Document:

BSQUARE Corporation 2011 Inducement Award Plan

 Exhibit 10.1 
 BSQUARE CORPORATION 
 2011 INDUCEMENT AWARD PLAN 

 TABLE OF CONTENTS 

 

									
	 	 	 	  	 	  	Page	 
			
	 1.
	 	DEFINITIONS	  	 	1	  
			
	 2.
	 	PURPOSES	  	 	3	  
			
	 3.
	 	ADMINISTRATION	  	 	3	  
				
		 	 (a)
	  	Committee	  	 	3	  
		 	 (b)
	  	Appointment of Committee	  	 	4	  
		 	 (c)
	  	Powers; Regulations	  	 	4	  
			
	 4.
	 	ELIGIBILITY	  	 	4	  
			
	 5.
	 	STOCK	  	 	5	  
			
	 6.
	 	TERMS AND CONDITIONS OF OPTIONS	  	 	5	  
				
		 	 (a)
	  	Number of Shares and Type of Option	  	 	5	  
		 	 (b)
	  	Date of Grant	  	 	5	  
		 	 (c)
	  	Option Price	  	 	5	  
		 	 (d)
	  	Duration of Options	  	 	5	  
		 	 (e)
	  	Vesting Schedule and Exercisability of Options	  	 	6	  
		 	 (f)
	  	Acceleration of Vesting	  	 	6	  
		 	 (g)
	  	Term of Option	  	 	6	  
		 	 (h)
	  	Exercise of Options	  	 	7	  
		 	 (i)
	  	Payment upon Exercise of Option	  	 	7	  
		 	 (j)
	  	Rights as a Shareholder	  	 	8	  
		 	 (k)
	  	Transfer of Option	  	 	8	  
		 	 (l)
	  	Securities Regulation and Tax Withholding	  	 	9	  
		 	 (m)
	  	Stock Split, Reorganization or Liquidation	  	 	10	  
		 	 (n)
	  	Approved Transactions; Control Purchase	  	 	11	  
			
	 7.
	 	TERMS AND CONDITIONS OF STOCK APPRECIATION RIGHTS	  	 	12	  
				
		 	 (a)
	  	Award of Stock Appreciation Rights	  	 	12	  
		 	 (b)
	  	Restrictions of Tandem SARs	  	 	12	  
		 	 (c)
	  	Amount of Payment Upon Exercise of SARs	  	 	12	  
		 	(d)	  	Form of Payment Upon Exercise of SARs	  	 	12	  
			
	 8.
	 	RESTRICTED STOCK AWARDS	  	 	12	  
				
		 	 (a)
	  	Nature of Restricted Stock Awards	  	 	12	  
		 	 (b)
	  	Rights as a Shareholder	  	 	13	  
		 	 (c)
	  	Restrictions	  	 	13	  
		 	 (d)
	  	Vesting of Restricted Stock	  	 	13	  
		 	 (e)
	  	Waiver, Deferral and Reinvestment of Dividends	  	 	13	  
			
	 9.
	 	UNRESTRICTED STOCK AWARDS	  	 	13	  
				
		 	 (a)
	  	Grant or Sale of Unrestricted Stock	  	 	13	  
		 	 (b)
	  	Elections to Receive Unrestricted Stock In Lieu of Compensation	  	 	13	  
		 	 (c)
	  	Restrictions on Transfers	  	 	14	  
			
	 10.
	 	TERMS AND CONDITIONS OF RESTRICTED STOCK UNITS	  	 	14	  
				
		 	 (a)
	  	Restricted Stock Unit Agreement	  	 	14	  
		 	 (b)
	  	Number of Shares	  	 	14	  
		 	 (c)
	  	Payment for Awards	  	 	14	  

  
 i. 

 TABLE OF CONTENTS 

(Continued) 
  

									
	 	 	 	  	 	  	Page	 
				
		 	 (d)
	  	Vesting of Restricted Stock Units	  	 	14	  
		 	 (e)
	  	Voting and Dividend Rights	  	 	14	  
		 	 (f)
	  	Form and Time of Settlement of Restricted Stock Units	  	 	14	  
		 	 (g)
	  	Creditors’ Rights	  	 	15	  
			
	 11.
	 	SECURITIES REGULATION AND TAX WITHHOLDING	  	 	15	  
			
	 12.
	 	STOCK SPLIT, REORGANIZATION OR LIQUIDATION	  	 	16	  
			
	 13.
	 	APPROVED TRANSACTIONS; CONTROL PURCHASE	  	 	17	  
			
	 14.
	 	EFFECTIVE DATE; TERM	  	 	18	  
			
	 15.
	 	NO OBLIGATIONS TO EXERCISE AWARD	  	 	18	  
			
	 16.
	 	NO RIGHT TO AWARDS OR TO EMPLOYMENT	  	 	18	  
			
	 17.
	 	APPLICATION OF FUNDS	  	 	18	  
			
	 18.
	 	INDEMNIFICATION OF COMMITTEE	  	 	18	  
			
	 19.
	 	SHAREHOLDERS AGREEMENT	  	 	19	  
			
	 20.
	 	NON-EXCLUSIVITY OF THE PLAN	  	 	19	  
			
	 21.
	 	EXCLUSION FROM PENSION AND PROFIT-SHARING COMPUTATION	  	 	19	  
			
	 22.
	 	AMENDMENT OF PLAN	  	 	19	  

  
 ii.

 BSQUARE CORPORATION 

2011 INDUCEMENT AWARD PLAN 
  

	1.	DEFINITIONS. 

 Capitalized
terms not defined elsewhere in the Plan shall have the following meanings (whether used in the singular or plural). 
 (a)
“Agreement” means a written agreement approved by the Committee evidencing Awards granted under the Plan. 

(b) “Approved Transaction” means 

(i) a firm commitment underwritten public offering pursuant to an effective registration statement under the
Securities Act covering the offer and sale of Common Stock for the account of the Company to the public with aggregate proceeds paid to the Company of not less than $10,000,000 (after the deduction of underwriting commissions and offering expenses);

 (ii) the acquisition of the Company by another entity by means of merger, consolidation or other
transaction or series of related transactions resulting in the exchange of the outstanding shares of the Company for securities of, or consideration issued, or caused to be issued by, the acquiring entity or any of its affiliates, provided, that
after such event the shareholders of the Company immediately prior to the event own less than a majority of the outstanding voting equity securities of the surviving entity immediately following the event; 

(iii) any liquidation or dissolution of the Company; and 

(iv) any sale, lease, exchange or other transfer not in the ordinary course of business (in one transaction or a
series of related transactions) of all, or substantially all, of the assets of the Company. 
 (c) “Award”
means any award granted under the Plan, including Options, Stock Awards, Restricted Stock Units and SARs. 
 (d)
“Awardee” means any person to whom an Award is granted under the Plan (as well as any permitted transferee of an Award). 
 (e) “Board” means the Board of Directors of the Company. 
 (f)
“Code” means the Internal Revenue Code of 1986, as amended from time to time, or any successor statute or statutes thereto. Reference to any specific section of the Code shall include any successor section. 

(g) “Committee” shall mean the Board, or the committee appointed by the Board pursuant to Section 3(b) of the Plan,
if it is administering the Plan. 
 (h) “Common Stock” means the Common Stock, no par value, of the Company.

 (i) “Company” means BSQUARE CORPORATION, a Washington corporation. 

  
 1. 

