committee”) of the Board of Directors of the Company (the “Board”), or whomever is delegated such authority by the Board (the “Incentive Bonus”).  The Incentive Bonus shall not be based upon performance criteria that would encourage Executive to take any unnecessary and excessive risks that threaten the value of Employer, and Employer expressly discourages Executive from taking such risks.  Subject to the terms of the annual incentive bonus program, any bonus payable under this Section 3(c) shall be paid on or before March 15 of the year following the year for which the bonus is payable.

 

 

(d)                                 Long-Term Incentive Awards.  Executive shall be eligible to participate in any long-term incentive award programs adopted by the Compensation Committee, or whomever is delegated such authority by the Board (an “LTIP Award”).  An LTIP Award shall be subject to the terms and conditions of the applicable long-term incentive award program and an award agreement between Executive and Employer.  An LTIP Award shall not be based upon performance criteria that would encourage Executive to take any unnecessary and excessive risks that threaten the value of Employer, and Employer expressly discourages Executive from taking such risks.  Executive agrees to execute any documents requested by Employer in connection with the grant of an LTIP Award pursuant to this Section 3(d).

 

(e)                                  Reimbursement of Expenses.  Employer shall reimburse Executive for all out-of-pocket expenses incurred by Executive in the course of his duties, in accordance with Employer’s normal policies.  Executive shall be required to submit to Employer appropriate documentation supporting such out-of-pocket expenses as a prerequisite to reimbursement in accordance with Employer’s normal policies.  The amount of expenses eligible for reimbursement under this Section 3(e) during a calendar year shall not affect the expenses eligible for reimbursement in any other calendar year.  Reimbursement of eligible expenses shall be made on or before the last day of the calendar year following the calendar year in which the expenses were incurred.

 

(f)                                   Employee Benefits.  Executive shall be entitled to participate in the employee benefit programs generally available to employees of Employer.

 

(g)                                  Benefits Not in Lieu of Compensation.  No benefit or perquisite provided to Executive shall be deemed to be in lieu of base salary or other compensation.

 

4.                                      Term of Agreement.  This Agreement shall become effective and binding immediately upon its execution and shall remain in effect until the date that is the third anniversary of the Effective Date (such third anniversary date being referred to herein as, the “Term Date”).  Unless Employer and Executive agree in writing to extend the term of this Agreement at any time on or before the Term Date, this Agreement shall expire on the Term Date.

 

5.                                      General Termination Provisions.  If Executive has a Termination of Employment during the term of this Agreement, other than under the provisions of Section 6, then upon such Termination of Employment, Employer will be liable to Executive for all payments (if any) as described in Section 5, as follows:

 

(a)                                 Termination by Employer.  Employer may terminate Executive’s employment and this Agreement under this Section 5 only upon the occurrence of one or more of the following events and under the conditions described below.

 

(i)                                     Termination For Cause.  Employer may discharge Executive for Cause, and, upon such Termination of Employment, this Agreement shall terminate immediately (except for such provisions of this Agreement that expressly survive termination hereof) and Executive shall be entitled to receive:

 

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(A)                               Executive’s base salary through the effective date of such Termination of Employment at the annual rate in effect at the time Notice of Termination is given, payable within ten (10) business days after the effective date of such Termination of Employment;

 

(B)                               all earned and unpaid and/or vested, nonforfeitable amounts owing at the effective date of such Termination of Employment under this Agreement or any compensation and benefit plans, programs, and arrangements of Employer and its affiliates in which Executive theretofore participated, payable in accordance with the terms and conditions of this Agreement or the plans, programs, and arrangements (and agreements and documents thereunder) pursuant to which such compensation and benefits were granted; and

 

(C)                               reimbursement for any unreimbursed business expenses properly incurred by Executive in accordance with Employer policy prior to the effective date of such Termination of Employment (collectively, (A) through (C) above shall be the “Accrued Amounts”).

