Document:

Exhibit 10.1
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EL POLLO LOCO HOLDINGS, INC.
EQUITY INCENTIVE PLAN
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Section 1.  Purpose of Plan.
The name of the Plan is the El Pollo Loco Holdings, Inc. Equity Incentive Plan (formerly the El Pollo Loco Holdings, Inc. 2018 Omnibus Equity Incentive Plan).  The purposes of the Plan are to (i) provide an additional incentive to selected employees, directors, independent contractors and consultants of the Company or its Affiliates whose contributions are essential to the growth and success of the Company, (ii) strengthen the commitment of such individuals to the Company and its Affiliates, (iii) motivate those individuals to faithfully and diligently perform their responsibilities and (iv) attract and retain competent and dedicated individuals whose efforts will result in the long-term growth and profitability of the Company.  To accomplish these purposes, the Plan provides that the Company may grant Options, Share Appreciation Rights, Restricted Shares, Restricted Stock Units, Other Share-Based Awards, Cash Awards or any combination of the foregoing.
Section 2.  Definitions.
For purposes of the Plan, the following terms shall be defined as set forth below:
(a) “Administrator” means the Board, or, if and to the extent the Board does not administer the Plan, the Committee in accordance with Section 3 hereof.
(b) “Affiliate” means a Person that directly, or indirectly through one or more intermediaries, controls, or is controlled by, or is under common control with, the Person specified as of any date of determination.
(c) “Amendment Date” has the meaning set forth in Section 18 hereof.
(d) “Applicable Laws” means the applicable requirements under U.S. federal and state corporate laws, U.S. federal and state securities laws, including the Code, any stock exchange or quotation system on which the Common Stock is listed or quoted and the applicable laws of any other country or jurisdiction where Awards are granted under the Plan, as are in effect from time to time.
(e) “Award” means any Option, Share Appreciation Right, Restricted Share, Restricted Stock Unit, Other Share-Based Award or Cash Award granted under the Plan.
(f) “Award Agreement” means any written notice, agreement, contract or other instrument or document evidencing an Award, including through electronic medium, which shall contain such terms and conditions with respect to an Award as the Administrator shall determine, consistent with the Plan.
(g) “Beneficial Owner” (or any variant thereof) has the meaning defined in Rule 13d-3 under the Exchange Act.
(h) “Board” means the Board of Directors of the Company.
(i) “Bylaws” mean the bylaws of the Company, as may be amended and/or restated from time to time.
(j) “Cash Award” means cash awarded under Section 11 of the Plan, including cash awarded as a bonus or upon the attainment of performance goals or otherwise as permitted under the Plan.
(k) “Cause” has the meaning assigned to such term in any individual service, employment or severance agreement or Award Agreement with the Participant or, if no such agreement exists or if such agreement does not define “Cause,” then “Cause” means (i) the conviction, guilty plea or plea of “no contest” by the Participant to any felony or a crime involving moral turpitude or the Participant’s commission of any other act or omission involving dishonesty or fraud, (ii) the substantial and repeated failure of the Participant to perform duties of the office held by the Participant,
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(iii) the Participant’s gross negligence, willful misconduct or breach of fiduciary duty with respect to the Company or any of its Subsidiaries or Affiliates, (iv) any breach by the Participant of any restrictive covenants to which the Participant is subject, and/or (v) the Participant’s engagement in any conduct which is or can reasonably be expected to be materially detrimental or injurious to the business or reputation of the Company or its Affiliates.  Any voluntary termination of employment or service by the Participant in anticipation of an involuntary termination of the Participant’s employment or service, as applicable, for Cause shall be deemed to be a termination for Cause.
(l) “Change in Capitalization” means any (i) merger, consolidation, reclassification, recapitalization, spin-off, spin-out, repurchase or other reorganization or corporate transaction or event, (ii) special or extraordinary dividend or other extraordinary distribution (whether in the form of cash, Common Stock or other property), stock split, reverse stock split, share subdivision or consolidation, (iii) combination or exchange of shares or (iv) other change in corporate structure, which, in any such case, the Administrator determines, in its sole discretion, affects the Shares such that an adjustment pursuant to Section 5 hereof is appropriate.
(m) “Change in Control” means the first occurrence of an event set forth in any one of the following paragraphs following the Effective Date:
(1) any Person is or becomes the Beneficial Owner, directly or indirectly, of securities of the Company (not including in the securities Beneficially Owned by such Person which were acquired directly from the Company or any Affiliate thereof) representing more than fifty percent (50%) of the combined voting power of the Company’s then outstanding securities, excluding any Person who becomes such a Beneficial Owner in connection with a transaction described in clause (i) of paragraph (3) below; or
(2) the date on which individuals who constitute the Board as of the Effective Date and any new director (other than a director whose initial assumption of office is in connection with an actual or threatened election contest, including, but not limited to, a consent solicitation, relating to the election of directors of the Company) whose appointment or election by the Board or nomination for election by the Company’s stockholders was approved or recommended by a vote of at least two-thirds (2/3) of the directors then still in office who either were directors on the Effective Date or whose appointment, election or nomination for election was previously so approved or recommended cease for any reason to constitute a majority of the number of directors serving on the Board; or
(3) there is consummated a merger or consolidation of the Company or any direct or indirect Subsidiary with any other corporation or other entity, other than (i) a merger or consolidation (A) which results in the voting securities of the Company outstanding immediately prior to such merger or consolidation continuing to represent (either by remaining outstanding or by being converted into voting securities of the surviving entity or any parent thereof), in combination with the ownership of any trustee or other fiduciary holding securities under an employee benefit plan of the Company or any Subsidiary, fifty percent (50%) or more of the combined voting power of the securities of the Company or such surviving entity or any parent thereof outstanding immediately after such merger or consolidation and (B) following which the individuals who comprise the Board immediately prior thereto constitute at least a majority of the board of directors of the Company, the entity surviving such merger or consolidation or, if the Company or the entity surviving such merger or consolidation is then a Subsidiary, the ultimate parent thereof, or (ii) a merger or consolidation effected to implement a recapitalization of the Company (or similar transaction) in which no Person is or becomes the Beneficial Owner, directly or indirectly, of securities of the Company (not including in the securities Beneficially Owned by such Person any securities acquired directly from the Company or its Affiliates) representing more than fifty percent (50%) of the combined voting power of the Company’s then outstanding securities; or
(4) the stockholders of the Company approve a plan of complete liquidation or dissolution of the Company or there is consummated an agreement for the sale or disposition by the Company of all or substantially all of the Company’s assets, other than (A) a sale or disposition by the Company of all or substantially all of the Company’s assets to an entity, more than fifty percent (50%) of the combined voting power of the voting securities of which are owned by stockholders of the Company following the completion of such transaction in substantially the same proportions as their ownership of the Company immediately prior to such sale or (B) a sale or disposition of all or substantially all of the Company’s assets immediately following which the individuals who comprise the Board immediately prior thereto constitute at least a majority of the board of directors of the entity to which such assets are sold or disposed or, if such entity is a subsidiary, the ultimate parent thereof.
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Notwithstanding the foregoing, (i) a Change in Control shall not be deemed to have occurred by virtue of the consummation of any transaction or series of integrated transactions immediately following which the holders of Common Stock immediately prior to such transaction or series of transactions continue to have substantially the same proportionate ownership in an entity which owns all or substantially all of the assets of the Company immediately following such transaction or series of transactions and (ii) to the extent required to avoid accelerated taxation and/or tax penalties under Section 409A of the Code, a Change in Control shall be deemed to have occurred under the Plan with respect to any Award that constitutes deferred compensation under Section 409A of the Code only if a change in the ownership or effective control of the Company or a change in ownership of a substantial portion of the assets of the Company shall also be deemed to have occurred under Section 409A of the Code.  For purposes of this definition of Change in Control, the term “Person” shall not include (i) the Company or any Subsidiary thereof, (ii) a trustee or other fiduciary holding securities under an employee benefit plan of the Company or any Subsidiary thereof, (iii) an underwriter temporarily holding securities pursuant to an offering of such securities, or (iv) a corporation owned, directly or indirectly, by the stockholders of the Company in substantially the same proportions as their ownership of shares of the Company.
(n) “Code” means the Internal Revenue Code of 1986, as amended from time to time, or any successor thereto.
(o) “Committee” means any committee or subcommittee the Board may appoint to administer the Plan.  Subject to the discretion of the Board, the Committee shall be composed entirely of individuals who meet the qualifications of a “non-employee director” within the meaning of Rule 16b-3 under the Exchange Act and any other qualifications required by the applicable stock exchange on which the Common Stock is traded.
(p) “Common Stock” means the common stock of the Company, having a par value of $0.01 per share.
(q) “Company” means El Pollo Loco Holdings, Inc., a Delaware corporation (or any successor company, except as the term “Company” is used in the definition of “Change in Control” above).
(r) “Disability” has the meaning assigned to such term in any individual service, employment or severance agreement or Award Agreement with the Participant or, if no such agreement exists or if such agreement does not define “Disability,” then “Disability” means that a Participant, as determined by the Administrator in its sole discretion, (i) is unable to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment which can be expected to result in death or can be expected to last for a continuous period of not less than twelve (12) months, or (ii) is, by reason of any medically determinable physical or mental impairment which can be expected to result in death or can be expected to last for a continuous period of not less than twelve (12) months, receiving income replacement benefits for a period of not less than three (3) months under an accident and health plan covering employees of the Company or an Affiliate thereof.
(s) “Effective Date” has the meaning set forth in Section 18 hereof.
(t) “Eligible Recipient” means an employee, director, independent contractor or consultant of the Company or any Affiliate of the Company who has been selected as an eligible participant by the Administrator; provided, however, to the extent required to avoid accelerated taxation and/or tax penalties under Section 409A of the Code, an Eligible Recipient of an Option or a Stock Appreciation Right means an employee, non-employee director, independent contractor or consultant of the Company or any Affiliate of the Company with respect to whom the Company is an “eligible issuer of service recipient stock” within the meaning of Section 409A of the Code.
(u) “Exchange Act” means the Securities Exchange Act of 1934, as amended from time to time.
(v) “Exempt Award” shall mean the following:
(1) An Award granted in assumption of, or in substitution for, outstanding awards previously granted by a corporation or other entity acquired by the Company or any of its Subsidiaries or with which the Company or any of its Subsidiaries combines by merger or otherwise.  The terms and conditions of any such Awards may vary from the terms and conditions set forth in the Plan to the extent the Administrator at the time of grant may deem appropriate, subject to Applicable Laws.
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(2) An “employment inducement” award as described in the applicable stock exchange listing manual or rules may be granted under the Plan from time to time.  The terms and conditions of any “employment inducement” award may vary from the terms and conditions set forth in the Plan to such extent as the Administrator at the time of grant may deem appropriate, subject to Applicable Laws.
(3) An award that an Eligible Recipient purchases at Fair Market Value (including awards that an Eligible Recipient elects to receive in lieu of fully vested compensation that is otherwise due) whether or not the Shares are delivered immediately or on a deferred basis.
(w) “Exercise Price” means, (i) with respect to any Option, the per share price at which a holder of such Option may purchase Shares issuable upon exercise of such Award, and (ii) with respect to a Share Appreciation Right, the base price per share of such Share Appreciation Right.
(x) “Fair Market Value” of a share of Common Stock or another security as of a particular date shall mean the fair market value as determined by the Administrator in its sole discretion; provided, that, (i) if the Common Stock or other security is admitted to trading on a national securities exchange, the fair market value on any date shall be the closing sale price reported on such date, or if no shares were traded on such date, on the last preceding date for which there was a sale of a share of Common Stock on such exchange, or (ii) if the Common Stock or other security is then traded in an over-the-counter market, the fair market value on any date shall be the average of the closing bid and asked prices for such share in such over-the-counter market for the last preceding date on which there was a sale of such share in such market.
(y) “Free Standing Rights” has the meaning set forth in Section 8.
(z) “Good Reason” has the meaning assigned to such term in any individual service, employment or severance agreement or Award Agreement with the Participant or, if no such agreement exists or if such agreement does not define “Good Reason,” “Good Reason” and any provision of this Plan that refers to “Good Reason” shall not be applicable to such Participant.
(aa) “Grandfathered Arrangement” means an Award which is provided pursuant to a written binding contract in effect on November 2, 2017, and which was not modified in any material respect on or after November 2, 2017, within the meaning of Section 13601(e)(2) of P.L. 115.97, as may be amended from time to time (including any rules and regulations promulgated thereunder).
(bb) “Incentive Compensation” means annual cash bonus and any Award.
(cc) “ISO” means an Option intended to be and designated as an “incentive stock option” within the meaning of Section 422 of the Code.
(dd) “Nonqualified Stock Option” shall mean an Option that is not designated as an ISO.
(ee) “Option” means an option to purchase shares of Common Stock granted pursuant to Section 7 hereof.  The term “Option” as used in the Plan includes the terms “Nonqualified Stock Option” and “ISO.”
(ff) “Other Share-Based Award” means a right or other interest granted pursuant to Section 10 hereof that may be denominated or payable in, valued in whole or in part by reference to, or otherwise based on or related to, Common Stock, including, but not limited to, unrestricted Shares, dividend equivalents or performance units, each of which may be subject to the attainment of performance goals or a period of continued provision of service or employment or other terms or conditions as permitted under the Plan.
(gg) “Participant” means any Eligible Recipient selected by the Administrator, pursuant to the Administrator’s authority provided for in Section 3 below, to receive grants of Awards, and, upon his or her death, his or her successors, heirs, executors and administrators, as the case may be.
(hh) “Person” shall have the meaning given in Section 3(a)(9) of the Exchange Act, as modified and used in Sections 13(d) and 14(d) thereof.
