Document:

Exhibit 10.2

 

Execution Copy

 

REGISTRATION RIGHTS AGREEMENT

 

REGISTRATION RIGHTS AGREEMENT (this “Agreement”), dated as of June 1, 2017, by and among Neos Therapeutics, Inc., a Delaware corporation (the “Company”), Deerfield Private Design Fund III, L.P. (“DPDF”) and Deerfield Special Situations Fund, L.P. (“DSSF” and, together with DPDF, the “Original Investors” and each individually, an “Original Investor”).

 

WHEREAS:

 

A. In connection with the amendment of the Facility Agreement, dated as of May 11, 2016, by and among the Company and the Original Investors (the “Original Facility Agreement”) pursuant to that certain First Amendment to Facility Agreement, dated as of the date hereof, by and among the Company, the Original Investors and the other parties thereto (the “First Amendment”), the Company is issuing Convertible Notes (as defined below) which permit each holder to convert the principal of the Convertible Note (as defined below) held thereby into shares of the Company’s common stock (“Common Stock”), in each case, upon the terms and conditions, and subject to the limitations, set forth in the Convertible Notes; and

 

B. To induce the Original Investors to execute and deliver the First Amendment, the Company has agreed to provide certain registration rights under the Securities Act of 1933, as amended, and the rules and regulations thereunder, or any similar successor statute (collectively, the “Securities Act”), and applicable state securities laws.

 

NOW, THEREFORE, in consideration of the premises and the mutual covenants contained herein and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Company and each of the Investors hereby agree as follows:

 

1. DEFINITIONS.

 

a. As used in this Agreement, the following terms shall have the following meanings:

 

(i) “Additional Filing Deadline” means, with respect to any Registration Statement that may be required pursuant to Section 2(a)(ii), (A) the first date or time that such Registrable Securities may then be included in a Registration Statement if such Registration Statement is required because the SEC shall have notified the Company in writing that certain Registrable Securities were not eligible for inclusion on a previously filed Registration Statement, or (B) if such additional Registration Statement is required for a reason other than as described in (A) above, the twentieth (20th) day following the date on which the Company first knows that such additional Registration Statement is required; provided, however, if the Additional Filing Deadline would otherwise fall more than 45 days, but less than 76 days, after the end of the Company’s most recent fiscal year and the Company is unable to comply with the Additional Filing Deadline solely as a result of the unavailability of audited financial statements for such fiscal year, the Additional Filing Deadline shall be extended until the first business day following the earlier to occur of (a) the deadline (without regard to any extensions that may be permitted by

 

 

Rule 12b-25 under the Exchange Act) for filing by the Company of an annual report on Form 10-K containing such financial statements with the SEC and (b) the date on which the Company files an annual report on Form 10-K containing such financial statements with the SEC.

 

(ii) “Additional Registration Deadline” means, with respect to any additional Registration Statement(s) that may be required to be filed pursuant to Section 2(a)(ii), the thirtieth (30th) day following (A) the first date or time that such Registrable Securities may then be included in a Registration Statement if such Registration Statement is required because the SEC shall have notified the Company in writing that certain Registrable Securities were not eligible for inclusion on a previously filed Registration Statement, or (B) if such additional Registration Statement is required for a reason other than as described in (A) above, the fortieth (40th) day following the date on which the Company first knows that such additional Registration Statement(s) is required; provided, however, if the applicable Additional Filing deadline is extended due to the proviso contained in Section 1(a)(i) above, then such Additional Registration Deadline shall be extended until the thirtieth (30th) or fortieth (40th) day, as the case may be, following the Additional Filing Deadline, as so extended, and provided, further, that if, following the filing date but before the date that the Additional Registration Statement is declared effective by the SEC, the Company is unable to file a pre-effective amendment to the Additional Registration Statement that is required in order to cause such Additional Registration Statement to become effective because such amendment would otherwise be filed more than 45 days, but less than 76 days, after the end of the Company’s last fiscal year and the audited financial statement for such year are unavailable, the Additional Registration Deadline shall be the date that is the later of (a) thirty (30) days after the earlier of (1) the deadline (without regard to any extensions that may be permitted by Rule 12b-25 under the Exchange Act) for filing by the Company of an annual report on Form 10-K containing such financial statements with the SEC and (2) the date on which the Company files an annual report on Form 10-K containing such financial statements with the SEC, and (b) forty-five (45) days after the Registration Statement is filed.

 

(iii)  “Convertible Notes” means the Senior Secured Convertible Note(s) issued by the Company pursuant to the Facility Agreement evidencing the Accrued Interest Amount (as defined in the Facility Agreement).

 

(iv) “Exchange Act” means the Securities Exchange Act of 1934, as amended, together with the rules and regulations promulgated thereunder, and any successor statute.

 

(v) “Facility Agreement” means the Original Facility Agreement, as amended by the First Amendment and as may otherwise be amended, restated or modified and in effect from time to time.

 

(vi) “Filing Deadline,” for the Registration Statement required pursuant to Section 2(a)(i), shall mean the date that is thirty (30) calendar days following the date hereof, and, for each Registration Statement required pursuant to Section 2(a)(ii) shall mean the Additional Filing Deadline.

 

(vii) “FINRA” means the Financial Industry Regulatory Authority (or successor thereto).

 

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(viii) “Investor” means any Original Investor and any transferee or assignee who agrees to become bound by the provisions of this Agreement in accordance with Section 10 hereof.

 

(ix) “Person” means and includes any natural person, partnership, joint venture, corporation, trust, limited liability company, limited company, joint stock company, unincorporated organization, government entity or any political subdivision or agency thereof, or any other entity.

 

(x) “Prospectus” means (i) any prospectus (preliminary or final) included in any Registration Statement, as may be amended or supplemented by any prospectus supplement with respect to the terms of the offering of any portion of the Registrable Securities covered by such Registration Statement and by all other amendments and supplements to such prospectus, including post-effective amendments, and all material incorporated by reference in such prospectus, and (ii) any “free writing prospectus” as defined in Rule 405 under the Securities Act relating to any offering of Registrable Securities pursuant to a Registration Statement.

 

(xi) “Register,” “Registered,” and “Registration” refer to a registration effected by preparing and filing a Registration Statement or Statements in compliance with the Securities Act and pursuant to Rule 415, and the declaration or ordering of effectiveness of such Registration Statement by the United States Securities and Exchange Commission (the “SEC”).

 

(xii) “Registrable Securities,” for a given Registration, means (a) any shares of Common Stock (the “Conversion Shares”) issued or issuable upon conversion of the Convertible Notes (without giving effect to any limitations on conversion set forth in the Convertible Notes), and (b) any securities issued or issuable upon any stock split, dividend or other distribution, recapitalization or similar event with respect to any of the foregoing; provided, however, that any Registrable Securities shall cease to be Registrable Securities when (x) a Registration Statement with respect to the sale of such securities has become effective under the Securities Act and such securities have been disposed of in accordance with such Registration Statement, (y) such securities are sold in accordance with Rule 144 under the Securities Act or any successor rule (“Rule 144”), or (z) all of such securities may be immediately sold to the public without registration or restriction (including without limitation as to volume by each holder thereof), and without compliance with any “current public information” requirement, pursuant to Rule 144.

 

(xiii) “Registration Deadline” shall mean, for purposes of the Registration Statement required pursuant to Section 2(a)(i), the earlier of (i) the date that is seventy-five (75) days after the date that the applicable Registration Statement is actually filed or (ii) the date that is seventy-five (75) days after the applicable Filing Deadline and, with respect to any Registration Statement required pursuant to Section 2(a)(ii), the Additional Registration Deadline.

 

(xiv) “Registration Statement(s)” means any registration statement(s) of the Company filed under the Securities Act that covers the resale of any of the Registrable Securities pursuant to the provisions of this Agreement, all amendments and supplements to such Registration Statement, including post-effective amendments, and all exhibits to, and all material incorporated by reference in, such Registration Statement.

 

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(xv)  Rule 415” means Rule 415 under the Securities Act or any successor rule providing for the offering of securities on a continuous basis.

 

2. REGISTRATION.

 

a. MANDATORY REGISTRATION.  (i) Following the date hereof, the Company shall prepare, and, on or prior to the applicable Filing Deadline, file with the SEC a Registration Statement (the “Mandatory Registration Statement”) on Form S-3 (or, if Form S-3 is not then available, on such form of Registration Statement as is then available to effect a registration of the Registrable Securities, subject to the consent of the Investors, which consent shall not be unreasonably withheld) covering the resale of the Registrable Securities, which Registration Statement, to the extent allowable under the Securities Act and the rules and regulations promulgated thereunder (including Rule 416), shall state that such Registration Statement also covers such indeterminate number of additional shares of Common Stock as may become issuable upon conversion of, or otherwise pursuant to, the Convertible Notes or the Conversion Shares to prevent dilution resulting from stock splits, stock dividends or similar transactions. The number of shares of Common Stock initially included in such Registration Statement shall be no less than 940,924 shares.  Each Registration Statement (and each amendment or supplement thereto, and each request for acceleration of effectiveness thereof) shall be provided to (and shall be subject to the approval, which shall not be unreasonably withheld or delayed, of) the Investors and their counsel prior to its filing or other submission.

 

(ii) If for any reason, despite the Company’s use of its best efforts to include all of the Registrable Securities in the Registration Statement filed pursuant to Section 2 (a)(i) above, the Company is not permitted to include all of the Registrable Securities in, or for any other reason any Registrable Securities are not then included in, such Registration Statement, then the Company shall prepare, and, as soon as practicable but in no event later than the Additional Filing Deadline, file with the SEC an additional Registration Statement covering the resale of all Registrable Securities not already covered by an existing and effective Registration Statement for an offering to be made on a continuous basis pursuant to Rule 415.

 

b. RESERVED.

 

3.  OBLIGATIONS OF THE COMPANY. In connection with any registration of the Registrable Securities hereunder, the Company shall have the following obligations:

 

a. The Company shall prepare promptly, and file with the SEC as soon as practicable after such registration obligation arises hereunder (but in no event later than the applicable Filing Deadline), a Registration Statement with respect to the number of Registrable Securities provided in Section 2(a), as applicable, and thereafter use its best efforts to cause each such Registration Statement relating to Registrable Securities to become effective as soon as possible after such filing, but in any event shall cause each such Registration Statement relating to Registrable Securities to become effective no later than the Registration Deadline, and shall thereafter keep the Registration Statement current and effective pursuant to Rule 415 at all times until such date as is the earlier of (i) the date on which all of the Registrable Securities included in such Registration Statement have been sold and (ii) the date on which no Investor holds any

 

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Registrable Securities (the “Registration Period”), which Registration Statement (including any amendments or supplements thereto and prospectuses contained therein), except for information provided in writing by an Investor pursuant to Section 4(a), shall not contain any untrue statement of a material fact or omit to state a material fact required to be stated therein, or necessary to make the statements therein not misleading.  In the event that Form S-3 is not available for the registration of the resale of any Registrable Securities hereunder (but, for the avoidance of doubt, without in any way affecting the Company’s obligation to register the resale of the Registrable Securities on such other form as is available, as provided in Section 2(a)), (i) the Company shall undertake to file, within twenty-five (25) days of such time as such form is available for such registration, a post-effective amendment to the Registration Statement then in effect, or otherwise file a Registration Statement on Form S-3, registering such Registrable Securities on Form S-3; provided that the Company shall maintain the effectiveness of the Registration Statement then in effect until such time as a Registration Statement (or post-effective amendment) on Form S-3 covering such Registrable Securities has been declared effective by the SEC, and (ii) the Company shall provide that any Registration Statement on Form S-1 filed hereunder shall incorporate documents by reference (including by way of forward incorporation by reference) to the maximum extent possible.