 

(ii)                                  Termination Without Cause.  If Employer shall discharge Executive without Cause (other than pursuant to a Change in Control as described in Section 6), then upon such Termination of Employment, this Agreement shall terminate immediately (except for such provisions of this Agreement that expressly survive termination hereof) and Executive shall be entitled to receive the Accrued Amounts.  In addition, conditioned upon Executive’s execution and delivery to Employer of a release, in a form provided at the time of termination by Employer, within forty-five (45) days following such Termination of Employment, Executive shall be entitled to receive:

 

(A)                               a cash amount equal to one (1) times the sum of (1) the annual base salary rate of Executive immediately prior to the effective date of such Termination of Employment, and (2) an amount equal to the Incentive Bonus paid to Executive in respect of the calendar year immediately preceding the year of the Termination of Employment, payable in a lump-sum payment within sixty (60) days of the effective date of such Termination of Employment; and

 

(B)                               provided Executive elects continuation of coverage under Employer’s group health plan pursuant to COBRA, Employer shall reimburse Executive for his COBRA premiums for a period of twelve (12) months following the date of such Termination of Employment, or until Executive is otherwise eligible for health coverage under another employer group health plan.  To the extent the benefits provided under this Section 5(a)(ii) are otherwise taxable to Executive, such benefits, for purposes of Section 409A of the Internal Revenue Code of 1986, as amended (the “Code”), and the regulations and other guidance issued thereunder (“Section 409A”), shall be provided as separate monthly in-kind payments of those benefits, and to the extent those benefits are

 

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subject to and not otherwise excepted from Section 409A of the Code, the provision of the in-kind benefits during one calendar year shall not affect the in-kind benefits to be provided in any other calendar year.

 

(iii)                           Termination Because of Death or Disability.  In the event of Executive’s death or disability (within the meaning of Employer’s disability policy that is in effect at the time of disability), upon such Termination of Employment, this Agreement shall terminate immediately and Executive (or his estate) shall be entitled to receive the Accrued Amounts.

 

(b)                                 Termination by Executive.  Executive may voluntarily terminate this Agreement at any time following its execution.  If Executive shall voluntarily terminate his employment for any reason, this Agreement shall terminate immediately (except for such provisions of this Agreement that expressly survive termination hereof) and Executive shall be entitled to receive the Accrued Amounts.

 

6.                                      Termination Upon Change in Control.

 

(a)                                 Upon the discharge of Executive by Employer without Cause within the twelve (12) months immediately following, or the six (6) months immediately preceding, a Change in Control; then upon such Termination of Employment, this Agreement shall terminate immediately (except for such provisions of this Agreement that expressly survive termination hereof) and Executive shall be entitled to receive the Accrued Amounts.  In addition, conditioned upon Executive’s execution of a release, in a form provided by Employer, within forty-five (45) days following such Termination of Employment, Executive shall be entitled to receive:

 

(i)                                     a cash amount equal to two (2) times the sum of (A) the annual base salary rate of Executive immediately prior to the effective date of such Termination of Employment, and (B) an amount equal to the Incentive Bonus paid to Executive in respect of the calendar year immediately preceding the year of the Termination of Employment, payable in a lump-sum payment within sixty (60) days of the effective date of such Termination of Employment (or, if later, the effective date of the Change in Control); and

 

(ii)                                  provided Executive elects continuation of coverage under Employer’s group health plan pursuant to COBRA, Employer shall reimburse Executive for his COBRA premiums for a period of twelve (12) months following the date of such Termination of Employment, or until Executive is otherwise eligible for health coverage under another employer group health plan.  To the extent the benefits provided under this Section 6(a) are otherwise taxable to Executive, such benefits, for purposes of Section 409A shall be provided as separate monthly in-kind payments of those benefits, and to the extent those benefits are subject to and not otherwise excepted from Section 409A of the Code, the provision of the in-kind benefits during one calendar year shall not affect the in-kind benefits to be provided in any other calendar year;

 

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(b)                                 Anything in this Section 6 to the contrary notwithstanding, in the event it shall be determined that any payment or distribution made, or benefit provided, by Employer to or for the benefit of Executive pursuant to this Agreement or any plan, program, or arrangement of Employer (whether paid or payable or distributed or distributable or provided pursuant to the terms hereof or otherwise) would constitute a “parachute payment” as defined in Section 280G of the Code, then the benefits payable to Executive under this Agreement or such plan, program, or arrangement shall be reduced so that the aggregate present value of all payments in the nature of compensation to (or for the benefit of) Executive which are contingent on a change of control (as defined in Section 280G(b)(2)(A) of the Code) is One Dollar ($1.00) less than the amount which Executive could receive without being considered to have received any parachute payment (the amount of this reduction in the benefits payable is referred to herein as the “Excess Amount”).  The determination of the amount of any reduction required by this Section 6(b) shall be made by an independent accounting firm selected by Employer, and such determination shall be conclusive and binding on the parties hereto.

