Document:

Exhibit 10.1

 

EXECUTION COPY

 

EMPLOYMENT AGREEMENT

 

THIS AGREEMENT is entered into this 21st  day of June, 2016 (the “Effective Date”) by and between A. J. Smith Federal Savings Bank (the “Bank”), a corporation organized under the laws of the State of Illinois, with its office at 14757 S. Cicero Avenue, Midlothian, IL, and Thomas R. Butkus (the “Employee”).  Any reference to the “Company” herein shall refer to AJS Bancorp, Inc. the holding company of the Bank.

 

WHEREAS, the Bank and the Employee entered into an employment agreement dated the 19th day of June 2012, pursuant to which the Employee was employed by the Bank as its Chairman of the Board and Chief Executive Officer; and

 

WHEREAS, the foregoing employment agreement is set to expire on June 19, 2016; and

 

WHEREAS, the Board of Directors of the Bank and the Employee believe it is in the best interests of the Bank to enter into this new employment agreement (the “Agreement”) in order to reinforce and reward the Employee for his service and dedication to the continued success of the Bank; and

 

WHEREAS, the parties hereto desire by this writing to set forth the terms of the revised Agreement and the continuing employment relationship of the Bank and the Employee.

 

NOW, THEREFORE, it is AGREED as follows:

 

1.                                                Employment.  During the term of his employment hereunder, the Employee shall serve as the Chairman of the Board, Chief Executive Officer and President of the Bank. The Employee shall render such administrative and management services for the Bank as are currently rendered and as are customarily performed by persons situated in a similar executive capacity. The Employee shall also promote, by entertainment or otherwise, as and to the extent permitted by law, the business of the Bank. The Employee’s other duties shall be such as the Board of Directors (the “Board”) of the Bank may from time to time reasonably direct, including normal duties as an officer of the Bank.

 

2.                                      Base Compensation.  The Bank agrees to pay the Employee during the term of this Agreement a salary at the rate of $215,000 per annum (the “Base Salary”).  The Board shall review, not less often than annually, the rate of the Employee’s salary, and in its sole discretion may decide to increase (but not decrease) his Base Salary. Any such increase in the Base Salary shall become the Base Salary for all purposes under this Agreement. Such Base Salary shall be payable in cash no less frequently than monthly (the monthly amount shall be referred to as the “monthly Base Salary”) or in accordance with the normal payroll practices of the Bank, as such may be changed from time to time. Notwithstanding the foregoing, following a Change in Control (as defined in Section 10(a)(3) of this Agreement), the Board shall continue to annually review the rate of the Employee’s Base Salary, and shall increase said rate of Base Salary by a percentage which is not less than the average annual percentage increase in Base Salary that the

 

 

Employee received over the three calendar years immediately preceding the year in which the Change in Control occurs.

 

3.                                      Discretionary Bonuses.  The Employee shall participate in an equitable manner with all other senior management employees of the Bank in discretionary bonuses that the Board may award from time to time to the Bank’s senior management employees. No other compensation provided for in this Agreement shall be deemed a substitute for the Employee’s right to participate in such discretionary bonuses.

 

4.                                      Benefit Plans and Expenses.

 

(a)                                 Participation in Retirement, Medical and Other Plans.  During the term of this Agreement, the Employee shall participate in any plan that the Bank maintains for the benefit of its employees if the plan relates to (i) pension, profit-sharing, or other retirement benefits, or (ii) medical insurance or the reimbursement of medical or dependent care expenses. If the Employee ceases employment with the Bank for any reason other than death or “Just Cause” (as defined in Section 9(c) hereof), then notwithstanding termination of the Employee’s employment or of this Agreement, the Bank (or any successor) shall provide the Employee and his dependents with coverage under the Bank’s (or any successor’s) group health insurance plan or under a health insurance plan that provides comparable health coverage (and if the Bank maintains more than one plan for its employees, any one of such plans selected by the Employee in accordance with the general procedures by which the Bank’s full-time employees make such elections).  The Bank (or any successor) shall bear the full cost for said coverage, which shall continue until the Employee’s death, with the terms and conditions thereof being determined from time to time as though the Employee had remained a full-time employee of the Bank (or successor) (but with the Bank (or any successor) in all events paying the full cost for such insurance).  The Bank (or any successor) shall also provide the Employee’s spouse with continued health insurance coverage (with the Bank (or any successor) paying the full cost for such insurance) for her lifetime.

 

(b)                                           Employee Benefits; Expenses.  The Employee shall be eligible to participate in any fringe benefits which are or may become available to the Bank’s senior management employees, including for example: any stock option or incentive compensation plans, and any other benefits which are commensurate with the responsibilities and functions to be performed by the Employee under this Agreement. The Bank shall provide the Employee with an automobile suitable to the position of Chairman of the Board and Chief Executive Officer of the Bank, and such automobile may be used by the Employee in carrying out his duties under this Agreement and for his personal use such as commuting between his residence and his principal place of employment. The Bank shall reimburse the Employee for the cost of maintenance, use and servicing of such automobile. The Bank shall reimburse the Employee for his reasonable out-of-pocket expenses incurred in connection with the performance of his duties under this Agreement, including, without limitation, fees for memberships in such clubs and organization that the Employee and the Board mutually agree are necessary and appropriate to further the business of the Bank  upon substantiation of such expenses in accordance with the policies of the Bank.

 

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5.                                      Term.  The Bank hereby employs the Employee, and the Employee hereby accepts such employment under this Agreement, for the period commencing on the Effective Date and ending thirty-six (36) months thereafter (or such earlier date as is determined in accordance with Section 9). Additionally, on each annual anniversary date from the Effective Date, the Employee’s term of employment shall be extended for an additional one-year period beyond the then effective expiration date provided the Board determines in a duly adopted resolution that the performance of the Employee has met the Board’s requirements and standards, and that this Agreement shall be extended. Only those members of the Board of Directors who have no personal interest in this Agreement shall discuss and vote on the approval and subsequent renewal of this Agreement.

 

6.                                      Loyalty: Noncompetition.

 

(a)                                 During the period of his employment hereunder and except for illnesses, reasonable vacation periods, and reasonable leaves of absence, the Employee shall devote all his full business time and attention to the performance of his duties hereunder; provided, however, from time to time, Employee may serve on the boards of directors of, and hold any other offices or positions in, companies or organizations, which will not present any conflict of interest with the Bank or any of its subsidiaries or affiliates, or unfavorably affect the performance of Employee’s duties pursuant to this Agreement, or will not violate any applicable statute or regulation. During the term of his employment under this Agreement, the Employee shall not engage in any business or activity contrary to the business affairs or interests of the Bank, or be gainfully employed in any other position or job other than as provided above.

 

(b)                                 Nothing contained in this Section 6 shall be deemed to prevent or limit the Employee’s right to invest in the capital stock or other securities of any business dissimilar from that of the Bank, or, solely as a passive or minority investor, in any business.

 

7.                                      Standards.  The Employee shall perform his duties under this Agreement in accordance with such reasonable standards as the Board may establish from time to time. The Bank will provide Employee with the working facilities and staff customary for similar executives and necessary for him to perform his duties.

 

8.                                      Vacation, Sick and Other Leave.  At such reasonable times as the Board shall in its discretion permit, the Employee shall be entitled, without loss of pay, to absent himself voluntarily from the performance of his employment under this Agreement, all such voluntary absences to count as vacation time, provided that:

 

(a)                                 The Employee shall be entitled to an annual vacation in accordance with the policies that the Board periodically establishes for senior management employees of the Bank. The Employee shall not receive any additional compensation from the Bank on account of his failure to take vacation leave, and the Employee shall not accumulate unused vacation leave from one fiscal year to the next, except to the extent authorized by the Board.

 

(b)                                 In addition, the Employee shall be entitled to an annual sick leave benefit as established by the Board. In the event any sick leave benefit shall not have been used during

 

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any year, such leave shall not accrue to subsequent years, except to the extent authorized by the Board.

 

(c)                                  In addition to the aforesaid paid vacations and sick leave, the Employee shall be entitled without loss of pay, to absent himself voluntarily from the performance of his employment with the Bank for such additional periods of time and for such valid and legitimate reasons as the Board may in its discretion determine. Further, the Board may grant to the Employee a leave or leaves of absence, with or without pay, at such time or times and upon such terms and conditions as such Board in its discretion may determine.

 

9.                                      Termination and Termination Pay.  Subject to Section 10 hereof, the Employee’s employment hereunder may be terminated under the following circumstances:

 

(a)                                 Death.  The Employee’s employment under this Agreement shall terminate upon his death during the term of this Agreement, in which event the Employee’s beneficiary or beneficiaries, or his estate, shall be entitled to receive the compensation due the Employee through the last day of the calendar month in which his death occurred. Notwithstanding any provision of this Agreement to the contrary, in the event that the Employee dies while employed by the Bank, the Bank shall pay the Employee’s beneficiary or beneficiaries, or his estate, the Employee’s Base Salary then in effect pursuant to Section 2 hereof for a period of one (1) year from the date of the Employee’s death, in accordance with its regular payroll practice, with such payment commencing on the Bank’s first regular payroll date following the Employee’s death.

 

(b)                                 Disability.  In the event of Employee’s Disability (as hereinafter defined), the Employee shall receive any disability insurance for which the Employee shall be eligible under any disability insurance or similar program maintained by the Bank.  In addition, in the event of Disability, Employee shall be entitled to the benefits set forth in Section 9(d)(1) hereof, with such benefits to be paid in a lump sum within sixty (60) days following the Employee’s date of Disability.

 

“Disability” or “Disabled” shall be construed to comply with Section 409A of the Internal Revenue Code of 1986, as amended (the “Code”) and shall be deemed to have occurred if: (i) Employee is unable to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment that can be expected to result in death, or last for a continuous period of not less than twelve (12) months; (ii) by reason of any medically determinable physical or mental impairment that can be expected to result in death, or last for a continuous period of not less than twelve (12) months, Employee is receiving income replacement benefits for a period of not less than three months under an accident and health plan covering employees of the Bank or the Company; or (iii) Employee is determined to be totally disabled by the Social Security Administration.

 

(c)                                  Just Cause.  The Board may, by written notice to the Employee, immediately terminate his employment at any time, for Just Cause.  The Employee shall have no right to receive compensation or other benefits for any period after termination for Just Cause. Termination for “Just Cause” shall mean termination because of, in the good faith determination

 

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of the Board, the Employee’s personal dishonesty, incompetence, willful misconduct, breach of fiduciary duty involving personal profit, intentional failure to perform stated duties, willful violation of any law, rule or regulation (other than traffic violations or similar offenses) or final cease-and-desist order, or material breach of any provision of this Agreement. Any stock options or restricted stock awards granted to the Employee under any stock plan of the Bank, the Company or any subsidiary or affiliate thereof, shall become null and void effective upon the Employee’s receipt of notice of termination for Just Cause pursuant to Section 9 hereof, and shall not be exercisable by the Employee at any time subsequent to such termination for Just Cause.

 

(d)                                 Without Just Cause; Constructive Discharge.

 

(1)                                 The Board may, by written notice to the Employee, immediately terminate his employment at any time for a reason other than Just Cause, in which event the Employee, or in the event of his subsequent death, his beneficiary or beneficiaries, or his estate, as the case may be, as severance pay or liquidated damages, or both, shall be entitled to receive an amount equal to three (3) times the sum of (i) his Base Salary provided pursuant to Section 2 hereof, and (ii) the highest rate of bonus awarded to the Employee, pursuant to Section 3 hereof, at any time during the prior five (5) years. In addition, the Employee shall be entitled to a lump sum payment in an amount equal to the present value (calculated using a discount rate of equal to 120% of the applicable Federal rate determined under Section 1274(d) of the Code, compounded semi-annually) of the Bank’s contributions that would have been made on Employee’s behalf under the Bank’s tax-qualified retirement plans (including the 401(k) Plan, the profit sharing plan and the employee stock ownership plan) if he had continued working for the Bank for a thirty-six (36) month period following his termination of employment earning the Base Salary that would have been achieved during the remaining unexpired term of this Agreement and making the maximum amount of employee contributions permitted, if any, under such plans. Upon such an event of termination at any time for a reason other than Just Cause, the Employee will vest on the date of termination of employment in any outstanding unvested stock options or shares of restricted stock of the Company that have been awarded to him, and Employee (and his spouse) shall be entitled to the continued health benefits set forth in Section 4(a) hereof.  Notwithstanding the foregoing, in the event such termination occurs after a Change in Control and within the time period set forth in Section 10(a)(1) hereof, the benefits and compensation provided for in that Section 10 shall apply. All amounts payable to the Employee in cash shall be paid in one lump sum within thirty (30) days of the Employee’s date of termination.

 

(2)                                 The Employee may voluntarily terminate his employment under this Agreement within ninety (90) days following the occurrence of an event which constitutes “Constructive Discharge,” provided, however, that the Bank shall have thirty (30) days to cure the “Constructive Discharge” condition described below, but the Bank may waive its right to cure.  Upon the Employee’s termination of employment for an event that constitutes a “Constructive Discharge, the Employee shall be entitled to receive the compensation and benefits payable under Section 9(d)(1) hereof (unless such voluntary termination occurs following a Change in Control as set forth under Section 10(b) in which event the benefits and compensation provided for in Section 10 shall apply).

 

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For purposes of this Section 9, a Constructive Discharge shall include the occurrence of any of the following events which has not been consented to in advance in writing by the Employee: (1) the requirement that the Employee perform his principal executive functions, more than thirty-five (35) miles from his primary office; (2) a material reduction in the Employee’s base compensation; (3) the requirement that the Employee report directly to a person or persons other than the Board; or (4) a material diminution or reduction in the Employee’s responsibilities or authority in connection with his employment with the Bank (or any successor to the Bank).