 

b. Subject to Section 3(q) hereof, the Company shall prepare and file with the SEC such amendments (including post-effective amendments) and supplements to each Registration Statement and the prospectus used in connection with each Registration Statement as may be necessary to keep each Registration Statement current and effective at all times during the Registration Period, and, during the Registration Period, shall comply with the provisions of the Securities Act applicable to the Company with respect to the disposition of all Registrable Securities covered by each Registration Statement until such time as all of such Registrable Securities have been disposed of in accordance with the intended methods of disposition by the seller or sellers thereof as set forth in such Registration Statement.  In the event that on any Trading Day (as defined below) (the “Registration Trigger Date”) the number of shares available under the Registration Statements filed pursuant to this Agreement is insufficient to cover all of the Registrable Securities issued or issuable upon conversion of, or otherwise pursuant to, the Convertible Notes, without giving effect to any limitations on the Investors’ ability to convert the Convertible Notes, then the Company shall as soon as practicable, but in any event within twenty (20) days after the Registration Trigger Date, amend the Registration Statements, or file a new Registration Statement (on the short form available therefor, if applicable), or both, so as to cover the total number of Registrable Securities so issued or issuable (assuming a Conversion Price (as defined in the Convertible Notes) of Seven Dollar ($7.00) (subject to appropriate adjustment for any Stock Event (as defined in the Convertible Notes) that occurs after the date of this Agreement) and without giving effect to any limitations on conversion contained in the Convertible Notes) as of the second Trading Day immediately preceding the date of the filing of such amendment or new Registration Statement with the SEC.  The Company shall use its best efforts to cause such amendment and/or new Registration Statement to become effective as soon as practicable following the filing thereof, but in any event the Company shall cause such amendment and/or new Registration Statement to become effective within sixty (60) days of the Registration Trigger Date or as promptly as practicable in the event the Company is required to increase its authorized shares.  “Trading Day” shall mean any day on which the Common Stock is traded for any period on the NASDAQ Global Market (the “NasdaqGM”), or if not the

 

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NasdaqGM, the principal securities exchange or other securities market on which the Common Stock is then being traded.  For purposes of the foregoing provision, the number of shares available under a Registration Statement shall be deemed “insufficient to cover all Registrable Securities” specified above if as of any date of determination (A) the number of shares of Common Stock equal to the sum of (x) the total number of Conversion Shares so issued or issuable (assuming a Conversion Price of Seven Dollar ($7.00) (subject to appropriate adjustment for any Stock Event that occurs after the date of this Agreement) and without giving effect to any limitations on conversion contained in the Convertible Notes) plus (y) the number of shares of Common Stock otherwise beneficially owned by the Investors that remain Registrable Securities as of such date of determination is greater than (B) the number of shares of Common Stock available for resale under such Registration Statement.  The foregoing calculations shall be made without regard to any limitations on conversion of the Convertible Notes.

 

c. The Company shall furnish or otherwise make available to each Investor and its legal counsel (i) promptly after the same is prepared and publicly distributed, filed with the SEC or received by the Company, one copy of each Registration Statement and any amendment thereto, each preliminary prospectus and prospectus and each amendment or supplement thereto, and, in the case of a Registration Statement referred to in Section 2(a), each letter written by or on behalf of the Company to the SEC or the staff of the SEC, and each item of correspondence from the SEC or the staff of the SEC, in each case relating to such Registration Statement (other than any portion of any thereof which contains information for which the Company has sought or intends to seek confidential treatment); and provided that the Company may excise any information contained therein which would constitute material non-public information as to any Investor which has not executed a confidentiality agreement with the Company, and (ii) such number of copies of a prospectus, including a preliminary prospectus, and all amendments and supplements thereto and such other documents as an Investor may reasonably request in order to facilitate the disposition of the Registrable Securities owned by such Investor; provided that the Company may determine in its reasonable judgment to provide any such copies in electronic form only.  The Company will promptly notify each of the Investors by electronic mail of the effectiveness of each Registration Statement or any post-effective amendment. The Company will respond to any and all comments received from the SEC as soon as reasonably practicable, with a view towards causing each Registration Statement or any amendment thereto to be declared effective by the SEC as soon as practicable and, as soon as practicable, but in no event later than three (3) business days, following the resolution or clearance of all SEC comments or, if applicable, following notification by the SEC that any such Registration Statement or any amendment thereto will not be subject to review, shall file a request for acceleration of effectiveness of such Registration Statement to a time and date not later than two (2) business days after the submission of such request; provided, however, that if during such period, the Company is unable to file such acceleration request because such acceleration request would otherwise be filed more than 45, but less than 76 days, after the end of the Company’s most recent fiscal year and the audited financial statements for such fiscal year are unavailable at such time, such obligation to file an acceleration request shall be extended until the first business day following the earlier of (a) the deadline (without regard to any extensions that may be permitted by Rule 12b-25 under the Exchange Act) for filing by the Company of an annual report on Form 10-K containing such financial statements with the SEC and (b) the date on which the Company files

 

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an annual report on Form 10-K containing such financial statements with the SEC.  After such Registration Statement becomes effective, the Company will file with the SEC the final prospectus included therein pursuant to Rule 424 (or successor thereto) under the Securities Act within the time period required by the Securities Act.

 

d. The Company shall use its best efforts to (i) register and qualify, in any jurisdiction where registration and/or qualification is required, the Registrable Securities covered by the Registration Statements under such other securities or “blue sky” laws of such jurisdictions in the United States as the Investors shall reasonably request in writing, (ii) prepare and file in those jurisdictions such amendments (including post-effective amendments) and supplements to such registrations and qualifications as may be reasonably necessary to maintain the effectiveness thereof during the Registration Period, (iii) take such other actions as may be reasonably necessary to maintain such registrations and qualifications in effect at all times during the Registration Period, and (iv) take all other actions reasonably necessary or advisable to qualify the Registrable Securities for sale in such jurisdictions; provided, however, the Company shall not be required in connection therewith or as a condition thereto to (x) qualify to do business in any jurisdiction where it would not otherwise be required to qualify but for this Section 3(d), (y) subject itself to general taxation in any such jurisdiction, or (z) file a general consent to service of process in any such jurisdiction.

 

e. Subject to Section 3(q) hereof, as promptly as practicable after becoming aware of such event, the Company shall notify each Investor that holds Registrable Securities of the happening of any event, of which the Company has knowledge, as a result of which the prospectus included in any Registration Statement, as then in effect, includes an untrue statement of a material fact or omits to state a material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances in which they were made, not misleading, and promptly prepare a supplement or amendment to any Registration Statement to correct such untrue statement or omission, and deliver such number of copies of such supplement or amendment to each Investor as such Investor may reasonably request.

 

f. The Company shall use its best efforts to prevent the issuance of any stop order or other suspension of effectiveness of any Registration Statement, and, if such an order is issued, to obtain the withdrawal of such order at the earliest practicable moment and to notify each Investor that holds Registrable Securities (and, in the event of an underwritten offering, the managing underwriters) of the issuance of such order and the resolution thereof.

 

g. The Company shall permit a single firm of counsel designated by the Investors (“Legal Counsel”) to review such Registration Statement and all amendments and supplements thereto (as well as all requests for acceleration or effectiveness thereof), a reasonable period of time prior to their filing with the SEC (not less than five (5) business days but not more than eight (8) business days) and use commercially reasonable efforts to reflect in such documents any comments as such counsel may reasonably propose (so long as such comments are provided to the Company at least two (2) business days prior to the expected filing date) (provided that the Company shall make the final decision as to the form and content of each such document) and will not request acceleration of such Registration Statement without prior notice to Legal Counsel.  Any fees incurred by Legal Counsel shall be governed by Section 6 of this Agreement.

 

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h. The Company shall hold in confidence and not make any disclosure of information concerning an Investor provided to the Company unless (i) disclosure of such information is necessary to comply with federal or state securities laws, (ii) the disclosure of such information is necessary to avoid or correct a misstatement or omission in any Registration Statement, (iii) the release of such information is ordered pursuant to a subpoena or other order from a court or governmental body of competent jurisdiction, or (iv) such information has been made generally available to the public other than by disclosure in violation of this or any other agreement. The Company agrees that it shall, upon learning that disclosure of such information concerning any Investor is sought in or by a court or governmental body of competent jurisdiction or through other means, give prompt notice to such Investor prior to making such disclosure, and allow such Investor, at its expense, to undertake appropriate action to prevent disclosure of, or to obtain a protective order for, such information.

 

i. The Company shall use its best efforts to cause all the Registrable Securities covered by each Registration Statement to be listed on each securities exchange on which securities of the same class or series issued by the Company are then listed, if any, if the listing of such Registrable Securities is then permitted under the rules of such exchange.

 

j. The Company shall provide a transfer agent and registrar, which may be a single entity, for the Registrable Securities not later than the effective date of the initial Registration Statement.

 

k. The Company shall cooperate with each Investor that holds Registrable Securities being offered and the managing underwriter or underwriters as reasonably requested by them with respect to an applicable Registration Statement, if any, to facilitate the timely (i) preparation and delivery of certificates (not bearing any restrictive legends) representing Registrable Securities to be offered pursuant to such Registration Statement, and enable such certificates to be registered in such names and in such denominations or amounts, as the case may be, or (ii) crediting of the Registrable Securities to be offered pursuant to a Registration Statement to the applicable account (or accounts) with The Depository Trust Company through its Deposit/Withdrawal At Custodian (DWAC) system, in any such case as such Investor or the managing underwriter or underwriters, if any, may reasonably request.  Within three (3) business days after a Registration Statement which includes Registrable Securities becomes effective, the Company shall deliver, and shall cause legal counsel selected by the Company to deliver, to the transfer agent for the Registrable Securities (with copies to each Investor) an appropriate instruction and an opinion of such counsel in the form required by the transfer agent in order to issue the Registrable Securities free of restrictive legends.

 

l. At the reasonable request of an Investor, the Company shall prepare and file with the SEC such amendments (including post-effective amendments) and supplements to a Registration Statement and any prospectus used in connection with the Registration Statement as may be necessary in order to make changes to the plan of distribution set forth in such Registration Statement.