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(ii) “Plan” means this Equity Incentive Plan (formerly the 2018 Omnibus Equity Incentive Plan).
(jj) “Prior Plan” means the Company’s 2014 Omnibus Equity Incentive Plan as in effect immediately prior to the Effective Date.
(kk) “Related Rights” has the meaning set forth in Section 8.
(ll) “Restricted Share” means a Share granted pursuant to Section 9 below subject to certain restrictions that lapse at the end of a specified period (or periods) of time and/or upon attainment of specified performance objectives.
(mm) Restricted Period” has the meaning set forth in Section 9.
(nn) “Restricted Stock Unit” means the right granted pursuant to Section 9 hereof to receive a Share at the end of a specified restricted period (or periods) of time and/or upon attainment of specified performance objectives.
(oo) “Rule 16b-3” has the meaning set forth in Section 3.
(pp) “Section 16 Officer” means any officer of the Company whom the Board has determined is subject to the reporting requirements of Section 16 of the Exchange Act, whether or not such individual is a Section 16 Officer at the time the determination to recoup compensation is made.
(qq) “Shares” means Common Stock reserved for issuance under the Plan, as adjusted pursuant to the Plan, and any successor (pursuant to a merger, consolidation or other reorganization) security.
(rr) “Share Appreciation Right” means a right granted pursuant to Section 8 hereof to receive an amount equal to the excess, if any, of (i) the aggregate Fair Market Value, as of the date such Award or portion thereof is surrendered, of the Shares covered by such Award or such portion thereof, over (ii) the aggregate Exercise Price of such Award or such portion thereof.
(ss) “Subsidiary” means, with respect to any Person, as of any date of determination, any other Person as to which such first Person owns or otherwise controls, directly or indirectly, more than 50% of the voting shares or other similar interests or a sole general partner interest or managing member or similar interest of such other Person.
(tt) “Transfer” has the meaning set forth in Section 16.
Section 3.  Administration.
(a) The Plan shall be administered by the Administrator and shall be administered, to the extent applicable, in accordance with Rule 16b-3 under the Exchange Act (“Rule 16b-3”).
(b) Pursuant to the terms of the Plan, the Administrator, subject, in the case of any Committee, to any restrictions on the authority delegated to it by the Board, shall have the power and authority, without limitation:
(1) to select those Eligible Recipients who shall be Participants;
(2) to determine whether and to what extent Options, Share Appreciation Rights, Restricted Shares, Restricted Stock Units, Cash Awards, Other Share-Based Awards or a combination of any of the foregoing, are to be granted hereunder to Participants;
(3) to determine the number of Shares to be covered by each Award granted hereunder;
(4) to determine the terms and conditions, not inconsistent with the terms of the Plan, of each Award granted hereunder (including, but not limited to, (i) the restrictions applicable to Restricted Shares or Restricted Stock Units and the conditions under which restrictions applicable to such Restricted Shares or Restricted Stock Units shall lapse, (ii) the performance goals and periods applicable to Awards, (iii) the Exercise Price of each Option and each
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Share Appreciation Right or the purchase price of any other Award, (iv) the vesting schedule and terms applicable to each Award, (v) the number of Shares or amount of cash or other property subject to each Award and (vi) subject to the requirements of Section 409A of the Code (to the extent applicable) and to Section 4(e) of the Plan, any amendments to the terms and conditions of outstanding Awards, including, but not limited to, extending the exercise period of such Awards and accelerating the vesting and/or payment schedules of such Awards);
(5) to determine the terms and conditions, not inconsistent with the terms of the Plan, which shall govern all written instruments evidencing Awards;
(6) to determine the Fair Market Value in accordance with the terms of the Plan;
(7) to determine the duration and purpose of leaves of absence which may be granted to a Participant without constituting termination of the Participant’s service or employment for purposes of Awards granted under the Plan;
(8) to adopt, alter and repeal such administrative rules, regulations, guidelines and practices governing the Plan as it shall from time to time deem advisable;
(9) to construe and interpret the terms and provisions of, and supply or correct omissions in, the Plan and any Award issued under the Plan (and any Award Agreement relating thereto), and to otherwise supervise the administration of the Plan and to exercise all powers and authorities either specifically granted under the Plan or necessary and advisable in the administration of the Plan; and
(10) to prescribe, amend and rescind rules and regulations relating to sub-plans established for the purpose of satisfying applicable non-United States laws or for qualifying for favorable tax treatment under applicable non-United States laws, which rules and regulations may be set forth in an appendix or appendixes to the Plan.
(c) Subject to Section 5, neither the Board nor the Committee shall have the authority to (1) amend an outstanding Option or Share Appreciation Right to reduce the exercise price or base price of the Award, (2) cancel, exchange, or surrender an outstanding Option or Share Appreciation Right in exchange for cash or other Awards for the purpose of repricing the award, or (3) cancel, exchange, or surrender an outstanding Option or Share Appreciation Right in exchange for an Option or Share Appreciation Right with an exercise or base price that is less than the exercise or base price of the original Award.
(d) All decisions made by the Administrator pursuant to the provisions of the Plan shall be final, conclusive and binding on all Persons, including the Company and the Participants.
(e) The expenses of administering the Plan shall be borne by the Company and its Affiliates.
(f) If at any time or to any extent the Board shall not administer the Plan, then the functions of the Administrator specified in the Plan shall be exercised by the Committee.  Except as otherwise provided in the Certificate of Incorporation or Bylaws of the Company, any action of the Committee with respect to the administration of the Plan shall be taken by a majority vote at a meeting at which a quorum is duly constituted or unanimous written consent of the Committee’s members.
Section 4.  Shares Reserved for Issuance Under the Plan.
(a) Subject to Section 5 hereof, the number of shares of Common Stock that are reserved and available for issuance pursuant to Awards granted under the Plan shall be equal to 2,000,000 shares, plus the number of shares of Common Stock reserved, but unissued under the Prior Plan; provided, that, shares of Common Stock issued under the Plan with respect to an Exempt Award shall not count against such share limit.  Following the Effective Date, no further awards shall be issued under the Prior Plan, but all awards under the Prior Plan which are outstanding as of the Effective Date (including any Grandfathered Arrangement) shall continue to be governed by the terms, conditions and procedures set forth in the Prior Plan and any applicable Award Agreement.
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(b) Shares issued under the Plan may, in whole or in part, be authorized but unissued Shares or Shares that shall have been or may be reacquired by the Company in the open market, in private transactions or otherwise.  If an Award entitles the Participant to receive or purchase Shares, the number of Shares covered by such Award or to which such Award relates shall be counted on the date of grant of such Award against the aggregate number of Shares available for granting Awards under the Plan.  If any Shares subject to an Award are forfeited, cancelled, exchanged or surrendered or if an Award otherwise terminates or expires without a distribution of shares to the Participant, the Shares with respect to such Award shall, to the extent of any such forfeiture, cancellation, exchange, surrender, termination or expiration, again be available for granting Awards under the Plan.  Notwithstanding the foregoing, Shares surrendered or withheld as payment of either the Exercise Price of an Award (including Shares otherwise underlying a Share Appreciation Right that are retained by the Company to account for the Exercise Price of such Share Appreciation Right) and/or withholding taxes in respect of an Award shall no longer be available for grant under the Plan.  In addition, (i) to the extent an Award is denominated in shares of Common Stock, but paid or settled in cash, the number of shares of Common Stock with respect to which such payment or settlement is made shall again be available for grants of Awards pursuant to the Plan and (ii) shares of Common Stock underlying Awards that can only be settled in cash shall not be counted against the aggregate number of shares of Common Stock available for Awards under the Plan.  Upon the exercise of any Award granted in tandem with any other Awards, such related Awards shall be cancelled to the extent of the number of Shares as to which the Award is exercised and, notwithstanding the foregoing, such number of shares shall no longer be available for grant under the Plan.
(c) No more than 1,820,477 Shares shall be issued pursuant to the exercise of ISOs.
(d) No Participant who is a non-employee director of the Company shall be granted Awards during any calendar year that, when aggregated with such non-employee director’s cash fees with respect to such calendar year, exceed $500,000 in total value (with Cash Awards or other cash fees measured for this purpose at their value upon payment and any other Awards measured for this purpose at their grant date fair value as determined for the Company’s financial reporting purposes).
(e) Notwithstanding anything to the contrary in the Plan, any Awards granted under the Plan (other than such Awards representing a maximum of five percent (5%) of the Shares reserved for issuance under the Plan pursuant to Section 4(a) hereof) shall be granted subject to a minimum vesting period of at least twelve (12) months.
Section 5.  Equitable Adjustments.
In the event of any Change in Capitalization, an equitable substitution or proportionate adjustment shall be made in (i) the aggregate number and kind of securities reserved for issuance under the Plan pursuant to Section 4, (ii) the kind, number of securities subject to, and the Exercise Price subject to outstanding Options and Share Appreciation Rights granted under the Plan, (iii) the kind, number and purchase price of Shares or other securities or the amount of cash or amount or type of other property subject to outstanding Restricted Shares, Restricted Stock Units or Other Share-Based Awards granted under the Plan; and/or (iv) the terms and conditions of any outstanding Awards (including, without limitation, any applicable performance targets or criteria with respect thereto); provided, however, that any fractional shares resulting from the adjustment shall be eliminated.  Such other equitable substitutions or adjustments shall be made as may be determined by the Administrator, in its sole discretion.  Without limiting the generality of the foregoing, in connection with a Change in Capitalization, the Administrator may provide, in its sole discretion, but subject in all events to the requirements of Section 409A of the Code, for the cancellation of any outstanding Award granted hereunder in exchange for payment in cash or other property having an aggregate Fair Market Value equal to the Fair Market Value of the Shares, cash or other property covered by such Award, reduced by the aggregate Exercise Price or purchase price thereof, if any; provided, however, that if the Exercise Price or purchase price of any outstanding Award is equal to or greater than the Fair Market Value of the shares of Common Stock, cash or other property covered by such Award, the Administrator may cancel such Award without the payment of any consideration to the Participant.  Further, without limiting the generality of the foregoing, with respect to Awards subject to foreign laws, adjustments made hereunder shall be made in compliance with applicable requirements.  Except to the extent determined by the Administrator, any adjustments to ISOs under this Section 5 shall be made only to the extent not constituting a “modification” within the meaning of Section 424(h)(3) of the Code.  The Administrator’s determinations pursuant to this Section 5 shall be final, binding and conclusive.
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Section 6.  Eligibility.
The Participants in the Plan shall be selected from time to time by the Administrator, in its sole discretion, from those individuals that qualify as Eligible Recipients.
Section 7.  Options.
(a) General.  Options granted under the Plan shall be designated as Nonqualified Stock Options or ISOs.  Each Participant who is granted an Option shall enter into an Award Agreement with the Company, containing such terms and conditions as the Administrator shall determine, in its sole discretion, including, among other things, the Exercise Price of the Option, the term of the Option and provisions regarding exercisability of the Option, and whether the Option is intended to be an ISO or a Nonqualified Stock Option (and in the event the Award Agreement has no such designation, the Option shall be a Nonqualified Stock Option).  The provisions of each Option need not be the same with respect to each Participant.  More than one Option may be granted to the same Participant and be outstanding concurrently hereunder.  Options granted under the Plan shall be subject to the terms and conditions set forth in this Section 7 and shall contain such additional terms and conditions, not inconsistent with the terms of the Plan, as the Administrator shall deem desirable and set forth in the applicable Award Agreement.
(b) Exercise Price.  The Exercise Price of Shares purchasable under an Option shall be determined by the Administrator in its sole discretion at the time of grant, but in no event shall the exercise price of an Option be less than one hundred percent (100%) of the Fair Market Value of a share of Common Stock on the date of grant.
(c) Option Term.  The maximum term of each Option shall be fixed by the Administrator, but no Option shall be exercisable more than ten (10) years after the date such Option is granted.  Each Option’s term is subject to earlier expiration pursuant to the applicable provisions in the Plan and the Award Agreement.  Notwithstanding the foregoing, the Administrator shall have the authority to accelerate the exercisability of any outstanding Option at such time and under such circumstances as the Administrator, in its sole discretion, deems appropriate.
(d) Exercisability.  Each Option shall be exercisable at such time or times and subject to such terms and conditions, including the attainment of performance goals, as shall be determined by the Administrator in the applicable Award Agreement.  The Administrator may also provide that any Option shall be exercisable only in installments, and the Administrator may waive such installment exercise provisions at any time, in whole or in part, based on such factors as the Administrator may determine in its sole discretion.
(e) Method of Exercise.  Options may be exercised in whole or in part by giving written notice of exercise to the Company specifying the number of whole Shares to be purchased, accompanied by payment in full of the aggregate Exercise Price of the Shares so purchased in cash or its equivalent, as determined by the Administrator.  As determined by the Administrator, in its sole discretion, with respect to any Option or category of Options, payment in whole or in part may also be made (i) by means of consideration received under any cashless exercise procedure approved by the Administrator (including the withholding of Shares otherwise issuable upon exercise), (ii) in the form of unrestricted Shares already owned by the Participant which have a Fair Market Value on the date of surrender equal to the aggregate exercise price of the Shares as to which such Option shall be exercised, (iii) any other form of consideration approved by the Administrator and permitted by Applicable Laws or (iv) any combination of the foregoing.
(f) ISOs.  The terms and conditions of ISOs granted hereunder shall be subject to the provisions of Section 422 of the Code and the terms, conditions, limitations and administrative procedures established by the Administrator from time to time in accordance with the Plan.  At the discretion of the Administrator, ISOs may be granted only to an employee of the Company, its “parent corporation” (as such term is defined in Section 424(e) of the Code) or a Subsidiary of the Company.
(1) ISO Grants to 10% Stockholders.  Notwithstanding anything to the contrary in the Plan, if an ISO is granted to a Participant who owns shares representing more than ten percent (10%) of the voting power of all classes of shares of the Company, its “parent corporation” (as such term is defined in Section 424(e) of the Code) or a Subsidiary of the Company, the term of the ISO shall not exceed five (5) years from the time of grant of such ISO and