 

All amounts payable to the Employee in cash under this Section 9(d)(2) shall be paid in a lump sum within thirty (30) days of the Employee’s date of termination.  .

 

(e)                                  Voluntary Termination by Employee.  Except to the extent set forth in Sections 9(d)(2) and 10 hereof, the Employee may voluntarily terminate employment with the Bank during the term of this Agreement, upon at least sixty (60) days’ prior written notice to the Board of Directors, in which case the Employee shall receive only his compensation, vested rights (including continuing health benefits as provided in Section 4(a) hereof) and employee benefits up to the date of his termination, payable as set forth in the documents governing such payments.

 

Notwithstanding any contrary provision of this Agreement, in the event that the Employee elects to retire from employment with the Bank (such event being referred to herein as “Retirement”), the Employee (or in the event of his death after Retirement but prior to payment pursuant to this Section 9(e), his estate) shall be paid within thirty (30) days of Retirement a lump sum payment equal to fifty-percent (50%) of the Base Salary provided pursuant to Section 2 hereof as of such date of Retirement.  .

 

10.                               Change in Control.

 

(a)                                 Change in Control; Involuntary Termination.

 

(1)                                 Notwithstanding any provision herein to the contrary, if the Employee’s employment under this Agreement is terminated by the Bank, without the Employee’s prior written consent and for a reason other than Just Cause, upon the occurrence of or within twenty-four (24) months after any Change in Control of the Bank or the Company, the Employee shall, subject to paragraph (2) of this Section 10(a), be paid an amount equal to three (3) times the sum of (i) the Employee’s Base Salary provided pursuant to Section 2 hereof, as in effect on the date of such Change in Control, and (ii) the highest rate of bonus awarded to the Employee at any time during the prior five (5) years.  In addition, the Employee shall be entitled to a lump sum payment in an amount equal to the present value (calculated using a discount rate of equal to 120% of the applicable Federal rate determined under Section 1274(d) of the Code, compounded semi-annually) of the Bank’s contributions that would have been made on Employee’s behalf under the Bank’s tax-qualified retirement plans (including the 401(k) Plan, the profit sharing plan and the employee stock ownership plan) if he had continued working for the Bank for a thirty-six (36) month period following his termination of employment earning the Base Salary that would have been achieved during the remaining unexpired term of this

 

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Agreement and making the maximum amount of employee contributions permitted, if any, under such plans.  Upon such qualifying termination of employment following a Change in Control, the Employee will also immediately vest in any outstanding unvested stock options or shares of restricted stock of the Company that have been awarded to him and Employee shall be entitled to the continued health benefits set forth in Section 4(a) hereof.  All amounts payable to the Employee in cash shall be paid in one lump sum within thirty (30) days following the Employee’s date of termination. Moreover, in the event of such qualifying termination of employment occurring on or after a Change in Control, the Bank shall transfer ownership to Employee of the automobile provided for Employee’s use in effect as of his date of termination, free and clear of all liens, at no cost to Employee within thirty (30) days following such termination.

 

(2)                                 Notwithstanding the foregoing paragraph (a)(1), in the event that the Bank’s independent accountants or legal counsel determine that the total payments receivable under this Agreement hereof, when added to any other payments contingent on a Change in Control of the Bank or the Company, is equal to or greater than three (3) times the Employee’s “base amount” as defined in Section 280G(b)(3) of the Code and regulations promulgated thereunder (the “Maximum Amount”), then such payments payable under this Agreement shall be reduced to avoid an “excess parachute payment,” as defined in Section 280G(b)(1) of the Code.  Nothing in this Section 10(a)(2) shall result in the reduction of any payments or benefits to which Employee may be entitled upon termination of employment and/or a Change in Control other than as specified in this Section 10(a)(2), or a reduction in benefits payable under this Agreement below zero.

 

(3)                                 The term “Change in Control” shall mean an event of a nature that: (i) would be required to be reported in response to Item 1(a) of the current report on Form 8-K, as in effect on the date hereof, pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 (the “Exchange Act”); or (ii) results in a Change in Control of the Bank or the Company within the meaning of the Home Owners’ Loan Act, as amended (“HOLA”), and applicable rules and regulations promulgated thereunder, as in effect at the time of the Change in Control; or (iii) without limitation such a Change in Control shall be deemed to have occurred at such time as (a) any “person” (as the term is used in Sections 13(d) and 14(d) of the Exchange Act) is or becomes the “beneficial owner” (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of securities of the Company representing 25% or more of the combined voting power of Company’s outstanding securities except for any securities purchased by the Bank’s employee stock ownership plan or trust; or (b) individuals who constitute the Company’s Board on the date hereof (the “Incumbent Board”) cease for any reason to constitute at least a majority thereof, provided that any person becoming a director subsequent to the date hereof whose election was approved by a vote of at least three-quarters of the directors comprising the Incumbent Board, or whose nomination for election by the Company’s stockholders was approved by the same nominating committee serving under an Incumbent Board, shall be, for purposes of this clause (b), considered as though he were a member of the Incumbent Board; or (c) a plan of reorganization, merger, consolidation, sale of all or substantially all the assets of the Bank or the Company or similar transaction in which the Bank or Company is not the surviving institution occurs; or (d) a proxy statement soliciting proxies from stockholders of the Company, by someone other than the current management of the Company, seeking stockholder approval of a

 

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plan of reorganization, merger or consolidation of the Company or similar transaction with one or more corporations as a result of which the outstanding shares of the class of securities then subject to the Plan are to be exchanged for or converted into cash or property or securities not issued by the Company; or (e) a tender offer is made for 25% or more of the voting securities of the Company and the shareholders owning beneficially or of record 25% or more of the outstanding securities of the Company have tendered or offered to sell their shares pursuant to such tender offer and such tendered shares have been accepted by the tender offeror.  Notwithstanding the foregoing, solely to the event necessary to comply with Code Section 409A, in no event shall the foregoing events shall be considered a “Change in Control” unless it constitutes a “change in control” as defined in accordance with Section 409A of the Code and the final regulations promulgated thereunder.

 

(b)                                 Change in Control; Constructive Discharge.  Notwithstanding any other provision of this Agreement to the contrary, the Employee may voluntarily terminate his employment under this Agreement if upon the occurrence of or within twenty-four (24) months following such Change in Control of the Bank or the Company an event constituting a Constructive Discharge has occurred.  If an event constituting a Constructive Discharge shall occur, the Employee shall be entitled to voluntarily terminate employment within ninety (90) days of such Constructive Discharge and completion of a thirty (30) day cure period by the Bank (unless waived), and shall be entitled to the payments and benefits set forth in Section 10(a) hereof.  All amounts payable to the Employee under this Section 10(b) shall be paid in the same manner as required under Section 10(a) hereof.

 

(c)                                  Trust.

 

(1)                                 Within five (5) business days before a Change in Control (as defined in Section 10(a) of this Agreement), the Bank shall: (i) deposit, or cause to be deposited, in a grantor trust (the “Trust”) substantially in the form described in Revenue Procedure 92-64, as issued by the Internal Revenue Service and as amended or superseded thereby, an amount equal to one (1) dollar less than three (3) times the Employee’s “base amount” as defined in Section 280G(b)(3) of the Code; and (ii) provide the trustee of the Trust, who shall be an independent corporation having corporate trust powers, with a written direction to hold said amount and any investment return thereon in a segregated account for the benefit of the Employee, and to follow the procedures set forth in the next paragraph as to the payment of such amounts from the Trust.

 

(2)                                 Immediately following Employee’s Separation from Service (as defined below) for one of the reasons set forth in Section 10(a) or 10(b) hereof, the Employee shall provide the trustee of the Trust with a written notice requesting that the trustee pay to the Employee the amount designated in said notice.  Within three (3) business days after receiving said notice, the trustee of the Trust shall send a copy of the notice to the Bank via overnight and registered mail return receipt requested.  On the tenth (10th) business day after mailing said notice to the Bank, the trustee of the Trust shall pay the Employee the amount designated therein in immediately available funds, unless prior thereto the Bank provides the trustee with a written notice directing the trustee to withhold such payment.  In the latter event, the trustee shall submit the dispute to non-appealable binding arbitration for a determination of the amount payable to

 

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the Employee pursuant to Section 10(a) or (b) hereof, and the party responsible for the payment of the costs of such arbitration (which may include any reasonable legal fees and expenses incurred by the Employee) shall be determined by the arbitrator.  The trustee shall choose the arbitrator to settle the dispute, and such arbitrator shall be bound by the rules of the American Arbitration Association in making her determination.  The parties and the trustee shall be bound by the results of the arbitration and, within three (3) days of the determination by the arbitrator, the trustee shall pay from the Trust the amounts required to be paid to the Employee and/or the Bank, and in no event shall the trustee be liable to either party for making the payments as determined by the arbitrator.

 

(d)                                 In the event that any dispute arises between the Employee and the Bank as to the terms or interpretation of this Agreement, including this Section 10, whether instituted by formal legal proceedings or otherwise, including any action that the Employee takes to enforce the terms of this Section 10 or to defend against any action taken by the Bank, the Employee shall be reimbursed for all costs and expenses, including reasonable attorneys’ fees, arising from such dispute, proceedings or actions, provided that the Employee shall obtain a final judgment by a court of competent jurisdiction in favor of the Employee.  Such reimbursement shall be paid within ten (10) days of Employee’s furnishing to the Bank written evidence, which may be in the form, among other things, of a cancelled check or receipt, of any costs or expenses incurred by the Employee.

 

11.                               Required Provisions.

 

Notwithstanding anything herein contained to the contrary, the following provisions shall apply:

 

(a)                                 The Board may terminate Employee’s employment at any time, but any termination by the Bank’s Board other than termination for Just Cause shall not prejudice Employee’s right to compensation or other benefits under this Agreement.  Employee shall have no right to receive compensation or other benefits for any period after Employee’s termination for Just Cause.

 

(b)                                 If Employee is suspended from office and/or temporarily prohibited from participating in the conduct of the Bank’s affairs by a notice served under Section 8(e)(3) [12 U.S.C. §1818(e)(3)] or 8(g)(1) [12 U.S.C. §1818(g)(1)] of the Federal Deposit Insurance Act (the “FDI Act”), the Bank’s obligations under this Agreement shall be suspended as of the date of service, unless stayed by appropriate proceedings.  If the charges in the notice are dismissed, the Bank may in its discretion: (i) pay Employee all or part of the compensation withheld while its contract obligations were suspended and (ii) reinstate (in whole or in part) any of its obligations which were suspended.

 

(c)                                  If Employee is removed and/or permanently prohibited from participating in the conduct of the Bank’s affairs by an order issued under Section 8(e)(4) [12 U.S.C. §1818(e)(4)] or 8(g)(1) [12 U.S.C. §1818(g)(1)] of the FDI Act, all obligations of the Bank under this Agreement shall terminate as of the effective date of the order, but vested rights of the contracting parties shall not be affected.

 

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(d)                                 If the Bank is in default as defined in Section 3(x)(1) [12 U.S.C. §1813(x)(1)] of the FDI Act, all obligations of the Bank under this Agreement shall terminate as of the date of default, but this paragraph shall not affect any vested rights of the contracting parties.

 

(e)                                  All obligations under this Agreement shall be terminated, except to the extent determined that continuation of this Agreement is necessary for the continued operation of the Bank, (i) by the Comptroller of the Office of the Comptroller of the Currency or his or her designee, at the time the FDIC enters into an agreement to provide assistance to or on behalf of the Bank under the authority contained in Section 13(c) [12 U.S.C. §1823(c)] of the FDI Act; or (ii) by the Comptroller or his or her designee at the time the Director or his or her designee approves a supervisory merger to resolve problems related to operation of the Bank or when the Bank is determined by the Comptroller to be in an unsafe or unsound condition.  Any rights of the parties that have already vested, however, shall not be affected by such action.

 

(f)                                   Any payments made to the Employee pursuant to this Agreement, or otherwise, are subject to and conditioned upon their compliance with 12 U.S.C. Section 1828(k) and any regulations promulgated thereunder.

 

(g)                                  Notwithstanding the foregoing, but only to the extent required under federal banking law, the amount payable under this Agreement shall be reduced to the extent that on the date of the Employee’s termination of employment, the present value of the benefits payable thereunder exceeds the limitation on severance benefits that is set forth in Regulatory Bulletin 27b of the Office of Thrift Supervision (“OTS”) and the OTS Thrift Activities Handbook Section 310, as adopted by the Office of the Comptroller of the Currency, as in effect on the Effective Date.

 

(h)                                 Notwithstanding anything else in this Agreement to the contrary, Employee’s employment shall not be deemed to have been terminated unless and until Employee has a Separation from Service within the meaning of Code Section 409A.  For purposes of this Agreement, a “Separation from Service” shall have occurred if the Bank and Employee reasonably anticipate that either no further services will be performed by Employee after the date of termination (whether as an employee or as an independent contractor) or the level of further services performed is less than fifty (50) percent of the average level of bona fide services in the thirty-six (36) months immediately preceding the termination.  For all purposes hereunder, the definition of Separation from Service shall be interpreted consistent with Treasury Regulation Section 1.409A-1(h)(ii).