 

m. The Company shall not, and shall not agree to, allow the holders of any securities of the Company to include any of their securities (other than Registrable Securities) in any Registration Statement filed pursuant to Section 2(a) hereof or any amendment or supplement thereto under

 

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Section 3(b) hereof without the consent of Investors holding a majority-in-interest of the then outstanding Registrable Securities.  In addition, the Company shall not include any securities for its own account or the account of others in any Registration Statement filed pursuant to Section 2(a) hereof or any amendment or supplement thereto filed pursuant to Section 3(b) hereof without the consent of Investors holding a majority-in-interest of the then outstanding Registrable Securities.

 

n. Reserved.

 

o. The Company shall comply with all applicable laws related to a Registration Statement and offering and sale of securities and all applicable rules and regulations of governmental authorities in connection therewith (including the Securities Act and the Exchange Act and the rules and regulations promulgated by the SEC).

 

p.  If required by the FINRA Corporate Financing Department, the Company shall promptly effect a filing with FINRA pursuant to FINRA Rule 5110 (or successor thereto) with respect to the public offering contemplated by resales of securities under the Registration Statement (an “Issuer Filing”), and pay the filing fee required by such Issuer Filing. The Company shall use its best efforts to pursue the Issuer Filing until FINRA issues a letter confirming that it does not object to the terms of the offering contemplated by the Registration Statement.

 

q.  Notwithstanding anything to the contrary in Section 3(e), at any time after the effective date of the applicable Registration Statement, the Company may delay the effectiveness of any Registration Statement, other than the Registration Statement filed pursuant to Section 2(a)(i) hereof, or suspend the use of any prospectus forming a part of any Registration Statement, in its reasonable, good faith discretion, due to the non-disclosure of material non-public information concerning the Company the disclosure of which at the time is not, in the good faith opinion of the Board of Directors of the Company and its counsel, in the best interest of the Company and not, in the opinion of counsel to the Company, otherwise required (a “Grace Period”); provided, that the Company shall (i) promptly notify the Investors in writing of the existence of a Grace Period (provided that in each notice the Company shall not be required to disclose the content of such material non-public information to any Investor) and the date on which the Grace Period will begin, and (ii) as soon as practicable after such date may be determined, notify the Investors in writing of the date on which the Grace Period ends; and, provided, further, that (A) no Grace Period shall exceed forty-five (45) consecutive days, (B) during any three hundred sixty five (365) day period, such Grace Periods shall not exceed an aggregate of seventy-five (75) days, and (C) the first day of any Grace Period must be at least ten (10) Trading Days after the last day of any prior Grace Period (each Grace Period that satisfies all of the requirements of this Section 3(q) being referred to as an “Allowable Grace Period”).  For purposes of determining the length of a Grace Period above, the Grace Period shall begin on and include the date the Investors receive the notice referred to in clause (i) and shall end on and include the later of the date the Investors receive the notice referred to in clause (ii) and the date referred to in such notice.  The provisions of Section 3(e) hereof shall not be applicable during the period of any Allowable Grace Period, damages pursuant to Section 3 of the Convertible Notes shall not accrue on any day during an Allowable Grace Period, and the unavailability of a Registration Statement for resales of the Registrable Securities on any day during an Allowable Grace Period shall not

 

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constitute a “Registration Failure” (as defined in the Convertible Notes).  Upon expiration of the Grace Period, the Company shall again be bound by the first sentence of Section 3(e) with respect to the information giving rise thereto unless such material non-public information is no longer applicable.

 

4. OBLIGATIONS OF THE INVESTOR. In connection with the registration of the Registrable Securities, each Investor shall have the following obligations:

 

a. It shall be a condition precedent to the obligations of the Company to complete the registration pursuant to this Agreement with respect to the Registrable Securities of an Investor that such Investor shall furnish to the Company such information regarding itself, the Registrable Securities held by it and the intended method of disposition of the Registrable Securities held by it as shall be reasonably required to effect the registration of such Registrable Securities and shall execute such documents in connection with such registration as the Company may reasonably request. At least seven (7) business days prior to the first anticipated filing date of a Registration Statement, the Company shall notify each Investor of the information the Company requires from such Investor.  Any such information shall not contain any untrue statement of a material fact or omit to state a material fact required to be stated therein, or necessary to make the statements therein not misleading.  An Investor must provide such information to the Company at least two (2) business days prior to the first anticipated filing date of such Registration Statement if such Investor elects to have any Registrable Securities included in the Registration Statement.

 

b. Each Investor, by such Investor’s acceptance of the Registrable Securities, agrees to cooperate with the Company as reasonably requested by the Company in connection with the preparation and filing of a Registration Statement hereunder, unless such Investor has notified the Company in writing of such Investor’s election to exclude all of the Investor’s Registrable Securities from such Registration Statement.

 

c. In the event of an underwritten offering pursuant to Section 2(b) in which any Registrable Securities of any Investor are to be included, such Investor agrees to enter into and perform the Investor’s obligations under an underwriting agreement, in usual and customary form, including customary indemnification and contribution obligations (as applicable to selling security holders generally), with the managing underwriter of such offering and take such other actions as are reasonably required in order to expedite or facilitate the disposition of such Investor Registrable Securities.

 

d. Each Investor agrees that, upon receipt of any notice from the Company of the happening of any event of the kind described in Section 3(e) or 3(f), such Investor will immediately discontinue disposition of Registrable Securities pursuant to the Registration Statement covering such Registrable Securities until such Investor’s receipt of the copies of the supplemented or amended prospectus contemplated by Section 3(e) or 3(f).

 

e.  Each Investor agrees that it will not effect any disposition or other transfer of the Registrable Securities that would constitute a sale within the meaning of the Securities Act other than transactions exempt from the registration requirements of the Securities Act or pursuant to, and

 

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as contemplated in, a Registration Statement, and that it will promptly notify the Company of any material changes in the information set forth in a Registration Statement furnished by or regarding such Investor or its plan of distribution other than changes in the number of shares beneficially owned.

 

5. REGISTRATION FAILURE.  In the event of a Registration Failure (as defined in the Convertible Notes), the Investors shall be entitled to such rights as set forth in the Convertible Notes.

 

6. EXPENSES OF REGISTRATION. All reasonable expenses, other than underwriting discounts and commissions, incurred in connection with registrations, filings or qualifications pursuant to Sections 2 and 3, including, without limitation, all registration, listing and qualification fees, printers and accounting fees, and the fees and disbursements of counsel for the Company shall be borne by the Company.  The Company shall also reimburse the Investors for the reasonable fees and disbursements of Legal Counsel in the aggregate amount up to $25,000 per registration in connection with registrations pursuant to Section 2 or 3 of this Agreement.

 

7. INDEMNIFICATION. In the event any Registrable Securities are included in a Registration Statement under this Agreement:

 

a. The Company will indemnify, hold harmless and defend (i) each Investor, (ii) the directors, officers, partners, managers, members, employees, agents of each Investor, and each Person who controls any Investor within the meaning of the Securities Act or the Exchange Act, if any, (iii) any underwriter (as defined in the Securities Act) for each Investor in connection with an underwritten offering pursuant to Section 2(b) hereof, and (iv) the directors, officers, partners, employees and each Person who controls any such underwriter within the meaning of the Securities Act or the Exchange Act, if any (each, an “Indemnified Person”), against any joint or several losses, claims, damages, liabilities or expenses (collectively, together with actions, proceedings or inquiries by any regulatory or self-regulatory organization, whether commenced or threatened, in respect thereof, “Claims”) to which any of them may become subject insofar as such Claims arise out of or are based upon: (i) any untrue statement or alleged untrue statement of a material fact in any Registration Statement, or any amendment as supplement thereto, or any filing made under state securities laws as required hereby, or the omission or alleged omission to state therein a material fact required to be stated or necessary to make the statements therein not misleading; (ii) any untrue statement or alleged untrue statement of a material fact contained in any Prospectus, or any amendment or supplement thereto, or the omission or alleged omission to state therein any material fact necessary to make the statements made therein, in the light of the circumstances under which the statements therein were made, not misleading; or (iii) any violation or alleged violation by the Company of the Securities Act, the Exchange Act, any other law, including any state securities law, or any rule or regulation thereunder relating to the offer or sale of the Registrable Securities (the matters in the foregoing clauses (i) through (iii) being, collectively, “Violations”). The Company shall reimburse the Indemnified Person, promptly as such expenses are incurred and are due and payable, for any reasonable legal fees and other reasonable expenses incurred by them in connection with investigating or defending any such Claim.  Notwithstanding anything to the contrary contained herein, the indemnification agreement contained in this Section 7(a) (A) shall not apply to a Claim arising out of or based

 

11

 

upon a Violation to the extent that such Violation occurs in reliance upon and in conformity with information furnished in writing to the Company by or on behalf of any Indemnified Person expressly for use in connection with the preparation of such Registration Statement or any such amendment thereof or supplement thereto; and (B) shall not apply to amounts paid in settlement of any Claim if such settlement is effected without the prior written consent of the Company, which consent shall not be unreasonably withheld, conditioned or delayed.  Such indemnity shall remain in full force and effect regardless of any investigation made by or on behalf of the Indemnified Person and shall survive the transfer of the Registrable Securities by any of the Investors pursuant to Section 10.

 

b. Promptly after receipt by an Indemnified Person under this Section 7 of notice of the commencement of any action (including any governmental action), such Indemnified Person shall, if a Claim in respect thereof is to be made against the Company under this Section 7, deliver to the Company a written notice of the commencement thereof, and the Company shall have the right to participate in, and, to the extent the Company so desires, to assume control of the defense thereof with counsel mutually satisfactory to the Company and the Indemnified Person, as the case may be;

 

provided, however, that an Indemnified Person shall have the right to retain its own counsel with the reasonable fees and expenses to be paid by the Company, if, in the reasonable opinion of counsel for such Indemnified Person, the representation by such counsel of the Indemnified Person and the Company would be inappropriate due to actual or potential differing interests between such Indemnified Person and any other party represented by such counsel in such proceeding. The Company shall pay for only one separate legal counsel for the Indemnified Persons, and such legal counsel shall be selected by the Investors. The failure to deliver written notice to the Company within a reasonable time of the commencement of any such action shall not relieve the Company of any liability to the Indemnified Person under this Section 7, except to the extent that the Company is actually prejudiced in its ability to defend such action.  The Company shall not, without the prior written consent of the Indemnified Persons, consent to entry of any judgment or enter into any settlement or other compromise with respect to any Claim in respect of which indemnification or contribution may be or has been sought hereunder (whether or not any such Indemnified Party is an actual or potential party to such action or claim) which does not include as an unconditional term thereof the giving by the claimant or plaintiff to the Indemnified Persons of a full release from all liability with respect to such Claim or which includes any admission as to fault or culpability on the part of any Indemnified Person.