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the Exercise Price shall be at least one hundred and ten percent (110%) of the Fair Market Value of the Shares on the date of grant.
(2) $100,000 Per Year Limitation For ISOs.  To the extent the aggregate Fair Market Value (determined on the date of grant) of the Shares for which ISOs are exercisable for the first time by any Participant during any calendar year (under all plans of the Company) exceeds $100,000, such excess ISOs shall be treated as Nonqualified Stock Options.
(3) Disqualifying Dispositions.  Each Participant awarded an ISO under the Plan shall notify the Company in writing immediately after the date the Participant makes a “disqualifying disposition” of any Share acquired pursuant to the exercise of such ISO.  A “disqualifying disposition” is any disposition (including any sale) of such Shares before the later of (i) two years after the date of grant of the ISO and (ii) one year after the date the Participant acquired the Shares by exercising the ISO.  The Company may, if determined by the Administrator and in accordance with procedures established by it, retain possession of any Shares acquired pursuant to the exercise of an ISO as agent for the applicable Participant until the end of the period described in the preceding sentence, subject to complying with any instructions from such Participant as to the sale of such Shares.
(g) Rights as Stockholder.  A Participant shall have no rights to dividends, dividend equivalents or distributions or any other rights of a stockholder with respect to the Shares subject to an Option until the Participant has given written notice of the exercise thereof, and has paid in full for such Shares and has satisfied the requirements of Section 15 hereof.
(h) Termination of Employment or Service.  Treatment of an Option upon termination of employment of a Participant shall be provided for by the Administrator in the Award Agreement.
(i) Other Change in Employment or Service Status.  An Option shall be affected, both with regard to vesting schedule and termination, by leaves of absence, including unpaid and un-protected leaves of absence, changes from full-time to part-time employment, partial Disability or other changes in the employment status or service status of a Participant, in the discretion of the Administrator.
Section 8.  Share Appreciation Rights.
(a) General.  Share Appreciation Rights may be granted either alone (“Free  Standing Rights”) or in conjunction with all or part of any Option granted under the Plan (“Related Rights”).  Related Rights may be granted either at or after the time of the grant of such Option.  The Administrator shall determine the Eligible Recipients to whom, and the time or times at which, grants of Share Appreciation Rights shall be made.  Each Participant who is granted a Share Appreciation Right shall enter into an Award Agreement with the Company, containing such terms and conditions as the Administrator shall determine, in its sole discretion, including, among other things, the number of Shares to be awarded, the Exercise Price per Share, and all other conditions of Share Appreciation Rights.  Notwithstanding the foregoing, no Related Right may be granted for more Shares than are subject to the Option to which it relates.  The provisions of Share Appreciation Rights need not be the same with respect to each Participant.  Share Appreciation Rights granted under the Plan shall be subject to the following terms and conditions set forth in this Section 8 and shall contain such additional terms and conditions, not inconsistent with the terms of the Plan, as the Administrator shall deem desirable, as set forth in the applicable Award Agreement.
(b) Awards; Rights as Stockholder.  A Participant shall have no rights to dividends or any other rights of a stockholder with respect to the shares of Common Stock, if any, subject to a Stock Appreciation Right until the Participant has given written notice of the exercise thereof and has satisfied the requirements of Section 15 hereof.
(c) Exercise Price.  The Exercise Price of Shares purchasable under a Share
Appreciation Rights shall be determined by the Administrator in its sole discretion at the time of grant, but in no event shall the exercise price of a Share Appreciation Rights be less than one hundred percent (100%) of the Fair Market Value of a share of Common Stock on the date of grant.
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(d) Exercisability.
(1) Share Appreciation Rights that are Free Standing Rights shall be exercisable at such time or times and subject to such terms and conditions as shall be determined by the Administrator in the applicable Award Agreement.
(2) Share Appreciation Rights that are Related Rights shall be exercisable only at such time or times and to the extent that the Options to which they relate shall be exercisable in accordance with the provisions of Section 7 hereof and this Section 8 of the Plan.
(e) Payment Upon Exercise.
(1) Upon the exercise of a Free Standing Right, the Participant shall be entitled to receive up to, but not more than, that number of Shares equal in value to the excess of the Fair Market Value as of the date of exercise over the Exercise Price per share specified in the Free Standing Right multiplied by the number of Shares in respect of which the Free Standing Right is being exercised.
(2) A Related Right may be exercised by a Participant by surrendering the applicable portion of the related Option.  Upon such exercise and surrender, the Participant shall be entitled to receive up to, but not more than, that number of Shares equal in value to the excess of the Fair Market Value as of the date of exercise over the Exercise Price specified in the related Option multiplied by the number of Shares in respect of which the Related Right is being exercised.  Options which have been so surrendered, in whole or in part, shall no longer be exercisable to the extent the Related Rights have been so exercised.
(3) Notwithstanding the foregoing, the Administrator may determine to settle the exercise of a Share Appreciation Right in cash (or in any combination of Shares and cash).
(f) Termination of Employment or Service.  Treatment of an Share Appreciation Right upon termination of employment of a Participant shall be provided for by the Administrator in the Award Agreement.
(g) Term.
(1) The term of each Free Standing Right shall be fixed by the Administrator, but no Free Standing Right shall be exercisable more than ten (10) years after the date such right is granted.
(2) The term of each Related Right shall be the term of the Option to which it relates, but no Related Right shall be exercisable more than ten (10) years after the date such right is granted.
(h) Other Change in Employment or Service Status.  Share Appreciation Rights shall be affected, both with regard to vesting schedule and termination, by leaves of absence, including unpaid and un-protected leaves of absence, changes from full-time to part-time employment, partial Disability or other changes in the employment or service status of a Participant, in the discretion of the Administrator.
Section 9.  Restricted Shares and Restricted Stock Units.
(a) General.  Restricted Shares or Restricted Stock Units may be issued under the Plan.  The Administrator shall determine the Eligible Recipients to whom, and the time or times at which, Restricted Shares or Restricted Stock Units shall be made.  Each Participant who is granted Restricted Shares or Restricted Stock Units shall enter into an Award Agreement with the Company, containing such terms and conditions as the Administrator shall determine, in its sole discretion, including, among other things, the number of Shares to be awarded; the price, if any, to be paid by the Participant for the acquisition of Restricted Shares or Restricted Stock Units; the period of time restrictions, performance goals or other conditions that apply to Transferability, delivery or vesting of such Awards (the “Restricted Period”); and all other conditions applicable to the Restricted Shares and Restricted Stock Units.  If the restrictions, performance goals or conditions established by the Administrator are not attained, a Participant shall forfeit his or her Restricted Shares or Restricted Stock Units, in accordance with the terms of the grant.  The provisions of the Restricted Shares or Restricted Stock Units need not be the same with respect to each Participant.
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(b) Awards and Certificates.  Except as otherwise provided below in Section 9(c), (i) each Participant who is granted an Award of Restricted Shares may, in the Company’s sole discretion, be issued a share certificate in respect of such Restricted Shares; and (ii) any such certificate so issued shall be registered in the name of the Participant, and shall bear an appropriate legend referring to the terms, conditions and restrictions applicable to any such Award.
The Company may require that the share certificates, if any, evidencing Restricted Shares granted hereunder be held in the custody of the Company until the restrictions thereon shall have lapsed, and that, as a condition of any Award of Restricted Shares, the Participant shall have delivered a share transfer form, endorsed in blank, relating to the Shares covered by such Award.  Certificates for shares of unrestricted Common Stock may, in the Company’s sole discretion, be delivered to the Participant only after the Restricted Period has expired without forfeiture in such Restricted Stock Award.
With respect to Restricted Stock Units to be settled in Shares, at the expiration of the Restricted Period, share certificates in respect of the shares of Common Stock underlying such Restricted Stock Units may, in the Company’s sole discretion, be delivered to the Participant, or his legal representative, in a number equal to the number of shares of Common Stock underlying the Restricted Stock Units Award.
Notwithstanding anything in the Plan to the contrary, any Restricted Shares or Restricted Stock Units to be settled in Shares (at the expiration of the Restricted Period, and whether before or after any vesting conditions have been satisfied) may, in the Company’s sole discretion, be issued in uncertificated form.
Further, notwithstanding anything in the Plan to the contrary, with respect to Restricted Stock Units, at the expiration of the Restricted Period, Shares, or cash, as applicable, shall promptly be issued (either in certificated or uncertificated form) to the Participant, unless otherwise deferred in accordance with procedures established by the Company in accordance with Section 409A of the Code, and such issuance or payment shall in any event be made within such period as is required to avoid the imposition of a tax under Section 409A of the Code.
(c) Restrictions and Conditions.  The Restricted Shares or Restricted Stock Units granted pursuant to this Section 9 shall be subject to the following restrictions and conditions and any additional restrictions or conditions as determined by the Administrator at the time of grant or, subject to Section 409A of the Code where applicable, thereafter:
(1) The Administrator may, in its sole discretion, provide for the lapse of restrictions in installments and may accelerate or waive such restrictions in whole or in part based on such factors and such circumstances as the Administrator may determine, in its sole discretion, including, but not limited to, the attainment of certain performance goals, the Participant’s termination of employment or service with the Company or any Affiliate thereof, or the Participant’s death or Disability.  Notwithstanding the foregoing, upon a Change in Control, the outstanding Awards shall be subject to Section 12 hereof.
(2) Except as provided in the applicable Award Agreement, the Participant shall generally have the rights of a stockholder of the Company with respect to Restricted Shares during the Restricted Period; provided, however, that dividends declared during the Restricted Period with respect to an Award, shall only become payable if (and to the extent) the underlying Restricted Shares vest.  Except as provided in the applicable Award Agreement, the Participant shall generally not have the rights of a stockholder with respect to Shares subject to Restricted Stock Units during the Restricted Period; provided, however, that, subject to Section 409A of the Code, an amount equal to dividends declared during the Restricted Period with respect to the number of Shares covered by Restricted Stock Units shall, unless otherwise set forth in an Award Agreement, be paid to the Participant at the time (and to the extent) Shares in respect of the related Restricted Stock Units are delivered to the Participant.  Certificates for Shares of unrestricted Common Stock may, in the Company’s sole discretion, be delivered to the Participant only after the Restricted Period has expired without forfeiture in respect of such Restricted Shares or Restricted Stock Units, except as the Administrator, in its sole discretion, shall otherwise determine.
(3) The rights of Participants granted Restricted Shares or Restricted Stock Units upon termination of employment or service as a director, independent contractor or consultant to the Company or to any Affiliate thereof during the Restricted Period shall be set forth in the Award Agreement.
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(d) Form of Settlement.  The Administrator reserves the right in its sole discretion to provide (either at or after the grant thereof) that any Restricted Stock Unit represent the right to receive the amount of cash per unit that is determined by the Administrator in connection with the Award.
Section 10.  Other Share-Based Awards.
Other Share-Based Awards may be issued under the Plan.  Subject to the provisions of the Plan, the Administrator shall have sole and complete authority to determine the individuals to whom and the time or times at which such Other Share-Based Awards shall be granted.  Each Participant who is granted an Other Share-Based Award shall enter into an Award Agreement with the Company, containing such terms and conditions as the Administrator shall determine, in its sole discretion, including, among other things, the number of shares of Common Stock to be granted pursuant to such Other Share-Based Awards, or the manner in which such Other Share-Based Awards shall be settled (e.g., in shares of Common Stock, cash or other property), or the conditions to the vesting and/or payment or settlement of such Other Share-Based Awards (which may include, but not be limited to, achievement of performance criteria) and all other terms and conditions of such Other Share-Based Awards.  In the event that the Administrator grants a bonus in the form of Shares, the Shares constituting such bonus shall, as determined by the Administrator, be evidenced in uncertificated form or by a book entry record or a certificate issued in the name of the Participant to whom such grant was made and delivered to such Participant as soon as practicable after the date on which such bonus is payable.  Notwithstanding anything set forth in the Plan to the contrary, any dividend or dividend equivalent Award issued hereunder shall be subject to the same restrictions, conditions and risks of forfeiture as apply to the underlying Award.
Section 11.  Cash Awards.
The Administrator may grant Awards that are denominated in, or payable to Participants solely in, cash, as deemed by the Administrator to be consistent with the purposes of the Plan, and, such Cash Awards shall be subject to the terms, conditions, restrictions and limitations determined by the Administrator, in its sole discretion, from time to time.  Awards granted pursuant to this Section 11 may be granted with value and payment contingent upon the achievement of performance goals.
Section 12.  Change in Control.
Unless otherwise determined by the Administrator and evidenced in an Award Agreement, notwithstanding Section 4(e) of the Plan, in the event that (a) a Change in Control occurs, and (b) the Participant’s employment or service is terminated by the Company, its successor or an Affiliate thereof without Cause or by the Participant for Good Reason (if applicable) on or after the effective date of the Change in Control but prior to twelve (12) months following the Change in Control, then:
(a) any unvested or unexercisable portion of any Award carrying a right to exercise shall become fully vested and exercisable; and
(b) the restrictions, deferral limitations, payment conditions and forfeiture conditions applicable to an Award granted under the Plan shall lapse and such Awards shall be deemed fully vested and any performance conditions imposed with respect to such Awards shall be deemed to be fully achieved at target performance levels.
If the Administrator determines in its discretion pursuant to Section 3(b)(4) hereof to accelerate the vesting of Options and/or Share Appreciation Rights in connection with a Change in Control, the Administrator shall also have discretion in connection with such action to provide that all Options and/or Share Appreciation Rights outstanding immediately prior to such Change in Control shall expire on the effective date of such Change in Control.
In connection with a Change in Control, the Administrator may provide, in its sole discretion, but subject in all events to the requirements of Section 409A of the Code, for the cancellation of any outstanding Award granted hereunder in exchange for payment in cash or other property having an aggregate Fair Market Value equal to the Fair Market Value of the Shares, cash or other property covered by such Award, reduced by the aggregate Exercise Price or purchase price thereof, if any; provided, however, that if the Exercise Price or purchase price of any outstanding Award is equal to or greater than the Fair Market Value of the shares of Common Stock, cash or other property covered by such Award, the Administrator may cancel such Award without the payment of any consideration to the Participant.