 

(i)                                     Notwithstanding the foregoing, if Employee is a “specified employee” (i.e., a “key employee” of a publicly traded company within the meaning of Section 409A of the Code and the final regulations issued thereunder) and any payment under this Agreement is triggered due to Employee’s Separation from Service (other than due to Disability or death), then solely to the extent necessary to avoid penalties under Section 409A of the Code, no payment shall be made during the first six (6) months following Employee’s Separation from Service.  Rather, any payment which would otherwise be paid to Employee during such period shall be accumulated and paid to Employee in a lump sum on the first day of the seventh month 

 

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following such Separation from Service.  All subsequent payments shall be paid in the manner specified in this Agreement.

 

(j)                                    To the extent not specifically provided in this Agreement, any compensation or reimbursements payable to Executive shall be paid or provided no later than two and one-half (2.5) months after the calendar year in which such compensation is no longer subject to a substantial risk of forfeiture within the meaning of Treasury Regulation Section 1.409A-1(d).

 

12.                               Federal Income Tax Withholding.  The Bank may withhold all Federal and State income or other taxes from any benefit payable under this Agreement as shall be required pursuant to any law or government regulation or ruling.

 

13.                               Reimbursements.  Reimbursement by the Bank of any expenses, fees, dues or other obligation of the Employee under any Section of this Agreement, including but not limited to Section 4, 9 or 10) shall be permitted provided that the amount of expenses, fees, dues or other obligation paid in a calendar year that are eligible for reimbursement equals only  the amount actually expended during such calendar year, and the maximum amount available for reimbursement in any calendar year will not be increased or decreased to reflect the amount expended or reimbursed in a prior or subsequent calendar year, and further, any reimbursement must be paid to the Employee by December 31 of the calendar year following the year in which the Employee pays such expenses, fees, dues or other obligation.

 

14.                               Successors and Assigns.

 

(a)                                 Bank.  This Agreement shall not be assignable by the Bank, provided that this Agreement shall inure to the benefit of and be binding upon any corporate or other successor of the Bank which shall acquire, directly or indirectly, by merger, consolidation, purchase or otherwise, all or substantially all of the assets or stock of the Bank.

 

(b)                                 Employee.  Since the Bank is contracting for the unique and personal skills of the Employee, the Employee shall be precluded from assigning or delegating his rights or duties hereunder without first obtaining the written consent of the Bank; provided, however, that nothing in this paragraph shall preclude (i) the Employee from designating a beneficiary to receive any benefit payable hereunder upon his death, or (ii) the executors, administrators, or other legal representatives of the Employee or his estate from assigning any rights hereunder to the person or persons entitled thereunto.

 

(c)                                  Attachment.  Except as required by law, no right to receive payments under this Agreement shall be subject to anticipation, commutation, alienation, sale, assignment, encumbrance, charge, pledge, or hypothecation or to exclusion, attachment, levy or similar process or assignment by operation of law, and any attempt, voluntary or involuntary, to effect any such action shall be null, void and of no effect.

 

15.                               Amendments.  No amendments or additions to this Agreement shall be binding unless made in writing and signed by all of the parties, except as herein otherwise specifically provided.

 

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16.                               Applicable Law.  Except to the extent preempted by Federal law, the laws of the State of Illinois shall govern this Agreement in all respects, whether as to its validity, construction, capacity, performance or otherwise.

 

17.                               Severability.  The provisions of this Agreement shall be deemed severable and the invalidity or unenforceability of any provision shall not affect the validity or enforceability of the other provisions hereof.

 

18.                               Entire Agreement.  This Agreement, together with any understanding or modifications thereof as agreed to in writing by the parties, shall constitute the entire agreement between the parties hereto, and shall completely supersede any prior agreements between the parties (including but not limited to their agreement dated July 20, 1992 and the employment agreements dated December 18, 1995, August 19, 2003 and June 19, 2012).

 

[signature page follows]

 

12

 

IN WITNESS WHEREOF, the parties have executed this Agreement on the day and year first hereinabove written.

 

 

	
ATTEST:
    	
 
    	
A. J.   SMITH FEDERAL SAVINGS BANK
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
/s/ Jo Anne Cano
    	
 
    	
/s/ Donna J. Manuel
    
	
Jo Anne Cano
    	
 
    	
Donna   J. Manuel, Sr. Vice President
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
WITNESS:
    	
 
    	
EMPLOYEE:
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
/s/ Susan Coleman
    	
 
    	
/s/ Thomas R. Butkus
    
	
Susan Coleman
    	
 
    	
Thomas R. Butkus
    

 

13Exhibit 10.1

 

POWER EFFICIENCY CORPORATION

2016 OMNIBUS EQUITY INCENTIVE PLAN

 

POWER EFFICIENCY CORPORATION. (the “Company”),
a Delaware corporation, hereby establishes and adopts the following 2016 Omnibus Equity Incentive Plan (this “Plan”).

 

		1.	PURPOSE OF THIS PLAN

 

The purpose of this Plan is to advance the
interests of the Company’s stockholders and the Company by enhancing the Company’s ability to attract, retain and motivate
persons who are expected to make important contributions to the Company and by providing such persons with equity ownership opportunities
and performance-based incentives that are intended to align their interests with those of the Company’s stockholders.

 

		2.	DEFINITIONS

 

2.1. “Affiliate” means, with
respect to a Person, another Person that directly or indirectly controls, or is controlled by, or is under common control with
such Person.

 

2.2. “Award” shall mean any
Option, Stock Appreciation Right, Restricted Stock Award, Restricted Stock Unit Award, Other Share-Based Award, Performance Award
or any other right, interest or option relating to Shares or other property (including cash) granted pursuant to the provisions
of this Plan.

 

2.3. “Award Agreement” shall
mean any agreement, contract or other instrument or document evidencing any Award hereunder, including through an electronic medium.

 

2.4. “Board” shall mean the
board of directors of the Company.

 

2.5. “Cause” means with respect
to a Participant’s Termination of Employment or Termination of Consultancy, the following: (a) in the case where there
is no employment agreement, consulting agreement, change in control agreement or similar agreement in effect between the Company
or an Affiliate and the Participant applicable to the Award (or where there is such an agreement but it does not define “cause”
(or words of like import), termination due to: (i) a Participant’s conviction of, or plea of guilty or nolo contendere
to, a felony; (ii) perpetration by a Participant of an illegal act, dishonesty, or fraud that could cause significant economic
injury to the Company; (iii) a Participant’s insubordination, refusal to perform his or her duties or responsibilities
for any reason other than illness or incapacity or materially unsatisfactory performance of his or her duties for the Company;
(iv) continuing willful and deliberate failure by the Participant to perform the Participant’s duties in any material
respect, provided that the Participant is given notice and an opportunity to effectuate a cure as determined by the Committee;
(v) a Participant’s willful misconduct with regard to the Company that could have a material adverse effect on the Company;
or (vi) an act of moral turpitude, whether or not resulting in a conviction by a court of law, which, in the opinion of the Board
of Directors, materially and adversely affects the reputation of the Company; or (b) in the case where there is an employment
agreement, consulting agreement, change in control agreement or similar agreement in effect between the Company or an Affiliate
and the Participant at the time of the grant of the Award that defines “cause” (or words of like import), “cause”
as defined under such agreement. With respect to a Participant’s Termination of Directorship, “cause” means an
act or failure to act that constitutes cause for removal of a director under applicable Delaware law or the Company’s Certificate
of Incorporation.

 

2.6. “Code” shall mean the
Internal Revenue Code of 1986, as amended from time to time.

 

2.7. “Committee” shall mean
the Compensation Committee of the Board or a subcommittee thereof formed by the Compensation Committee to act as the Committee
hereunder, or in the event no such committee is formed, the Board of Directors. The Committee shall consist of no fewer than two
Directors, each of whom is: (i) a “Non-Employee Director” within the meaning of Rule 16b-3 of the Exchange Act; (ii)
an “outside director” within the meaning of Section 162(m) of the Code, to the extent the Board has members meeting
such qualifications; and (iii) an “independent director” for purpose of the rules of the principal U.S. national securities
exchange on which the Shares are traded, to the extent required by such rules. Anything to the contrary in this Plan notwithstanding,
the Board reserves all authority to administer this Plan and to act as the Committee hereunder.

 

     

     

    

 

2.8. “Consultant” shall mean
any consultant or advisor who provides services to the Company or any Subsidiary, so long as such person: (i) renders bona fide
services that are not in connection with the offer and sale of the Company’s securities in a capital raising transaction
and does not directly or indirectly promote or maintain a market for the Company’s securities; and (ii) can be covered
as a consultant under the applicable rules of the Securities and Exchange Commission for registration of shares on a Form S-8 registration
statement (or a successor form thereto).

 

2.9. “Covered Employee” shall
mean an Employee of the Company or its subsidiaries who is a “covered employee” within the meaning of Section 162(m)
of the Code.

 

2.10. “Director” shall mean
a non-employee member of the Board.

 

2.11. “Dividend Equivalents”
shall have the meaning set forth in Section 12.4.

 

2.12. “Effective Date” shall
have the meaning set forth in Section 10.1.

 

2.13. “Employee” shall mean
any employee or officer of the Company or any Subsidiary and any prospective employee conditioned upon, and effective not earlier
than, such person becoming an employee or officer of the Company or any Subsidiary.

 

2.14. “Exchange Act” shall
mean the Securities Exchange Act of 1934, as amended.

 

2.15. “Fair
Market Value” shall mean, with respect to Shares as of any date, the per Share closing price of the Shares: (i) if the
Shares are listed on a national securities exchange, the closing sale price reported as having occurred on the principal securities
exchange on which the Shares are listed and traded on such date, or, if there is no such sale on that date, then on the last preceding
date on which such a sale was reported; (ii) if the Shares are not listed on any national securities exchange but is quoted in an inter-dealer quotation system
on a last sale basis, the final ask price reported on such date, or, if there is no such sale on such date, then on the last preceding
date on which a sale was reported; or (iii) if the Shares are not listed on a national securities exchange nor quoted on an inter-dealer
quotation system on a last sale basis, the amount determined by the Committee to be the fair market value of the Shares as determined
by the Committee in its sole discretion. The Fair Market Value of any property other than Shares shall mean the market value of
such property determined by such methods or procedures as shall be established from time to time by the Committee, subject to the
requirements of Section 409A of the Code.

 

2.16. “Incentive Stock Option”
shall mean an Option which when granted is intended to qualify as an incentive stock option for purposes of Section 422 of
the Code.

 

2.17. “Limitations” shall
have the meaning set forth in Section 8.7.

 

2.18. “Non-Qualified Stock Option”
means any Stock Option awarded under the Plan that is not an Incentive Stock Option.

 

2.19. “Option” shall mean
any right granted to a Participant under this Plan allowing such Participant to purchase Shares at such price or prices and during
such period or periods as the Committee shall determine.

 

2.20. “Other Share-Based Award”
shall have the meaning set forth in Section 9.1.

 

2.21. “Participant” shall
mean an Employee, Consultant or Director who is selected by the Committee to receive an Award under this Plan.

 

2.22. “Performance Award” shall
mean any Award of Performance Shares or Performance Units granted pursuant to Article 8.

2.23. “Performance Period” shall
mean the period established by the Committee during which any performance goals specified by the Committee with respect to such
Award are to be measured.

 

2.24. “Performance Share” shall
mean any grant pursuant to Article 8 of a unit valued by reference to a designated number of Shares, which value will be paid to
the Participant upon achievement of such performance goals as the Committee shall establish.

 

    	 	A-2	 

     

    

 

2.25. “Performance Unit” shall
mean any grant pursuant to Article 8 of a unit valued by reference to a designated amount of cash or property other than Shares,
which value will be paid to the Participant upon achievement of such performance goals during the Performance Period as the Committee
shall establish.

 

2.26. “Restricted Stock” shall
mean any Share issued with the restriction that the holder may not sell, transfer, pledge or assign such Share and with such other
restrictions as the Committee, in its sole discretion, may impose (including any restriction on the right to vote such Share and
the right to receive any dividends), which restrictions may lapse separately or in combination at such time or times, in installments
or otherwise, as the Committee may deem appropriate.

 

2.27. “Restricted Stock Award”
shall have the meaning set forth in Section 7.1.

 

2.28. “Restricted Stock Unit”
means an Award that is valued by reference to a Share, which value may be paid to the Participant by delivery of such property
as the Committee shall determine, including without limitation, cash or Shares, or any combination thereof, and that has such restrictions
as the Committee, in its sole discretion, may impose, including without limitation, any restriction on the right to retain such
Awards, to sell, transfer, pledge or assign such Awards, and/or to receive any cash Dividend Equivalents with respect to such Awards,
which restrictions may lapse separately or in combination at such time or times, in installments or otherwise, as the Committee
may deem appropriate.

 

2.29. “Restricted Stock Unit Award”
shall have the meaning set forth in Section 7.1.

 

2.30. “Services” shall mean
services provided to the Company or any Subsidiary or any successor company (or a subsidiary or parent thereof), whether as an
Employee, Consultant or Director, unless, in connection with the conversion, if any, of a Participant from one classification (i.e.,
Employee, Consultant or Director) to another, the Committee, in its sole and absolute discretion, determines that any on-going
services to the Company or any Subsidiary or any successor company (or a subsidiary or parent thereof) shall not constitute “Services.”

 

2.31. “Shares” shall mean
the shares of common stock of the Company, par value $0.001 per share.

 

2.32. “Stock Appreciation Right”
shall mean the right granted to a Participant pursuant to Article 6.

 

2.33. “Subsidiary” shall
mean any corporation (other than the Company) in an unbroken chain of corporations beginning with the Company if, at the relevant
time each of the corporations other than the last corporation in the unbroken chain owns stock possessing 50% or more of the total
combined voting power of all classes of stock in one of the other corporations in the chain.