 

c.  Each Investor will indemnify, hold harmless and defend (i) the Company, and (ii) the directors, officers, partners, managers, members, employees, or agents of the Company, if any (each, a “Company Indemnified Person”), against any Claims to which any of them may become subject insofar as such Claims arise out of or are based upon any violation or alleged violation by the Company of the Securities Act, the Exchange Act, any other law, including any state securities law, or any rule or regulation thereunder relating to the offer or sale of the Registrable Securities, which occurs due to the inclusion by the Company in a Registration Statement of false or misleading information about an Investor, where such information was furnished in writing to the Company by or on behalf of such Investor expressly for the purpose of inclusion in such Registration Statement.  Such Investor shall reimburse the Company Indemnified Person,

 

12

 

promptly as such expenses are incurred and are due and payable, for any reasonable legal fees or other reasonable expenses incurred by them in connection with investigating or defending any such Claim. Notwithstanding anything herein to the contrary, the indemnity agreement contained in this Section 7(c) shall not apply to amounts paid in settlement of any Claim if such settlement is effected without the prior written consent of the Investors, which consent shall not be unreasonably withheld or delayed; and provided, further, however, that an Investor shall be liable under this Section 7(c) for only that amount of a Claim as does not exceed the net amount of proceeds received by such Investor as a result of the sale of Registrable Securities pursuant to such Registration Statement. Such indemnity shall remain in full force and effect regardless of any investigation made by or on behalf of the Company Indemnified Person.

 

d.  Promptly after receipt by a Company Indemnified Person under this Section 7 of notice of the commencement of any action (including any governmental action), such Company Indemnified Person shall, if a Claim in respect thereof is to be made against any Investor under this Section 7, deliver to such Investor a written notice of the commencement thereof, and such Investor shall have the right to participate in, and, to the extent such Investor so desires, to assume control of the defense thereof with counsel mutually satisfactory to such Investor and such Company Indemnified Person.

 

PROVIDED, HOWEVER, that a Company Indemnified Person shall have the right to retain its own counsel with the reasonable fees and expenses to be paid by the applicable Investor, if, in the reasonable opinion of counsel for the Company, the representation by such counsel of the Company Indemnified Person and the Investor would be inappropriate due to actual or potential material differing interests between the Company Indemnified Person and any other party represented by such counsel in such proceeding. An Investor shall pay for only one separate legal counsel for the Company Indemnified Persons, and such legal counsel shall be selected by the Company. The failure to deliver written notice to the Investor within a reasonable time of the commencement of any such action shall not relieve the Investor of any liability to the Company Indemnified Person under this Section 7, except to the extent that the Investor is actually prejudiced in its ability to defend such action.  No Investor shall, without the prior written consent of the Company Indemnified Person, consent to entry of any judgment or enter into any settlement or other compromise with respect to any Claim in respect of which indemnification or contribution may be or has been sought hereunder (whether or not any such Company Indemnified Person is an actual or potential party to such action or claim) which does not include as an unconditional term thereof the giving by the claimant or plaintiff to the Company Indemnified Person of a full release from all liability with respect to such Claim or which includes any admission as to fault or culpability on the part of any Company Indemnified Person.

 

8.  CONTRIBUTION.  If for any reason the indemnification provided for in Section 7(a) or 7(c) (as applicable) is unavailable to an Indemnified Person or Company Indemnified Person (as applicable) or insufficient to hold it harmless, other than as expressly specified therein, then the indemnifying party shall contribute to the amount paid or payable by the Indemnified Person or Company Indemnified Person (as applicable) as a result of the Claim in such proportion as is appropriate to reflect the relative fault of the Indemnified Person or Company Indemnified Person (as applicable) and the indemnifying party (provided that the relative fault of any Company Indemnified Person shall be deemed to include the fault of all other Company

 

13

 

Indemnified Persons), as well as any other relevant equitable considerations.  No Person guilty of fraudulent misrepresentation within the meaning of Section 11(f) of the Securities Act shall be entitled to contribution from any Person not guilty of such fraudulent misrepresentation.  In no event shall the contribution obligation of an Investor be greater in amount than the net amount of proceeds received by such Investor as a result of the sale of Registrable Securities giving rise to such contribution obligation pursuant to the applicable Registration Statement (net of the aggregate amount of any damages or other amounts such Investor has otherwise been required to pay (pursuant to Section 7(c) or otherwise) by reason of such Investor’s untrue or alleged untrue statement or omission or alleged omission).

 

9.  REPORTS UNDER THE 1934 ACT.  During the Reporting Period (as defined in the First Amendment), with a view to making available to the Investors the benefits of Rule 144 promulgated under the Securities Act or any other similar rule or regulation of the SEC that may at any time permit the Investors to sell securities of the Company to the public without registration, the Company agrees to:

 

a.  make and keep public information available, as those terms are understood and defined in Rule 144;

 

b.  file with the SEC in a timely manner all reports and other documents required of the Company under the Exchange Act so long as the Company remains subject to such requirements and the filing of such reports and other documents is required for the applicable provisions of Rule 144; and

 

c.  so long as any of the Investors owns Registrable Securities, promptly upon request, furnish to such Investor (i) a written statement by the Company that it has complied with the reporting requirements of the Exchange Act as required for applicable provisions of Rule 144, (ii) a copy of the most recent annual or quarterly report of the Company and such other reports and documents so filed by the Company and (iii) such other information as may be reasonably requested to permit such Investor to sell such Registrable Securities pursuant to Rule 144 without registration.

 

10.  ASSIGNMENT OF REGISTRATION RIGHTS.  The rights under this Agreement shall be automatically assignable by each Investor to any transferee of all or any portion of the Registrable Securities (provided such transfer is permitted under the Convertible Notes) if:  (i) such Investor agrees in writing with the transferee or assignee to assign such rights, and a copy of such agreement is furnished to the Company within a reasonable time after such assignment, (ii) the Company is, within a reasonable time after such transfer or assignment, furnished with written notice of (a) the name and address of such transferee or assignee, and (b) the securities with respect to which such registration rights are being transferred or assigned, and (iii) the transferee or assignee agrees in writing with the Company to be bound by all of the provisions contained herein as applicable to the Investors.  In the event that an Investor transfers all or any portion of its Registrable Securities pursuant to this Section, the Company shall have up to ten (10) days to file any amendments or supplements necessary to keep a Registration Statement current and effective pursuant to Rule 415, and the commencement date of any Registration Failure (as defined in the Convertible Notes) caused thereby will be extended by ten (10) days.

 

14

 

11.  AMENDMENT OF REGISTRATION RIGHTS.  Provisions of this Agreement may be amended and the observance thereof may be waived (either generally or in a particular instance and either retroactively or prospectively), only with written consent of the Company and the holders of a majority in interest of then-outstanding Registrable Securities.  Any amendment or waiver effected in accordance with this Section 11 shall be binding upon each of the Investors and the Company.

 

12.  MISCELLANEOUS.

 

a.  A Person is deemed to hold, and be a holder of, shares of Common Stock or other Registrable Securities whenever such Person owns of record or beneficially through a “street name” holder such shares of Common Stock or other Registrable Securities (or the Convertible Notes, Conversion Shares or other securities upon exercise, conversion or exchange of which such Registrable Securities are directly or indirectly issuable, without giving effect to any limitations on exercise, conversion or exchange of the Convertible Notes, Conversion Shares or other securities), and solely for purposes hereof, Registrable Securities shall be deemed outstanding to the extent they are directly or indirectly issuable upon exercise, conversion or exchange (as applicable) of the Convertible Notes, Conversion Shares or other outstanding securities, Registrable Securities, without giving effect to any limits on exercise, conversion or exchange of the Convertible Notes, Conversion Shares or other securities.  If the Company receives conflicting instructions, notices or elections from two or more Persons with respect to the same Registrable Securities, the Company shall act upon the basis of instructions, notice or election received from the registered owner of such Registrable Securities (or the Convertible Notes or Conversion Shares or other securities upon exercise, conversion, redemption or exchange of which such Registrable Securities are directly or indirectly issuable).

 

b.  Any notices required or permitted to be given under the terms hereof shall be sent by certified or registered mail (return receipt requested) or delivered personally or by courier (including a recognized overnight delivery service) or by electronic mail and shall be effective five days after being placed in the mail, if mailed by regular United States mail, or upon receipt, if delivered personally or by courier (including a recognized overnight delivery service) or by electronic mail, in each case addressed to a party.  The addresses for such communications shall be:

 

If to the Company:

 

Neos Therapeutics, Inc.

 

2940 N. Hwy 360, Suite 400

Grand Prairie, TX 75050

Facsimile: (972) 408-1143

E-mail: reisenstadt@neostx.com

Attn: Richard Eisenstadt

 

With copy to:

 

Goodwin Procter LLP

100 Northern Avenue

 

15

 

Boston, MA 02210

Facsimile: (617) 801-8864

Email: jtheis@goodwinlaw.com

Attn: Joseph C. Theis, Jr., Esq.

 

If to an Investor:

 

c/o Deerfield Mgmt, L.P.
 780 Third Avenue, 37th Floor
 New York, NY 10017
 Fax:  (212) 599-3075
 Email:  dclark@deerfield.com

Attn:  David J. Clark, Esq.

 

With a copy to:

 

Katten Muchin Rosenman LLP
 575 Madison Avenue
 New York, NY 10022
 Fax:  (212) 940-8776

 

Email: mark.fisher@kattenlaw.com and mark.wood@kattenlaw.com
 Attn:  Mark I. Fisher, Esq.

Mark D. Wood, Esq.

 

Each party shall provide notice to the other party of any change in address.

 

c.  Failure of any party to exercise any right or remedy under this Agreement or otherwise, or delay by a party in exercising such right or remedy, shall not operate as a waiver thereof.

 

d.  Governing Law.  All questions concerning the construction, validity, enforcement and interpretation of this Agreement shall be governed by and construed and enforced in accordance with the internal laws of the State of New York, without regard to the principles of conflicts of law thereof.  Each party agrees that all legal proceedings concerning the interpretations, enforcement and defense of the transactions contemplated by this Agreement (whether brought against a party hereto or its respective affiliates, directors, officers, shareholders, employees or agents) shall be commenced exclusively in the state and federal courts sitting in the City of New York, borough of Manhattan.  Each party hereby irrevocably submits to the exclusive jurisdiction of the state and federal courts sitting in the City of New York, Borough of Manhattan for the adjudication of any dispute hereunder or in connection herewith or with any transaction contemplated hereby or discussed herein, and hereby irrevocably waives, and agrees not to assert in any suit, action or proceeding, any claim that it is not personally subject to the jurisdiction of any such court, that such suit, action or proceeding is improper or is an inconvenient venue for such proceeding.  Each party hereby irrevocably waives personal service of process and consents to process being served in any such suit, action or proceeding by mailing a copy thereof via registered or certified mail or overnight delivery (with evidence of delivery) to such party at the address in effect for notices to it under this Agreement and agrees that such service shall constitute good and sufficient service of process and notice thereof.  Nothing contained herein

 

16

 

shall be deemed to limit in any way any right to serve process in any other manner permitted by law.  The parties hereby waive all rights to a trial by jury.  If either party shall commence an action or proceeding to enforce any provision of this Agreement, then the prevailing party in such action or proceeding shall be reimbursed by the other party for its reasonable attorneys’ fees and other costs and expenses incurred with the investigation, preparation and prosecution of such action or proceeding.