 

(c)                                  Notwithstanding anything to the contrary contained herein, any amounts payable to Executive pursuant to Section 6(a) shall be reduced by any amounts previously received by Executive pursuant to Section 5 above.

 

7.                                      Definitions.

 

(a)                                 Cause.  “Cause” for termination shall mean that, prior to any termination pursuant to Section 5(a)(i) hereof, Executive shall have committed or caused:

 

	
(i)
    	
an   intentional act of fraud, embezzlement or theft in connection with his duties   or in the course of his employment with Employer;
    
	
 
    	
 
    
	
(ii)
    	
intentional   wrongful damage to property of Employer;
    
	
 
    	
 
    
	
(iii)
    	
intentional   wrongful disclosure of trade secrets or confidential information of Employer;
    
	
 
    	
 
    
	
(iv)
    	
intentional   violation of any law, rule or regulation (other than traffic violations   or similar offenses) or final cease and desist order;
    
	
 
    	
 
    
	
(v)
    	
intentional   breach of fiduciary duty involving personal profit;
    
	
 
    	
 
    
	
(vi)
    	
intentional   action or inaction that causes material economic harm to Employer;
    
	
 
    	
 
    
	
(vii)
    	
a   material violation of the Company’s or Employer’s written policies, standards   or guidelines applicable to Executive; or
    
	
 
    	
 
    
	
(viii)
    	
the   failure or refusal of Executive to follow the reasonable lawful directives of   the Board or his supervisors.
    

 

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provided, however, that none of the actions described in clauses (ii) through (vii) above shall constitute grounds for a “Cause” termination unless any such act or actions shall have been determined by the Compensation Committee to have been materially harmful to Employer.  For the purposes of this Agreement, no act or failure to act on the part of Executive shall be deemed “intentional” unless done or omitted to be done by Executive not in good faith and without reasonable belief that his action or omission was in the best interest of Employer.

 

Notwithstanding the foregoing, Executive shall not be deemed to have been terminated for “Cause” hereunder unless and until there shall have been delivered to Executive a copy of a resolution duly adopted by the affirmative vote of not less than a majority (50.1%) of the members of the Compensation Committee then in office at a meeting of the Compensation Committee called and held for such purpose (after reasonable notice to Executive and an opportunity for Executive, together with his counsel, to be heard before such members), finding that in the good faith opinion of such members, Executive had committed an act set forth above in this Section 7(a) and specifying the particulars thereof in detail.

 

(b)                                 Change in Control.  A “Change in Control” means and shall be deemed to have occurred for purposes of this Agreement if and when any of the following occur:

 

(i)                                     The acquisition by any individual, entity, or group (within the meaning of Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) (a “Person”) of beneficial ownership (within the meaning of Rule 13d-3 promulgated under the Exchange Act) of thirty-three percent (33%) or more of either (A) the then outstanding shares of common stock of the Company (the “Outstanding Company Common Stock”) or (B) the combined voting power of the then outstanding voting securities of the Company entitled to vote generally in the election of directors (the “Outstanding Company Voting Securities”); provided, however, that for purposes of this subsection (i), the following acquisitions shall not constitute a Change in Control: (1) any acquisition directly from the Company, (2) any acquisition by the Company, (3) any acquisition by any employee benefit plan (or related trust) sponsored or maintained by the Company or any entity controlled by the Company, (4) any acquisition by a Person who holds or controls entities that, in the aggregate (including the holdings of such Person), hold or control ten percent (10%) or more of the Outstanding Company Common Stock or the Outstanding Company Voting Securities on the Effective Date, or (5) any acquisition by any entity pursuant to a transaction which complies with clauses (A), (B), and (C) of subsection (iii) of this Section 7(b);