 (j) “Control Purchase” means any transaction (or series of related
transactions) in which any person, corporation or other entity (including any “person” as defined in Sections 13(d)(3) and 14(d)(2) of the Exchange Act, but excluding the Company and any employee benefit plan sponsored by the Company):

 (i) purchases any Common Stock (or securities convertible into Common Stock) for cash, securities or
any other consideration pursuant to a tender offer or exchange offer unless by the terms of such offer the offeror, upon consummation thereof, would be the “beneficial owner” (as that term is defined in Rule 13d-3 under the Exchange Act)
of less than 30% of the shares of Common Stock then outstanding; or 
 (ii) becomes the “beneficial
owner,” directly or indirectly, of securities of the Company representing fifty percent (50%) or more of the combined voting power of the then outstanding securities of the Company ordinarily (and apart from rights accruing under special
circumstances) having the right to vote in the election of directors (calculated as provided in Rule 13d-3(d) under the Exchange Act in the case of rights to acquire the Company’s securities); 

provided, however, that the foregoing shall not constitute a Control Purchase if the transactions or related transactions received the prior
approval of a majority of all of the directors of the Company, excluding for such purpose the votes of directors who are directors or officers of, or have a material financial interest in any Person (other than the Company) who is a party to the
event specified in either clauses (i) or (ii). 
 (k) “Date of Grant” means that date the Committee has
deemed to be the effective date of the Award for purposes of the Plan. 
 (l) “Disability” means any medically
determinable physical or mental impairment which can be expected to result in death or which has lasted or can be expected to last for a continuous period of not less than twelve (12) months that renders the Awardee unable to engage in any
substantial gainful activity. 
 (m) “Effective Date” means at the time specified in the resolutions of the
Board adopting the Plan, in accordance with Rule 5635(c)(4) of the NASDAQ Listing Rules. 
 (n) “Employees”
means individuals employed by the Company or a Related Corporation. 
 (o) “Exchange Act” means the Securities
Exchange Act of 1934, as amended from time to time, or any successor statute or statutes thereto. Reference to any specific section of the Exchange Act shall include any successor section. 

(p) “Fair Market Value” means, if the Common Stock is publicly traded, the last sales price (or, if no last sales price
is reported, the average of the high bid and low asked prices) for a share of Common Stock on that day (or, if that day is not a trading day, on the next preceding trading day), as reported by the principal exchange on which the Common Stock is
listed, or, if the Common Stock is publicly traded but not listed on an exchange, as reported by The Nasdaq Stock Market, or if such prices or quotations are not reported by The Nasdaq Stock Market, as reported by any other available source of
prices or quotations selected by the Committee. If the Common Stock is not publicly traded or if the Fair Market Value is not determinable by any of the foregoing means, the Fair Market Value on any day shall be determined in good faith by the
Committee on the basis of such considerations as the Committee deems important. 
 (q) “Immediate Family
Member” means a spouse, children or grandchildren of the Optionee. 

  
 2. 

 (r) “Non-Employee Director” has the meaning given to it by Rule 16b-3
promulgated under the Exchange Act of 1934. 
 (s) “Non-Qualified Stock Option” means an Option that is not an
incentive stock option within the meaning of Section 422 of the Code. 
 (t) “Option” means an option with
respect to shares of Common Stock awarded pursuant to Section 6. 
 (u) “Optionee” means any person to
whom an Option is granted under the Plan (as well as any permitted transferee of an Option). 
 (v) “Plan”
means the BSQUARE CORPORATION 2011 Inducement Award Plan. 
 (w) “Related Corporation” means any corporation
(other than the Company) that is a “parent” of the Company or “subsidiary” of the Company, as defined in Rule 405 of the Securities Act. 
 (x) “Restricted Stock Awards” means Awards granted pursuant to Section 8. 
 (y) “Restricted Stock Unit” means a bookkeeping entry representing the equivalent of one share of Common Stock, as awarded under the Plan. 

(z) “SARs” means Awards granted pursuant to Section 7. 

(aa) “Securities Act” means the Securities Act of 1933, as amended from time to time, or any successor statute or
statutes thereto. References to any specific section of the Securities Act shall include any successor section. 
 (bb)
“Stock Awards” means Restricted and Unrestricted Stock Awards granted pursuant to Sections 8 and 9, respectively. 
 (cc) “Unrestricted Stock Awards” means Awards granted pursuant to Section 9. 
  

	2.	PURPOSES. 

 The purposes
of the Plan are to retain the services of persons not previously employees or directors of the Company or following a bona fide period of non-employment, as an inducement material to the individuals’ entering into employment with the
Company within the meaning of Rule 5635(c)(4) of the NASDAQ Listing Rules, and to provide incentives for such persons to exert maximum efforts for the success of the Company and its Affiliates. 

 

	3.	ADMINISTRATION. 

 (a)
Committee. 
 The Plan shall be administered by the Board unless the Board appoints a separate committee of the board to
administer the Plan pursuant to Section 3(b) below. A majority of the members of the Committee shall constitute a quorum, and all actions of the Committee shall be taken by a majority of the members present. Any action may be taken by a written
instrument signed by all of the members of the Committee and any action so taken shall be fully effective as if it had been taken at a meeting. 

  
 3. 

 (b) Appointment of Committee. 

The Board may appoint a committee consisting of two or more of its members to administer the Plan. The committee may consist of solely two
or more Non-Employee Directors in accordance with Rule 16b-3 promulgated under the Exchange Act of 1934. The Committee shall have the powers and authority vested in the Board hereunder (including the power and authority to interpret any provision of
the Plan or of any Option). The members of any such Committee shall serve at the pleasure of the Board. 
 (c) Powers;
Regulations. 
 Subject to the provisions of the Plan, and with a view to effecting its purpose, the Committee shall have
sole authority, in its absolute discretion, to: 
 (i) construe and interpret the Plan; 

(ii) define the terms used in the Plan; 

(iii) prescribe, amend and rescind rules and regulations relating to the Plan; 

(iv) correct any defect, supply any omission or reconcile any inconsistency in the Plan; 

(v) grant Awards under the Plan; 

(vi) determine the individuals to whom Awards shall be granted under the Plan and the type of Award; 

(vii) determine the time or times at which Awards shall be granted under the Plan; 

(viii) determine the number of shares of Common Stock subject to each Award, the exercise price of each Award, the
duration of each Award and the times at which each Award shall become exercisable; 
 (ix) determine all
other terms and conditions of Awards; 
 (x) adopt such procedures and sub-plans as are necessary or
appropriate to permit participation in the Plan by Employees who are foreign nationals or employed outside the United States; and 
 (xi) make all other determinations necessary or advisable for the administration of the Plan. 
 Notwithstanding the foregoing and any other provision of the Plan to the contrary, all Awards must be granted either by a majority of the Company’s independent directors or by the independent
compensation committee of the Board within the meaning of Rule 5605(a)(2) of the NASDAQ Listing Rules. All decisions, determinations and interpretations made by the Committee shall be binding and conclusive on all participants in the Plan and on
their legal representatives, heirs and beneficiaries. 
  

	4.	ELIGIBILITY. 

 Awards may
be granted only to Employees not previously an Employee or member of the Board, or following a bona fide period of non-employment, as an inducement material to the individual’s entering into employment with the Company within the meaning
of Rule 5635(c)(4) of the NASDAQ Listing Rules. 

  
 4. 

	5.	STOCK. 

 The Company is
authorized to grant up to a total of 250,000 shares of the Company’s authorized but unissued, or reacquired, Common Stock pursuant to Awards under the Plan. The number of shares with respect to which Awards may be granted hereunder is subject
to adjustment as set forth herein. In the event that any outstanding Award expires or is terminated for any reason, the shares of Common Stock allocable to the unexercised or forfeited portion of such Award may again be subject to an Award granted
to the same Awardee or to a different person eligible under Section 4. 
  

	6.	TERMS AND CONDITIONS OF OPTIONS. 

 Each Option granted under the Plan shall be evidenced by an Agreement. Agreements may contain such provisions, not inconsistent with the Plan, as the Committee, in its discretion, may deem advisable. All
Options also shall comply with the following requirements: 
 (a) Number of Shares and Type of Option. 

Each Agreement shall state the number of shares of Common Stock to which it pertains. All Options shall be Non-Qualified Stock Options.

 (b) Date of Grant. 
 Each Agreement shall state the Date of Grant. 
 (c) Option Price.

 Each Agreement shall state the price per share of Common Stock at which it is exercisable. The exercise price shall be
fixed by the Committee at whatever price the Committee may determine in the exercise of its sole discretion; provided, however, that the per share exercise price shall not be less than the Fair Market Value at the Date of Grant; and,
provided further, that Options granted in substitution for outstanding options of another corporation in connection with the merger, consolidation, acquisition of property or stock or other reorganization involving such other corporation and
the Company or any subsidiary of the Company may be granted with an exercise price equal to the exercise price for the substituted option of the other corporation, subject to any adjustment consistent with the terms of the transaction pursuant to
which the substitution is to occur. 
 (d) Duration of Options. 

On the Date of Grant, the Committee shall designate, subject to Section 6(g), the expiration date of the Option. In the absence of
action to the contrary by the Committee in connection with the grant of an Option, all Options granted under this Section 6 shall expire ten (10) years from the Date of Grant. 

  
 5. 