 

e.  This Agreement, the Convertible Notes and the Facility Agreement (including all schedules and exhibits thereto), including the First Amendment, constitute the entire agreement among the parties hereto with respect to the subject matter hereof.  This Agreement, the Convertible Notes and the Facility Agreement (including all schedules and exhibits thereto), including the First Amendment, supersede all prior agreements and understandings among the parties hereto with respect to the subject matter hereof.

 

f.  Subject to the requirements of Section 10 hereof, this Agreement shall inure to the benefit of and be binding upon the successors and assigns of each of the parties hereto, and the provisions of Sections 7 and 8 hereof shall inure to the benefit of, and be enforceable by, each Indemnified Person and Company Indemnified Person (as applicable).

 

g.  The headings in this Agreement are for convenience of reference only and shall not limit or otherwise affect the meaning hereof.

 

h.  This Agreement may be executed in two or more counterparts, each of which shall be deemed an original but all of which shall constitute one and the same agreement.  This Agreement, once executed by a party, may be delivered to the other party hereto by electronic transmission of a copy of this Agreement bearing the signature of the party so delivering this Agreement.

 

i.  Each party shall do and perform, or cause to be done and performed, all such further acts and things, and shall execute and deliver all such other agreements, certificates, instruments and documents, as the other parties may reasonably request in order to carry out the intent and accomplish the purposes of this Agreement and the consummation of the transactions contemplated hereby.

 

j.  The Company acknowledges that a breach by it of its obligations hereunder will cause irreparable harm to the Investors by vitiating the intent and purpose of the transactions contemplated hereby.  Accordingly, the Company acknowledges that the remedy at law for breach of its obligations hereunder will be inadequate and agrees, in the event of a breach or threatened breach by the Company of any of the provisions hereunder, that the Investors shall be entitled, in addition to all other available remedies in law or in equity, to an injunction or injunctions to prevent or cure breaches of the provisions of this Agreement and to enforce specifically the terms and provisions hereof, without the necessity of showing economic loss and without any bond or other security being required.

 

k.  The language used in this Agreement will be deemed to be the language chosen by the parties to express their mutual intent, and no rules of strict construction will be applied against any party.

 

17

 

l.  In the event that any provision of this Agreement is invalid or unenforceable under any applicable statute or rule of law, then such provision shall be deemed inoperative to the extent that it may conflict therewith and shall be deemed modified to conform with such statute or rule of law.  Any provision hereof which may prove invalid or unenforceable under any law shall not affect the validity or enforceability of any other provision hereof.

 

m.  In the event an Investor shall sell or otherwise transfer any of such holder’s Registrable Securities, each transferee shall be allocated a pro rata portion of the number of Registrable Securities included in a Registration Statement for such transferor.

 

n.  There shall be no oral modifications or amendments to this Agreement.  This Agreement may be modified or amended only in writing.

 

o.  The Company shall not grant any Person any registration rights with respect to shares of Common Stock or any other securities of the Company to the extent such registration rights limit in any way the number of Registrable Securities that could be included in any Registration Statement pursuant to Rule 415 and shall not otherwise enter into any agreement that is inconsistent with the rights granted to the Investors hereunder.

 

p.  The obligations of each Investor hereunder are several and not joint with the obligations of any other Investor, and no provision of this Agreement is intended to confer any obligations on any Investor vis-à-vis any other Investor.  Nothing contained herein, and no action taken by any Investor pursuant hereto, shall be deemed to constitute the Investors as a partnership, an association, a joint venture or any other kind of entity, or create a presumption that the Investors are in any way acting in concert or as a group with respect to such obligations or the transactions contemplated herein.

 

q.  Unless the context otherwise requires, (i) all references to Sections, Schedules or Exhibits are to Sections, Schedules or Exhibits contained in or attached to this Agreement, (ii) words in the singular or plural include the singular and plural, and pronouns stated in either the masculine, the feminine or neuter gender shall include the masculine, feminine and neuter, and (ii) the use of the word “including” in this Agreement shall be by way of example rather than limitation.

 

[Remainder of page left intentionally blank]

 

[Signature page follows]

 

18

 

IN WITNESS WHEREOF, the undersigned Investors and the Company have caused this Registration Rights Agreement to be duly executed as of the date first written above.

 

	
 
    	
COMPANY:
    
	
 
    	
 
    
	
 
    	
NEOS THERAPEUTICS, INC.,   a Delaware corporation
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/ Richard Eisenstadt
    
	
 
    	
Name:
    	
Richard Eisenstadt
    
	
 
    	
Title:
    	
Chief Financial   Officer, Secretary and Treasurer
    

 

[Signature Page to Registration Rights Agreement]

 

 

IN WITNESS WHEREOF, the undersigned Investors and the Company have caused this Registration Rights Agreement to be duly executed as of the date first written above.

 

	
 
    	
INVESTORS:
    
	
 
    	
 
    
	
 
    	
DEERFIELD PRIVATE DESIGN FUND   III, L.P.
    
	
 
    	
 
    
	
 
    	
By: Deerfield Mgmt,   L.P., its General Partner
    
	
 
    	
By: J.E. Flynn Capital,   LLC, its General Partner
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/ David J. Clark
    
	
 
    	
Name:
    	
David J. Clark
    
	
 
    	
Title:
    	
Authorized Signatory
    
	
 
    	
 
    
	
 
    	
DEERFIELD SPECIAL SITUATIONS   FUND, L.P.
    
	
 
    	
 
    
	
 
    	
By: Deerfield Mgmt,   L.P., its General Partner
    
	
 
    	
By: J.E. Flynn Capital,   LLC, its General Partner
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/ David J. Clark
    
	
 
    	
Name:
    	
David J. Clark
    
	
 
    	
Title:
    	
Authorized Signatory
    

 

20EXHIBIT 10.1

 

WEST MARINE, INC.

AMENDED AND RESTATED OMNIBUS EQUITY INCENTIVE
PLAN

 

ADOPTED BY THE BOARD OF DIRECTORS: APRIL
12, 2017

 

APPROVED BY THE STOCKHOLDERS: JUNE 1, 2017

 

     

     

    

  

SECTION 1

ESTABLISHMENT, PURPOSE AND DURATION

 

1.1           Establishment
of the Plan. West Marine, Inc., a Delaware corporation (the "Company"), previously established the "West Marine,
Inc. 1993 Omnibus Equity Incentive Plan,” and the “West Marine, Inc. Nonemployee Director Stock Option Plan,”
and merged those plans effective as of March, 2002, which merged plan was amended and restated in its entirety effective May 21,
2008 and May 19, 2011, was subsequently amended on March 30, 2012 and February 21, 2014, was thereafter amended and restated in
its entirety to incorporate such amendments effective March 26, 2014, and was thereafter amended and restated on April 26, 2016
and approved by the Company’s stockholders on May 26, 2016, as amended by Amendment #1 dated March 23, 2017 (collectively,
the “Prior Plan”). The Prior Plan is hereby amended and restated in its entirety and is effective as of April 12, 2017
(“Effective Date”), subject to the approval by an affirmative vote, at the next meeting of the stockholders of the
Company, or any adjournment thereof, of a majority of the votes cast by stockholders present in person or by proxy and entitled
to vote at such meeting (the “Plan”). Any awards issued under the Prior Plan, together with the terms and conditions
of any award agreement previously issued to any participant under the Prior Plan, shall continue in force and effect under the
terms of the Plan. The Plan permits the grant of Nonqualified Stock Options, Incentive Stock Options, Stock Appreciation Rights,
Restricted Stock, Restricted Stock Units, Performance Stock Unit Awards, Performance Cash Awards, and Other Stock-Based Awards
as described in the Plan.

 

1.2           Purpose
of the Plan. The purpose of the Plan, through the granting of Awards, is intended to promote the success, and to enhance the
value, of the Company by linking the personal interests of Participants to those of Company stockholders, and by providing such
Participants with an incentive for outstanding performance. The Plan is further intended to provide flexibility to the Company
in its ability to motivate, attract, and retain the services of Participants upon whose judgment, interest, and special effort
the successful conduct of its operation largely is dependent, to achieve long-term Company objectives, and to enable, if applicable,
Awards to qualify as performance-based compensation for purposes of the tax deduction limitations under Section 162(m) of the Code.

 

1.3           Duration
of the Plan. The Plan shall commence on the Effective Date and shall remain in effect, subject to the right of the Board to
terminate the Plan at any time pursuant to Section 16, until all Shares subject to the Plan have been purchased or acquired pursuant
to the provisions of the Plan.

 

SECTION 2

DEFINITIONS

The following terms shall have the meanings
set forth below, unless plainly required by the context:

 

2.1           “Adjustment
Event” means any “equity restructuring,” as defined under the Financial Accounting Standards Board Accounting
Standards Codification Topic 718, Stock Compensation (or any successor thereto) including but not limited to, any large or extraordinary
dividend payable in capital stock, stock split, share combination, large or extraordinary cash dividend, recapitalization, reorganization,
merger, consolidation, split-up, spin-off, combination, exchange of shares or other similar event affecting the Common Stock.

 

2.2           "Affiliated
SAR" means a Stock Appreciation Right that is granted in connection with a related Option, and which will be deemed to automatically
be exercised simultaneous with the exercise of the related Option.

 

2.3           “Applicable
Law” means the requirements relating to the administration of equity plans under U.S. state corporate laws, U.S. federal
and state securities laws, the Code, the rules of any stock exchange or quotation system on which the Common Stock is listed or
quoted and the applicable laws of any foreign country or jurisdiction where Awards are, or will be, granted under the Plan.

 

2.4           "Award"
means, individually or collectively, a grant under the Plan of a Stock Award and/or a Performance Cash Award.

 

     

     

    

 

2.5           “Award
Agreement” means a written or electronic agreement, instrument, document or arrangement setting forth the terms and provisions
applicable to Awards granted to Participants under this Plan. The Award Agreement is subject to the terms and conditions of the
Plan, and in the event of any inconsistency or conflict between the terms of the Plan and an Award Agreement, the terms of the
Plan shall govern. An Award Agreement shall not require the signature of the Participant and/or the Company. The approval of an
Award by the Company, the Committee and/or the Board (in accordance with the Plan), together with notice of the Award to the Participant
(which notice may be accomplished through the posting thereof on a website for the Plan), shall be sufficient evidence of the issuance
to, and acceptance by, the Participant of the Award reflected in the Award Agreement and/or notice of Award, unless such Participant
expressly rejects such Award and/or the Award Agreement in writing. The terms of any Other Company Plan applicable to an Award
and this Plan shall be deemed incorporated in and part of the related Award Agreement.