 

(ii)                                  Individuals who, as of the Effective Date, 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 Effective Date 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

 

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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 transaction involving the Company or any of its subsidiaries with a third party or sale or other disposition of all or substantially all of the assets of the Company to a third party, or the acquisition of assets or securities of another entity by the Company or any of its subsidiaries (a “Business Combination”), in each case, unless, following such Business Combination, (A) all or substantially all of the individuals and entities who were the beneficial owners, respectively, of the Outstanding Company Common Stock and Outstanding Company Voting Securities immediately prior to such Business Combination beneficially own, directly or indirectly, more than fifty percent (50%) of, respectively, the then outstanding shares of common stock (or, for a non-corporate entity, equivalent securities) and the combined voting power of the then outstanding voting securities entitled to vote generally in the election of directors (or, for a non-corporate entity, equivalent securities), as the case may be, 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) in substantially the same proportions as their ownership, immediately prior to such Business Combination of the Outstanding Company Common Stock and Outstanding Company Voting Securities, as the case may be, (B) no Person (excluding any entity resulting from such Business Combination or any employee benefit plan (or related trust) of the Company or such entity resulting from such Business Combination, or any Person who holds or controls entities that, in the aggregate (including the holdings of such Person), hold or control ten percent (10%) or more of the Outstanding Company Common Stock or the Outstanding Company Voting Securities on the Effective Date) beneficially owns, directly or indirectly, thirty-three percent (33%) or more of, respectively, the then outstanding shares of common stock (or, for a non-corporate entity, equivalent securities) of the entity resulting from such Business Combination or the combined voting power of the then outstanding voting securities of such entity, except to the extent that such ownership existed prior to the Business Combination, and (C) at least a majority of the members of the board of directors (or, for a non-corporate entity, the equivalent body) of the entity 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)                              The approval by the stockholders of the Company of a complete liquidation or dissolution of the Company.

 

(c)                                  COBRA.  “COBRA” shall mean the Consolidated Omnibus Budget Reconciliation Act of 1985, as amended.

 

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(d)                                 Notice of Termination.  “Notice of Termination” shall mean a notice which shall indicate the specific termination provision in this Agreement relied upon and the termination date, and shall set forth in reasonable detail the facts and circumstances claimed to provide a basis for Termination of Employment under the provision so indicated.  Any purported Termination of Employment by Employer or by Executive (other than due to Executive’s death) shall be communicated by written Notice of Termination to the other party hereto in accordance with Section 12 hereof.

 

(e)                                  Termination of Employment.  “Termination of Employment” shall mean a “separation from service” as such term is defined in the regulations issued under Section 409A.

 

8.                                      Governing Law.  This Agreement is made and entered into in the State of Texas, and the laws of Texas shall govern its validity and interpretation in the performance by the parties of their respective duties and obligations.

 

9.                                      Entire Agreement.  This Agreement constitutes the entire agreement between the parties concerning the employment of Executive, and there are no representations, warranties or commitments other than those in writing executed by all of the parties.  This is an integrated agreement.  This Agreement may not be altered, modified, or amended except by written instrument signed by the parties hereto.  The failure of a party to insist upon strict adherence to any term of this Agreement on any occasion shall not be considered a waiver of such party’s rights or deprive such party of the right thereafter to insist upon strict adherence to that term or any other term of this Agreement.

 

10.                               Arbitration.

 

(a)                                 Executive and Employer acknowledge and agree that any claim or controversy arising out of or relating to this Agreement or the breach of this Agreement or any other dispute arising out of or relating to the employment of Executive by Employer, shall be settled by final and binding arbitration in the City of Dallas, Texas, in accordance with the Commercial Arbitration Rules of the American Arbitration Association in effect on the date the claim or controversy arises.