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Section 13.  Amendment and Termination.
The Board may amend, alter or terminate the Plan at any time, but no amendment, alteration or termination shall be made that would impair the rights of a Participant under any Award theretofore granted without such Participant’s consent.  The Board shall obtain approval of the Company’s stockholders for any amendment that would require such approval in order to satisfy the requirements of any rules of the stock exchange on which the Common Stock is traded or other Applicable Law.  The Administrator may amend the terms of any Award theretofore granted, prospectively or retroactively, but, subject to Section 5 of the Plan and the immediately preceding sentence, no such amendment shall materially impair the rights of any Participant without his or her consent.
Section 14.  Unfunded Status of Plan.
The Plan is intended to constitute an “unfunded” plan for incentive compensation.  With respect to any payments not yet made to a Participant by the Company, nothing contained herein shall give any such Participant any rights that are greater than those of a general creditor of the Company.
Section 15.  Withholding Taxes.
Each Participant shall, no later than the date as of which the value of an Award first becomes includible in the gross income of such Participant for purposes of applicable taxes, pay to the Company, or make arrangements satisfactory to the Administrator regarding payment of an amount up to the maximum statutory tax rates in the Participant’s applicable jurisdiction with respect to the Award, as determined by the Company.  The obligations of the Company under the Plan shall be conditional on the making of such payments or arrangements, and the Company shall, to the extent permitted by Applicable Laws, have the right to deduct any such taxes from any payment of any kind otherwise due to such Participant.  Whenever cash is to be paid pursuant to an Award, the Company shall have the right to deduct therefrom an amount sufficient to satisfy any applicable withholding tax requirements related thereto.  Whenever Shares or property other than cash are to be delivered pursuant to an Award, the Company shall have the right to require the Participant to remit to the Company in cash an amount sufficient to satisfy any related taxes to be withheld and applied to the tax obligations; provided, that, with the approval of the Administrator, a Participant may satisfy the foregoing requirement by either (i) electing to have the Company withhold from delivery of Shares or other property, as applicable, or (ii) delivering already owned unrestricted shares of Common Stock, in each case, having a value not exceeding the applicable taxes to be withheld and applied to the tax obligations.  Such already owned and unrestricted shares of Common Stock shall be valued at their Fair Market Value on the date on which the amount of tax to be withheld is determined and any fractional share amounts resulting therefrom shall be settled in cash.  Such an election may be made with respect to all or any portion of the Shares to be delivered pursuant to an award.  The Company may also use any other method of obtaining the necessary payment or proceeds, as permitted by Applicable Laws, to satisfy its withholding obligation with respect to any Award.
Section 16.  Transfer of Awards.
Until such time as the Awards are fully vested and/or exercisable in accordance with the Plan or an Award Agreement, no purported sale, assignment, mortgage, hypothecation, transfer, charge, pledge, encumbrance, gift, transfer in trust (voting or other) or other disposition of, or creation of a security interest in or lien on, any Award or any agreement or commitment to do any of the foregoing (each, a “Transfer”) by any holder thereof in violation of the provisions of the Plan or an Award Agreement will be valid, except with the prior written consent of the Administrator, which consent may be granted or withheld in the sole discretion of the Administrator.  Any purported Transfer of an Award or any economic benefit or interest therein in violation of the Plan or an Award Agreement shall be null and void ab initio and shall not create any obligation or liability of the Company, and any Person purportedly acquiring any Award or any economic benefit or interest therein transferred in violation of the Plan or an Award Agreement shall not be entitled to be recognized as a holder of such Shares or other property underlying such Award.  Unless otherwise determined by the Administrator in accordance with the provisions of the immediately preceding sentence, an Option or a Share Appreciation Right may be exercised, during the lifetime of the Participant, only by the Participant or, during any period during which the Participant is under a legal Disability, by the Participant’s guardian or legal representative.
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Section 17.  Continued Employment or Service.
Neither the adoption of the Plan nor the grant of an Award shall confer upon any Eligible Recipient any right to continued employment or service with the Company or any Affiliate thereof, as the case may be, nor shall it interfere in any way with the right of the Company or any Affiliate thereof to terminate the employment or service of any of its Eligible Recipients at any time.
Section 18.  Effective Date.
The Plan was originally adopted by the Board on April 21, 2018 and became effective on June 5, 2018, the date it was approved by the Company’s stockholders (the “Effective Date”). The amended version of the Plan was adopted by the Board on April [_],2021 and shall become effective on the date that it is approved by the Company’s stockholders (the “Amendment Date”). The Plan shall be submitted for and subject to stockholder approval no later than twelve months after the Amendment Date.
Section 19.  Electronic Signature.
Participant’s electronic signature of an Award Agreement shall have the same validity and effect as a signature affixed by hand.
Section 20.  Term of Plan.
No Award shall be granted pursuant to the Plan on or after the tenth anniversary of the Amendment Date, but Awards theretofore granted may extend beyond that date.
Section 21.  Securities Matters and Regulations.
(a) Notwithstanding anything herein to the contrary, the obligation of the Company to sell or deliver Shares with respect to any Award granted under the Plan shall be subject to all Applicable Laws, rules and regulations, including all applicable federal and state securities laws, and the obtaining of all such approvals by governmental agencies as may be deemed necessary or appropriate by the Administrator.  The Administrator may require, as a condition of the issuance and delivery of certificates evidencing shares of Common Stock pursuant to the terms hereof, that the recipient of such shares make such agreements and representations, and that such certificates bear such legends, as the Administrator, in its sole discretion, deems necessary or advisable.
(b) Each Award is subject to the requirement that, if at any time the Administrator determines that the listing, registration or qualification of Shares is required by any securities exchange or under any state or federal law, or the consent or approval of any governmental regulatory body is necessary or desirable as a condition of, or in connection with, the grant of an Award or the issuance of Shares, no such Award shall be granted or payment made or Shares issued, in whole or in part, unless listing, registration, qualification, consent or approval has been effected or obtained free of any conditions not acceptable to the Administrator.
(c) In the event that the disposition of Shares acquired pursuant to the Plan is not covered by a then current registration statement under the Securities Act and is not otherwise exempt from such registration, such Shares shall be restricted against transfer to the extent required by the Securities Act or regulations thereunder, and the Administrator may require a Participant receiving Common Stock pursuant to the Plan, as a condition precedent to receipt of such Common Stock, to represent to the Company in writing that the Common Stock acquired by such Participant is acquired for investment only and not with a view to distribution.
Section 22.  Section 409A of the Code.
The Plan as well as payments and benefits under the Plan are intended to be exempt from, or to the extent subject thereto, to comply with Section 409A of the Code, and, accordingly, to the maximum extent permitted, the Plan shall be interpreted in accordance therewith.  Notwithstanding anything contained herein to the contrary, to the extent required in order to avoid accelerated taxation and/or tax penalties under Section 409A of the Code, the Participant shall not be considered to have terminated employment or service with the Company for purposes of the Plan and no payment
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shall be due to the Participant under the Plan or any Award until the Participant would be considered to have incurred a “separation from service” from the Company and its Affiliates within the meaning of Section 409A of the Code.  Any payments described in the Plan that are due within the “short term deferral period” as defined in Section 409A of the Code shall not be treated as deferred compensation unless Applicable Law requires otherwise.  Notwithstanding anything to the contrary in the Plan, to the extent that any Awards (or any other amounts payable under any plan, program or arrangement of the Company or any of its Affiliates) are payable upon a separation from service and such payment would result in the imposition of any individual tax and penalty interest charges imposed under Section 409A of the Code, the settlement and payment of such awards (or other amounts) shall instead be made on the first business day after the date that is six (6) months following such separation from service (or death, if earlier).  Each amount to be paid or benefit to be provided under this Plan shall be construed as a separate identified payment for purposes of Section 409A of the Code.  The Company makes no representation that any or all of the payments or benefits described in this Plan will be exempt from or comply with Section 409A of the Code and makes no undertaking to preclude Section 409A of the Code from applying to any such payment.  The Participant shall be solely responsible for the payment of any taxes and penalties incurred under Section 409A.
Section 23.  Notification of Election Under Section 83(b) of the Code.
If any Participant shall, in connection with the acquisition of shares of Common Stock under the Plan, make the election permitted under Section 83(b) of the Code, such Participant shall notify the Company of such election within ten (10) days after filing notice of the election with the Internal Revenue Service.
Section 24.  No Fractional Shares.
No fractional shares of Common Stock shall be issued or delivered pursuant to the Plan.  The Administrator shall determine whether cash, other Awards, or other property shall be issued or paid in lieu of such fractional shares or whether such fractional shares or any rights thereto shall be forfeited or otherwise eliminated.
Section 25.  Beneficiary.
A Participant may file with the Administrator a written designation of a beneficiary on such form as may be prescribed by the Administrator and may, from time to time, amend or revoke such designation.  If no designated beneficiary survives the Participant, the executor or administrator of the Participant’s estate shall be deemed to be the Participant’s beneficiary.
Section 26.  Paperless Administration.
In the event that the Company establishes, for itself or using the services of a third party, an automated system for the documentation, granting or exercise of Awards, such as a system using an internet website or interactive voice response, then the paperless documentation, granting or exercise of Awards by a Participant may be permitted through the use of such an automated system.
Section 27.  Severability.
If any provision of the Plan is held to be invalid or unenforceable, the other provisions of the Plan shall not be affected but shall be applied as if the invalid or unenforceable provision had not been included in the Plan.
Section 28.  Clawback.
(a) If the Company is required to prepare a financial restatement due to the material non-compliance of the Company with any financial reporting requirement, then the Committee may require any Section 16 Officer to repay or forfeit to the Company, and each Section 16 Officer agrees to so repay or forfeit, that part of the Incentive Compensation received by that Section 16 Officer during the three-year period preceding the publication of the restated financial statement that the Committee determines was in excess of the amount that such Section 16 Officer would have received had such Incentive Compensation been calculated based on the financial results reported in the restated financial statement.  The Committee may take into account any factors it deems reasonable in determining whether to seek recoupment of previously paid Incentive Compensation and how much Incentive Compensation to recoup from
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each Section 16 Officer (which need not be the same amount or proportion for each Section 16 Officer), including any determination by the Committee that a Section 16 Officer engaged in fraud, willful misconduct or committed grossly negligent acts or omissions which materially contributed to the events that led to the financial restatement.  The amount and form of the Incentive Compensation to be recouped shall be determined by the Committee in its sole and absolute discretion, and recoupment of Incentive Compensation may be made, in the Committee’s sole and absolute discretion, through the cancellation of vested or unvested Awards, cash repayment or both.
(b) Notwithstanding any other provisions in this Plan, any Award which is subject to recovery under any Applicable Laws, government regulation or stock exchange listing requirement, will be subject to such deductions and clawback as may be required to be made pursuant to such Applicable Law, government regulation or stock exchange listing requirement (or any policy adopted by the Company pursuant to any such law, government regulation or stock exchange listing requirement).
Section 29.  Governing Law.
The Plan shall be governed by, and construed in accordance with, the laws of the State of Delaware, without giving effect to principles of conflicts of law of such state.
Section 30.  Indemnification.
To the extent allowable pursuant to applicable law, each member of the Board and the Administrator and any officer or other employee to whom authority to administer any component of the Plan is delegated shall be indemnified and held harmless by the Company from any loss, cost, liability, or expense that may be imposed upon or reasonably incurred by such member in connection with or resulting from any claim, action, suit, or proceeding to which he or she may be a party or in which he or she may be involved by reason of any action or failure to act pursuant to the Plan and against and from any and all amounts paid by him or her in satisfaction of judgment in such action, suit, or proceeding against him or her; provided, however, that he or she gives the Company an opportunity, at its own expense, to handle and defend the same before he or she undertakes to handle and defend it on his or her own behalf.  The foregoing right of indemnification shall not be exclusive of any other rights of indemnification to which such individuals may be entitled pursuant to the Company’s Certificate of Incorporation or Bylaws, as a matter of law, or otherwise, or any power that the Company may have to indemnify them or hold them harmless.
Section 31.  Titles and Headings, References to Sections of the Code or Exchange Act.
The titles and headings of the Sections in the Plan are for convenience of reference only and, in the event of any conflict, the text of the Plan, rather than such titles or headings, shall control.  References to Sections of the Code or the Exchange Act shall include any amendment or successor thereto.
Section 32.  Successors.
The obligations of the Company under the Plan shall be binding upon any successor corporation or organization resulting from the merger, consolidation or other reorganization of the Company, or upon any successor corporation or organization succeeding to substantially all of the assets and business of the Company.
Section 33.  Relationship to other Benefits.
No payment pursuant to the Plan shall be taken into account in determining any benefits under any pension, retirement, savings, profit sharing, group insurance, welfare, or other benefit plan of the Company or any Affiliate except to the extent otherwise expressly provided in writing in such other plan or an agreement thereunder.
Section 34.   Discretion to Accelerate.
The Administrator shall have the discretion to accelerate the vesting of any Award in circumstances it determines to be appropriate (whether in connection with a transaction, termination of employment or for any other reason).