 

2.34. “Substitute Awards” shall
mean Awards granted or Shares issued by the Company in assumption of, or in substitution or exchange for, awards previously granted,
or the right or obligation to make future awards, in each case by a company acquired by the Company or any Subsidiary or with which
the Company or any Subsidiary combines.

 

2.35. “Termination” means
a Termination of Consultancy, Termination of Directorship or Termination of Employment, as applicable.

 

2.36. “Termination of Consultancy”
means: (a) that the Consultant is no longer acting as a consultant to the Company or an Affiliate; or (b) when an entity
that is retaining a Participant as a Consultant ceases to be an Affiliate unless the Participant otherwise is, or thereupon becomes,
a Consultant to the Company or another Affiliate at the time the entity ceases to be an Affiliate. In the event that a Consultant
becomes an Employee or a Director upon the termination of his or her consultancy, unless otherwise determined by the Committee,
in its sole discretion, no Termination of Consultancy shall be deemed to occur until such time as such Consultant is no longer
a Consultant, an Employee or a Director. Notwithstanding the foregoing, the Committee may, in its sole discretion, otherwise define
Termination of Consultancy in the Award agreement or, if no rights of a Participant are reduced, may otherwise define Termination
of Consultancy thereafter.

 

2.37. “Termination of Directorship”
means that the Director has ceased to be a Director of the Company; except that if a Director becomes an Employee or a Consultant
upon the termination of his or her directorship, his or her ceasing to be a Director of the Company shall not be treated as a Termination
of Directorship unless and until the Participant has a Termination of Employment or Termination of Consultancy, as the case may
be.

 

    	 	A-3	 

     

    

 

2.38. “Termination of Employment”
means: (a) a termination of employment of a Participant from the Company and its Affiliates; or (b) when an entity that
is employing a Participant ceases to be an Affiliate, unless the Participant otherwise is, or thereupon becomes, employed by the
Company or another Affiliate at the time the entity ceases to be an Affiliate. In the event that an Employee becomes a Consultant
or a Director upon the termination of his or her employment, unless otherwise determined by the Committee, in its sole discretion,
no Termination of Employment shall be deemed to occur until such time as such Employee is no longer an Employee, a Consultant or
a Director. Notwithstanding the foregoing, the Committee may, in its sole discretion, otherwise define Termination of Employment
in the Award agreement or, if no rights of a Participant are reduced, may otherwise define Termination of Employment thereafter.

 

3. SHARES SUBJECT TO THIS PLAN

 

3.1. Number of Shares. (a) Subject to
adjustment as provided for in this Plan, as of the Effective Date, a total of 75,000,000 Shares shall be authorized for grant under
this Plan. Subject at all times to Section 13.3, if: (i) any Shares subject to an Award are forfeited or expire or an Award is
settled for cash (in whole or in part) pursuant to the terms of an Award Agreement, the Shares subject to such Award, to the extent
of such forfeiture, expiration or cash settlement, again be available for Awards under this Plan, in accordance with this Section
3.1. Notwithstanding anything to the contrary contained herein, the following Shares shall not be added to the Shares authorized
for grant under paragraph (a) of this Section: (i) Shares tendered by the Participant or withheld by the Company in payment of
the purchase price of an Option; (ii) Shares tendered by the Participant or withheld by the Company to satisfy any tax withholding
obligation with respect to an Award; (iii) Shares subject to a Stock Appreciation Right that are not issued in connection with
the stock settlement of the Stock Appreciation Right on exercise thereof; and (iv) Shares reacquired by the Company on the open
market or otherwise using cash proceeds from the exercise of Options.

 

(b)Substitute Awards shall not reduce the
Shares authorized for grant under this Plan. Additionally, in the event that a company acquired by the Company or any Subsidiary
or with which the Company or any Subsidiary combines has shares available under a pre-existing plan approved by stockholders and
not adopted in contemplation of such acquisition or combination, the shares available for grant pursuant to the terms of such pre-existing
plan (as adjusted, to the extent appropriate, using the exchange ratio or other adjustment or valuation ratio or formula used in
such acquisition or combination to determine the consideration payable to the holders of common stock of the entities party to
such acquisition or combination) may be used for Awards under this Plan and shall not reduce the Shares authorized for grant under
this Plan; provided that Awards using such available shares shall not be made after the date awards or grants could have been made
under the terms of the pre-existing plan, absent the acquisition or combination, and shall only be made to individuals who were
not Employees or Directors prior to such acquisition or combination.

 

3.2. Character of Shares. Any Shares issued
hereunder may consist, in whole or in part, of authorized and unissued shares, treasury shares or shares purchased in the open
market or otherwise. No fractional shares shall be issued under the Plan and the Committee shall determine the manner in which
fractional share value shall be treated.

 

3.3. Limitations on Grants to Individual Participants.
Subject to adjustment as provided in Section 12.2, no Participant may: (i) be granted Options or Stock Appreciation Rights during
any 12-month period with respect to more than 1,000,000 Shares; and (ii) earn more than 500,000 Shares for each twelve (12) months
in the vesting period or Performance Period with respect to Restricted Stock Awards, Restricted Stock Unit Awards, Performance
Awards and/or Other Share-Based Awards that are intended to comply with the performance-based exception under Code Section 162(m)
and are denominated in Shares. In addition to the foregoing, the maximum dollar value that may be earned by any Participant for
each twelve (12) months in a Performance Period with respect to Performance Awards that are intended to comply with the performance-based
exception under Code Section 162(m) and are denominated in cash is $250,000. If an Award is cancelled, the cancelled Award shall
continue to be counted toward the applicable limitation in this section.

 

4. ELIGIBILITY AND ADMINISTRATION

 

4.1. Eligibility. Any Employee (inclusive
of officers), Consultant or Director shall be eligible to be selected as a Participant.

 

    	 	A-4	 

     

    

 

4.2. Administration. (a) This Plan shall
be administered by the Committee, or in the absence of a Committee, the full Board of Directors. The Committee shall have full
power and authority, subject to the provisions this Plan and subject to such orders or resolutions not inconsistent with the provisions
of this Plan as may from time to time be adopted by the Board, to: (i) select the Employees, Directors and Consultants to whom
Awards may from time to time be granted hereunder; (ii) determine the type or types of Awards, not inconsistent with the provisions
of this Plan, to be granted to each Participant hereunder; (iii) determine the number of Shares to be covered by each Award granted
hereunder; (iv) determine the terms and conditions, not inconsistent with the provisions of this Plan, of any Award granted hereunder
(including, but not limited to, the exercise or purchase price (if any), any restriction or limitation, any vesting schedule or
acceleration thereof, or any forfeiture restrictions or waiver thereof, regarding any Award and the Shares relating thereto, based
on such factors, if any, as the Committee shall determine, in its sole discretion); (v) determine whether, to what extent and under
what circumstances Awards may be settled in Shares, cash or other property; (vi) determine whether, to what extent, and under what
circumstances Shares, cash or other property and other amounts payable with respect to an Award made under this Plan shall be deferred
either automatically or at the election of the Participant, in any case, in a manner intended to comply with Section 409A
of the Code; (vii) determine whether, to what extent and under what circumstances any Award shall be canceled or suspended; (viii)
interpret and administer this Plan and any instrument or agreement entered into under or in connection with this Plan, including
any Award Agreement; (ix) correct any defect, supply any omission or reconcile any inconsistency in this Plan or any Award in the
manner and to the extent that the Committee shall deem desirable to carry it into effect; (x) establish such rules and regulations
and appoint such agents as it shall deem appropriate for the proper administration of this Plan; (xi) determine whether any Award,
other than an Option or Stock Appreciation Right, will have Dividend Equivalents; and (xii) make any other determination and take
any other action that the Committee deems necessary or desirable for administration of this Plan. Decisions of the Committee shall
be final, conclusive and binding on all persons or entities, including the Company, any Participant, and any Subsidiary.

 

(b) Subject to the terms of this Plan,
the Committee shall, in its sole discretion, have the authority to adopt, alter and repeal such administrative rules, guidelines
and practices governing the Plan and perform all acts, as it shall, from time to time, deem advisable; to construe and interpret
the terms and provisions of the Plan and any Award issued under the Plan (and any agreements relating thereto); and to otherwise
supervise the administration of the Plan. To the extent not inconsistent with applicable law, including Section 162(m) of the Code,
or the rules and regulations of the principal U.S. national securities exchange on which the Shares are traded, the Committee may
delegate to: (i) a committee of one or more directors of the Company any of the authority of the Committee under this Plan, including
the right to grant, cancel or suspend Awards; and (ii) to the extent permitted by law, to one or more executive officers or a committee
of executive officers the right to grant Awards to Employees who are not Directors or executive officers of the Company and the
authority to take action on behalf of the Committee pursuant to this Plan to cancel or suspend Awards to Employees who are not
Directors or executive officers of the Company. To the extent applicable, the Plan is intended to comply with the applicable requirements
of Rule 16b-3 and with respect to Awards intended to be “performance-based,” the applicable provisions of Section 162(m)
of the Code, and the Plan shall be limited, construed and interpreted in a manner so as to comply therewith.

 

5. OPTIONS

 

5.1. Grant of Options. Options may be
granted hereunder to Participants either alone or in addition to other Awards granted under this Plan. Any Option shall be subject
to the terms and conditions of this Article and to such additional terms and conditions, not inconsistent with the provisions of
this Plan, as the Committee shall deem desirable. Each Stock Option granted under the Plan shall be one of two types: (a) an
Incentive Stock Option; or (b) a Non-Qualified Stock Option. The Committee shall, in its sole discretion, have the authority
to grant any Consultant or Director Non-Qualified Stock Options. To the extent that any Option does not qualify as an Incentive
Stock Option (whether because of its provisions or the time or manner of its exercise or otherwise), such Option or the portion
thereof that does not qualify shall constitute a separate Non-Qualified Stock Option.

 

5.2. Award Agreements. All Options granted
pursuant to this Article shall be evidenced by a written Award Agreement in such form and containing such terms and conditions
as the Committee shall determine which are not inconsistent with the provisions of this Plan. The terms of Options need not be
the same with respect to each Participant. Granting an Option pursuant to this Plan shall impose no obligation on the recipient
to exercise such Option. Any individual who is granted an Option pursuant to this Article may hold more than one Option granted
pursuant to this Plan at the same time.

 

5.3. Option
Price. Other than in connection with Substitute Awards, the option price per each Share purchasable under any Option granted
pursuant to this Article shall not be less than 100% of the Fair Market Value of one Share on the date of grant of such Option;
provided, however, that in the case of an Incentive Stock Option granted to a Participant who, at the time of the grant, owns
stock representing more than 10% of the voting power of all classes of stock of the Company or any Subsidiary, the option price
per share shall be no less than 110% of the Fair Market Value of one Share on the date of grant. Other than pursuant to Section
12.2, the Committee shall not without the approval of the Company’s stockholders: (a) lower the option price per Share of
an Option after it is granted; (b) cancel an Option when the option price per Share exceeds the Fair Market Value of the underlying
Shares in exchange for cash or another Award (other than in connection with a Change in Control or a Substitute Award); or (c)
take any other action with respect to an Option that would be treated as a repricing under the rules and regulations of the principal
securities exchange on which the Shares are traded.

 

    	 	A-5	 

     

    

 

5.4. Vesting and Term of Option. The
terms of each Option shall be fixed by the Committee in its sole discretion; provided that no Option shall be exercisable after
the expiration of ten (10) years from the date the Option is granted, except in the event of death or disability; provided, however,
that the term of the Option shall not exceed five (5) years from the date the Option is granted in the case of an Incentive Stock
Option granted to a Participant who, at the time of the grant, owns stock (not inclusive of the actual grant) representing more
than 10% of the voting power of all classes of stock of the Company or any Subsidiary. Options awarded hereunder shall vest and
become exercisable in whole or in part, in accordance with such vesting conditions as the Committee shall determine, which conditions
shall be stated in the Award Agreement. Vested Options may be exercised in any order elected by the Participant whether or not
the Participant holds any unexercised Options under this Plan or any other plan of the Company.

 

5.5. Exercise of Options. (a) Options
granted under this Plan shall be exercised by the Participant or by a permitted assignee thereof (or by a Participant’s executors,
administrators, guardian or legal representative, as may be provided in an Award Agreement) as to all or part of the Shares covered
thereby which are vested at such time of exercise, by giving notice of exercise to the Company or its designated agent, specifying
the number of Shares to be purchased. The notice of exercise shall be in such form, made in such manner, and in compliance with
such other requirements consistent with the provisions of this Plan as the Committee may prescribe from time to time

 

(b) Unless otherwise provided in an Award Agreement,
full payment of such purchase price shall be made at the time of exercise and shall be made: (i) in cash or cash equivalents (including
certified check or bank check or wire transfer of immediately available funds); (ii) to the extent provided for in the applicable
Award Agreement or approved by the Committee, in its sole discretion, by delivery (either by actual delivery or attestation) of
shares of Common Stock owned by the Participant valued at their Fair Market Value as determined by the Committee, provided: (A) such
method of payment is then permitted under applicable law; (B) such Common Stock, if acquired directly from the Company, was
owned by the Participant for such minimum period of time, if any, as may be established by the Committee in its discretion; and
(C) such Common Stock is not subject to any repurchase, forfeiture, unfulfilled vesting or other similar requirements; (iii)
to the extent permitted by applicable law and provided for in the applicable Award Agreement or approved by the Committee in its
sole discretion, by payment of such other lawful consideration having a Fair Market Value on the exercise date equal to the
total purchase price as the Committee may determine; (iv) except as may otherwise be provided in the applicable Award Agreement,
by: (A) delivery of an irrevocable and unconditional undertaking by a creditworthy broker to deliver promptly to the Company
sufficient funds to pay the exercise price and any required tax withholding; or (B) delivery by the Participant to the Company
of a copy of irrevocable and unconditional instructions to a creditworthy broker to deliver promptly to the Company cash or a check
or wire transfer of funds sufficient to pay the exercise price and any required tax withholding; (v) through any other method specified
in an Award Agreement, or (vi) through any combination of any of the foregoing.