 

(b)                                 All claims or controversies subject to arbitration shall be submitted to arbitration within six (6) months from the date the written notice of a request for arbitration is effective.  All claims or controversies shall be resolved by a panel of three (3) arbitrators who are licensed to practice law in the State of Texas and who are experienced in the arbitration of labor and employment disputes.  These arbitrators shall be selected in accordance with the Commercial Arbitration Rules of the American Arbitration Association in effect at the time the claim or controversy arises.  Either party may request that the arbitration proceeding be stenographically recorded by a Certified Shorthand Reporter.  The arbitrators shall issue a written decision with respect to all claims or controversies within thirty (30) days from the date the claims or controversies are heard in arbitration.  The parties shall be entitled to be represented by legal counsel at any arbitration proceeding.  Executive and Employer acknowledge and agree that each party will bear fifty percent (50%) of the cost of the arbitration proceeding.  The parties shall be responsible for paying their own attorneys’ fees, if any.

 

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(c)                                  Employer and Executive acknowledge and agree that the arbitration provisions in Sections 10(a) and 10(b) may be specifically enforced by either party and submission to arbitration proceedings compelled by any court of competent jurisdiction.  Employer and Executive further acknowledge and agree that the decision of the arbitrators may be specifically enforced by either party in any court of competent jurisdiction.

 

(d)                                 Notwithstanding the arbitration provisions set forth above, Executive and Employer acknowledge and agree that nothing in this Agreement shall be construed to require the arbitration of any claim or controversy arising under the NON-DISCLOSURE, NON-INTERFERENCE, NON-COMPETITION, and NON-DISPARAGEMENT provisions set forth at Sections 13 through 16 of this Agreement.  These provisions shall be enforceable by any court of competent jurisdiction and shall not be subject to ARBITRATION pursuant to Sections 10(a)-(c).  Executive and Employer further acknowledge and agree that nothing in this Agreement shall be construed to require arbitration of any claim for workers’ compensation benefits (although any claims arising under Tex. Labor Code § 450.001 shall be subject to arbitration) or unemployment compensation.

 

11.                               Assistance in Litigation.  Executive shall make himself available, upon the request of Employer, to testify or otherwise assist in litigation, arbitration or other disputes involving Employer, or any of its directors, officers, employees, subsidiaries or parent corporations, during the term of this Agreement and at any time following the termination of this Agreement.

 

12.                               Notice.  Any notice or communication required or permitted to be given to the parties shall be delivered personally or sent by United States registered or certified mail, postage prepaid and return receipt requested, and addressed or delivered as follows, or to such other address as the party addressed may have substituted by notice pursuant to this Section.  Any notice given pursuant to this Section 12 will be effective immediately upon delivery if delivered in person or three (3) days after mailing deposited in the United States addressed as set forth below:

 

(a)                                 If to Employer:

 

Hilltop Holdings Inc.

200 Crescent Court, Suite 1330

Dallas, Texas 75201

Attention:  General Counsel

 

(b)                                 If to Executive:

 

Todd L. Salmans

18111 Preston Road, Suite 900

Dallas, Texas 75252

 

13.                               Non-Disclosure of Confidential Information.  Employer agrees to provide Executive access to Employer’s Confidential Information, which information will be necessary to Executive’s performance of the duties and responsibilities contemplated herein.  Executive acknowledges that such Confidential Information is a valuable asset of Employer and that any disclosure or

 

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unauthorized use of any Confidential Information by Executive will cause irreparable harm and loss to Employer.  For the purposes of this Agreement, “Confidential Information” shall mean trade secrets, confidential or proprietary information, including, but not limited to the following:   methods of operation, products, inventions, services, processes, equipment, know-how, technology, technical data, policies, strategies, designs, formulas, developmental or experimental work, improvements, discoveries, research, plans for research or future products and services, database schemas or tables, software, development tools or techniques, training procedures, training techniques, training manuals, business information, marketing and sales methods, plans and strategies, competitors, markets, market surveys, techniques, production processes, infrastructure, business plans, distribution and installation plans, processes and strategies, methodologies, budgets, financial data and information, customer and client information, prices and costs, fees, customer and client lists and profiles, employee, customer and client nonpublic personal information, supplier lists, business records, product construction, product specifications, audit processes, pricing strategies, business strategies, marketing and promotional practices, management methods and information, plans, reports, recommendations and conclusions, information regarding the skills and compensation of employees and contractors of Employer, and other business information disclosed to Executive by Employer, either directly or indirectly, in writing, orally, or by drawings or observation.  Confidential Information does not include, and there shall be no obligation hereunder with respect to, information that (a) is generally available to the public on the Effective Date, (b) becomes generally available to the public other than as a result of a disclosure not otherwise permissible hereunder, or (c) was known by Executive prior to his employment by Employer.  Executive agrees that during the term of this Agreement and thereafter, Executive will not disclose any Confidential Information.