 

2.6           “Beneficiary”
means the person designated in accordance with Section 14 of the Plan.

 

2.7           "Board"
or "Board of Directors" means the Board of Directors of the Company.

 

2.8          
“Cause” means: (i) a breach of any material obligation to the Company or any Subsidiary that is or could reasonably
be expected to result in material harm to the Company; (ii) a violation of any significant Company or a Subsidiary’s policy;
(iii) a violation of any of the Company’s or a Subsidiary’s operating and/or financial/accounting procedures which
results in a material loss to the Company; (iv) an arrest for, conviction of, or a plea of guilty or nolo contendere to, any felony,
or to any misdemeanor involving moral turpitude (including forgery, fraud, theft or embezzlement); (v) an arrest for, conviction
of, or a plea of guilty or nolo contendere to, any offense involving fraud, dishonesty, breach of trust or money laundering; (vi)
engagement in dishonesty, embezzlement, misappropriation or fraud in connection with the business of the Company or any Subsidiary;
(vii) stolen property or opportunities of the Company or any Subsidiary; (viii) an assault or battery of an associate or Director
of the Company; (ix) failure substantially to perform assigned duties with the Company or any Subsidiary (other than a failure
resulting from incapacity due to physical or mental illness or from the assignment of duties that would constitute “good
reason” as set forth in any applicable Other Company Plan); or (x) engagement in willful malfeasance, illegal conduct, gross
negligence or misconduct demonstrably injurious to the Company or any Subsidiary.

 

2.9           “Change
in Control” means, and shall be deemed to have occurred upon the occurrence of, any one of the following events:

 

(a) The acquisition in
one or more transactions, other than from the Company, by any individual, entity or group (within the meaning of Section 13(d)(3)
or 14(d)(2) of the Exchange Act), other than the Company, a Subsidiary or any employee benefit plan (or related trust) sponsored
or maintained by the Company or a Subsidiary, of beneficial ownership (within the meaning of Rule 13d-3 promulgated under the Exchange
Act) of a number of the Company’s Voting Securities in excess of 50% of the Company’s Voting Securities;

 

(b) Any election has
occurred of persons to the Board that causes two-thirds of the Board to consist of persons other than: (i) persons who were members
of the Board on the Effective Date of the Plan; and (ii) persons who were nominated for election as members of the Board at a time
when two-thirds of the Board consisted of persons who were members of the Board on the Effective Date of the Plan, provided, however,
that any person nominated for election by: (x) a Board at least two-thirds of whom constituted persons described in clauses (i)
and/or (ii); or (y) by persons who were themselves nominated by such Board, shall for this purpose be deemed to have been nominated
by a Board composed of persons described in clause (i);

 

(c) The consummation
(i.e. closing) of a reorganization, merger or consolidation involving the Company, unless, following such reorganization, merger
or consolidation, all or substantially all of the persons who were the respective beneficial owners of the Outstanding Common Stock
and the Company’s Voting Securities immediately prior to such reorganization, merger or consolidation, following such reorganization,
merger or consolidation beneficially own, directly or indirectly, more than 75% of, respectively, the then outstanding shares of
common stock and the combined voting power of the then outstanding Voting Securities entitled to vote generally in the election
of directors of the entity resulting from such reorganization, merger or consolidation in substantially the same proportion as
their ownership of the Outstanding Common Stock and the Company’s Voting Securities immediately prior to such reorganization,
merger or consolidation, as the case may be;

 

(d) The consummation
(i.e. closing) of a sale or other disposition of all or substantially all the assets of the Company, unless, following such sale
or disposition, all or substantially all of the persons who were the respective beneficial owners of the Outstanding Common Stock
and the Company’s Voting Securities immediately prior to such sale or disposition, following such sale or disposition beneficially
own, directly or indirectly, more than 75% of, respectively, the then outstanding shares of common stock and the combined voting
power of the then outstanding voting securities entitled to vote generally in the election of directors or trustees, as the case
may be, of the entity acquiring such assets in substantially the same proportion as their ownership of the Outstanding Common Stock
and the Company’s Voting Securities immediately prior to such sale or disposition, as the case may be; or

 

     

     

    

 

(e) a complete liquidation
or dissolution of the Company.

 

2.10         "Code"
means the Internal Revenue Code of 1986, as amended from time to time. Reference to a specific section of the Code shall include
such section, any valid final or temporary regulation promulgated thereunder, and any comparable provision of any future legislation
amending, supplementing or superseding such section.

 

2.11         "Committee"
means the Compensation and Leadership Development Committee of the Board or any successor committee appointed by the Board to administer
the Plan with respect to grants of Awards, or any subcommittee thereof.

 

2.12         “Common
Stock” means the common stock of the Company, par value $0.001 per Share.

 

2.13         "Company"
means West Marine, Inc., a Delaware corporation.

 

2.14       
“Covered Employee” has the same meaning as set forth in Section 162(m) of the Code, and successor provisions.

 

2.15         “Date
of Grant” means:

 

(a)           for
annual Awards to Participants who are current Employees of the Company, the 14th day of March of each year, or if the
14th falls on a weekend or a holiday, the immediately preceding business day in March; and

 

(b)           for
one-time Awards made to Participants who are newly-hired Employees, the 10th business day of the calendar month following the new
Employee’s date of hire; and

 

(c)           for
one-time Awards made to existing Employee Participants who are promoted and whom the Management Committee or the Committee determines
are entitled to receive an Award, the 3rd business day following the release of quarterly earnings which occurs immediately following
the effective date of the promotion;  and

 

(d)           for
annual Awards made to Non-Employee Directors, the close of each annual meeting of the Company’s stockholders at which the
Non-Employee Director is nominated for reelection and is so elected by the stockholders; and

 

(e)           for
Awards, other than annual Awards, made to Non-Employee Directors appointed by the Board at any time prior to the next annual meeting
of stockholders (e.g. an appointment to fill a vacancy on the Board), the first day of attendance by such newly-appointed Non-Employee
Director at the first to occur of a Board meeting or a meeting of any of the Board’s standing committees; and

 

(f)            for
any other Awards and/or for Awards set forth in subsections (a) through (e) above notwithstanding the dates set forth therein,
any date designated by the Committee or the Board as the date as of which an Award is granted, which shall not be earlier than
the date on which the Committee or the Board approves the granting of such Award.

 

2.16         "Director"
means any individual who is a member of the Board of Directors of the Company.

 

2.17         "Disability"
means a permanent and total disability within the meaning of Code Section 22(e)(3).

 

2.18         “Dividend”
means an amount equal to any ordinary cash dividends or other cash distributions, other than a cash distribution that constitutes
an Adjustment Event, paid by the Company with respect to the Common Stock.

 

2.19         “Dividend
Equivalents” means a credit payable in Shares equal to (i) the amount of Dividends paid by the Company multiplied by the
number of Shares underlying a Restricted Stock Award, Restricted Stock Unit Award or Performance Stock Unit Award, (ii) divided
by the Fair Market Value of the Common Stock on the record date for such Dividends.

 

     

     

    

 

2.20         “Effective
Date” means April 12, 2017, subject to approval by the Company’s stockholders at the Annual Meeting of Stockholders
scheduled to be held on June 1, 2017 (or, if the vote on the Plan is accelerated or postponed, such other date on which a stockholders’
meeting to vote to approve the Plan occurs).

 

2.21         "Employee"
means any employee of the Company or of the Company's Subsidiaries, whether such employee is so employed at the time the Plan is
adopted or becomes so employed subsequent to the adoption of the Plan.

 

2.22         "Exchange
Act" means the Securities Exchange Act of 1934, as amended from time to time, or any successor act thereto. Reference to a
specific section or regulation of the Exchange Act shall include such section or regulation, any valid regulation promulgated thereunder,
and any comparable provision of any future legislation amending, supplementing or superseding such section or regulation.

 

2.23         "Fair
Market Value" means the average of the highest and lowest quoted selling prices for Shares on the relevant date as reflected
by composite transactions on the national securities exchange or system upon which such Shares are then listed and/or traded, or
if there were no sales on such date, the weighted average of the means between the highest and lowest quoted selling prices on
the nearest day before and the nearest day after the relevant date, as determined by the Committee.

 

2.24         “Freestanding
SAR" means a Stock Appreciation Right that is granted independently of any Options.

 

2.25         “Full-Value
Stock Award” means a Restricted Stock Award, a Restricted Stock Unit Award, a Performance Stock Unit Award, or any Other
Stock-Based Award.

 

2.26         "Incentive
Stock Option" or "ISO" means an option to purchase Shares, which is designated as an Incentive Stock Option and
is intended to meet the requirements of Section 422 of the Code.

 

2.27         "Insider"
shall mean an individual who, on the relevant date, is a Company Director, Company officer (within the meaning of Rule 16a-1 promulgated
under the Exchange Act), or beneficial owner of 10% or more of the outstanding Shares.

 

2.28         “Management
Committee” means a committee consisting of the Chief Executive Officer, the Chief Financial Officer and the Vice President
of Human Resources, or such other Company officers that the Committee may designate from time to time, to whom the Committee has
delegated authority to grant Awards to Employees not constituting Insiders, pursuant to and consistent with the terms of this Plan
and Applicable Law.

 

2.29         "Non-Employee
Director" shall mean a Director who is an employee of neither the Company nor any Subsidiary (within the meaning of Rule 16b-3(b)
promulgated under the Exchange Act).

 

2.30         "Nonqualified
Stock Option" or "NQSO" means an option to purchase Shares which is not intended to be an Incentive Stock Option.

 

2.31         "Option"
means an Incentive Stock Option or a Nonqualified Stock Option.

 

2.32         "Option
Price" means the price at which a Share may be purchased by a Participant pursuant to an Option, as determined by the Committee
in accordance with the terms of this Plan.

 

2.33         “Other
Company Plan” means any Company plan, policy, agreement or guideline adopted by the Company, the Committee or the Board other
than this Plan, applicable to an Award.

 

2.34         “Other
Stock-Based Award” means a right, granted to a Participant under Section 13, that relates to or is valued by reference to
Shares.

 

2.35         “Outstanding
Common Stock” means, at any time, the issued and outstanding shares of Common Stock.

 

2.36         "Participant"
means an Employee or Non-Employee Director to whom an Award is granted, or who holds (or if applicable, any other person who holds)
an outstanding Stock Award granted under the Plan.

 

2.37         “Performance
Cash Award” means an award of cash granted pursuant to the terms of Section 11.