 

(c)The notice of exercise, accompanied by
such payment, shall be delivered to the Company at its principal business office or such other office as the Committee may from
time to time direct, and shall be in such form, containing such further provisions consistent with the provisions of this Plan,
as the Committee may from time to time prescribe. In no event may any Option granted hereunder be exercised for a fraction of a
Share. No adjustment shall be made for cash dividends or other rights for which the record date is prior to the date of such issuance.

 

(d)Notwithstanding the foregoing, an Award
Agreement may provide at the time of grant, in the discretion of the Committee, that if on the last day of the term of an Option
the Fair Market Value of one Share exceeds the option price per Share, the Participant has not exercised the Option (or a tandem
Stock Appreciation Right, if applicable) and the Option has not expired, the Option shall be deemed to have been exercised by the
Participant on such day with payment made by withholding Shares otherwise issuable in connection with the exercise of the Option;
provided, however, that this feature, to the extent contained in an Option, may only be utilized to the extent that the
holder of such Option is an active Employee, Director or Consultant as of the last day of the term of such Option. In such event,
the Company shall deliver to the Participant the number of Shares for which the Option was deemed exercised, less the number of
Shares required to be withheld for the payment of the total purchase price and required withholding taxes; provided, however, any
fractional Share shall be settled in cash.

 

5.6. Incentive Stock Options. The Committee
may grant Options intended to qualify as “incentive stock options” as defined in Section 422 of the Code, to any employee
of the Company or any Subsidiary, subject to the requirements of Section 422 of the Code. To the extent that the aggregate Fair
Market Value (determined as of the time of grant) of the Common Stock with respect to which Incentive Stock Options are exercisable
for the first time by an Employee during any calendar year under the Plan and/or any other stock option plan of the Company, any
Subsidiary or any Parent exceeds $100,000 (or such other dollar amount as may be applicable from time to time under the Code) ,
such Options shall be treated as Non-Qualified Stock Options. Should any provision of the Plan not be necessary in order for the
Stock Options to qualify as Incentive Stock Options, or should any additional provisions be required, the Committee may, in its
sole discretion, amend the Plan accordingly, without the necessity of obtaining the approval of the stockholders of the Company.
Solely for purposes of determining whether Shares are available for the grant of “incentive stock options” under this
Plan, the maximum aggregate number of Shares that may be issued pursuant to “incentive stock options” granted under
this Plan shall be the number of Shares set forth in the first sentence of Section 3.1(a), subject to adjustments provided in Section
12.2.

 

    	 	A-6	 

     

    

 

6.  STOCK APPRECIATION RIGHTS

 

6.1. Grant and Exercise. The Committee
may grant Stock Appreciation Rights: (a) in conjunction with all or part of any Option granted under this Plan or at any subsequent
time during the term of such Option; (b) in conjunction with all or part of any Award (other than an Option) granted under this
Plan or at any subsequent time during the term of such Award; or (c) without regard to any Option or other Award in each case upon
such terms and conditions as the Committee may establish in its sole discretion.

 

6.2. Terms
and Conditions. Stock Appreciation Rights shall be subject to such terms and conditions, not inconsistent with the provisions
of this Plan, as shall be determined from time to time by the Committee, including the following:

 

(a)  Upon the exercise of a Stock
Appreciation Right, the holder shall have the right to receive the excess of (i) the Fair Market Value of one Share on the date
of exercise (or such amount less than such Fair Market Value as the Committee shall so determine at any time during a specified
period before the date of exercise) over (ii) the grant price of the Stock Appreciation Right on the date of grant, which, except
in the case of Substitute Awards or in connection with an adjustment provided in Section 12.2, shall not be less than the Fair
Market Value of one Share on such date of grant of the Stock Appreciation Right.

 

(b)  The Committee shall determine
in its sole discretion whether payment of a Stock Appreciation Right shall be made in cash, in whole Shares or other property,
or any combination thereof. The provisions of Stock Appreciation Rights need not be the same with respect to each recipient. The
Committee may impose such terms and conditions on Stock Appreciation Rights granted in conjunction with any Award (other than an
Option) as the Committee shall determine in its sole discretion.

 

(c)  Stock Appreciation Rights may
be exercised by delivery to the Company of a written notice of exercise signed by the proper person or by any other form of notice
(including electronic notice) approved by the Board, together with any other documents required by the Board. The Committee may
impose such other terms and conditions on the exercise of any Stock Appreciation Right, as it shall deem appropriate. A Stock Appreciation
Right shall: (i) have a grant price per Share of not less than the Fair Market Value of one Share on the date of grant or,
if applicable, on the date of grant of an Option with respect to a Stock Appreciation Right granted in exchange for or in tandem
with, but subsequent to, the Option (subject to the requirements of Section 409A of the Code) except in the case of Substitute
Awards or in connection with an adjustment provided in Section 12.2; and (ii) have a term not greater than ten (10) years.

 

(d)  Without the approval of the Company’s
stockholders, other than pursuant to Section 12.2, the Committee shall not: (i) reduce the grant price of any Stock Appreciation
Right after the date of grant; (ii) cancel any Stock Appreciation Right when the grant price per Share exceeds the Fair Market
Value of the underlying Shares in exchange for cash or another Award (other than in connection with a Change in Control or a Substitute
Award)); or (iii) take any other action with respect to a Stock Appreciation Right that would be treated as a repricing under the
rules and regulations of the principal securities market on which the Shares are traded.

 

(e)  An Award Agreement may provide
at the time of grant, in the discretion of the Committee, that if on the last day of the term of a Stock Appreciation Right the
Fair Market Value of one Share exceeds the grant price per Share of the Stock Appreciation Right, the Participant has not exercised
the Stock Appreciation Right, and the Stock Appreciation Right has not expired, the Stock Appreciation Right shall be deemed to
have been exercised by the Participant on such day; provided, however, that this feature, to the extent contained in an
Stock Appreciation Right, may only be utilized to the extent that the holder of such Stock Appreciation Right is an active Employee,
Director or Consultant as of the last day of the term of such Stock Appreciation Right. In such event, the Company shall make payment
to the Participant in accordance with this Section, reduced by the number of Shares (or cash) required for withholding taxes; any
fractional Share shall be settled in cash.

 

    	 	A-7	 

     

    

 

7. RESTRICTED STOCK AND RESTRICTED STOCK UNITS

 

7.1. Grants. Awards of Restricted Stock
and of Restricted Stock Units may be issued hereunder to Participants either alone or in addition to other Awards granted under
this Plan (a “Restricted Stock Award” or “Restricted Stock Unit Award” respectively), and such Restricted
Stock Awards and Restricted Stock Unit Awards shall also be available as a form of payment of Performance Awards and other earned
cash-based incentive compensation. A Restricted Stock Award or Restricted Stock Unit Award may be subject to vesting restrictions
imposed by the Committee covering a period of time specified by the Committee. Subject to applicable law, the Committee has absolute
discretion to determine whether any consideration (other than services) is to be received by the Company or any Subsidiary as a
condition precedent to the issuance of Restricted Stock or Restricted Stock Units.

 

7.2. Award Agreements. The terms of any
Restricted Stock Award or Restricted Stock Unit Award granted under this Plan may be set forth in a written Award Agreement which
shall contain provisions determined by the Committee and not inconsistent with this Plan. The terms of Restricted Stock Awards
and Restricted Stock Unit Awards need not be the same with respect to each Participant.

 

7.3. Rights
of Holders of Restricted Stock and Restricted Stock Units. Unless otherwise provided in an Award Agreement, beginning on the
date of grant of the Restricted Stock Award and subject to execution of an Award Agreement, if so required, the Participant shall
become a stockholder of the Company with respect to all Shares subject to the Award Agreement and shall have all of the rights
of a stockholder, including the right to vote such Shares and the right to receive distributions made with respect to such Shares.
A Participant receiving a Restricted Stock Unit Award shall have only those rights specifically provided for by the Award Agreement,
provided that in no event shall such a participant possess voting rights with respect to such Award. Except as otherwise provided
in an Award Agreement any Shares or any other property (other than cash) distributed as a dividend or otherwise with respect to
any Restricted Stock Award or Restricted Stock Unit Award as to which the restrictions have not yet lapsed shall be subject to
the same restrictions as such Restricted Stock Award or Restricted Stock Unit Award. Notwithstanding the provisions of this Section,
cash dividends, stock and any other property (other than cash) distributed as a dividend or otherwise with respect to any Restricted
Stock Award or Restricted Stock Unit Award that vests based on achievement of performance goals shall either: (i) not be paid
or credited; or (ii) be accumulated, shall be subject to restrictions and risk of forfeiture to the same extent as the Restricted
Stock or Restricted Stock Units with respect to which such cash, stock or other property has been distributed and shall be paid
at the time such restrictions and risk of forfeiture lapse.

 

7.4. Restrictions and Conditions.  Restricted
Stock and Restricted Stock Units awarded pursuant to the Plan shall be subject to the following restrictions. The Participant shall
not be permitted to Transfer shares of Restricted Stock awarded under the Plan during the period or periods set by the Committee
(the “Restriction Period”) commencing on the date of such Award, as set forth in an Award Agreement and such agreement
shall set forth a vesting schedule and any events that would accelerate vesting of the Award. Within these limits, based on service,
attainment of performance goals and/or such other factors or criteria as the Committee may determine in its sole discretion, the
Committee may condition the grant or provide for the lapse of such restrictions in installments in whole or in part, or may accelerate
the vesting of all or any part of any Award and/or waive the deferral limitations for all or any part of any Award.

 

 7.5. Issuance of Shares. Any Restricted
Stock granted under this Plan may be evidenced in such manner as the Board may deem appropriate, including book-entry registration
or issuance of a stock certificate or certificates, which certificate or certificates shall be held by the Company or its designee.
Such certificate or certificates shall be registered in the name of the Participant and, and shall, in addition to such legends
required by applicable securities laws, bear an appropriate legend referring to the terms, conditions, and restrictions applicable
to such Award, in such form as may be determined by the Committee.

 

7.6. Payment of Director Fees. Directors
shall, if determined by the Board, receive awards in the form of Restricted Stock or Restricted Stock Units in lieu of all or a
portion of any annual payment of fees for services. In addition, if permitted by the Board, Directors may elect to receive Restricted
Stock or Restricted Stock Units in lieu of all or a portion of their annual and committee retainers and annual meeting fees or
other payments for services. The Board (or if so delegated, the Committee) shall, in its absolute discretion, establish such rules
and procedures as it deems appropriate for such elections and for payment in Restricted Stock or Restricted Stock Units.

 

    	 	A-8	 

     

    

 

		8.	PERFORMANCE AWARDS

 

8.1. Grants. Performance Awards in the
form of Performance Shares or Performance Units, as determined by the Committee in its sole discretion, may be granted hereunder
to Participants, for no consideration or for such minimum consideration as may be required by applicable law, either alone or in
addition to other Awards granted under this Plan. The performance goals to be achieved for each Performance Period shall be conclusively
determined by the Committee and shall be based upon the criteria set forth in Section 8.5.

 

8.2. Award Agreements. The terms of any
Performance Award granted under this Plan shall be set forth in a written Award Agreement which shall contain provisions determined
by the Committee and not inconsistent with this Plan. If a Performance Award has Dividend Equivalents, provision for such shall
be contained in the applicable Award Agreement. The terms of Performance Awards need not be the same with respect to each Participant.

 

8.3. Payment. Except as provided in
Article 11 or as may be provided in an Award Agreement, Performance Awards will be distributed only after the end of the relevant
Performance Period. Performance Awards may be paid in Shares, cash, other property, or any combination thereof, in the sole discretion
of the Committee. Performance Awards may be paid in a lump sum or in installments following the close of the Performance Period
or, in accordance with procedures established by the Committee, on a deferred basis subject to the requirements of Section 409A
of the Code. The amount of the Award to be distributed shall be conclusively determined by the Committee.

 

8.4.  Terms and Conditions. The
performance criteria to be achieved during any Performance Period and the length of the Performance Period shall be determined
by the Committee prior to the grant of each Performance Award and shall be subject to the following terms and conditions:  

 

(a)  The Committee shall establish the
objective performance goals for the earning of Performance Awards based on a Performance Period applicable to each Participant
or class of Participants in writing prior to the beginning of the applicable Performance Period or at such later date as permitted
under Section 162(m) of the Code and while the outcome of the Performance goals are substantially uncertain. Each grant may
specify in respect of such performance goals a minimum acceptable level of achievement and may set forth a formula for determining
the number of Performance Shares or Performance Units that will be earned if performance is at or above the minimum or threshold
level or levels, or is at or above the target level or levels, but falls short of maximum achievement of the specified performance
goals. At the expiration of the applicable Performance Period, the Committee shall determine the extent to which the performance
goals established pursuant to Section 8.5 are achieved and the percentage of each Performance Award that has been earned.

 

(b) Unless otherwise determined by the Committee
at the time of grant, amounts equal to any dividends declared during the Performance Period with respect to the number of shares
of Common Stock covered by a Performance Share will not be paid to the Participant.