 

i.                                          Upon the termination of Executive’s employment for any reason, Executive shall immediately return and deliver to Employer any and all Confidential Information, software, devices, cell phones, personal data assistants, credit cards, data, reports, proposals, lists, correspondence, materials, equipment, computers, hard drives, papers, books, records, documents, memoranda, manuals, e-mail, electronic or magnetic recordings or data, including all copies thereof, which belong to Employer or relate to Employer’s business and which are in Executive’s possession, custody or control, whether prepared by Executive or others.  If at any time after termination of Executive’s employment Executive determines that Executive has any Confidential Information in Executive’s possession or control, Executive shall immediately return to Employer all such Confidential Information in Executive’s possession or control, including all copies and portions thereof.

 

ii.                                       Throughout Executive’s employment with Employer and thereafter: (A) Executive shall hold all Confidential Information in the strictest confidence, take all reasonable precautions to prevent its inadvertent disclosure to any unauthorized person, and follow all Company policies protecting the Confidential Information; and (B) Executive shall not, directly or indirectly, utilize, disclose or make available to any other person or entity, any of the Confidential Information, other than in the proper performance of Executive’s duties.

 

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14.                               Non-Interference.  Executive covenants and agrees that during the Restricted Period (as defined below), Executive shall not recruit, hire or attempt to recruit or hire other employees of Employer, directly or by assisting other employees of Employer or others, nor shall Executive contact or communicate with any other employees of Employer for the purpose of inducing other employees of Employer to terminate their employment with Employer.  For purposes of this covenant, “other employees of Employer” shall refer to employees who are still actively employed by or doing business with Employer at the time of the attempted recruiting or hiring.

 

15.                               Non-Competition.  Ancillary to his promise to protect the Confidential Information of Employer, Executive agrees that during the term of this Agreement, and for a period of twelve (12) months following the earlier of (i) his Termination of Employment or (ii) the termination of this Agreement (the “Restricted Period”), Executive shall not, other than in connection with Executive’s duties under this Agreement, engage or invest in, own, manage, operate, finance, control, participate in the ownership, management, operation, financing or control of, be employed by, associated with or in any manner connected with, lend Executive ‘s name or any similar name to, lend Executive ‘s credit to or render services or advice to any business that provides services of investment banking, consumer banking, commercial banking, financial advisory services, mortgage banking, residential mortgage brokerage, commercial mortgage brokerage, equipment leasing, personal property leasing, personal insurance, commercial insurance, title insurance or other financial services of any type whatsoever anywhere within the state of Texas; provided, however, Executive may purchase or otherwise acquire up to (but not more than) one percent (1%) of any class of securities of any enterprise (but without participating in the activities of such enterprise) if such securities are listed on any national or regional securities exchange or have been registered under Section 12(g) of the Securities Exchange Act of 1934.

 

Executive further acknowledges that:

 

(a)                                 The services to be performed by Executive under this Agreement are of a special, unique, unusual, extraordinary and intellectual character;

 

(b)                                 Employer’s business is statewide in scope and its products and services are marketed throughout the state of Texas;

 

(c)                                  Employer competes with other businesses that are or could be located in any part of the state of Texas; and

 

(d)                                 The provisions of this Section 15 are reasonable and necessary to protect Employer’s business.