 (e) Vesting Schedule and Exercisability of Options. 

No Option shall be exercisable until it has vested. The vesting schedule for each Option shall be specified by the Committee at the time
of grant of the Option; provided, however, that if no vesting schedule is specified at the time of grant, the Option shall be vested according to the following schedule: 

 

					
	 Number of Years of Continuous

Employment With the Company
 Following Grant Date
	  	Portion of Total Option
Which Will Become
Vested	 
	 1
	  	 	25	% 
	 2
	  	 	50	% 
	 3
	  	 	75	% 
	 4
	  	 	100	% 

 The Committee may specify a vesting schedule for all or any portion of an Option based on the achievement
of performance objectives. 
 (f) Acceleration of Vesting. 

Except to the extent that such acceleration would render unavailable “pooling of interests” accounting treatment for any
reorganization, merger or consolidation of the Company, the vesting of one or more outstanding Options may be accelerated by the Board at such times and in such amounts as it shall determine in its sole discretion. 

(g) Term of Option. 
 Any vested Option granted to an Optionee shall terminate, to the extent not previously exercised, upon the occurrence of the first of the following events: 

(i) as designated by (x) the Board in accordance with Section 6(n) hereof or (y) the Committee in
accordance with Section 6(d) hereof; 
 (ii) the date of the Optionee’s termination of
employment or contractual relationship with the Company or any Related Corporation for cause (as determined in the sole discretion of the Committee); 
 (iii) the expiration of ninety (90) days from the date of the Optionee’s termination of employment or contractual relationship with the Company or any Related Corporation for any reason
whatsoever other than cause, death or Disability unless the exercise period is extended by the Committee a date not later than the expiration date of the Option; 

(iv) the expiration of one year from (A) the date of death of the Optionee or (B) cessation of the
Optionee’s employment or contractual relationship by reason of Disability unless the exercise period is extended by the Committee until a date not later than the expiration date of the Option; or 

(v) any other event specified by the Committee at the time of grant of the Option. 

If an Optionee’s employment or contractual relationship is terminated by death, any Option granted to the Optionee shall be
exercisable only by the person or persons to whom such Optionee’s rights under such Option shall pass by the Optionee’s will or by the laws of descent and distribution of the state or county of the Optionee’s domicile at the time of
death. The Committee shall determine whether an Optionee has incurred a Disability on the basis of medical evidence reasonably acceptable to the Committee. Upon making a determination of Disability, the Committee shall, for purposes of the Plan,
determine the date of an Optionee’s termination of employment or contractual relationship. 

  
 6. 

 Unless accelerated in accordance with Section 6(f), any unvested Option granted to an
Optionee shall terminate immediately upon termination of employment of the Optionee by the Company for any reason whatsoever, including death or Disability. For purposes of the Plan, transfer of employment between or among the Company and/or any
Related Corporation shall not be deemed to constitute a termination of employment with the Company or any Related Corporation. 

(h) Exercise of Options. 
 If less than all of the shares included in an Option are purchased, the remainder may be purchased at any subsequent time prior to the expiration date with respect to, or the termination of, the Option.
No portion of any Option may be exercised for less than one hundred (100) shares (as adjusted pursuant to Section 6(m)); provided, however, that if the Option is less than one hundred (100) shares, it may be exercised with
respect to all shares for which it is vested. Only whole shares may be issued upon exercise of an Option, and to the extent that an Option covers less than one (1) share, it is unexercisable. 

An Option or any portion thereof may be exercised by giving written notice to the Company upon such terms and conditions as the Agreement
evidencing the Option may provide and in accordance with such other procedures for the exercise of an Option as the Committee may establish from time to time. Such notice shall be accompanied by payment in the amount of the aggregate exercise price
for such shares, which payment shall be in the form specified in Section 6(i). The Company shall not be obligated to issue, transfer or deliver a certificate of Common Stock to the holder of any Option until provision has been made by the
holder, to the satisfaction of the Company, for the payment of the aggregate exercise price for all shares for which the Option shall have been exercised and for satisfaction of any tax withholding obligations associated with such exercise. Options
granted to an Optionee are, during the Optionee’s lifetime, exercisable only by the Optionee or a transferee who takes title to the Option in the manner permitted by Section 6(k). 

(i) Payment upon Exercise of Option. 
 Upon the exercise of an Option, the Optionee shall pay to the Company the aggregate exercise price therefor in cash, by certified or cashier’s check. In addition, such Optionee may pay for all or any
portion of the aggregate exercise price by complying with one or more of the following alternatives: 
 (1)
by delivering to the Company whole shares of Common Stock then owned by such Optionee, or, subject to the prior approval of the Committee, by the Company withholding whole shares of Common Stock otherwise issuable to the Optionee upon exercise
of the Option, which shares of Common Stock received or withheld shall be valued for such purpose at their Fair Market Value on the date of exercise. 
 (2) by delivering a properly executed exercise notice together with irrevocable instructions to a broker to promptly deliver to the Company the amount of sale or loan proceeds required to pay the
exercise price; 
 (3) by any combination of the foregoing methods of payment; or 

(4) by complying with any other payment mechanism, including through the execution of a promissory note, as may be
permitted for the issuance of equity securities under applicable securities and other laws and approved by the Committee at the time of exercise. 

  
 7. 

 (j) Rights as a Shareholder. 

An Optionee shall have no rights as a shareholder with respect to any shares of Common Stock issuable upon exercise of the Option until
such holder becomes a record holder of such shares. Subject to the provisions of Sections 6(m), no rights shall accrue to an Optionee and no adjustments shall be made on account of dividends (ordinary or extraordinary, whether in cash, securities or
other property) or distributions or other rights declared on, or created in, the Common Stock for which the record date is prior to the date such Optionee becomes a record holder of the shares of Common Stock issuable upon exercise of such Option.

 (k) Transfer of Option. 
 Options granted under the Plan and the rights and privileges conferred by the Plan may not be transferred, assigned, pledged or hypothecated in any manner (whether by operation of law or otherwise) other
than by will, by applicable laws of descent and distribution or pursuant to a domestic relations order (as defined in the Code or Title I of the Employment Retirement Income Security Act of 1974 or the rules or regulations thereunder), and shall not
be subject to execution, attachment or similar process; provided, however, that the Committee may, in its discretion, authorize all or a portion of the Options to be granted to an Optionee to be on terms which permit transfer by such Optionee
to: 
 (i) Immediate Family Members, 

(ii) a trust or trusts for the exclusive benefit of such Immediate Family Members, or 

(iii) a partnership in which such Immediate Family Members are the only partners, provided that: 

(x) there may be no consideration for any such transfer, 

(y) the Agreement evidencing such Options must be approved by Committee, and must expressly provide for transferability in
a manner consistent with this Section, and 
 (z) subsequent transfers of transferred Options shall be prohibited
other than by will, by applicable laws of descent and distribution or pursuant to a domestic relations order (as defined in the Code or Title I of the Employment Retirement Income Security Act of 1974 or the rules or regulations thereunder).

 Following transfer, any such Options shall continue to be subject to the same terms and conditions as were applicable
immediately prior to transfer, provided that for purposes of Section 6(l)(2), the term “Optionee” shall be deemed to refer to the initial transferor. The events of termination of employment of Section 6(g) shall continue to be
applied with respect to the original Optionee, following which the options shall be exercisable by the transferee only to the extent, and for the periods, specified in Section 6(g). Upon any attempt to transfer, assign, pledge, hypothecate or
otherwise dispose of any Option or of any right or privilege conferred by the Plan contrary to the provisions hereof, or upon the sale, levy or any attachment or similar process upon the rights and privileges conferred by the Plan, such Option shall
thereupon terminate and become null and void. 

  
 8. 

 (l) Securities Regulation and Tax Withholding. 

(1) No shares of Common Stock shall be issued upon exercise of an Option unless the exercise of such Option and the
issuance and delivery of such shares shall comply with all relevant provisions of law, including, without limitation, any applicable state securities laws, the Securities Act, the Exchange Act, the rules and regulations thereunder and the
requirements of any stock exchange upon which such shares may then be listed, and such issuance shall be further subject to the approval of counsel for the Company with respect to such compliance, including the availability of an exemption from
registration for the issuance and sale of such shares. The inability of the Company to obtain from any regulatory body the authority deemed by the Company to be necessary for the lawful issuance and sale of any shares under the Plan, or the
unavailability of an exemption from registration for the issuance and sale of any shares under the Plan, shall relieve the Company of any liability with respect to the non-issuance or sale of such shares. 