 

     

     

    

 

2.38         “Performance
Criteria” means the one or more criteria that the Committee will select for purposes of establishing the Performance Goals
for a Performance Period. The Performance Criteria that will be used to establish such Performance Goals may be based on any one
of, or combination of, the following as determined by the Committee or the Board: (i) income or earnings (before or after taxes),
(ii) operating income or operating income after taxes; (iii) earnings per share or earnings per share growth, (iv) sales, net sales,
sales growth, total revenue, or revenue growth, (v) product revenue; (vi) pre-tax profit or pre-tax or pre-bonus, pre-tax operating
profit, (viii) operating profit or net operating profit; (ix) return measures (including, but not limited to, return on assets,
return on investment, return on capital, return on capital employed, return on invested capital, return on equity, sales, or revenue),
(x) shareholder’s equity or average stockholder’s equity; (xi) cash flow (including, but not limited to, operating
cash flow, free cash flow, cash flow return on equity, cash flow per share and cash flow return on investment), (xii) earnings
before or after taxes, interest or depreciation; (xiii) earnings before or after taxes, interest, depreciation, and amortization,
(xiv) margin (including gross or operating margins), (xv) economic value added (or an equivalent metric); (xvi) share price, share
price performance, share price return or relative share price (including, but not limited to, growth measures and total shareholder
return), (xvii) market share or change in market share, (xviii) expense or cost reduction goals; (xix) customer retention or satisfaction,
(xx) working capital targets or improvement in or attainment of working capital goals, (xxi) debt reduction; (xxii) debt reduction
or debt levels; (xxiii) capital expenditures; (xxiv) workforce diversity; (xxv) reduction in billings; and (xxvi) to the extent
that an Award is not intended to comply with Section 162(m) of the Code, other measures of performance determined by the Committee
or the Board.

 

2.39         “Performance
Goals” mean, for a Performance Period, the one or more goals established by the Committee or the Board for the Performance
Period based upon the Performance Criteria. Performance Goals may be measured with respect to the Company or any one or more of
its Subsidiaries or one or more of its business units, divisions and either in absolute terms or as compared to another company
or companies or the performance of one or more relevant indices. Unless specified otherwise by the Committee or the Board (i) in
the Award Agreement at the time the Award is granted or (ii) in such other document setting forth the Performance Goals at the
time the Performance Goals are established, the Board will appropriately make adjustments in the method of calculating the attainment
of Performance Goals for a Performance Period as follows: (1) to exclude restructuring and/or other nonrecurring charges; (2) to
exclude exchange rate effects; (3) to exclude the effects of changes to generally accepted accounting principles; (4) to exclude
the effects of any statutory adjustments to corporate tax rates; (5) to exclude the effects of items that are “unusual”
in nature or occur “infrequently” as determined under accounting principles generally accepted in the United States;
(6) to exclude the dilutive effects of acquisitions or joint ventures; (7) to assume that any business divested by the Company
achieved performance objectives at targeted levels during the balance of a Performance Period following such divestiture; (8) to
exclude the effect of any change in the outstanding shares of Common Stock of the Company by reason of any stock dividend or split,
stock repurchase, reorganization, recapitalization, merger, consolidation, spin-off, combination or exchange of shares or other
similar corporate change, or any distributions to common stockholders other than regular cash dividends; (9) to exclude the effects
of stock based compensation and the award of bonuses under the Company’s bonus plans; (10) to exclude costs incurred in connection
with potential acquisitions or divestitures that are required to be expensed under generally accepted accounting principles; and
(11) to exclude the goodwill and intangible asset impairment charges that are required to be recorded under generally accepted
accounting principles.

 

2.40         “Performance
Period” means the period of time selected by the Committee or the Board over which the attainment of one or more Performance
Goals will be measured for the purpose of determining a Participant’s right to and the payment of a Stock Award or a Performance
Cash Award. Performance Periods may be of varying and overlapping duration, at the sole discretion of the Committee or the Board.

 

2.41         "Performance
Stock Unit Award" means a Participant’s right to receive a stated number of Shares of Common Stock pursuant to Section
10 of the Plan that is forfeitable by the Participant until the completion of the Period of Restriction or until otherwise determined
by the Committee or the Board or in accordance with the Plan. Each Performance Stock Unit Award represents an unfunded and unsecured
obligation of the Company.

 

2.42         "Period
of Restriction" means, for Stock Awards, the period during which the transfer of Shares of a Stock Award is limited in some
way (based on the passage of time, the achievement of one or more Performance Criteria and/or Performance Goals, or upon the occurrence
of other events as determined by the Committee or the Board, in its discretion), and/or the Shares are subject to a substantial
risk of forfeiture. For Performance Cash Awards, the Period of Restriction means the period during which the transfer of payment
with respect to such Performance Cash Award is limited in some way (based on the achievement of one or more Performance Criteria
and/or Performance Goals, or upon the occurrence of other events as determined by the Committee or the Board, in its discretion),
and the Performance Cash Awards are subject to a substantial risk of forfeiture.

 

     

     

    

 

2.43         "Restricted
Stock Award" means a grant of a stated number of Shares of Common Stock to a Participant pursuant to Section 8 of the Plan
that is forfeitable by the Participant until the completion of the Period of Restriction or until otherwise determined by the Committee
or the Board or in accordance with the Plan.

 

2.44         Restricted
Stock Unit Award” means a Participant’s right to receive a stated number of Shares of Common Stock pursuant to Section
9 of the Plan that is forfeitable by the Participant until the completion of the Period of Restriction or until otherwise determined
by the Committee or the Board in accordance with the Plan. Each Restricted Stock Unit Award represents an unfunded and unsecured
obligation of the Company.

 

2.45         "Shares"
means the shares of Common Stock of the Company.

 

2.46         “Stock
Award” means any right to receive Shares granted under the Plan including a Nonqualified Stock Option, an Incentive Stock
Option, a Stock Appreciation Right, a Restricted Stock Award, a Restricted Stock Unit Award, a Performance Stock Unit Award, or
any Other Stock-Based Award.

 

2.47         "Stock
Appreciation Right" or "SAR" means an Award, granted alone or in connection with a related Option, designated as
a SAR, pursuant to the terms of Section 7 including, without limitation, a Freestanding SAR, an Affiliated SAR and a Tandem SAR.

 

2.48         "Subsidiary"
means any corporation in which the Company owns directly, or indirectly through subsidiaries, at least fifty percent (50%) of the
total combined voting power of all classes of stock, or any other entity (including, but not limited to, partnerships and joint
ventures) in which the Company owns at least fifty percent (50%) of the combined equity thereof.

 

2.49         “Substitute
Awards" means Awards granted or Shares issued by the Company in assumption of, or in substitution or exchange for, awards
previously granted, in each case by a company acquired by the Company or any Subsidiary or with which the Company or any Subsidiary
combines.

 

2.50         "Tandem
SAR" means a Stock Appreciation Right that is granted in connection with a related Option, the exercise of which shall require
forfeiture of the right to purchase a Share under the related Option (and when a Share is purchased under the Option, a SAR shall
similarly be cancelled).

 

2.51         “Voting
Securities” means the combined voting power of all outstanding voting securities of the Company entitled to vote generally
in the election of directors to the Board.

 

SECTION 3

ADMINISTRATION

 

3.1           The
Committee. The Plan shall be administered by the Committee. The Committee shall consist of not less than two (2) Directors
who must be Non-Employee Directors. The members of the Committee shall be appointed from time to time by, and shall serve at the
pleasure of, the Board.

 

     

     

    

 

3.2           Authority
of the Committee or the Board. The Committee or the Board shall have full power, except as limited by Applicable Law or by
the Certificate of Incorporation or Bylaws of the Company, and subject to the provisions of this Plan: to determine the size and
types of Awards and when and how such Awards will be granted; to determine the terms and conditions of such Awards in a manner
consistent with the Plan; to determine the number of shares of Common Stock subject to, or the cash value of, an Award; to determine
the terms and conditions of each Award Agreement, which need not be identical for each Participant; to construe and interpret the
Plan and any or instrument entered into under the Plan; to establish, amend, or waive rules and regulations for the Plan's administration;
and (subject to the provisions of Section 17 herein) to amend the terms and conditions of any outstanding Stock Award to the extent
such terms and conditions are within the discretion of the Committee and/or the Board as provided in the Plan; to construe and
interpret the Plan and Awards granted under it, and to establish, amend and revoke rules and regulations for administration of
the Plan and Awards. The Committee or the Board, in the exercise of these powers, may correct any defect, omission or inconsistency
in the Plan or in any Award Agreement, in a manner and to the extent it will deem necessary or expedient to make the Plan or Award
fully effective; to settle all controversies regarding the Plan and Awards granted under it, subject to any restrictions contained
in this Plan; to accelerate, in whole or in part, the time at which an Award may be exercised or vest (or at which cash or Shares
may be issued); to submit any amendment to the Plan for stockholder approval, including, but not limited to, amendments to the
Plan intended to satisfy the requirements of (A) Section 162(m) of the Code regarding the exclusion of performance-based compensation
from the limit on corporate deductibility of compensation paid to Covered Employees, (B) Section 422 of the Code regarding incentive
stock options or (C) Rule 16b-3 promulgated under the Exchange Act; to approve forms of Award Agreements for use under the Plan
and to amend the terms of any one or more Awards, including, but not limited to, amendments to provide terms more favorable to
the Participant than previously provided in the Award Agreement, subject to any specified limits in the Plan that are not subject
to Committee or Board discretion; provided, however, that a Participant’s rights under any Award will not be
materially impaired by any such amendment unless (A) the Company requests the consent of the affected Participant, and (B) such
Participant consents in writing. Notwithstanding the foregoing, (1) a Participant’s rights will not be deemed to have been
materially impaired by any such amendment if the Committee or the Board, in its sole discretion, determines that the amendment,
taken as a whole, does not materially impair the Participant’s rights, and (2) subject to the limitations of Applicable Law,
if any, the Board may amend the terms of any one or more Stock Awards without the affected Participant’s consent (A) to maintain
the qualified status of the Stock Award as an Incentive Stock Option under Section 422 of the Code; (B) to change the terms of
an Incentive Stock Option, if such change results in impairment of the Stock Award solely because it impairs the qualified status
of the Stock Award as an Incentive Stock Option under Section 422 of the Code; (C) to clarify the manner of exemption from, or
to bring the Award into compliance with, Section 409A of the Code; (D) to comply with the applicable provisions of any Other Company
Plan; or (E) to comply with other Applicable Laws or listing requirements; and generally, to exercise such powers and to perform
such acts as the Board deems necessary or expedient to promote the best interests of the Company and that are not in conflict with
the provisions of the Plan or Awards. Further, the Committee shall make all other determinations, which may be necessary or advisable
for the administration of the Plan.

 

3.3           Delegation.
As permitted by Applicable Law, the Committee or the Board may delegate authority to the Management Committee to grant Awards permitted
under this Plan to Employees who are not Insiders, in accordance with such guidelines as the Committee shall set forth at any time
or from time to time.