 

16.                               Non-Disparagement.                            During the term of this Agreement and after Executive’s Termination of Employment for any reason, Executive agrees not to, directly or indirectly, disclose, communicate, or publish any disparaging, negative, harmful, or disapproving information, written communications, oral communications, electronic or magnetic communications, writings, oral or written statements, comments, opinions, facts, or remarks, of any kind or nature whatsoever (collectively, “Disparaging Information”), that disparages the reputation of Employer, its products, services or employees. Executive acknowledges that in executing this Agreement, he has knowingly, voluntarily, and intelligently waived any free speech, free association, free press,

 

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or First Amendment to the United States Constitution (including, without limitation, any counterpart or similar provision or right under the Texas Constitution) rights to disclose, communicate, or publish Disparaging Information concerning or related to Employer.  Executive further acknowledges and agrees that any breach or violation of this non-disparagement provision shall entitle Employer to seek injunctive relief to prevent any future breaches of this provision and/or to sue Executive under the provisions of this Agreement for the immediate recovery of any damages caused by such breach.

 

17.                               Tolling.  If Executive violates any of the restrictions contained in Sections 13 through 16, the Restricted Period shall be suspended and shall not run in favor of Executive from the time of the commencement of any violation until the time when Executive cures the violation to the satisfaction of Employer; the period of time in which Executive is in breach shall be added to the Restricted Period.

 

18.                               Injunctive Relief and Additional Remedy.  Executive acknowledges that the injury suffered by Employer as a result of a breach of Sections 13 through 16 of this Agreement would be irreparable and that an award of money damages to Employer for such a breach would be an inadequate remedy.  Consequently, Employer shall have the right, in addition to any other rights it may have, to obtain relief to restrain any breach or threatened breach or otherwise to specifically enforce Sections 13 through 16 of this Agreement, and Employer will not be obligated to post bond or other security in seeking such relief.  Without limiting Employer’s rights under this Section 18 or any other remedies of Employer, if Executive breaches the provisions of Sections 13 through 16, Employer shall have the right to cease making payments otherwise due to Executive under this Agreement.

 

19.                               Reasonableness.  Executive hereby represents to Employer that Executive has read and understands, and agrees to be bound by, the terms of Sections 13 through 16.  Executive acknowledges that the geographic scope and duration of the covenants contained in Sections 13 through 16 are fair and reasonable in light of (a) the nature and wide geographic scope of the operations of Employer’s business; (b) Executive’s level of control over and contact with the business in Texas; and (v) the amount of compensation, trade secrets and Confidential Information that Executive is receiving in connection with Executive’s employment by Employer.  It is the desire and intent of the Parties that the provisions of Sections 13 through 16 be enforced to the fullest extent permitted under applicable law, whether now or hereafter in effect and therefore, to the extent permitted by applicable law, Executive and Employer hereby waive any provision of applicable law that would render any provision of Sections 13 through 16 invalid or unenforceable.

 

20.                               Binding Agreement and Successors.  This Agreement shall inure to the benefit of and be enforceable by Executive’s and Employer’s respective personal or legal representatives, executors, administrators, assigns, successors, heirs, distributees, devisees, and legatees.  Notwithstanding anything herein to the contrary, the duties of Executive hereunder are personal in nature and may not be assigned to any other person or entity.  If Executive should die while any amounts would still be payable to him hereunder if he had continued to live, all such amounts, unless otherwise provided herein, shall be paid in accordance with the terms of this Agreement to his devisee, legatee, or other designee, or, if there be no such designee, to his estate.  In the event of a Change in Control, Employer shall require any successor (whether direct or indirect, by purchase, merger consolidation or otherwise) to all or substantially all of the

 

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business and/or assets of Employer, by agreement in form and substance satisfactory to Executive, expressly to assume and agree to perform this Agreement in the same manner and to the same extent that Employer would be required to perform it if no such succession had taken place.

 

21.                           No Mitigation of Amounts Payable Hereunder.  Executive shall not be required to mitigate the amount of any payment provided for in this Agreement by seeking other employment or otherwise, nor shall the amount of any payment provided for in this Agreement be reduced by any compensation earned by Executive as the result of employment by another employer after the date of termination or otherwise.

 

22.                               Captions.  The captions of this Agreement are inserted for convenience and are not part of the Agreement.

 

23.                               Gender and Number.  Words of any gender used in this Agreement shall be held and construed to include any other gender, and words in the singular number shall be held to include the plural, and vice versa, unless the context requires otherwise.