 

8.5. Performance Criteria. If the Committee
determines that a Restricted Stock Award, a Restricted Stock Unit, a Performance Award or an Other Share-Based Award is intended
to be subject to this Article 8, the lapsing of restrictions thereon and the distribution of cash, Shares or other property pursuant
thereto, as applicable, shall be subject to the achievement of one or more objective performance goals established by the Committee,
which shall be based on the attainment of specified levels of one or any combination of the following: (a) earnings per share;
(b) operating income (before or after taxes); (c) net income (before or after taxes); (d) net sales; (e) cash flow; (f) gross profit;
(g) gross profit return on investment; (h) gross margin return on investment; (i) gross margin; (j) working capital; (k) earnings
before interest and taxes; (l) earnings before interest, tax, depreciation and amortization; (m) return on equity; (n) return on
assets; (o) return on capital; (p) return on invested capital; (q) net revenues; (r) gross revenues; (s) revenue growth or product
revenue growth; (t) total shareholder return; (u) appreciation in and/or maintenance of the Company’s market capitalization;
(v) cash flow or cash flow per share (before or after dividends); (w) economic value added; (x) the fair market value of the shares
of the Company’s Common Stock; (y) the growth in the value of an investment in the Company’s Common Stock assuming
the reinvestment of dividends; (z) reduction in expenses or improvement in or attainment of expense levels or working capital
levels; (aa) financing and other capital raising transactions; (bb) debt reductions; (cc) regulatory achievements (including submitting
or filing applications or other documents with regulatory authorities, having any such applications or other documents accepted
for review by the applicable regulatory authority or receiving approval of any such applications or other documents); or (dd) strategic
partnerships or transactions (including in-licensing and out-licensing of intellectual property). Such performance goals also may
be based solely by reference to the Company’s performance or the performance of a Subsidiary, division, business segment
or business unit of the Company, or based upon the relative performance of other companies or upon comparisons of any of the indicators
of performance relative to other companies. The Committee may also exclude charges related to an event or occurrence which the
Committee determines should appropriately be excluded, including: (A) restructurings, discontinued operations, extraordinary items,
and other unusual or non-recurring charges; (B) an event either not directly related to the operations of the Company or not within
the reasonable control of the Company’s management; or (C) the cumulative effects of tax or accounting changes in accordance
with U.S. generally accepted accounting principles. Such performance goals shall be set by the Committee within the time period
prescribed by, and shall otherwise comply with the requirements of, Section 162(m) of the Code, and the regulations thereunder.

 

    	 	A-9	 

     

    

 

8.6. Adjustment and Restrictions. Notwithstanding
any provision of this Plan (other than Article 11), with respect to any Performance Award, the Committee may adjust downwards,
but not upwards, the amount payable pursuant to such Award, and the Committee may not waive the achievement of the applicable performance
goals, except in the case of the death or disability of the Participant or as otherwise determined by the Committee in special
circumstances. The Committee shall have the power to impose such other restrictions on Awards subject to this Article as it may
deem necessary or appropriate to ensure that such Awards satisfy all requirements for “performance-based compensation”
within the meaning of Section 162(m) of the Code.

 

		9.	OTHER SHARE-BASED AWARDS

 

9.1. Grants. The Committee, in its sole
discretion, is authorized to grant to Participants, other Awards of Shares and other Awards that are valued in whole or in part
by reference to, or are otherwise based on, Shares or other property (“Other Share-Based Awards”), that are payable
in, valued in whole or in part by reference to, or otherwise based on or related to shares of Common Stock, including, but not
limited to, shares of Common Stock awarded purely as a bonus and not subject to any restrictions or conditions, shares of Common
Stock in payment of the amounts due under an incentive or performance plan sponsored or maintained by the Company or an Affiliate,
performance units, dividend equivalent units, stock equivalent units, restricted stock units and deferred stock units. To the extent
permitted by law, the Committee may, in its sole discretion, permit Participants to defer all or a portion of their cash compensation
in the form of Other Share-Based Awards granted under the Plan, subject to the terms and conditions of any deferred compensation
arrangement established by the Company, which shall be intended to comply with Section 409A of the Code. Other Stock-Based
Awards may be granted either alone or in addition to or in tandem with other Awards granted under the Plan. Other Share-Based Awards
may be subject to vesting restrictions imposed by the Committee covering a period of time specified by the Committee. The Committee
has absolute discretion to determine whether any consideration (other than services) is to be received by the Company or any Subsidiary
as a condition precedent to the issuance of Other Share-Based Awards.

 

9.2. Award Agreements. The terms of Other
Share-Based Awards granted under this Plan shall be set forth in a written Award Agreement which shall contain provisions determined
by the Committee and not inconsistent with this Plan. The terms of such Awards need not be the same with respect to each Participant.
Unless otherwise determined by the Committee at the time of Award, subject to the provisions of the Award agreement and the Plan,
the recipient of an Other-Share Based Award shall not be entitled to receive, currently or on a deferred basis, dividends or dividend
equivalents with respect to the number of shares of Common Stock covered by the Award. Any Other Share-Based Award and any Shares
covered by any such Award shall vest or be forfeited to the extent so provided in the Award Agreement, as determined by the Committee,
in its sole discretion. Notwithstanding the provisions of this Section, Dividend Equivalents and any property (other than cash)
distributed as a dividend or otherwise with respect to the number of Shares covered by a Other Share-Based Award that vests based
on achievement of performance goals shall be subject to restrictions and risk of forfeiture to the same extent as the Shares covered
by a Other Share-Based Award with respect to which such cash, Shares or other property has been distributed.

 

9.3. Payment. Except as may be provided
in an Award Agreement, Other Share-Based Awards may be paid in cash, Shares, other property, or any combination thereof, in the
sole discretion of the Committee. Other Share-Based Awards may be paid in a lump sum or in installments or, in accordance with
procedures established by the Committee, on a deferred basis subject to the requirements of Section 409A of the Code.

 

		10.	EFFECTIVENESS OF PLAN; TERMINATION OF AWARDS

 

10.1. Effective Date and Termination of
Plan. The Plan shall be effective on the date of the approval of the Plan by the holders of the shares entitled to vote at
a duly constituted meeting of the stockholders of the Company, which approval shall be obtained within 12 months of the date this
Plan is approved by the Board. The Plan shall be null and void and of no effect if the foregoing condition is not fulfilled and
in such event each Award shall, notwithstanding any of the preceding provisions of the Plan, be null and void and of no effect.
Awards may be granted under the Plan at any time and from time to time on or prior to the tenth anniversary of the effective date
of the Plan, on which date the Plan will expire except as to Awards then outstanding under the Plan. Such outstanding Awards shall
remain in effect until they have been exercised or terminated, or have expired.

 

    	 	A-10	 

     

    

 

10.2. Termination of Awards. The Committee
shall determine and set forth in each Award Agreement whether any Awards granted in such Award Agreement will continue to be exercisable,
and the terms of such exercise, on and after the date that a Participant ceases to be employed by or to provide services to the
Company or any Subsidiary (including as a Director or Consultant), whether by reason of death, disability, voluntary or involuntary
termination of employment or services, or otherwise. The date of termination of a Participant’s employment or services will
be determined by the Committee, which determination will be final. Unless otherwise determined by the Committee at the time of
grant, the following provisions shall apply.

 

 (a)  Rules Applicable to
Options and Stock Appreciation Rights.  Unless otherwise provided in an Award Agreement, as may be determined by
the Committee at grant (or, if no rights of the Participant are reduced, thereafter) or under the terms of an Employment or Consulting
or similar agreement with the Participant:

 

(i) Termination by Reason of Death,
Disability or Retirement.  If a Participant’s Termination is by reason of death or Disability, all Options
or Stock Appreciation Rights that are held by such Participant that are vested and exercisable at the time of the Participant’s
Termination may be exercised by the Participant (or, in the case of death, by the legal representative of the Participant’s
estate) at any time within a one-year period from the date of such Termination, but in no event beyond the expiration of the stated
term of such Stock Options or Stock Appreciation Rights; provided, however, if the Participant dies within such exercise
period, all unexercised Stock Options or Stock Appreciation Rights held by such Participant shall thereafter be exercisable, to
the extent to which they were exercisable at the time of death, for a period of one year from the date of such death, but in no
event beyond the expiration of the stated term of such Options or Stock Appreciation Rights.

 

(ii) Termination Without Cause. If
a Participant’s Termination is a termination without Cause, all Options or Stock Appreciation Rights that are held by such
Participant that are vested and exercisable at the time of the Participant’s Termination may be exercised by the Participant
at any time within a period of 90 days from the date of such Termination, but in no event beyond the expiration of the stated
term of such Options or Stock Appreciation Rights.

 

(iii) Termination for Cause.  If
a Participant’s Termination: (1) is for Cause; or (2) is a voluntary Termination by the Participant after the occurrence
of an event that would be grounds for a Termination for Cause, all Options or Stock Appreciation Rights, whether vested or not
vested, that are held by such Participant shall thereupon terminate and expire as of the date of such Termination.

 

(iv) Unvested Options and Stock
Appreciation Rights.  Options or Stock Appreciation Rights that are not vested as of the date of a Participant’s
Termination for any reason shall terminate and expire as of the date of such Termination.

 

(b)  Rules Applicable to Restricted
Stock, Restricted Stock Units Performance Awards and Other Stock-Based Awards. Unless otherwise provided in an Award Agreement,
as may be determined by the Committee at grant or thereafter, upon a Participant’s Termination for any reason: (i) with respect
to Restricted Stock Awards or Restricted Stock Unit Awards subject to vesting, (A) in the event a Participant who is an Employee
ceases to be employed with the consent of the Committee or upon the Participant’s death or Disability before the end of a
vesting period subject only to continued service with the Company or a Subsidiary, the number of Shares subject to the Restricted
Stock Award or Restricted Stock Unit Award that shall vest shall be determined by the Committee; and (B) in the event the Participant
ceases to be employed for any other reason, all Shares subject to the Restricted Stock Award or Restricted Stock Unit Award which
are still unvested shall be forfeited; and (ii) any unvested Performance Awards or Other Stock-Based Awards shall be forfeited.

 

10.3. Cancellation of Award; Forfeiture of
Gain. Notwithstanding anything to the contrary contained herein, an Award Agreement may provide that the Award shall be canceled
if the Participant, without the consent of the Company, while employed by the Company or any Subsidiary or after termination of
such employment or service, violates a non-competition, non-solicitation or non-disclosure covenant or agreement or otherwise engages
in activity that is in conflict with or adverse to the interest of the Company or any Subsidiary (including conduct contributing
to any financial restatements or financial irregularities), as determined by the Committee in its sole discretion. The Committee
may provide in an Award Agreement that if within the time period specified in the Agreement the Participant establishes a relationship
with a competitor or engages in an activity referred to in the preceding sentence, the Participant will forfeit any gain realized
on the vesting or exercise of the Award and must repay such gain to the Company.

 

    	 	A-11	 

     

    

 

11.  CHANGE IN CONTROL PROVISIONS

 

11.1. Impact on Certain Awards. Award
Agreements may provide that in the event of a Change in Control of the Company (as defined in Section 11.3): (i) Options and Stock
Appreciation Rights outstanding as of the date of the Change in Control shall be cancelled and terminated without payment if the
Fair Market Value of one Share as of the date of the Change in Control is less than the per Share Option exercise price or Stock
Appreciation Right grant price; and (ii) all Performance Awards shall be (x) considered to be earned and payable based on achievement
of performance goals or based on target performance (either in full or pro rata based on the portion of Performance Period completed
as of the date of the Change in Control), and any limitations or other restrictions shall lapse and such Performance Awards shall
be immediately settled or distributed or (y) converted into Restricted Stock or Restricted Stock Unit Awards based on achievement
of performance goals or based on target performance (either in full or pro rata based on the portion of Performance Period completed
as of the date of the Change in Control) that are subject to Section 11.2. Notwithstanding anything to the contrary in this Section
11 (including all provisions of this Section 11) in the event that the Award Agreement does not explicitly state the intended treatment
or acceleration or vesting of the Award upon a Change of Control, then the Award shall vest in accordance with the terms originally
stated therein and there shall be no accelerated vesting or earning of any such Award.

 

11.2.
Assumption or Substitution of Certain Awards. (a) Unless otherwise provided in an Award
Agreement, in the event of a Change in Control of the Company in which the successor company assumes or substitutes for an Option,
Stock Appreciation Right, Restricted Stock Award, Restricted Stock Unit Award or Other Share-Based Award (or in which the Company
is the ultimate parent corporation and continues the Award), if a Participant’s employment or service as a Director with
such successor company (or the Company) or a subsidiary thereof terminates within 24 months following such Change in Control (or
such other period set forth in the Award Agreement, including prior thereto if applicable) and under the circumstances specified
in the Award Agreement: (i) Options and Stock Appreciation Rights outstanding as of the date of such termination of employment
will immediately vest, become fully exercisable, and may thereafter be exercised for 24 months (or the period of time set forth
in the Award Agreement), (ii) the restrictions, limitations and other conditions applicable to Restricted Stock and Restricted
Stock Units outstanding as of the date of such termination of employment shall lapse and the Restricted Stock and Restricted Stock
Units shall become free of all restrictions, limitations and conditions and become fully vested, and (iii) the restrictions, limitations
and other conditions applicable to any Other Share-Based Awards or any other Awards shall lapse, and such Other Share-Based Awards
or such other Awards shall become free of all restrictions, limitations and conditions and become fully vested and transferable
to the full extent of the original grant. For the purposes of this Section 11.2, an Option, Stock Appreciation Right, Restricted
Stock Award, Restricted Stock Unit Award or Other Share-Based Award shall be considered assumed or substituted for if following
the Change in Control the Award confers the right to purchase or receive, for each Share subject to the Option, Stock Appreciation
Right, Restricted Stock Award, Restricted Stock Unit Award or Other Share-Based Award immediately prior to the Change in Control,
the consideration (whether stock, cash or other securities or property) received in the transaction constituting a Change in Control
by holders of Shares for each Share held on the effective date of such transaction (and if holders were offered a choice of consideration,
the type of consideration chosen by the holders of a majority of the outstanding Shares); provided, however, that if such consideration
received in the transaction constituting a Change in Control is not solely common stock of the successor company, the Committee
may, with the consent of the successor company, provide that the consideration to be received upon the exercise or vesting of an
Option, Stock Appreciation Right, Restricted Stock Award, Restricted Stock Unit Award or Other Share-Based Award, for each Share
subject thereto, will be solely common stock of the successor company substantially equal in fair market value to the per Share
consideration received by holders of Shares in the transaction constituting a Change in Control. The determination of such substantial
equality of value of consideration shall be made by the Committee in its sole discretion and its determination shall be conclusive
and binding.