16
​ex_256877.htm

Exhibit 10.1

 

 

SEPARATION AND CONSULTING AGREEMENT 

 

This Separation and Consulting Agreement (the “Agreement”) is by and between inTEST Corporation (the “Company”) and Hugh T. Regan, Jr. (“Executive”).

 

WHEREAS, Executive served as the Chief Financial Officer, Treasurer, and Secretary of the Company;

 

WHEREAS, the Company and Executive are not parties to a written employment agreement or other contractual understanding regarding the employment of Executive, and the employment of Executive is “at will”;

 

WHEREAS, the parties have determined by mutual agreement that the employment of Executive shall end, and that Executive shall continue in a consulting capacity with the Company on the terms set forth in this Agreement; and

 

WHEREAS, the parties agree to resolve any and all issues or disputes that may presently exist, or that may arise out of the circumstances surrounding Executive’s employment with or separation from the Company.

 

NOW THEREFORE, in consideration of the mutual promises and commitments made herein, and intending to be legally bound hereby, Executive and the Company agree as follows:

 

	
			1.

				
			Termination of Employment and Officer Relationships

			

 

	 	
			A.

				
			The parties have agreed to end Executive’s employment relationship with the Company, and Executive’s participation as an officer of the Company and its subsidiaries and affiliates, effective June 11, 2021 (“Termination Date”); but if, upon the parties’ mutual agreement, Executive separates from the Company on a date other than the Termination Date, the Termination Date for purposes of this Agreement will be the actual date on which the employment relationship between the parties is terminated. From and after the Termination Date, Executive shall not hold any office, title or fiduciary role with the Company or its subsidiaries and affiliates, except as a consultant as set forth herein.