As long as the Common Stock is not registered under the Exchange Act, the Company intends that all offers and sales of Options and shares
of Common Stock issuable upon exercise of Options shall be exempt from registration under the provisions of Section 5 of the Securities Act, and the Plan shall be administered in a manner so as to preserve such exemption. The Company also
intends that the Plan shall constitute a written compensatory benefit plan, within the meaning of Rule 701(b) promulgated under the Securities Act, and that each Option granted pursuant to the Plan at a time when the Common Stock is not registered
under the Exchange Act shall, unless otherwise specified by the Committee at the time the Option is granted or at any time thereafter, be granted in reliance on the exemption from the registration requirements of Section 5 of the Securities Act
provided by Rule 701. 
 As a condition to the exercise of an Option, the Committee may require the Optionee to represent and
warrant in writing at the time of such exercise that the shares of Common Stock issuable upon exercise of the Option are being purchased only for investment and without any then-present intention to sell or distribute such shares. At the option of
the Committee, a stop-transfer order against such shares may be placed on the stock books and records of the Company, and a legend indicating that such shares may not be pledged, sold or otherwise transferred unless an opinion of counsel is provided
stating that such transfer is not in violation of any applicable law or regulation, may be stamped on the certificates representing such shares in order to assure an exemption from registration. The Committee also may require such other
documentation as it shall, in its discretion, deem necessary from time to time to comply with federal and state securities laws. THE COMPANY HAS NO OBLIGATION TO UNDERTAKE REGISTRATION OF ANY OPTION OR ANY SHARES OF COMMON STOCK ISSUABLE UPON THE
EXERCISE OF ANY OPTION. 
 (2) The Optionee shall pay to the Company by certified or cashier’s check,
promptly upon exercise of the Option or, if later, the date that the amount of such obligations becomes determinable, all applicable federal, state, local and foreign withholding taxes that the Committee, in accordance with the applicable rules and
regulations, determines to result from the exercise of the Option or from a transfer or other disposition of shares of Common Stock acquired upon exercise of the Option or otherwise related to the Option or shares of Common Stock acquired upon
exercise of the Option, which determination by the Committee of the amount due shall be binding upon the Optionee. Upon approval of the Committee, such Optionee may satisfy such obligation by complying with one or more of the following alternatives
selected by the Committee: 
 (A) by delivering to the Company whole shares of Common Stock then owned by
such Optionee, or by the Company withholding whole shares of Common Stock otherwise issuable to the Optionee upon exercise of the Option, which shares of Common Stock received or withheld shall have a Fair Market Value on the date of exercise (as
determined by the Committee in good faith) equal to the tax obligation to be paid by such Optionee upon such exercise; 

  
 9. 

 (B) by executing appropriate loan documents approved by the Committee
by which such Optionee borrows funds from the Company to pay the withholding taxes due under this Section 6(l)(2), with such repayment terms as the Committee shall select; 

(C) by any combination of the foregoing methods of payment; or 

(D) by complying with any other payment mechanism as may be permitted for the issuance of equity securities under
applicable securities and other laws and approved by the Committee from time to time. 
 (3) The issuance,
transfer or delivery of certificates of Common Stock pursuant to the exercise of an Option may be delayed, at the discretion of the Committee, until the Committee is satisfied that the applicable requirements of the federal and state securities laws
and the withholding provisions of the Code have been met. 
 (m) Stock Split, Reorganization or Liquidation. 

(1) Upon the occurrence of any of the following events, the Committee shall, with respect to each outstanding
Option, proportionately adjust the number of shares of Common Stock issuable upon exercise of such Option, the per share exercise price or both so as to preserve the rights of the Optionee substantially proportionate to the rights of such Optionee
prior to such event, and to the extent that such action shall include an increase or decrease in the number of shares of Common Stock issuable upon exercise of outstanding Options, the number of shares available under Section 5 shall
automatically be increased or decreased, as the case may be, proportionately, without further action on the part of the Committee, the Company, the Company’s shareholders, or any Optionee: 

(i) the Company shall at any time be involved in a transaction described in Section 424(a) of the Code (or any
successor provision) or any “corporate transaction” described in the regulations promulgated thereunder; 
 (ii) the Company subdivides its outstanding shares of Common Stock into a greater number of shares of Common Stock (by stock dividend, stock split, reclassification or otherwise) or combines its
outstanding shares of Common Stock into a smaller number of shares of Common Stock (by reverse stock split, reclassification or otherwise); or 
 (iii) any other event with substantially the same effect shall occur. 
 (2) If the Company shall at any time declare an extraordinary dividend with respect to the Common Stock, whether payable in cash or other property, or is involved in any recapitalization, spin-off,
combination, exchange of shares, warrants or rights offering to purchase Common Stock, or other similar event (including a merger or consolidation other than one that constitutes an Approved Transaction), the Committee may, in the exercise of its
sole discretion and with respect to each outstanding Option, proportionately adjust the number of shares of Common Stock issuable upon exercise of such Option, the per share exercise price or both so as to preserve the rights of the Optionee
substantially proportionate to the rights of such Optionee prior to such event, and to the extent that such action shall include an increase or decrease in the number of shares of Common Stock issuable upon exercise of outstanding Options, the
number of shares available under Section 5 of the Plan shall automatically be increased or decreased, as the case may be, proportionately, without further action on the part of the Committee, the Company, the Company’s shareholders, or any
Optionee. 

  
 10.

 (3) The foregoing adjustments shall be made by the Committee or by
the applicable terms of any assumption or substitution document. 
 (4) With respect to the foregoing
adjustments, the number of shares subject to an Option shall always be a whole number. The Committee may, if deemed appropriate, provide for a cash payment to any Optionee in connection with any adjustment made pursuant to this Section 6(m).

 (5) The grant of an Option shall not affect in any way the right or power of the Company to make
adjustments, reclassifications, reorganizations or changes of its capital or business structure, to merge, consolidate or dissolve, to liquidate or to sell or transfer all or any part of its business or assets. 

(n) Approved Transactions; Control Purchase. 
 In the event of any Approved Transaction or Control Purchase, if so provided for in the Agreement representing such Option, an Option may become exercisable in full in respect of the aggregate number of
shares thereunder effective upon the Control Purchase or immediately prior to consummation of the Approved Transaction. In the case of an Approved Transaction, the Company shall provide notice of the pendency of the Approved Transaction at least
fifteen (15) days prior to the expected date of consummation thereof to each Optionee entitled to acceleration. Each such Optionee shall thereupon be entitled to exercise the vested portion of the Option at any time prior to consummation of the
Approved Transaction or immediately following the Control Purchase. Any such exercise shall be contingent on such consummation. 

Following consummation of the Approved Transaction or Control Purchase, and until such Option is terminated pursuant to Section 6(g)
hereof, any vested portion of Options that are not exercised shall remain exercisable, and any unvested portions of any Options shall remain in effect and continue to vest in accordance with the vesting schedule specified at the time of grant, and
upon such vesting shall become exercisable. Notwithstanding the foregoing, in its reasonable discretion, the Board may determine that any or all outstanding Options that are unvested at the time of, or are not exercised upon consummation of, the
Approved Transaction or Control Purchase shall thereafter terminate, provided that, in making such determination, the Board shall consider the best interests of the Optionees, the Company and its shareholders, and will make such determination only
if the action to be taken, in the opinion of the Board, is appropriate in light of the circumstances under which such determination is made. 
 Moreover, except to the extent that such determination would render unavailable “pooling of interests” accounting treatment for any reorganization, merger or consolidation of the Company, the
Board may take, or make effective provision for the taking of, such action as in the opinion of the Board is equitable and appropriate in order to substitute new stock options for any or all outstanding Options that do not become exercisable on an
accelerated basis, or to assume such Options (which assumption may be effected by any means determined by the Board, in its discretion, including, but not limited to, by a cash payment to each Optionee, in cancellation of the Options held by him or
her, of such amount as the Board determines, in its sole discretion, represents the then value of the Options) and in order to make such new stock options or assumed Options, as nearly as practicable, equivalent to the old Options, taking into
account, to the extent applicable, the kind and amount of securities, cash or other assets into or for which the Common Stock may be changed, converted or exchanged in connection with the Approved Transaction. 