 

(b)
Unless otherwise provided in an Award Agreement, in the event of a Change in Control of the Company to the extent the successor
company does not assume or substitute for an Option, Stock Appreciation Right, Restricted Stock Award, Restricted Stock Unit Award
or Other Share-Based Award (or in which the Company is the ultimate parent corporation and does not continue the Award), then immediately
prior to the Change in Control: (i) those Options and Stock Appreciation Rights outstanding as of the date of the Change in Control
that are not assumed or substituted for (or continued) shall immediately vest and become fully exercisable; (ii) restrictions,
limitations and other conditions applicable to Restricted Stock and Restricted Stock Units that are not assumed or substituted
for (or continued) shall lapse and the Restricted Stock and Restricted Stock Units shall become free of all restrictions, limitations
and conditions and become fully vested; and (iii) the restrictions, other limitations and other conditions applicable to any Other
Share-Based Awards or any other Awards that are not assumed or substituted for (or continued) shall lapse, and such Other Share-Based
Awards or such other Awards shall become free of all restrictions, limitations and conditions and become fully vested and transferable
to the full extent of the original grant. 

 

    	 	A-12	 

     

    

 

(c)   The
Committee, in its discretion, may determine that, upon the occurrence of a Change in Control of the Company, each Option and Stock
Appreciation Right outstanding shall terminate within a specified number of days after notice to the Participant, and/or that each
Participant shall receive, with respect to each Share subject to such Option or Stock Appreciation Right, an amount equal to the
excess of the Fair Market Value of such Share immediately prior to the occurrence of such Change in Control over the exercise price
per Share of such Option and/or Stock Appreciation Right; such amount to be payable in cash, in one or more kinds of stock or property
(including the stock or property, if any, payable in the transaction) or in a combination thereof, as the Committee, in its discretion,
shall determine.

 

11.3. Change in Control. For purposes
of this Plan, unless otherwise provided in an Award Agreement, Change in Control means the occurrence of any one of the following
events after the date of approval of this Plan by the Board:

(a)   Over
a period of 24 consecutive months or less, there is a change in the composition of the Board such that a majority of the Board
(rounded up to the next whole number, if a fraction) ceases, by reason of one or more proxy contests for the election of Board
members, to be composed of individuals who either: (i) have been Board members continuously since the beginning of that period;
or (ii) have been elected or nominated for election as Board members during such period by at least a majority of the Board members
described in the preceding clause (i) who were still in office at the time that election or nomination was approved by the Board;
provided, however, that no individual initially elected or nominated as a director of the Company as a result of an actual or threatened election contest with respect to
directors or as a result of any other actual or threatened solicitation of proxies by or on behalf of any person other than the
Board shall be deemed to satisfy the criteria described in the preceding clause (ii);

 

(b)   Any person or group of
persons (within the meaning of Section 13(d)(3) of the Exchange Act) directly or indirectly acquires beneficial ownership (determined
pursuant to Rule 13d-3 promulgated under the Exchange Act) of securities possessing more than 50% of the total combined voting
power of the Company’s outstanding securities, other than: (i) the Company or any corporation, partnership, limited liability
company, business trust, or other entity that is an Affiliate of the Company; (ii) an employee benefit plan of the Company or an
Affiliate; (iii) a trustee or other fiduciary holding securities under an employee benefit plan of the Company or an Affiliate;
or (iv) an underwriter temporarily holding securities pursuant to an offering of such securities;

 

(c)   The consummation of a
merger or consolidation of the Company with or into another person or the sale, transfer, or other disposition of all or substantially
all of the Company’s assets to one or more other persons in a single transaction or series of related transactions that requires
the approval of the Company’s stockholders, whether for such transaction or the issuance of securities in such transaction
(a “Business Combination”), unless in connection with such Business Combination securities possessing more than 50%
of the total combined voting power of the survivor’s or acquiror’s outstanding securities (or the securities of any
parent thereof) are held by a person or persons who held securities possessing more than 50% of the total combined voting power
of the Company’s outstanding securities (“Voting Securities”) immediately prior to such Business Combination
and such voting power among the holders thereof is in substantially the same proportion as the voting power of such Company Voting
Securities among the holders thereof immediately prior to such Business Combination; or

 

(d)   The stockholders of the
Company approve a plan of complete liquidation or dissolution of the Company or the consummation of a sale of all or substantially
all of the Company’s assets.

 

Notwithstanding the foregoing, a Change in Control
shall not be deemed to occur solely because any person acquires beneficial ownership of more than 50% of the Voting Securities
as a result of the acquisition of Voting Securities by the Company which reduces the number of Voting Securities outstanding; provided,
that if after such acquisition by the Company such person becomes the beneficial owner of additional Voting Securities that increases
the percentage of outstanding Voting Securities beneficially owned by such person, a Change in Control shall then occur.

 

    	 	A-13	 

     

    

 

12. PROVISIONS WITH GENERAL APPLICABILITY

 

12.1. Amendment and Termination of this Plan.
The Board may, from time to time, alter, amend, suspend or terminate this Plan as it shall deem advisable, subject to any
requirement for stockholder approval imposed by applicable law, including the rules and regulations of the principal securities
market on which the Shares are traded; provided that the Board may not amend this Plan in any manner that would result in noncompliance
with Rule 16b-3 of the Exchange Act; and further provided that the Board may not, without the approval of the Company’s stockholders,
amend this Plan to: (a) increase the number of Shares that may be the subject of Awards under this Plan (except for adjustments
pursuant to Section 12.2); (b) expand the types of awards available under this Plan; (c) materially expand the class of persons
eligible to participate in this Plan; (d) amend any provision of Section 5.3 or Section 6.2(a); (e) increase the maximum permissible
term of any Option or Stock Appreciation Right; (f) increase the Limitations; or (g) or otherwise materially increase the benefits
accruing to Participants under this Plan. The Board may not, without the approval of the Company’s stockholders, take any
other action with respect to an Option or Stock Appreciation Right that would be treated as a repricing under the rules and regulations
of the principal securities exchange on which the Shares are traded, including a reduction of the exercise price of an Option or
the grant price of a Stock Appreciation Right or the exchange of an Option or Stock Appreciation Right for cash or another Award.
In addition, no amendments to, or termination of, this Plan shall impair the rights of a Participant in any material respect under
any Award previously granted without such Participant’s consent.

 

12.2. Changes in Capital Structure.
In the event of any: (a) any reclassification, recapitalization, stock split (including a stock split in the form of a stock
dividend) or reverse stock split; (b) any merger, combination, consolidation, or other reorganization; (c) any spin-off,
split-up, or similar extraordinary dividend distribution in respect of the Shares (whether in the form of securities, cash (other
than regular cash dividends) or property); (d) any exchange of Shares or other securities of the Company, or any similar,
unusual or extraordinary corporate transaction in respect of the Shares; or (e) a sale of all or substantially all the business
or assets of the Company as an entirety, then the Committee shall, in such manner, to such extent (if any) and at such time as
it deems appropriate and equitable in the circumstances in order to preserve, but not increase, the benefits or potential benefits
intended to be made available under the Plan or an outstanding Award: (i) proportionately adjust any or all of: (A) the
number and type of shares of Shares (or other securities) that thereafter may be made the subject of Awards (including the specific
share limits, maximums and numbers of shares set forth elsewhere in this Plan); (B) the number, amount and type of shares
of Shares (or other securities or property) subject to any or all outstanding Awards; (C) the grant, purchase, or exercise
price of any or all outstanding Award; (D) the securities, cash or other property deliverable upon exercise or payment of
any outstanding Awards, or (E) the performance standards applicable to any outstanding Awards; or (ii) make provision
for a cash payment or for the assumption, substitution or exchange of any or all outstanding share-based Awards or the cash, securities
or property deliverable to the holder of any or all outstanding share-based Awards, based upon the distribution or consideration
payable to holders of the Shares upon or in respect of such event. Notwithstanding the foregoing, to the extent possible, all
adjustments shall be made in a manner to avoid: (i) an Award that is not already subject to Section 409A of the Code
from becoming subject to Section 409A of the Code; and (ii) the imposition of penalties pursuant to Section 409A
of the Code. In any of such events, the Committee may take such action prior to such event to the extent that the Committee deems
the action necessary to permit the Participant to realize the benefits intended to be conveyed with respect to the underlying
shares in the same manner as is or will be available to stockholders generally. In the case of any stock split or reverse stock
split, if no action is taken by the Committee, the proportionate adjustments contemplated by clause (i) above shall nevertheless
be made. 

 

12.3. Transferability of Awards. Except
as provided below, no Award and no Shares that have not been issued or as to which any applicable restriction, performance or deferral
period has not lapsed, may be sold, assigned, transferred, pledged or otherwise encumbered, other than by will or the laws of descent
and distribution, and such Award may be exercised during the life of the Participant only by the Participant or the Participant’s
guardian or legal representative. To the extent and under such terms and conditions as determined by the Committee, a Participant
may assign or transfer an Award without consideration (each transferee thereof, a “Permitted Assignee”) to: (i) the
Participant’s spouse, children or grandchildren (including any adopted and step children or grandchildren), parents, grandparents
or siblings; (ii) to a trust for the benefit of one or more of the Participant or the persons referred to in clause (i); (iii)
to a partnership, limited liability company or corporation in which the Participant or the persons referred to in clause (i) are
the only partners, members or shareholders; or (iv) for charitable donations; provided that such Permitted Assignee shall be bound
by and subject to all of the terms and conditions of this Plan and the Award Agreement relating to the transferred Award and shall
execute an agreement satisfactory to the Company evidencing such obligations; and provided further that such Participant shall
remain bound by the terms and conditions of this Plan. The Company shall cooperate with any Permitted Assignee and the Company’s
transfer agent in effectuating any transfer permitted under this Section.

 

    	 	A-14	 

     

    

 

12.4. Deferral; Dividend Equivalents.
The Committee shall be authorized to establish procedures pursuant to which the payment of any Award may be deferred consistent
with the requirements of Section 409A of the Code. Subject to the provisions of this Plan and any Award Agreement, the recipient
of an Award other than an Option or Stock Appreciation Right may, if so determined by the Committee, be entitled to receive, currently
or on a deferred basis, cash, stock or other property dividends, or cash payments in amounts equivalent to cash, stock or other
property dividends on Shares (“Dividend Equivalents”) with respect to the number of Shares covered by the Award, as
determined by the Committee, in its sole discretion. The Committee may provide that such amounts and Dividend Equivalents (if any)
shall be deemed to have been reinvested in additional Shares or otherwise reinvested and may provide that such amounts and Dividend
Equivalents are subject to the same vesting or performance conditions as the underlying Award. Notwithstanding the foregoing, Dividend
Equivalents credited in connection with an Award that vests based on the achievement of performance goals shall be subject to restrictions
and risk of forfeiture to the same extent as the Award with respect to which such Dividend Equivalents have been credited.

 

12.5. Privileges of Stock Ownership.
  No Participant will have any of the rights of a stockholder with respect to any Shares until the Shares are issued
to the Participant. After Shares are issued to the Participant, the Participant will be a stockholder and have all the rights of
a stockholder with respect to such Shares, including the right to vote and receive all dividends or other distributions made or
paid with respect to such Shares; provided, that if such Shares are restricted stock, then any new, additional or different
securities the Participant may become entitled to receive with respect to such Shares by virtue of a stock dividend, stock split
or any other change in the corporate or capital structure of the Company will be subject to the same restrictions as the restricted
stock; provided, further, that the Participant will have no right to retain such stock dividends or stock distributions
with respect to Shares that are repurchased at the Participant’s original purchase price.

 

12.6. Custody. To enforce any restrictions
on a Participant’s Award, the Committee may require the Participant to deposit all Award Agreements or certificates representing
Shares, together with stock powers or other instruments of transfer approved by the Committee, appropriately endorsed in blank,
with the Company or an agent designated by the Company to hold in escrow until such restrictions have lapsed or terminated, and
the Committee may cause a legend or legends referencing such restrictions to be placed on the certificates.

 

13.  COMPLIANCE MATTERS

 

13.1. Compliance
with Section 409A of the Code. This Plan is intended to comply and shall be administered in a manner that is intended to comply
with Section 409A of the Code and shall be construed and interpreted in accordance with such intent. To the extent that an Award
or the payment, settlement or deferral thereof is subject to Section 409A of the Code, the Award shall be granted, paid, settled or deferred
in a manner that will comply with Section 409A of the Code, including regulations or other guidance issued with respect thereto,
except as otherwise determined by the Committee. Any provision of this Plan that would cause the grant of an Award or the payment,
settlement or deferral thereof to fail to satisfy Section 409A of the Code shall be amended to comply with Section 409A of the
Code on a timely basis, which may be made on a retroactive basis, in accordance with regulations and other guidance issued under
Section 409A of the Code.