			

 

	 	
			B.

				
			Executive no longer will be authorized to transact business or incur any expenses, obligations and liabilities on behalf of the Company or its subsidiaries and affiliates after the Termination Date. Executive acknowledges the following: (i) Executive has no unreported reimbursements to report or claim against the Company or its subsidiaries and affiliates; and (ii) Executive has reported to the Company any and all work-related injuries incurred during Executive’s employment.

			

 

	 	
			C.

				
			Executive’s entitlement to continue family medical coverage under the Company’s benefit plans will be determined in accordance with the provisions of the Consolidated Omnibus Budget and Reconciliation Act of 1985, as amended (“COBRA”). The Company will not charge COBRA premiums for any period in which Executive timely elects COBRA continuation coverage and is eligible to receive subsidized COBRA coverage under the American Rescue Plan Act of 2021 (“ARPA”), and the Company agrees that Executive’s termination of employment with the Company consists of an involuntary termination for ARPA purposes.

			

 

 

 

 

	
			2.

				
			Consulting Services

			

 

	 	
			A.

				
			Executive shall be retained by the Company as a consultant for the period commencing on the Termination Date and expiring three (3) months after commencement of the Termination Date (the “Consulting Period”), subject to an additional three-month extension of time, on a month-to-month basis, at the sole discretion of the Company’s Board of Directors. Should the Company desire to extend the Consulting Period on a month-to-month basis upon conclusion of the initial three-month Consulting Period, the Company will notify Executive by the 25th day of the month preceding the discretionary monthly extension of the Consulting Period.

			

 

	 	
			B.

				
			During the Consulting Period, Executive shall consult with the Company and its executive officers on an as-needed basis regarding the business and operations of the Company, as well as the transition of duties of Executive to other officers or employees of the Company (the “Consulting Services”). Executive shall report directly to, and perform the Consulting Services as directed by, the President and Chief Executive Officer (“CEO”) of the Company and/or his designee. The Consulting Services shall be required at such times and such places as shall not result in unreasonable inconvenience to Executive. Executive will make good faith efforts to be available and responsive when his Consulting Services are requested.

			

 

	 	
			C.

				
			In consideration for the Consulting Services, the Company shall pay Executive a consulting fee of $375/hour (“Consulting Fee”), with a guaranteed minimum of (x) Seven Thousand Five Hundred Dollars ($7,500) per month during the initial three-month Consulting Period and (y) Three Thousand Seven Hundred Fifty Dollars ($3,750) per month during the remaining optional month-to-month Consulting Period if the Company decides, in its sole discretion, to extend the Consulting Period. The Consulting Fees shall be paid to Executive, in arrears, on or about the last business day of the month to which such Consulting Fees relate. The parties hereby acknowledge and agree that the Consulting Fees shall not be deemed wages and Executive will receive a Form 1099 with regarding to the Consulting Fee and will be solely responsible for, and shall pay, all taxes assessed on such fees under the applicable laws of any federal, state, or local jurisdiction.

			

 

	 	
			D.

				
			Executive acknowledges and agrees that his status at all times during the Consulting Period shall be that of an independent contractor, and that he may not, at any time, act as a representative for or on behalf of the Company for any purpose. Executive hereby waives any rights to be treated as an employee or deemed an employee of the Company for any purpose during the Consulting Period, and acknowledges that he is not entitled to employment-related benefits, compensation, or equity vesting during the Consulting Period.

			

 

	 	
			E.

				
			If, at any point during the Consulting Period, the Company determines in its reasonable discretion that Executive is not providing good faith Consulting Services that have been requested by Company, it will provide Executive with written notification of Executive’s deficiencies and a five-calendar day opportunity to cure. If, upon conclusion of the cure period, Executive has not cured to the reasonable satisfaction of the Company, the Company may terminate the Consulting Period effective immediately and Executive will not be entitled to Consulting Fees after termination of the Consulting Period through the end of the current month.

			

 

 

2

 

 

	
			3.

				
			Severance

			

 

	 	
			A.

				
			In consideration for Executive signing, returning and not revoking this Agreement (which contains a General Release), the Company has agreed to pay Executive severance in the amount of One Hundred and Twenty Thousand Dollars ($120,000), less applicable deductions and withholdings (“Severance”). The Severance shall be payable as follows: 60% in a lump sum within 30 days after Executive signs and does not timely revoke this Agreement and 40% in a lump sum within 60 days after Executive signs and does not timely revoke this Agreement.

			

 

	 	
			B.

				
			In further consideration for Executive signing, returning and not revoking this Agreement (which contains a General Release), the Company agrees that it will treat Executive’s termination as a “retirement” for purposes of the restricted stock and options awarded on March 9, 2020 (the “Retirement Awards”). The Company acknowledges that this will allow the Retirement Awards to continue to vest on various dates following the Termination Date. In addition, the Company agrees that it will amend the Retirement Awards to provide that Executive’s unvested options under the Retirement Awards will expire one (1) year from their respective vesting dates.

			

 

	 	
			C.

				
			Executive understands, acknowledges and agrees that the Severance and the treatment as a “retirement” for purposes of the Retirement Awards are being given as consideration in exchange for executing this Agreement and that Severance and treatment as a “retirement” for purposes of the Retirement Awards are contingent upon Executive complying with all material terms of this Agreement. If the Company believes Executive has violated a material term of this Agreement, the Company will provide written notification to Executive with a five (5) day cure period, if the violation is capable of cure. Executive further acknowledges that Executive is not entitled to any additional payment or consideration not specifically referenced in this Agreement and Executive agrees and affirms that, except with respect to the Retirement Awards, any and all unvested awards of restricted stock units and options, including the restricted stock and options awards granted on March 10, 2021, are forfeited as of the Termination Date. Executive further understands and acknowledges that his termination of employment will cause all of his currently vested options to expire one (1) year from the Termination Date, and as provided in Section 3(B), the unvested options under the Retirement Awards that will continue to vest will expire one (1) year from their respective vesting dates. Notwithstanding the foregoing, Executive shall be entitled to receive in a timely manner his final wage check and payment for accrued, unused vacation time.

			

 

	
			4.

				
			Executive Representations Executive specifically represents, warrants, and confirms that he: 

			

 

	 	
			A.

				
			has not filed any claims, complaints, or actions of any kind against the Company with any court of law, or local, state, or federal government or agency;

			

 

	 	
			B.

				
			has received all salary, wages, bonuses, and other compensation due to Executive, with the exception of Executive’s final payroll check through and including the Termination Date, which will be paid on the next regularly scheduled payroll date for the pay period including the Termination Date.

			

 

3

 

 

	
			5.

				
			General Release  In consideration for the Severance, Executive releases and forever discharges the Company (defined for this General Release to include the Company, its parents, subsidiaries, affiliates, successors and assigns, and all of their respective shareholders, officers, directors, agents, representatives, attorneys and employees and their successors, heirs and assigns) from every claim, demand, right, action or cause of action of whatsoever kind or nature, in law or in equity, direct or indirect, liquidated or unliquidated, known or unknown, that Executive ever had or now has, against the Company (as defined herein) with respect to any and all matters relating to Executive’s employment with the Company and the end of that employment with the Company, and any and all other claims of whatsoever kind or nature which Executive may have against the Company (as defined herein) arising from events occurring on or before Executive’s execution of this Agreement. This General Release of the Company (as defined herein) also specifically includes, but is not limited to, any and all claims for employment discrimination, harassment and/or retaliation; all claims in contract, including but not limited to, claims for breach of contract, claims for promissory estoppel and claims for detrimental reliance; all claims in tort (including, but not limited to, all claims for wrongful discharge, fraud, intentional and/or negligent misrepresentation, intentional and/or negligent infliction of emotional distress, defamation/libel/slander, fraudulent inducement, including fraudulent inducement as to this Agreement); all claims for wages, bonuses, equity, profit sharing, performance awards, incentive compensation, severance pay, vacation pay, health insurance premiums, other insurance premiums, medical expense/costs, retirement contributions or benefits, any other fringe benefit, or any form of income or compensation; and all claims arising under Title VII of the Civil Rights Act of 1964, the Age Discrimination in Employment Act, the Americans with Disabilities Act, the Employee Retirement Income Security Act, the New Jersey Law Against Discrimination (NJLAD), the New Jersey Family Leave Act (NJFLA), the New Jersey Conscientious Employee Protection Act (NJCEPA), the New Jersey Wage Payment Law, the New Jersey Wage and Hour Law, retaliation claims under the New Jersey Workers' Compensation Law (NJWCL), the New Jersey Equal Pay Act, the New Jersey Civil Union Act, and all other federal, state, and local laws that may be legally waived and released, all including any amendments and their respective implementing regulations. This General Release also includes, but is not limited to, any and all claims for any type of damages (e.g., back pay; front pay; compensatory damages for emotional distress/pain and suffering, etc.; punitive damages; liquidated damages; consequential damages for an employment search); for any type of equitable relief (i.e., reinstatement; injunction; etc.); for attorneys’ fees/costs; and for interest.

			

 

	
			6.

				
			Exceptions to the General Release. This General Release does not waive any claims for unemployment or workers’ compensation or for any claims related to the enforcement of this Agreement. Nothing in this General Release prevents Executive from filing a charge or complaint with or from participating in an investigation or proceeding conducted by any federal, state or local government agency, including but not limited to, the reporting of any whistleblower complaint to the Securities and Exchange Commission. Notwithstanding the foregoing, to the extent permitted by law, Executive waives the right to individual relief based on claims asserted in any charge or complaint filed with the Equal Employment Opportunity Commission, or any other applicable state or local fair employment practices agency, including, but not limited to, an award of monetary damages or reinstatement to employment with the Company.

			

 

4

 

 

	
			7.

				
			Non-Disparagement.

			

 

	 	
			A.

				
			Executive agrees that Executive will not at any time or in any manner make or cause to be made any written or verbal statements, or take any actions that disparage, are detrimental to or damage the reputation of the Company, its subsidiaries and affiliates, and their former or current officers, directors, employees, agents and/or owners. This Section does not in any way restrict or impede the Executive from exercising protected rights, including rights under the federal securities laws, including the Dodd-Frank Wall Street Reform and Consumer Protection Act, Pub. L. No. 111-203, Section 929-Z, 124 Stat. 1376, 1871 (2010), to the extent that such rights cannot be waived by agreement, or from complying with any applicable law or regulation or a valid order of a court of competent jurisdiction or an authorized government agency, provided that such compliance does not exceed that required by law. Executive shall promptly provide written notice of any such order to the Company’s CEO at inTEST Corporation, 804 East Gate Drive, Suite 200, Mount Laurel, NJ 08054.

			

 

	 	
			B.

				
			 Company agrees that the Company’s current Board of Directors and CEO and incoming Chief Financial Officer will not at any time or in any manner make or cause to be made any written or verbal statements, or take any actions that disparage, are detrimental to or damage the reputation of Executive.

			

 

	
			8.

				
			Confidentiality, Non-Competition and Non-Solicitation Agreement. Executive agrees that this Agreement is conditioned upon his review and execution of the Confidentiality, Non-Competition and Non-Solicitation Agreement attached hereto as Exhibit A.