  
 11.

	7.	TERMS AND CONDITIONS OF STOCK APPRECIATION RIGHTS. 

 (a) Award of Stock Appreciation Rights. 
 Stock appreciation rights
(“SARs”) may be granted to eligible participants, either on a free-standing basis (without regard to or in addition to the grant of an Option) or on a tandem basis (related to the grant of an underlying Option). SARs granted in tandem with
or in addition to an Option may be granted either at the same time as the Option or at a later time. SARs shall be evidenced by Agreements stating the number of shares of Common Stock subject to the SAR evidenced thereby and the terms and conditions
of such SAR. In no event shall a SAR be exercisable more than ten years from the date it is granted. The Awardee shall have none of the rights of a shareholder of the Company with respect to any shares of Common Stock represented by a SAR.

 (b) Restrictions of Tandem SARs. 
 SARs granted in tandem with Options shall be exercisable only to the same extent and subject to the same conditions as the Options related thereto are exercisable. Additional conditions to the exercise of
any such tandem SAR may be prescribed. 
 (c) Amount of Payment Upon Exercise of SARs. 

A SAR shall entitle the Awardee to receive, subject to the provisions of the Plan and the applicable Agreement, a payment having an
aggregate value equal to the product of (i) the excess of (A) the Fair Market Value on the exercise date of one share of Common Stock over (B) the base price per share specified in the applicable Agreement, times (ii) the number
of shares specified by the SAR, or portion thereof, which is exercised. In the case of exercise of a tandem SAR, such payment shall be made in exchange for the surrender of the unexercised related Option (or any portion or portions thereof which the
Awardee from time to time determines to surrender for this purpose). 
 (d) Form of Payment Upon Exercise of SARs.

 Payment by the Company of the amount receivable upon any exercise of a SAR may be made by the delivery of Common Stock or
cash, or any combination of Common Stock and cash, as determined in the sole discretion of the Committee from time to time. If upon settlement of the exercise of a SAR an Awardee is to receive a portion of such payment in shares of Common Stock, the
number of shares shall be determined by dividing such portion by the Fair Market Value of a share of Common Stock on the exercise date. No fractional shares shall be used for such payment and the Committee shall determine whether cash shall be given
in lieu of such fractional shares or whether such fractional shares shall be eliminated. 
  

	8.	RESTRICTED STOCK AWARDS. 

(a) Nature of Restricted Stock Awards. 
 A Restricted Stock Award is an Award pursuant to which the Company may, in its sole discretion, grant or sell, at such purchase price as determined by the Committee, in its sole discretion, shares of
Common Stock subject to such restrictions and conditions as the Committee may determine at the time of grant (“Restricted Stock”), which purchase price shall be payable in cash or other form of consideration acceptable to the Committee.
Conditions may be based on continuing employment (or other service relationship) and/or achievement of pre-established performance goals and objectives. The terms and conditions of each such Agreement shall be determined by the Committee, and such
terms and conditions may differ among individual Awards and Awardees. 

  
 12.

 (b) Rights as a Shareholder. 

Upon execution of an Agreement setting forth the Restricted Stock Award and payment of any applicable purchase price, an Awardee shall
have the rights of a shareholder with respect to the voting of the Restricted Stock, subject to such conditions contained in the applicable Agreement. Unless the Committee shall otherwise determine, certificates evidencing the Restricted Stock shall
remain in the possession of the Company until such Restricted Stock is vested as provided in Section 8(d) below, and the Awardee shall be required, as a condition of the grant, to deliver to the Company a stock power endorsed in blank.

 (c) Restrictions. 
 Restricted Stock may not be sold, assigned, transferred, pledged or otherwise encumbered or disposed of except as specifically provided herein or in the applicable Agreement. If an Awardee’s
employment (or other service relationship) with the Company terminates under the conditions specified in the applicable Agreement, or upon such other event or events as may be stated in the applicable Agreement, the Company or its assigns shall have
the right or shall agree, as may be specified in the applicable Agreement, to repurchase some or all of the shares of Common Stock subject to the Award at such purchase price as is set forth in such instrument. 

(d) Vesting of Restricted Stock. 
 The Committee at the time of grant shall specify the date or dates and/or the attainment of pre-established performance goals, objectives and other conditions on which Restricted Stock shall become
vested, subject to such further rights of the Company or its assigns as may be specified in the applicable Agreement. 
 (e)
Waiver, Deferral and Reinvestment of Dividends. 
 The Restricted Stock Award Agreement may require or permit the immediate
payment, waiver, deferral or investment of dividends paid on the Restricted Stock. 
  

	9.	UNRESTRICTED STOCK AWARDS. 

(a) Grant or Sale of Unrestricted Stock. 
 The Committee may, in its sole discretion, grant (or sell at a purchase price determined by the Committee) an Unrestricted Stock Award to any Awardee, pursuant to which such Awardee may receive shares of
Common Stock free of any vesting restrictions (“Unrestricted Stock”) under the Plan. Unrestricted Stock Awards may be granted or sold as described in the preceding sentence in respect of past services or other valid consideration, or in
lieu of any cash compensation due to such individual. 
 (b) Elections to Receive Unrestricted Stock In Lieu of Compensation.

 Upon the request of an Awardee and with the consent of the Committee, each such Awardee may, pursuant to an advance
written election delivered to the Company no later than the date specified by the Committee, receive a portion of the cash compensation otherwise due to such Awardee in the form of shares of Unrestricted Stock either currently or on a deferred
basis. 

  
 13.

 (c) Restrictions on Transfers. 

The right to receive shares of Unrestricted Stock on a deferred basis may not be sold, assigned, transferred, pledged or otherwise
encumbered, other than by will or the laws of descent and distribution. 
  

	10.	TERMS AND CONDITIONS OF RESTRICTED STOCK UNITS. 

 (a) Restricted Stock Unit Agreement. 
 Each grant of Restricted Stock Units
under the Plan shall be evidenced by an Agreement between the recipient and the Company. Such Restricted Stock Units shall be subject to the terms of the Plan and may be subject to any other terms that are not inconsistent with the Plan. The
provisions of the various Agreements evidencing Restricted Stock Units under the Plan need not be identical. 
 (b) Number of
Shares. 
 Each Agreement evidencing a Restricted Stock Unit shall specify the number of shares of Common Stock to which the
Restricted Stock Unit pertains and shall provide for the adjustment of such number in accordance with Section 12. 
 (c)
Payment for Awards. 
 To the extent that an Award is granted in the form of Restricted Stock Units, no cash consideration
shall be required of the Awardee. 
 (d) Vesting of Restricted Stock Units. 

The Committee at the time of grant shall specify the date or dates and/or the attainment of pre-established performance goals, objectives
and other conditions on which the Restricted Stock Unit shall become vested, subject to such further rights of the Company or its assigns as may be specified in the applicable Agreement. 

(e) Voting and Dividend Rights. 
 The holders of Restricted Stock Units shall have no voting rights. Prior to settlement or forfeiture, any Restricted Stock Unit awarded under the Plan may, at the Committee’s discretion, carry with
it a right to dividend equivalents. Such right entitles the holder to be credited with an amount equal to all cash dividends paid on one share of Common Stock while the Restricted Stock Unit is outstanding. Dividend equivalents may be converted into
additional Restricted Stock Units. Settlement of dividend equivalents may be made in the form of cash, in the form of shares of Common Stock, or in a combination of both. Prior to distribution, any dividend equivalents that are not paid shall be
subject to the same conditions and restrictions as the Restricted Stock Units to which they attach. 
 (f) Form and Time of
Settlement of Restricted Stock Units. 
 Settlement of vested Restricted Stock Units may be made in the form of
(a) cash, (b) shares of Common Stock or (c) any combination of both, as determined by the Committee. The actual number of Restricted Stock Units eligible for settlement may be larger or smaller than the number included in the original
Award, based on predetermined performance factors. Methods of converting Restricted Stock Units into cash may include (without limitation) a method based on the average Fair Market Value of shares of Common Stock over a series of trading days.
Vested Restricted Stock Units may be settled in a lump 

  
 14.

 
sum or in installments. The distribution may occur or commence when all vesting conditions applicable to the Restricted Stock Units have been satisfied or have lapsed, or it may be deferred to
any later date. The amount of a deferred distribution may be increased by an interest factor or by dividend equivalents. Until an Award of Restricted Stock Units is settled, the number of such Restricted Stock Units shall be subject to adjustment
pursuant to Section 12. 
 (g) Creditors’ Rights. 