 

13.2. Section 16(b) of the Exchange
Act.  All elections and transactions under the Plan by persons subject to Section 16 of the Exchange Act involving
shares of Common Stock are intended to comply with any applicable exemptive condition under Rule 16b-3. The Committee may,
in its sole discretion, establish and adopt written administrative guidelines, designed to facilitate compliance with Section 16(b)
of the Exchange Act, as it may deem necessary or proper for the administration and operation of the Plan and the transaction of
business thereunder.

 

13.3. Listing and Registration. (a) Each
Award shall be subject to the requirement that if at any time the Committee shall determine, in its discretion, that the listing,
registration, or qualification of such Award, or any Shares or other property subject thereto, upon any securities exchange or
under any foreign, federal or state securities or other law or regulation, or the consent or approval of any governmental body
or the taking of any other action to comply with or otherwise with respect to any such law or regulation, is necessary or desirable
as a condition to or in connection with the granting of such Award or the issue, delivery or purchase of Shares or other property
thereunder, no such Award may be exercised or paid in Shares or other property unless such listing, registration, qualification,
consent, approval or other action shall have been effected or obtained, free of any conditions not acceptable to the Committee.
The holder of the Award will supply the Company with such certificates, representations and information as the Company shall request
and shall otherwise cooperate with the Company in effecting or obtaining such listing, registration, qualification, consent, approval
or other action. In the case of persons subject to Section 16 of the Exchange Act, the Committee may at any time impose any
limitations upon the exercise, delivery or payment of any Award which, in the discretion of the Committee, are necessary or desirable
in order to comply with Section 16 and the rules and regulations thereunder. If the Company, as part of an offering of securities
or otherwise, finds it desirable or necessary because of foreign, federal or state legal or regulatory requirements to suspend
the period during which Options or Stock Appreciation Rights may be exercised, the Committee may, in its discretion and without
the holders’ consent, so suspend such period on not less than 15 days prior written notice to the holders thereof.

 

    	 	A-15	 

     

    

 

(b)  At the option of the Committee,
the obligation of the Company to issue Shares to a Participant upon the grant of any Award or exercise of an Option or other Award,
may be conditioned upon obtaining appropriate representations, warranties, restrictions and agreements of the Participant. Among
other representations, warranties, restrictions and agreements, the Participant may be required to represent and agree that the
purchase or receipt of Shares shall be for investment, and not with a view to the public resale or distribution thereof, unless
the Shares are registered under the Securities Act and the issuance and sale of the Shares complies with all other laws, rules
and regulations applicable thereto.

 

(c)  Unless the issuance of such Shares
is registered under the Securities Act of 1933, as amended (the “Securities Act”) (and any similar law of a foreign
jurisdiction applicable to the Participant), the Participant shall acknowledge that the Shares purchased are not registered under
the Securities Act (or any such other law) and may not be sold or otherwise transferred unless the Shares have been registered
under the Securities Act (or any such other law) in connection with the sale or other transfer thereof, or that counsel satisfactory
to the Company has issued an opinion satisfactory to the Company that the sale or other transfer of such Shares is exempt from
registration under the Securities Act (or any such other law), and unless said sale or transfer is in compliance with all other
applicable laws, rules and regulations, including all applicable federal, state and foreign securities laws, rules and regulations.
All certificates for Shares delivered under this Plan pursuant to any Award shall be subject to such stop-transfer orders and other
restrictions as the Committee may deem advisable under the rules, regulations and other requirements of the Securities and Exchange
Commission, any stock exchange upon which the Shares are then listed, and any applicable federal or state securities law, and the
Committee may cause a legend or legends to be put on any such certificates to make appropriate reference to such restrictions.
Unless the Shares subject to an Award are registered under the Securities Act, the certificates representing such Shares issued
shall contain the following legend in substantially the following form:

 

THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE
NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY APPLICABLE STATE SECURITIES LAWS. THESE SHARES HAVE NOT
BEEN ACQUIRED WITH A VIEW TO DISTRIBUTION OR RESALE, AND MAY NOT BE SOLD, ASSIGNED, EXCHANGED, MORTGAGED, PLEDGED, HYPOTHECATED
OR OTHERWISE TRANSFERRED OR DISPOSED OF, BY GIFT OR OTHERWISE, OR IN ANY WAY ENCUMBERED WITHOUT AN EFFECTIVE REGISTRATION STATEMENT
FOR SUCH SHARES UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND ANY APPLICABLE STATE SECURITIES LAWS, OR A SATISFACTORY OPINION
OF COUNSEL SATISFACTORY TO THE COMPANY THAT REGISTRATION IS NOT REQUIRED UNDER SUCH ACT AND UNDER APPLICABLE STATE SECURITIES LAWS.

 

14.  MISCELLANEOUS

 

14.1. Award
Agreements. Each Award Agreement shall either be: (a) in writing in a form approved by the Committee and executed by the Company
by an officer duly authorized to act on its behalf; or (b) an electronic notice in a form approved by the Committee and recorded
by the Company (or its designee) in an electronic recordkeeping system used for the purpose of tracking one or more types of Awards
as the Committee may provide; in each case and if required by the Committee, the Award Agreement shall be executed or otherwise
electronically accepted by the recipient of the Award in such form and manner as the Committee may require. The Committee may
authorize any officer of the Company to execute any or all Award Agreements on behalf of the Company. The Award Agreement shall
set forth the material terms and conditions of the Award as established by the Committee consistent with the provisions of this
Plan.

 

14.2. Tax Withholding. To the extent
that the Company is required to withhold federal, state, local or foreign taxes in connection with any payment made or benefit
realized by a Participant or other person under this Plan, and the amounts available to the Company for such withholding are insufficient,
including amounts from any other sums or property due or to become due from the Company to the Participant, it will be a condition
to the receipt of such payment or the realization of such benefit that the Participant or such other person make arrangements satisfactory
to the Company for payment of the balance of such taxes required to be withheld, which arrangements (in the discretion of the Board)
may include relinquishment of a portion of such benefit. If a Participant’s benefit is to be received in the form of Shares,
and such Participant fails to make arrangements for the payment of tax, the Company may withhold such Shares having a value equal
to the amount required to be withheld. When a Participant who is subject to Section 16 of the Exchange Act is required to
pay the Company an amount required to be withheld under applicable income and employment tax laws, the Participant may elect to
satisfy the obligation, in whole or in part, by electing to have withheld, from the shares required to be delivered to the Participant,
Shares having a value equal to the amount required to be withheld, or by delivering to the Company other Shares held by such Participant.
The Shares used for tax withholding will be valued at an amount equal to the Fair Market Value per Share of such Shares on the
date the benefit is to be included in Participant’s income. In no event shall the Fair Market Value per Share of the Shares
to be withheld and delivered pursuant to this Section to satisfy applicable withholding taxes in connection with the benefit exceed
the minimum amount of taxes required to be withheld. Participants shall also make such arrangements as the Company may require
for the payment of any withholding tax obligation that may arise in connection with the disposition of Shares acquired upon the
exercise of Options.

 

    	 	A-16	 

     

    

 

14.3. No Right of Employment or Service and
No Claims to Awards. This Plan is purely voluntary on the part of the Company, and the continuance of the Plan shall not be
deemed to constitute a contract between the Company and any Participant, or to be consideration for or a condition of the employment
or service of any Participant. Nothing in this Plan nor the grant of an Award hereunder shall confer upon any Employee, Director
of Consultant the right to continue in the employment or service of the Company or any Subsidiary or affect any right that the
Company or any Subsidiary may have to terminate the employment or service of (or to demote or to exclude from future Awards under
this Plan) any such Employee, Director or Consultant at any time for any reason. No Participant shall have any right to or interest
in Awards authorized hereunder prior to the award thereof to such Participant, and upon such Award the Participant shall have only
such rights and interests as are expressly provided herein, subject, however, to all applicable provisions of the Company’s
Certificate of Incorporation, as the same may be amended from time to time. Except as specifically provided by the Committee, the
Company shall not be liable for the loss of existing or potential profit from an Award granted in the event of termination of an
employment or other relationship. No Employee or Participant shall have any claim to be granted any Award under this Plan, and
there is no obligation for uniformity of treatment of Employees or Participants under this Plan. In the case of any Employee on
an approved leave of absence, the Committee may make such provisions with respect to continuance of Awards previously granted while
on leave from the employ of the Company or a Subsidiary as it may deem equitable.

 

14.4. Substitute Awards. Notwithstanding
any other provision of this Plan, the terms of Substitute Awards may vary from the terms set forth in this Plan to the extent the
Committee deems appropriate to conform, in whole or in part, to the provisions of the awards in substitution for which they are
granted.

 

14.5. Nature
of Payments. All Awards made pursuant to this Plan are in consideration of services performed or to be performed for the Company
or any Subsidiary, division or business unit of the Company. Any income or gain realized pursuant to Awards under this Plan constitute
a special incentive payment to the Participant and shall not be taken into account, to the extent permissible under applicable
law, as compensation for purposes of any of the employee benefit plans of the Company or any Subsidiary except as may be determined
by the Committee or by the Board or board of directors of the applicable Subsidiary.

 

14.6. Other Plans. Nothing contained
in this Plan shall prevent the Board from adopting other or additional compensation arrangements, subject to stockholder approval
if such approval is required; and such arrangements may be either generally applicable or applicable only in specific cases.

 

14.7. Severability. If any provision
of this Plan shall be held unlawful or otherwise invalid or unenforceable in whole or in part by a court of competent jurisdiction,
such provision shall: (a) be deemed limited to the extent that such court of competent jurisdiction deems it lawful, valid and/or
enforceable and as so limited shall remain in full force and effect; and (b) not affect any other provision of this Plan or part
thereof, each of which shall remain in full force and effect. If the making of any payment or the provision of any other benefit
required under this Plan shall be held unlawful or otherwise invalid or unenforceable by a court of competent jurisdiction, such
unlawfulness, invalidity or unenforceability shall not prevent any other payment or benefit from being made or provided under this
Plan, and if the making of any payment in full or the provision of any other benefit required under this Plan in full would be
unlawful or otherwise invalid or unenforceable, then such unlawfulness, invalidity or unenforceability shall not prevent such payment
or benefit from being made or provided in part, to the extent that it would not be unlawful, invalid or unenforceable, and the
maximum payment or benefit that would not be unlawful, invalid or unenforceable shall be made or provided under this Plan.

 

14.8. Construction. As used in this Plan,
the words “include” and “including” and variations thereof, shall not be deemed to be terms of limitation,
but rather shall be deemed to be followed by the words “without limitation.”

 

14.9. Unfunded Status of this Plan. This
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.

 

    	 	A-17	 

     

    

 

14.10. Governing Law. This Plan and all
determinations made and actions taken thereunder, to the extent not otherwise governed by the Code or the laws of the United States,
shall be governed by the laws of the State of Delaware, without reference to principles of conflict of laws, and construed accordingly.

 

14.11. Foreign Employees. Awards may
be granted to Participants who are foreign nationals or employed outside the United States, or both, on such terms and conditions
different from those applicable to Awards to Employees employed in the United States as may, in the judgment of the Committee,
be necessary or desirable in order to recognize differences in local law or tax policy. The Committee also may impose conditions
on the exercise or vesting of Awards in order to minimize the Company’s obligation with respect to tax equalization for Employees
on assignments outside their home country.

 

14.12. No Registration Rights; No Right to
Settle in Cash. The Company has no obligation to register with any governmental body or organization (including, without limitation,
the U.S. Securities and Exchange Commission “SEC”)) any of: (a) the offer or issuance of any Award; (b) any Shares
issuable upon the exercise of any Award; or (c) the sale of any Shares issued upon exercise of any Award, regardless of whether
the Company in fact undertakes to register any of the foregoing. In particular, in the event that any of (x) any offer or issuance
of any Award, (y) any Shares issuable upon exercise of any Award, or (z) the sale of any Shares issued upon exercise of any Award
are not registered with any governmental body or organization (including, without limitation, the SEC), the Company will not under
any circumstance be required to settle its obligations, if any, under this Plan in cash.

 

14.13. Captions. The captions in this
Plan are for convenience of reference only, and are not intended to narrow, limit or affect the substance or interpretation of
the provisions contained herein.

 

14.14. Notices. Any notice to be given
to the Company pursuant to the provisions of this Plan shall be addressed to the Company in care of its Secretary (or such other
person as the Company may designate from time to time) at its principal executive office, and any notice to be given to a Participant
shall be delivered personally or addressed to him or her at the address given beneath his or her signature on his or her Award
Agreement, or at such other address as such Participant or his or her permitted transferee (upon the permitted transfer) may hereafter
designate in writing to the Company. Any such notice shall be deemed duly given on the date and at the time delivered via hand
delivery, courier or recognized overnight delivery service or, if sent via telecopier, on the date and at the time telecopied with
confirmation of delivery or, if mailed, on the date five (5) days after the date of the mailing (which shall be by regular,
registered or certified mail). Delivery of a notice by telecopy (with confirmation) shall be permitted and shall be considered
delivery of a notice notwithstanding that it is not an original that is received. It shall be the obligation of each Participant
and each permitted transferee to provide the Secretary of the Company, by letter mailed as provided herein, with written notice
of his or her direct mailing address.

 

Duly Adopted by the Board of Directors as of
July 20, 2016.

 

Duly Adopted by Shareholders as of August
11, 2016.

 

	 	POWER EFFICIENCY CORPORATION
	 	 	 
	 	By:	 	 
	 	Name:	 
	 	Title:	 
	 	 	 
	 	By:	 	 
	 	Name:	 
	 	Title:	 

 

    	 	A-18

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