			

 

	
			9.

				
			Compliance with Securities Laws. Executive acknowledges that he is required to comply with all applicable securities laws, rules, and regulations including those with respect to insider trading as well as Section 16 of the Securities Exchange Act of 1934, as amended.

			

 

	
			10.

				
			Company Property. Executive agrees that Executive has returned or will return to the Company, or will arrange for return to the Company within five (5) days following Executive’s Termination Date, any and all of the Company’s, and its subsidiary and affiliates’, property, including Executive’s Company-issued desktop computer, laptop computer, mobile phone, and iPad, and proprietary and/or confidential information, including originals and copies thereof (whether in hard copy or electronic form), which was or may be in Executive’s possession or under Executive’s control. Any such materials and other property of Company that Executive possesses, including that which exists on Executive’s personal computer(s), electronic equipment, storage media and e-mail account(s), shall be returned in the same format that Executive possesses such (i.e., hardcopy paper documents returned in their original format and all electronically stored documents returned via electronic media (e.g., thumb drive or CD Rom)) on or before Executive’s Termination Date. To the extent an electronic copy exists of the returned materials, Executive must permanently delete such electronic copy/copies on or before Executive’s Termination Date (following transmittal to Company of such documents as set forth above), other than materials on Executive’s electronic devices. Executive agrees that he will not download, upload, transfer, erase, or otherwise relocate Company material from Executive’s Company-issued desktop computer, laptop computer, mobile phone, or iPad and will not use any type of wiping or erasing software on those devices or reset them to a factory default setting. Executive understands that if Executive does not return any hardcopy paper documents and/or electronic media within the time period set forth above, Executive is affirming and representing to the best of Executive’s knowledge that Executive has no such materials in Executive's possession.

			

 

5

 

 

	
			11.

				
			No Knowledge of Wrongdoing. Executive represents and warrants that Executive (a) has no knowledge that any officer, director, employee, agent, or representative of the Company, its subsidiaries or affiliates, has committed or is suspected of committing any act which is or may be in violation of any federal or state law or regulation or has acted in a manner which requires corrective action of any kind and (b) Executive has not informed the Company of, and Executive is unaware of, any alleged misconduct by the Company, its subsidiaries, or affiliates, that have not been resolved satisfactorily by the Company.

			

 

	
			12.

				
			No Admission of Wrongdoing.  Neither this Agreement nor the furnishing of the consideration for this Agreement shall be deemed or construed at any time for any purpose as an admission or evidence of any liability or unlawful conduct of any kind by the Company.

			

 

	
			13.

				
			No Obligation to Employ Executive in the Future. The Company has no obligation, contractual or otherwise, to rehire, employ, or hire Executive at any time in the future. Executive further agrees that if Executive seeks any employment with the Company, a rejection of Executive’s application or inquiry will not constitute a breach of this Agreement or a violation in any manner whatsoever by the Company.

			

 

	
			14.

				
			Cooperation. Executive agrees to cooperate with the Company and its attorneys with respect to any proceedings arising out of or relating to matters of which Executive was involved prior to the termination of Executive’s employment and, if applicable, shall receive reimbursement for expenses (including attorneys’ fees) in accordance with the Company’s Bylaws and the terms of the Indemnification Agreement entered into between Executive and the Company on June 24, 2020.

			

 

	
			15.

				
			Advice of Counsel, Consideration and Revocation Periods and Effective Date.

			

 

	 	
			A.

				
			Executive is advised to consult with an attorney prior to signing this Agreement that includes a General Release. Executive has twenty-one (21) days to consider whether to sign this Agreement (the “Consideration Period”), and is advised that the Agreement may not be signed before the Termination Date. If the Consideration Period ends before Executive’s Termination Date, Executive will be able to sign the Agreement (if Executive so chooses) on Executive’s Termination Date or within five (5) calendar days after Executive’s Termination Date.

			

 

6

 

 

	 	
			B.

				
			Executive must return this signed Agreement to the CEO of the Company, at inTEST Corporation, 804 East Gate Drive, Suite 200, Mount Laurel, NJ 08054, by first class mail or by hand delivery within the Consideration Period. If Executive signs and returns this Agreement before the end of the Consideration Period, it is because Executive freely chose to do so after carefully considering its terms. If Executive does, by mistake, sign this Agreement before Executive’s Termination Date, that mistaken, premature signature will not be valid and will not create a legally effective or binding Agreement. Instead, if Executive signs this Agreement before Executive’s Termination Date, this Agreement will be returned to Executive with a blank signature page to be signed by Executive on Executive’s Termination Date should Executive still want to do so.

			

 

	 	
			C.

				
			Additionally, Executive shall have seven (7) days from the date of the signing of this Agreement to revoke it by delivering a written notice of revocation within the seven-day revocation period to the CEO of the Company at the above address. If the revocation period expires on a weekend or holiday, Executive will have until the end of the next business day to revoke.

			

 

	 	
			D.

				
			This Agreement will become effective on the eighth (8th) day after Executive signs this Agreement provided Executive does not revoke this Agreement.

			

 

	 	
			E.

				
			Executive agrees with the Company that changes to the Agreement, whether material or immaterial, do not restart the running of the Consideration Period. The Company is not required to make any payment described in this Agreement unless the Agreement becomes effective.

			

 

	
			16.

				
			Section 409A. This Agreement is intended to be exempt from or comply with Section 409A of the Internal Revenue Code of 1986, as amended (“Section 409A”), including the exceptions thereto, and shall be construed and administered in accordance with such intent. Notwithstanding any other provision of this Agreement, payments provided under this Agreement may only be made upon an event and in a manner that complies with Section 409A or an applicable exemption. Any payments under this Agreement that may be excluded from Section 409A either as separation pay due to an involuntary separation from service, as a short-term deferral, or as a settlement payment pursuant to a bona fide legal dispute shall be excluded from Section 409A to the maximum extent possible. For purposes of Section 409A, any installment payments provided under this Agreement shall each be treated as separate and distinct payments. Notwithstanding the foregoing, the Company makes no representations that the payments and benefits provided under this Agreement comply with Section 409A and in no event shall the Company be liable for all or any portion of any taxes, penalties, interest, or other expenses that may be incurred by Executive on account of non-compliance with Section 409A.

			

 

	
			17.

				
			Applicable Law and General Provisions. This Agreement shall be interpreted under the laws of the State of New Jersey. This Agreement sets forth the entire agreement between the Parties. Executive is not relying on any other agreements or oral representations not fully addressed in this Agreement. The provisions of this Agreement are severable, and if any part of this Agreement is found by a court of law to be unenforceable, the remainder of this Agreement will continue to be valid and effective. The Company may assign this Agreement to any successor in interest to the business of the Company. Any legal action by either party to enforce any of the terms of this Agreement shall be commenced in the federal or state courts in the State of Delaware.

			

 

7

 

 

	
			18.

				
			Paragraph Headings. The paragraph headings in this Agreement are for convenience only; they form no part of this Agreement and shall not affect its interpretation.

			

 

	
			19.

				
			Significance of Executive’s Signature. Executive’s signature below indicates that Executive:

			

 

	 	
			A.

				
			has carefully read and reviewed this Agreement;

			

 

	 	
			B.

				
			fully understands all of its terms and conditions;

			

 

	 	
			C.

				
			fully understands that the Agreement is legally binding and that by signing it, Executive is giving up certain rights;

			

 

	 	
			D.

				
			has not relied on any other representations by the Company, whether written or oral, concerning the terms of the Agreement;

			

 

	 	
			E.

				
			has been provided at least twenty-one (21) days to consider this Agreement (which includes a General Release) and agrees that changes to this Agreement, whether material or immaterial, do not restart the Consideration Period;

			

 

	 	
			F.

				
			will have seven (7) days to revoke Executive’s acceptance of this Agreement after signing it;

			

 

	 	
			G.

				
			has been advised, and has had the opportunity, to consult with an attorney prior to signing the Agreement;

			

 

	 	
			H.

				
			has signed and delivered this Agreement freely and voluntarily; and

			

 

	 	
			I.

				
			is duly authorized to sign this Agreement and has not assigned or attempted to assign or give to anyone else any claim Executive has or believes that Executive may have against the Company.

			

 

	
			20.

				
			Execution in Counterparts. This Agreement may be executed in any number of counterparts, each of which shall be deemed to be an original against any party whose signature appears thereon, and all of which shall together constitute one and the same instrument. A signature made on a faxed or electronically mailed copy of the Agreement, or a signature transmitted by facsimile or electronic mail, shall have the same effect as the original signature.

			

 

8

 

 

IN WITNESS WHEREOF, the Parties have executed this Separation and Consulting Agreement on the date(s) set forth below.

 

 

 

	
			 

				
			EXECUTIVE

				
			 

			
	
			 

				
			 

				
			 

			
	
			June 11, 2021

				
			/s/ Hugh T. Regan, Jr

				
			 

			
	
			 

				
			 

				
			 

			
	
			Date of Signing

				
			Hugh T. Regan, Jr.

				
			 

			

 

 

 

 

 

	 	 	ACCEPTED:	 
	 	 	 	 
	 	 	 	 
	 	 	 	 
	 	 	inTEST Corporation	 
	 	 	 	 
	 	 	 	 
	 	 	 	 
	June 11, 2021	By:	/s/ Richard N. Grant, Jr.	 
	 	 	 	 
	Date of Signing	 	Richard N. Grant, Jr.	 
	 	 	 	 
	 	 	President and Chief Executive Officer

 

9

 

 

EXHIBIT A

 

Confidentiality, Non-Competition and Non-Solicitation Agreement

 

In consideration of the Separation and Consulting Agreement (“Separation Agreement”) that inTEST Corporation (the “Company”) is offering to you, you acknowledge that you owe a duty of loyalty to the Company and its’ affiliates and subsidiaries (collectively, the “Companies”) to safeguard and protect their trade secrets and confidential information. Intending to be legally bound, you hereby agree to the terms of this Confidentiality, Non-Competition and Non-Solicitation Agreement (“Agreement”) as follows:

 

1.         Non-Disclosure of Confidential Information. 

 

(a)    The term “Confidential Information” shall mean all confidential, non-public and proprietary technical, business and financial information relating to the respective businesses of the Companies including, but not limited to, financial and marketing information, personnel, sales and statistical data, plans for future development, computer programs, information and knowledge pertaining to the products and services offered, inventions, innovations, designs, ideas, formulas, manufacturing processes, trade secrets, technical data, computer source codes, software, proprietary information, construction, advertising, manufacturing, distribution and sales methods and systems, pricing, sales and profit figures, customer and client lists, and relationships with customers, clients, suppliers, distributors and others who have business dealings with any of the Companies and information with respect to various techniques, procedures, processes and methods. Confidential Information also includes confidential or proprietary information received by you from third parties in connection with your employment by any of the Companies subject to an obligation to maintain the confidentiality of such information. Confidential Information does not include information which is (a) known by you at the time of its disclosure, (b) is or otherwise becomes public information or part of the public domain other than as a result of your breach of this Section 1, (c) acquired by you from a third party not known by you to have an obligation of confidentiality with respect to such information or (d) independently developed by you without use of Confidential Information.