A holder of Restricted Stock Units shall have no rights other than those of a general creditor of the Company. Restricted Stock Units
represent an unfunded and unsecured obligation of the Company, subject to the terms and conditions of the applicable Restricted Stock Agreement. 
  

	11.	SECURITIES REGULATION AND TAX WITHHOLDING. 

 (a) No shares of Common Stock shall be issued upon exercise of an Award unless the exercise of such Award and the issuance and delivery of such shares shall comply with all relevant provisions of
law, including, without limitation, any applicable state securities laws, the Securities Act, the Exchange Act, the rules and regulations thereunder and the requirements of any stock exchange upon which such shares may then be listed, and such
issuance shall be further subject to the approval of counsel for the Company with respect to such compliance, including the availability of an exemption from registration for the issuance and sale of such shares. The inability of the Company to
obtain from any regulatory body the authority deemed by the Company to be necessary for the lawful issuance and sale of any shares under the Plan, or the unavailability of an exemption from registration for the issuance and sale of any shares under
the Plan, shall relieve the Company of any liability with respect to the non-issuance or sale of such shares. 
 As long as the
Common Stock is not registered under the Exchange Act, the Company intends that all offers and sales of Awards and shares of Common Stock issuable upon exercise of Awards shall be exempt from registration under the provisions of Section 5 of
the Securities Act, and the Plan shall be administered in a manner so as to preserve such exemption. The Company also intends that the Plan shall constitute a written compensatory benefit plan, within the meaning of Rule 701(b) promulgated under the
Securities Act, and that each Award granted pursuant to the Plan at a time when the Common Stock is not registered under the Exchange Act shall, unless otherwise specified by the Committee at the time the Award is granted or at any time thereafter,
be granted in reliance on the exemption from the registration requirements of Section 5 of the Securities Act provided by Rule 701. 
 As a condition to the exercise of an Award, the Committee may require the Awardee to represent and warrant in writing at the time of such exercise that the shares of Common Stock issuable upon exercise of
the Award are being purchased only for investment and without any then-present intention to sell or distribute such shares. At the option of the Committee, a stop-transfer order against such shares may be placed on the stock books and records of the
Company, and a legend indicating that such shares may not be pledged, sold or otherwise transferred unless an opinion of counsel is provided stating that such transfer is not in violation of any applicable law or regulation, may be stamped on the
certificates representing such shares in order to assure an exemption from registration. The Committee also may require such other documentation as it shall, in its discretion, deem necessary from time to time to comply with federal and state
securities laws. THE COMPANY HAS NO OBLIGATION TO UNDERTAKE REGISTRATION OF ANY AWARD OR ANY SHARES OF COMMON STOCK ISSUABLE UPON THE EXERCISE OF ANY AWARD. 

  
 15.

 (b) The Awardee shall pay to the Company by certified or cashier’s check,
promptly upon exercise of the Award or, if later, the date that the amount of such obligations becomes determinable, all applicable federal, state, local and foreign withholding taxes that the Committee, in accordance with the applicable rules and
regulations, determines to result from the exercise of the Award or from a transfer or other disposition of shares of Common Stock acquired upon exercise of the Award or otherwise related to the Award or shares of Common Stock acquired upon exercise
of the Award, which determination by the Committee of the amount due shall be binding upon the Awardee. Upon approval of the Committee, such Awardee may satisfy such obligation by complying with one or more of the following alternatives selected by
the Committee: 
 (i) by delivering to the Company whole shares of Common Stock then owned by such
Awardee, or by the Company withholding whole shares of Common Stock otherwise issuable to the Awardee upon exercise of the Award, which shares of Common Stock received or withheld shall have a Fair Market Value on the date of exercise (as determined
by the Committee in good faith) equal to the tax obligation to be paid by such Awardee upon such exercise; 

(ii) by executing appropriate loan documents approved by the Committee by which such Awardee borrows funds from the
Company to pay the withholding taxes due under this Section 11, with such repayment terms as the Committee shall select; 
 (iii) by any combination of the foregoing methods of payment; or 
 (iv) by complying with any other payment mechanism as may be permitted for the issuance of equity securities under applicable securities and other laws and approved by the Committee from time to
time. 
 (c) The issuance, transfer or delivery of certificates of Common Stock pursuant to the exercise of an Award may
be delayed, at the discretion of the Committee, until the Committee is satisfied that the applicable requirements of the federal and state securities laws and the withholding provisions of the Code have been met. 

 

	12.	STOCK SPLIT, REORGANIZATION OR LIQUIDATION. 

 (a) Upon the occurrence of any of the following events, the Committee shall, with respect to each outstanding Award, proportionately adjust the number of shares of Common Stock issuable upon
exercise of such Award, the per share exercise price or both so as to preserve the rights of the Awardee substantially proportionate to the rights of such Awardee prior to such event, and to the extent that such action shall include an increase or
decrease in the number of shares of Common Stock issuable upon exercise of outstanding Awards, the number of shares available under Section 5 shall automatically be increased or decreased, as the case may be, proportionately, without further
action on the part of the Committee, the Company, the Company’s shareholders, or any Awardee: 
 (i)
the Company shall at any time be involved in a transaction described in Section 424(a) of the Code (or any successor provision) or any “corporate transaction” described in the regulations promulgated thereunder; 

(ii) the Company subdivides its outstanding shares of Common Stock into a greater number of shares of Common Stock
(by stock dividend, stock split, reclassification or otherwise) or combines its outstanding shares of Common Stock into a smaller number of shares of Common Stock (by reverse stock split, reclassification or otherwise); or 

(iii) any other event with substantially the same effect shall occur. 

  
 16.

 (b) If the Company shall at any time declare an extraordinary dividend with respect
to the Common Stock, whether payable in cash or other property, or is involved in any recapitalization, spin-off, combination, exchange of shares, warrants or rights offering to purchase Common Stock, or other similar event (including a merger or
consolidation other than one that constitutes an Approved Transaction), the Committee may, in the exercise of its sole discretion and with respect to each outstanding Award, proportionately adjust the number of shares of Common Stock issuable upon
exercise of such Award, the per share exercise price or both so as to preserve the rights of the Awardee substantially proportionate to the rights of such Awardee prior to such event, and to the extent that such action shall include an increase or
decrease in the number of shares of Common Stock issuable upon exercise of outstanding Awards, the number of shares available under Section 5 of the Plan shall automatically be increased or decreased, as the case may be, proportionately,
without further action on the part of the Committee, the Company, the Company’s shareholders, or any Awardee. 
 (c)
The foregoing adjustments shall be made by the Committee or by the applicable terms of any assumption or substitution document. 
 (d) With respect to the foregoing adjustments, the number of shares subject to an Award shall always be a whole number. The Committee may, if deemed appropriate, provide for a cash payment to any
Awardee in connection with any adjustment made pursuant to this Section 12. 
 (e) The grant of an Award shall not
affect in any way the right or power of the Company to make adjustments, reclassifications, reorganizations or changes of its capital or business structure, to merge, consolidate or dissolve, to liquidate or to sell or transfer all or any part of
its business or assets. 
  

	13.	APPROVED TRANSACTIONS; CONTROL PURCHASE. 

 In the event of any Approved Transaction or Control Purchase, if so provided for in the Agreement representing such Award, an Award may become exercisable in full in respect of the aggregate number of
shares thereunder effective upon the Control Purchase or immediately prior to consummation of the Approved Transaction. In the case of an Approved Transaction, the Company shall provide notice of the pendency of the Approved Transaction at least
fifteen (15) days prior to the expected date of consummation thereof to each Awardee entitled to acceleration. Each such Awardee shall thereupon be entitled to exercise the vested portion of the Award at any time prior to consummation of the
Approved Transaction or immediately following the Control Purchase. Any such exercise shall be contingent on such consummation. 