 

24.                               Severability.  In case of any one or more of the provisions contained in this Agreement shall for any reason be held to be invalid, illegal, or unenforceable in any other respect, such invalidity, illegality, or unenforceability shall not affect any other provision of this Agreement.  This Agreement shall be construed as if such invalid, illegal, or unenforceable provision had never been a part of the Agreement and there shall be deemed substituted therefor such other provision as will most nearly accomplish the intent of the parties to the extent permitted by the applicable law.

 

25.                               Amendment.  Except as otherwise provided herein, this Agreement may not be amended or modified at any time except by a written instrument approved by the Compensation Committee, and executed by Employer and Executive.  Any attempted amendment or modification without such approval and execution shall be null and void ab initio and of no effect.  Notwithstanding the foregoing provisions of this Section 25, the Compensation Committee may change or modify this Agreement without Executive’s consent or signature if the Compensation Committee determines, in its sole discretion, that such change or modification is required for purposes of compliance with or exemption from the requirements of Section 409A.

 

26.                               No Waiver.  No waiver by either party at any time of any breach by the other party of, or compliance with, any condition or provision of this Agreement to be performed by the other party shall be deemed a waiver of similar or dissimilar provisions or conditions at any time.

 

27.                               Survival of Provisions.  The covenants and agreements of the parties set forth in Sections 5, 6, and 8 through 21 are of a continuing nature and shall survive the expiration, termination or cancellation of this Agreement, regardless of the reason therefor.

 

28.                               Counterparts.  This Agreement may be executed simultaneously in two or more counterparts, each of which shall be deemed an original.

 

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29.                               Section 409A.  In the event that it is reasonably determined by Employer or Executive that, as a result of Section 409A, any of the payments that Executive is entitled to under the terms of this Agreement or any nonqualified deferred compensation plan (as defined under Section 409A) may not be made at the time contemplated by the terms hereof or thereof, as the case may be, without causing Executive to be subject to an income tax penalty and interest, Employer will make such payment (with interest thereon) on the first day that would not result in Executive incurring any tax liability under Section 409A.  In addition, other provisions of this Agreement or any other plan notwithstanding, Employer shall have no right to accelerate any such payment or to make any such payment as the result of an event if such payment would, as a result, be subject to the tax imposed by Section 409A.

 

30.                           Six Month Delay.  To the extent (i) any payments to which Executive becomes entitled under this Agreement, or any agreement or plan referenced herein, in connection with Executive’s Termination of Employment with Employer constitute deferred compensation subject to Section 409A; (ii) Executive is deemed at the time of his Termination of Employment to be a “specified employee” under Section 409A; and (iii) at the time of Executive’s Termination of Employment, Employer is publicly traded (as defined in Section 409A), then such payments (other than any payments permitted by Section 409A to be paid within six (6) months of Executive’s Termination of Employment) shall not be made until the earlier of (x) the first day of the seventh (7th) month following Executive’s Termination of Employment or (y) the date of Executive’s death following such Termination of Employment.  During any period that payment or payments to Executive are deferred pursuant to the foregoing, Executive shall be entitled to interest on the deferred payment or payments at a per annum rate equal to Federal-Funds rate as published in The Wall Street Journal on the date of Executive’s Termination of Employment with Employer.  Upon the expiration of the applicable deferral period, any payments which would have otherwise been made during that period (whether in a single sum or in installments) in the absence of this Section 30 (together with accrued interest thereon) shall be paid to Executive or Executive ‘s beneficiary in one lump sum.

 

	
 
    	
EXECUTIVE
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
/s/   Todd L. Salmans
    
	
 
    	
 
    
	
 
    	
Name:
    	
Todd   L. Salmans
    
	
 
    	
 
    	
 
    
	
 
    	
Date:
    	
December 4,   2014
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
HILLTOP HOLDINGS INC.
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/   Corey G. Prestidge
    
	
 
    	
 
    
	
 
    	
Its:
    	
EVP &   General Counsel
    
	
 
    	
 
    
	
 
    	
Date:
    	
December 4,   2014
    

 

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