 

You acknowledge and agree that all Confidential Information known or obtained by you, whether before or after the date of the Separation Agreement and regardless of whether you participated in the discovery or development of such Confidential Information, is the property of the Company. Except as expressly authorized in writing by the Company or as necessary to perform your services as a consultant of the Company, you agree that you will not, for any reason, directly or indirectly, disclose Confidential Information to any person other than employees, agents, representatives, and affiliates of the Company or any of the Companies, and/or third parties pursuant to appropriate confidentiality and non-disclosure agreements. You may disclose Confidential Information if you are required or requested to produce such Confidential Information under order of a court of competent jurisdiction, a valid administrative or congressional subpoena or by any other governmental agency; provided, however, that upon receipt of any such order or subpoena, you shall, to the extent not prohibited, promptly notify the Company so that the Company has the opportunity at its cost and expense to contest the disclosure of such Confidential Information.

 

10

 

 

(b)    Notwithstanding anything herein to the contrary, nothing shall prohibit you from (i) making reports of possible violations of federal law or regulation to any governmental agency or entity in accordance with the provisions of and rules promulgated under Section 21F of the Securities Exchange Act of 1934, as amended, or Section 806 of the Sarbanes-Oxley Act of 2002, as amended, or of any other whistleblower protection provisions of federal law or regulations, or (ii) require notification or prior approval by the Companies of any such report. Furthermore, you acknowledge that, via this paragraph, the Company is providing you with written notice that the Defend Trade Secrets Act, 18 U.S.C. § 1833(b), provides immunity for the disclosure of a trade secret to report a suspected violation of law and/or in an anti-retaliation lawsuit, such that you will not be held criminally or civilly liable under any federal or state trade secret law for the disclosure of a trade secret that: (i) is made (x) in confidence to a federal, state, or local government official, either directly or indirectly, or to an attorney and (y) solely for the purpose of reporting or investigating a suspected violation of law; or (ii) is made in a complaint or other document that is filed under seal in a lawsuit or other proceeding. You further acknowledge and understand that, if you file a lawsuit for retaliation by an employer for reporting a suspected violation of law, then you may disclose the Company’s trade secrets to your attorney and use the trade secret information in the court proceeding if you: (a) file any document containing the trade secret under seal; and (b) do not disclose the trade secret, except pursuant to court order.

 

2.         Noncompetition; Non-solicitation; Non-disparagement. As an inducement for the Company to enter into the Separation Agreement and provide the Severance to you available under the Separation Agreement, you agree that:

 

(a)         For a period of twelve (12) months following the separation of your employment with the Company (the “Restricted Period”), you shall not, directly or indirectly, for your own account, or on behalf of, or together with, any other person (other than on behalf of the Companies) anywhere in any state of the United States or the District of Columbia:

 

(i)    own, manage, operate, control, finance or participate in the ownership, management, operation, control or financing of, render financial assistance to, be connected as an officer, director, stockholder, employee, partner, member, manager, principal, agent, representative, consultant or otherwise with, use or permit your name to be used in connection with, or develop products or services for, any Competing Business. “Competing Business” means any business which competes with or has offered or offers any products or services during the Restricted Period which are substantially similar to any line of business in which the Company: (i) engaged in at any time during your employment with the Company; (ii) engages in at any time during the Restricted Period, or (ii) proposes or has plans to engage in at any time during the one-year period immediately preceding the termination of the Restricted Period; notwithstanding the foregoing, it shall not be a breach of this Section 2(a)(i) for you to own a passive investment of less than one percent (1%) of a class of stock of a publicly held company that is traded on a national securities exchange or in the over the counter market;

 

(ii)    contact, solicit, induce or attempt to induce any person who is or was, within the one-year period prior to termination of your employment with any of the Companies, a customer, supplier or agent of any of the Companies or with which any of the Companies or you had contact during your employment with the Company, to terminate their relationship with any of the Companies, or do any act which may interfere with or result in the impairment of the relationship, including any reduction in sales or purchases, between any of the Companies and such customers, suppliers or agents; or

 

(iii) hire any person who is or was, within the one-year period prior to termination of your employment with the Company, an employee of any of the Companies; or contact, solicit, induce or attempt to induce any employee who is an employee of any of the Companies for the purpose of seeking to have such employee terminate his or her employment with any of the Companies.

 

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3.         Employee Invention Assignment. 

 

(a)    Assignment. You hereby confirm and acknowledge that, to the fullest extent permitted per applicable law, you do hereby irrevocably assign and transfer, to the Company all of your rights, title, and interests, including, without limitation, Intellectual Property Rights, in any Work Product, together with any and all causes of action for past, present or future infringement or misappropriation of the foregoing that may have accrued to you up to and including the date hereof in connection with any and all of the foregoing. For purposes hereof, “Intellectual Property Rights” means all rights in and to US and foreign: (i) patents, patent disclosures, and inventions (whether patentable or not); (ii) trademarks, service marks, trade dress, trade names, logos, corporate names, and domain names, and other similar designations of source or origin, together with the goodwill symbolized by any of the foregoing; (iii) copyrights and works of authorship (whether copyrightable or not), including computer programs; (iv) trade secrets; and (v) all applications, registrations, and issuances for, and renewals or extensions of, the foregoing rights in (i)-(iv). For purposes hereof, “Work Product” means all writings, documents, works of authorship, technology, inventions, discoveries, processes, techniques, methods, concepts, research, proposals, materials, and other work product created, authored, reduced to practice, or invented by you, individually or jointly with others, during and in the scope of your employment with the Company that (i) resulted from work performed by you for any of the Companies; and/or (ii) was created, developed, reduced to practice, or invented using, incorporating, or in reliance on the proprietary materials, confidential information, trade secrets, or other intellectual property of the any of the Companies.

 

(b)    Exclusion. Notwithstanding anything to the contrary in this Agreement, you and the Company understand and acknowledge that Work Product and Intellectual Property Rights do not include, and any provision in this Agreement requiring you to assign (or otherwise providing for ownership by the Company of) rights to Work Product, Confidential Information, or Intellectual Property Rights does not apply to, any Work Product, Confidential Information, or Intellectual Property Rights that (i) you create(d), develop(ed), reduce(d) to practice, or invent(ed) entirely on your own time without using the Company’s proprietary materials, Confidential Information, trade secrets, or other Intellectual Property Rights; and/or (b) is otherwise unassignable per applicable state or federal laws including, without limitation, 19 Del C. § 805 (which prohibits the assignment of inventions that you developed or develop entirely on your own time without using the Company equipment, supplies, facilities or trade secret information, other than inventions that relate to the Company business or actual or demonstrably anticipated research or development or result from any work performed by you for the Company).

 

(c)    You agree to reasonably cooperate with the Company, at the Company’s sole cost and expense, with respect to the transfer, procurement, maintenance, defense and enforcement of any Intellectual Property Rights in any Work Product.

 

12

 

 

4.         Return of Property. You agree to return to the Company all documents, materials, supplies, credit cards, keys and any other property or data that was the property of any of the Companies or that was used in the course of your employment with the Company. The return of such items shall be made at any time upon the written request of the Company, or at the time of termination, or if that is not possible, then as soon thereafter as is possible. Upon termination of employment for any reason, you agree to return all tangible copies of Confidential Information to the Company and at the Company request you agree to certify under oath that all electronic copies of such information have been deleted from all computers to which you have access other than those of the Companies.

 

5.         Enforcement; Editing of Restrictions; Tolling; Attorney’s Fees. 

 

(a)    Considering the nature of your job duties as Chief Financial Officer, Treasurer and Secretary of the Company, you acknowledge that the restrictions in this Agreement are reasonable and necessary for the protection of the Company. If any court determines that any of the covenants contained in this Agreement are unenforceable because of their duration, area or scope, the court shall reduce such covenant so that it becomes enforceable in its reduced form.

 

(b)    The Company and you agree that any dispute, controversy, or claim arising out of or related to in any way to this Agreement or any breach or threatened breach of this Agreement is likely to result in irreparable injury to the Company. You agree that the Company shall be entitled, if it so elects, to institute and prosecute proceedings, either in law or in equity, to enjoin you from activities in violation of this Agreement. The Company shall not be required to post bond as a condition of obtaining injunctive relief.

 

(c)    In the event that you violate any of the non-solicitation or non-competition obligations, the court is authorized to extend the length of the Restricted Period by the period of the duration of such breach.

 

(d)    The prevailing party in any action(s) brought to enforce any of the terms or provisions of this Agreement, shall be entitled to recover from the other party all reasonable court costs and reasonable attorneys’ fees actually incurred by the prevailing party.

 

6.         Governing Law, Disputes and Waiver of Jury Trial. 

 

(a)    The law of the State of New Jersey shall govern (a) all claims or matters related to or arising from this Agreement (including any tort or non-contractual claims) and (b) any questions concerning the construction, interpretation, validity and enforcement of this Agreement, without giving effect to any choice of law or conflict of law rules or provisions that would cause the application of the Law of any jurisdiction other than the State of New Jersey.

 

(b)    You and the Company hereby irrevocably waive all rights to trial by jury in any proceeding brought to resolve any dispute between or among you and the Company (whether arising in contract, tort or otherwise) arising out of, connected with, related or incidental to this Agreement, the transactions contemplated by this Agreement or the relationships established between you and the Company under this Agreement.

 

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7.         Surviving Obligations. You acknowledge and agree that your obligations under this Agreement will survive the termination of your employment and will apply regardless of the reasons for or circumstances of your termination.

 

8.         Entire Agreement; Amendments; Waiver; Severability. 

 

(a)    This Agreement constitutes the entire understanding between the Company and you with respect to the subject matter of this Agreement. This Agreement may not be modified orally, but only by written agreement signed by you and an authorized officer of the Company, making express reference hereto. No waiver of any provision or condition of this Agreement shall be valid unless the same shall be in writing and signed by the party against which such waiver is to be enforced. No waiver of any default, breach of representation or warranty or breach of covenant hereunder, whether intentional or not, shall be deemed to extend to any other, prior or subsequent default or breach or affect in any way any rights arising by virtue of any other, prior or subsequent such occurrence.

 

(b)    The invalidity or unenforceability of any provision herein shall not affect the validity or enforceability of any other provision herein. If a court of competent jurisdiction determines that any portion of this Agreement is in violation of any statute or public policy, then only the portions of this Agreement that violate such statute or public policy shall be stricken, and all other portions of this Agreement that do not violate any statute or public policy shall continue in full force and effect.

 

9.         Successors and Assigns. This Agreement shall bind and be for the benefit of the Company, its successors and assigns, including without limitation any entity which may acquire any division or subsidiary of the Company or all or substantially all of the Company’s assets or into which the Company is consolidated or merged. You understand and agree that your obligations hereunder are personal and may not be assigned or transferred by you.

 

 

	
			 

				
			inTEST CORPORATION

				
			 

			
	
			 

				
			 

				
			 

				
			 

			
	
			 

				
			By: 

				
			 

				
			 

			
	
			 

				
			 

				
			Richard N. Grant, Jr.

				
			 

			
	
			 

				
			 

				
			 

				
			 

			
	 	 	President and Chief Executive Officer	 
	 	 	 	 
	 	Date:	 	 
	 	 	 	 

 

	ACCEPTED AND AGREED TO:	 	 	 
	 	 	 	 
	 	 	 	 
	 	 	 	 
	Hugh T. Regan, Jr.	 	 	 
	 	 	 	 
	 	 	 	 
	 	 	 	 
	Date	 	 	 

 

14

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