Following consummation of the Approved Transaction or Control Purchase, and until such Award is terminated, any vested portion of Awards
that are not exercised shall remain exercisable, and any unvested portions of any Awards shall remain in effect and continue to vest in accordance with the vesting schedule specified at the time of grant, and upon such vesting shall become
exercisable. Notwithstanding the foregoing, in its reasonable discretion, the Board may determine that any or all outstanding Awards that are unvested at the time of, or are not exercised upon consummation of, the Approved Transaction or Control
Purchase shall thereafter terminate, provided that, in making such determination, the Board shall consider the best interests of the Awardees, the Company and its shareholders, and will make such determination only if the action to be taken, in the
opinion of the Board, is appropriate in light of the circumstances under which such determination is made. 
 Moreover, except
to the extent that such determination would render unavailable “pooling of interests” accounting treatment for any reorganization, merger or consolidation of the Company, the Board may take, or make effective provision for the taking of,
such action as in the opinion of the Board is equitable and appropriate in order to substitute new awards for any or all outstanding Awards that do not become exercisable on an accelerated basis, or to assume such Awards (which assumption may be
effected 

  
 17.

 
by any means determined by the Board, in its discretion, including, but not limited to, by a cash payment to each Awardee, in cancellation of the Awards held by him or her, of such amount as the
Board determines, in its sole discretion, represents the then value of the Awards) and in order to make such new stock options or assumed Awards, as nearly as practicable, equivalent to the old Awards, taking into account, to the extent applicable,
the kind and amount of securities, cash or other assets into or for which the Common Stock may be changed, converted or exchanged in connection with the Approved Transaction. 

 

	14.	EFFECTIVE DATE; TERM. 

The Plan shall be on the Effective Date. Awards may be granted by the Committee from time to time thereafter until the Plan is terminated.
Termination of the Plan shall not terminate any Award granted prior to such termination. Issuance of Non-Qualified Stock Options under the Plan shall be subject to the requirement of RCW 21.20.310(10) that the Administrator of Securities of the
Department of Financial Institutions of the State of Washington be provided with notification of the adoption of the Plan. No Non-Qualified Stock Option shall be granted hereunder until this notification requirement has been satisfied. 

 

	15.	NO OBLIGATIONS TO EXERCISE AWARD. 

 The grant of an Award shall impose no obligation upon the Awardee to exercise such Award. 
  

	16.	NO RIGHT TO AWARDS OR TO EMPLOYMENT. 

 Whether or not any Awards are to be granted under the Plan shall be exclusively within the discretion of the Committee, and nothing contained in the Plan shall be construed as giving any person any right
to participate under the Plan. The grant of an Award to any Awardee shall in no way constitute any form of agreement or understanding binding on the Company or any Related Corporation, express or implied, that the Company or such Related Corporation
will employ or contract with such Awardee for any length of time, nor shall it interfere in any way with the Company’s or, where applicable, a Related Corporation’s right to terminate such Awardee’s employment at any time, which right
is hereby reserved. 
  

	17.	APPLICATION OF FUNDS. 

The proceeds received by the Company from the sale of Common Stock issued upon the exercise of Awards shall be used for general corporate
purposes, unless otherwise directed by the Board. 
  

	18.	INDEMNIFICATION OF COMMITTEE. 

 In addition to all other rights of indemnification they may have by virtue of being a member of the Board or an executive officer of the Company, members of the Committee shall be indemnified by the
Company for all reasonable expenses and liabilities of any type or nature, including attorneys’ fees, incurred in connection with any action, suit or proceeding to which they or any of them are a party by reason of, or in connection with, the
Plan or any Award granted under the Plan, and against all amounts paid by them in settlement thereof (provided that such settlement is approved by independent legal counsel selected by the Company), except to the extent that such expenses relate to
matters for which it is adjudged that such Committee member is liable for willful misconduct; provided, however, that within fifteen (15) days after the institution of any such action, suit or proceeding, the Committee member involved
therein shall, in writing, notify the Company of such action, suit or proceeding, so that the Company may have the opportunity to make appropriate arrangements to prosecute or defend the same. 

  
 18.

	19.	SHAREHOLDERS AGREEMENT. 

Unless the Agreement evidencing an Award expressly provides otherwise, each Awardee may be required, as a condition to the issuance of any
shares of Common Stock that such Awardee acquires upon the exercise of the Award, to execute and deliver to the Company a shareholders agreement in such form as may be required by the Company at the time of such exercise, or a counterpart thereof,
together with, unless the Awardee is unmarried, a spousal consent in the form required thereby, unless the Awardee has previously executed and delivered such documents and they are in effect at the time of exercise and apply by their terms to the
shares to be issued. 
  

	20.	NON-EXCLUSIVITY OF THE PLAN. 

 The adoption of the Plan by the Board shall not be construed as creating any limitations on the power of the Board to adopt such other incentive arrangements as it may deem desirable, including, without
limitation, the granting of stock options and the awarding of stock and cash otherwise than pursuant to the Plan, and such arrangements may be either generally applicable or applicable only in specific cases. 

 

	21.	EXCLUSION FROM PENSION AND PROFIT-SHARING COMPUTATION. 

 By acceptance of an Award, unless otherwise provided in the Agreement evidencing the Award, the Awardee with respect to such Award shall be deemed to have agreed that the Award is special incentive
compensation that will not be taken into account, in any manner, as salary, compensation or bonus in determining the amount of any payment or other benefit under any pension, retirement or other employee benefit plan, program or policy of the
Company or any of its affiliates. 
  

	22.	AMENDMENT OF PLAN. 

 The
Board may, at any time, modify, amend or terminate the Plan or modify or amend any Award granted pursuant to the Plan, including, without limitation, such modifications or amendments as are necessary to maintain compliance with applicable statutes,
rules or regulations; provided, however, that no amendment with respect to an outstanding Award which has the effect of reducing the benefits afforded to the Awardee shall be made over the objection of such Awardee; further provided,
that the events triggering acceleration of vesting of an outstanding Award may be modified, expanded or eliminated without the consent of the Awardee. The Board may condition the effectiveness of any such amendment on the receipt of shareholder
approval at such time and in such manner as the Committee may consider necessary for the Company to comply with or to avail the Company, the Awardees or both of the benefits of any securities, tax, market listing or other administrative or
regulatory requirement which the Board determines to be desirable. Without limiting the generality of the foregoing, the Board may modify grants to persons who are eligible to receive Awards under the Plan who are foreign nationals or employed
outside the United States to recognize differences in local law, tax policy or custom. 
 Date Plan was Approved by Board of Directors of
Company: September 6, 2011 

  
 19.Form of Non-Qualified Stock Option Agreement

 Exhibit 10.1(a) 

THIS OPTION AGREEMENT MAY NOT BE TRANSFERRED EXCEPT BY WILL OR UNDER THE LAWS OF DESCENT AND DISTRIBUTION OR PURSUANT TO A QUALIFIED
DOMESTIC RELATIONS ORDER. 
 BSQUARE CORPORATION 
 2011 INDUCEMENT AWARD PLAN 
 NON-QUALIFIED STOCK OPTION AGREEMENT

 THIS AGREEMENT is entered into as of the <date> day of <month>,
[            ] (the “Date of Grant”) between BSQUARE CORPORATION, a Washington corporation (the “Company”), and <Optionee’s Name> (the
“Optionee”). 
 RECITALS: 
 A. The Company has approved and adopted the BSQUARE CORPORATION 2011 Inducement Award Plan (the “Plan”), pursuant to which the Company is authorized to grant to persons not previously employees
or directors of the Company, or following a bona fide period of non-employment, as an inducement material to the individual’s entering into employment with the Company (such persons, “Employees”) options to purchase shares of the
Company’s common stock, no par value (the “Common Stock”); 
 B. The Optionee is an Employee; 

C. The options granted hereunder are intended to qualify as Non-Qualified Stock Options which are not incentive stock options under
Section 422 of the Internal Revenue Code of 1986, as amended (the “Code”); 
 D. Capitalized terms used herein
and not otherwise defined shall have the definitions given to them in the Plan. 
 AGREEMENT: 

NOW, THEREFORE, the Company hereby grants to the Optionee the option to purchase, upon the terms and conditions set forth herein and in
the Plan, <# of Options> shares of Common Stock (the “Option”). 
 1. EXERCISE PRICE. 

The exercise price for the Option shall be $<Price> per share, which is not less than 100 percent of the Fair Market Value of the
Common Stock on the Date of Grant. 
 2. VESTING SCHEDULE. 

No Option shall be exercisable until it has vested. The Option shall be vested according to the following schedule: Option vests [1/16
each quarter] from <Base Date>. 

  
 1 

 3. TERM OF OPTIONS 

All Options granted under this Agreement shall expire ten (10) years from the Date of Grant. 

4. OPTION NOT TRANSFERABLE. 
 The Option may not be transferred, assigned, pledged or hypothecated in any manner (whether by operation of law or otherwise) other than by will, by the applicable laws of descent and distribution or
pursuant to any qualified domestic relations order, and shall not be subject to execution, attachment or similar process. Upon any attempt to transfer, assign, pledge, hypothecate or otherwise dispose of the Option or of any right or privilege
conferred hereby contrary to the provisions hereof, or upon the sale or levy or any attachment or similar process upon the rights and privileges conferred hereby, the Option shall thereupon terminate and become null and void. 

5. INVESTMENT INTENT. 
 By accepting the Option, the Optionee represents and agrees, for the Optionee and all persons who acquire rights in the Option through the Optionee, that none of the shares of Common Stock purchased upon
exercise of the Option will be distributed in violation of applicable federal and state laws and regulations. If requested by the Company, the Optionee shall furnish evidence satisfactory to the Company (including a written and signed representation
letter and a consent to be bound by all transfer restrictions imposed by applicable law, legend condition or otherwise) to that effect, before delivery of the purchased shares of Common Stock. 

6. TERMINATION OF OPTION. 
 Any vested Option granted to an Optionee shall terminate, to the extent not previously exercised, upon the occurrence of the first of the following events: 

(a) as designated by (x) the Board in accordance with Section 6(n) of the Plan or (y) the Committee in
accordance with Section 6(d) of the Plan; 
 (b) the date of the Optionee’s termination of employment
or contractual relationship with the Company or any Related Corporation for cause (as determined in the sole discretion of the Committee); 
 (c) the expiration of ninety (90) days from the date of the Optionee’s termination of employment or contractual relationship with the Company or any Related Corporation for any reason whatsoever
other than cause, death or Disability unless the exercise period is extended by the Committee a date not later than the expiration date of the Option; 
 (d) the expiration of one year from (A) the date of death of the Optionee or (B) cessation of the Optionee’s employment or contractual relationship by reason of Disability unless the
exercise period is extended by the Committee until a date not later than the expiration date of the Option; or 

(e) any other event specified by the Committee at the time of grant of the Option. 

  
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 If an Optionee’s employment or contractual relationship is terminated by death, any
Option granted to the Optionee shall be exercisable only by the person or persons to whom such Optionee’s rights under such Option shall pass by the Optionee’s will or by the laws of descent and distribution of the state or county of the
Optionee’s domicile at the time of death. The Committee shall determine whether an Optionee has incurred a Disability on the basis of medical evidence reasonably acceptable to the Committee. Upon making a determination of Disability, the
Committee shall, for purposes of the Plan, determine the date of an Optionee’s termination of employment or contractual relationship. 
 Unless accelerated in accordance with Section 6(f) of the Plan, any unvested Option granted to an Optionee shall terminate immediately upon termination of employment of the Optionee by the Company
for any reason whatsoever, including death or Disability. For purposes of the Plan, transfer of employment between or among the Company and/or any Related Corporation shall not be deemed to constitute a termination of employment with the Company or
any Related Corporation. 
 7. STOCK. 
 In the case of any stock split, stock dividend or like change in the nature of shares granted by this Agreement, the number of shares and option price shall be proportionately adjusted as set forth in
Section 6(m) of the Plan. 
 8. EXERCISE OF OPTION. 

Each exercise of the Option shall be by means of delivery of a Notice of Election to Exercise (which may be in the form attached hereto
as Exhibit A) to the Secretary of the Company at its principal executive office, specifying the number of shares of Common Stock to be purchased and accompanied by payment in cash, or by certified or cashier’s check payable to the order
of the Company, of the full exercise price for the Common Stock to be purchased. Upon approval of the Committee, the Optionee may pay for all or any portion of the exercise price by (i) delivery of already held shares of Common Stock,
(ii) having shares withheld from the amount of shares of Common Stock to be received by the Optionee upon exercise of the Option or (iii) execution and delivery of appropriate loan documents approved by the Committee. The shares of Common
Stock received or withheld by the Company as payment shall have a Fair Market Value equal to or greater than the aggregate exercise price to be paid by the Optionee upon such exercise. The Optionee agrees to also pay to the Company the amount
necessary for the Company to satisfy its federal, state, local and foreign withholding obligations. 
 9. OPTIONEE
ACKNOWLEDGMENTS. 
 The Optionee acknowledges that he or she has read and understands the terms of this Agreement and the
Plan, and that: 
 (a) The issuance of shares of Common Stock pursuant to the exercise of the Option, and any
resale of the shares of Common Stock, may only be effected in compliance with applicable state and federal laws and regulations and that the Optionee may be required to execute and deliver representations and warranties to that effect prior to the
exercise of any portion of the Option; 
 (b) The Optionee is not entitled to any rights as a shareholder with
respect to any shares of Common Stock issuable hereunder until the Optionee becomes a shareholder of record; 

  
 3 

 (c) The shares of Common Stock subject hereto may be adjusted in the event
of certain changes in the capital structure of the Company or for any other reason required or permitted by the Plan; 
 (d) As a condition to the exercise of the Option, the Optionee may be required to make such arrangements as the Committee requires for the satisfaction of any federal, state or local withholding tax
obligations; and 
 (e) This Agreement does not constitute an employment agreement nor does it entitle the
Optionee to any specific employment or to employment for a period of time and that the Optionee’s continued employment, if any, with the Company shall be at will and is subject to termination in accordance with the Company’s prevailing
policies and any other agreement between the Optionee and the Company. 
 10. PROFESSIONAL ADVICE. The acceptance and
exercise of the Option and the sale of Common Stock issued pursuant to the exercise of the Option may have consequences under federal and state tax and securities laws which may vary depending on the individual circumstances of the Optionee.
Accordingly, the Optionee acknowledges that the Optionee has been advised to consult his or her personal legal and tax advisor in connection with this Agreement and the Optionee’s dealings with respect to the Option or the Common Stock.

 11. NOTICES. Any notice required or permitted to be made or given hereunder shall be mailed or delivered personally to
the addresses set forth below, or as changed from time to time by written notice to the other: 
  

			
	Company:	    	 BSQUARE CORPORATION 
 110
110th Avenue SE
 Suite 200
 Bellevue,
Washington 98004
 Attention: Secretary

		
	Optionee:	    	 <Optionee Name> 

<Optionee Address>
 <Optionee
Address>

 12. AGREEMENT SUBJECT TO PLAN. The Option and this Agreement evidencing and confirming the same
are subject to the terms and conditions set forth in the Plan and in any amendments to the Plan existing now or in the future, which terms and conditions are incorporated herein by reference. A copy of the Plan previously has been delivered to the
Optionee. Should any conflict exist between the provisions of the Plan and those of this Agreement, those of the Plan shall govern and control. This Agreement and the Plan comprise the entire understanding between the Company and the Optionee with
respect to the Option and shall be construed and enforced under the laws of the State of Washington. 

  
 4 

 IN WITNESS WHEREOF, clicking the “Accept” button along with the electronic
signature of the Company’s representative below, you and the Company agree that this Option is granted under and governed by the terms and conditions of the Plan and this Option Agreement. 

 

									
	OPTIONEE	 		 	BSQUARE CORPORATION
				
	 	 		 	By:	 	/s/ Brian T. Crowley 
	Signature	 		 		 	Brian T. Crowley, CEO 
				
	 	 		 		 	
	Name Typed or Printed	 		 		 	

  
 5 

 Exhibit A 
 Notice of Election to Exercise 
 This Notice of Election to Exercise shall
constitute proper notice pursuant to Section 6(h) of the BSQUARE CORPORATION 2011 Inducement Award Plan (the “Plan”) and Section 8 of that certain Non-Qualified Stock Option Agreement (the “Agreement”) dated as of
                                     between BSQUARE
CORPORATION (the “Company”) and the undersigned. 
 The undersigned hereby elects to exercise the Optionee’s
option to purchase                          shares of the Company’s common stock, no par value, at a purchase price
of $                 per share, for aggregate consideration of
$                , on the terms and conditions set forth in the Agreement and the Plan. Such aggregate consideration, in the form specified in Section 8 of
the Agreement, accompanies this Notice. 
 The undersigned has executed this Notice this
             day of                         ,
            . 
  

	
	  
	Name Typed or Printed
	
	  
	Signature

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