 

3.4           Decisions
Binding. All determinations and decisions made by the Committee or the Board pursuant to the provisions of the Plan and all
related orders or resolutions of the Committee or the Board shall be final, conclusive, and binding on all persons, including the
Company, its shareholders, Employees, Participants, and their estates and beneficiaries, and shall be given the maximum deference
permitted by Applicable Law. Such determinations and decisions need not be uniform and may be made by the Committee or the Board
selectively among Participants who receive, or are eligible to receive, Awards under the Plan, whether or not such Participants
are similarly situated.

 

3.5           Limitation
of Liability. Each member of the Committee and the Board shall be entitled to rely or act in good faith upon any report
or other information furnished to him or her by any officer or other employee of the Company or any Subsidiary, the Company’s
independent certified public accountants, legal counsel or any executive compensation consultant or other professional retained
by the Company to assist in the administration of the Plan. No member of the Committee, nor any Employee of the Company acting
on behalf of the Committee, including, without limitation, the Management Committee or any member thereof, shall be personally
liable for any action, determination, or interpretation taken or made in good faith with respect to the Plan, and all members of
the Committee and any such Employee of the Company acting on their behalf, shall, to the extent permitted by Applicable Law, be
fully indemnified and protected by the Company, pursuant to Section 20 hereof, with respect to any such action, determination,
or interpretation.

 

3.6           Minimum
Vesting Requirement of Stock Awards. In addition to any other limitations set forth in the Plan, and notwithstanding any provisions
of the Plan to the contrary, Awards granted to Participants under the Plan shall vest over a period that is not less than one year
from the Date of Grant (except that this limit need not apply in the event of any Substitute Award or the death or disability of
the Participant or as otherwise provided in Section 22). In addition, subject to adjustments, if any, made in accordance with Section
4.3, up to 5% of the aggregate number of Shares authorized for issuance under the Plan may be used for such Awards without regard
to the minimum vesting requirements set forth above.

 

     

     

    

 

3.7           Exercisability
of Stock Awards. Except as otherwise permitted or required under the Plan or any Other Company Plan, any stock-settled Stock
Award granted on or after the Effective Date that vests solely on the basis of the passage of time (e.g., not on the basis of achievement
of Performance Goals) generally will vest in three equal annual installments over a three (3)-year period following the Date of
Grant. This Section 3.7 shall not apply to (i) any Stock Award that becomes vested based on the achievement of Performance Goals,
(ii) Stock Awards to Non-Employee Directors, or (iii) Stock Awards involving an aggregate number of Shares of Common Stock not
exceeding 10% of the number of Shares available for Stock Awards under the first sentence of Section 4.1 as of the Effective Date.

 

SECTION 4

SHARES SUBJECT TO THE PLAN

 

4.1           Number
of Shares. Subject to adjustment upon the occurrence of an Adjustment Event as provided in Section 4.3, the total number of
Shares available for grant under the Plan, including shares subject to Stock Awards previously issued and outstanding under the
Prior Plan, may not exceed 11,700,000. These 11,700,000 Shares may be either authorized but unissued or reacquired Shares. The
following rules will apply for purposes of the determination of the number of Shares available for grant under the Plan:

 

(a)          While
a Stock Award is outstanding, it shall be counted against the authorized pool of Shares, regardless of its vested status.

 

(b)          The
grant of an Option shall reduce the Shares available for grant under the Plan by the number of Shares subject to such Stock Award.

 

(c)          The
grant of a Tandem SAR shall reduce the number of Shares available for grant by the number of Shares subject to the related Option
(i.e., there is no double counting of Options and their related Tandem SARs).

 

(d)          The
grant of an Affiliated SAR shall reduce the number of Shares available for grant by the number of Shares subject to the SAR, in
addition to the number of Shares subject to the related Option.

 

(e)          The
grant of a Freestanding SAR shall reduce the number of Shares available for grant by the number of Freestanding SARs granted.

 

(f)          The
Committee shall in each case determine the appropriate number of Shares to deduct from the authorized pool in connection with the
grant of Performance Stock Unit Awards.

 

(g)          Commencing
with the Effective Date of this Plan, each grant of a Full-Value Stock Award shall reduce the authorized Share pool by 1.0 Share.

 

(h)          To
the extent that a Stock Award is settled in cash rather than in Shares, the Shares reserved for such Award shall not be deducted
from the authorized Share pool.

 

(i)          To
the extent Shares are withheld from any Stock Award by the Company or tendered by a Participant to pay taxes applicable to any
Stock Award, such Shares shall be deducted from the authorized Share pool.

 

(j)          Shares
withheld by the Company or tendered by a Participant to pay the exercise price of any Option or SAR shall not be added to the authorized
Share pool.

 

(k)          Shares
withheld by the Company or tendered by a Participant to satisfy tax-withholding obligations of any Stock Award shall not be added
to the authorized Share pool.

 

(l)          All
Shares covered by a SAR, to the extent that a SAR is exercised and settled in Shares, whether or not Shares are actually delivered
to the Participant upon exercise of the right, shall be deducted from the authorized Share pool.

 

(m)          Any
Shares repurchased by the Company using Option exercise proceeds shall not be added to the authorized Share Pool.

 

     

     

    

 

(n)          Substitute
Awards shall not reduce the number of Shares authorized for grant under the Plan or the applicable per person limitations for
grant to a Participant under Section 5.3 or Section 12.2 below, nor shall Shares subject to a Substitute Award again be available
for Awards. 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 the Plan and shall not reduce the Shares authorized for grant under the 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.

 

4.2           Lapsed
Awards. If any Stock Award granted under this Plan is cancelled, terminates, expires, or lapses for any reason (with the exception
of the termination of a Tandem SAR upon exercise of the related Option, or the termination of a related Option upon exercise of
the corresponding Tandem SAR), any Shares subject to such Stock Award again shall be available for the grant of a Stock Award under
the Plan. Without limiting the foregoing, to the extent a Full-Value Stock Award is forfeited prior to the expiration of the applicable
Period of Restriction or Performance Period, the same number of Shares shall be added to the authorized share pool as were deducted
when such Stock Award first was granted under the Prior Plan or the Plan.

 

4.3           Adjustments
in Authorized Shares. In the event of any Adjustment Event affecting the Common Stock such that an adjustment is appropriate
in order to prevent dilution or enlargement of the rights of Participants under the Plan, such adjustment shall be made in the
number and/or class of Shares which may be delivered under the Plan (including adjustment to the limits contained in Section 12.2),
and in the number and/or class of and/or price of Shares subject to outstanding Stock Awards granted under the Plan, as is necessary
to equalize a Stock Award’s value before and after an Adjustment Event, and provided that the number of Shares subject to
any Stock Award shall always be rounded down to the nearest whole number. In the event of any merger, reorganization, consolidation,
recapitalization, separation, liquidation, or other change in the corporate structure of the Company that does not constitute such
an Adjustment Event, the Committee or the Board may make such adjustment, if any, as it deems appropriate in the number and/or
class of and/or price of Shares subject to outstanding Awards granted under the Plan. Any adjustments made pursuant to this Section
4.2 shall be consistent with Sections 424, 409A and 162(m) of the Code to the extent the Awards subject to adjustment are subject
to such Sections of the Code.

 

SECTION 5

ELIGIBILITY AND PARTICIPATION

 

5.1           Eligibility.
Persons eligible to participate in this Plan include all Employees and Non-Employee Directors of the Company and its Subsidiaries,
as determined by the Committee.

 

5.2           Actual
Participation. Subject to the provisions of the Plan, the Committee or the Board, in its sole discretion, shall select from
all eligible Employees and Non-Employee Directors, those to whom Awards shall be granted, and the Committee or the Board, in its
sole discretion, shall determine the nature and amount of each Award, subject to the Committee’s or Board’s delegation
of its powers, including to the Management Committee, as set forth in this Plan.

 

5.3           Annual
Limit on Non-Employee Director Awards. The maximum number of shares of Common Stock subject to Stock Awards granted under the
Plan or otherwise during any one calendar year to any Non-Employee Director for service on the Board, taken together with any cash
fees paid by the Company to such Non-Employee Director with respect to such calendar year for service on the Board, will not exceed
$300,000 in total value (calculating the value of any such Stock Awards based on the grant date fair value of such Stock Awards
for financial reporting purposes). The Board may make exceptions to such limit for individual Non-Employee Directors in extraordinary
circumstances, as the Board may determine in its discretion, provided that the Non-Employee Director receiving such additional
compensation may not participate in the decision to award such compensation.

 

     

     

    

 

SECTION 6

STOCK OPTIONS

 

6.1           Grant
of Options. Subject to the terms and provisions of the Plan, Options may be granted to Employees and Non-Employee Directors
on the Date of Grant. The Committee shall have discretion in determining the number of Shares subject to Options granted to each
Participant, subject to the Committee’s delegation of powers, including delegation to the Management Committee, as set forth
in this Plan. The Committee may grant ISOs, NQSOs, or a combination thereof.

 

6.2           Award
Agreement. Each Option grant shall be evidenced by an Award Agreement that shall specify the Option Price, the duration of
the Option, the number of Shares to which the Option pertains, the conditions of exercise of the Options, and such other provisions
as the Committee shall determine. The Award Agreement also shall specify whether the Option is intended to be an ISO or a NQSO,
provided that if the Stock Award Agreement does not so specify, the Option shall be a NQSO.

 

6.3           Option
Price. The Option Price for each grant of an Option shall be determined by the Committee in its sole discretion, provided that:

 

6.3.1           Nonqualified
Stock Options. In the case of a Nonqualified Stock Option, the Option Price shall be not less than one-hundred percent (100%)
of the Fair Market Value of a Share on the Date of Grant.

 

6.3.2           Incentive
Stock Options. In the case of an Incentive Stock Option, the Option Price shall be not less than one-hundred percent (100%)
of the Fair Market Value of a Share on the Date of Grant; provided, however, that if at the time the Option is granted, the Employee
(together with persons whose stock ownership is attributed to the Employee pursuant to Section 424(d) of the Code) owns stock possessing
more than 10% of the total combined voting power of all classes of stock of the Company or any of its Subsidiaries, the Option
Price shall be not less than one-hundred and ten percent (110%) of the Fair Market Value of a Share on the Date of Grant.

 

6.4           Duration
of Options. Each Option shall expire at such time as the Committee, in its sole discretion, shall determine; provided, however,
that for grants made on or after the Effective Date of this Plan, no Option may be exercised after the expiration of seven (7)
years from the date the Option was granted. After the Option is granted, the Committee, in its sole discretion, may extend the
maximum term of such Option, provided, however, that on or after the Effective Date of this Plan, no extension shall make the Option
exercisable more than seven (7) years after the date the Option was granted.

 

6.5           Exercise
of Options. Options granted under the Plan shall be exercisable at such times and be subject to such restrictions and conditions
as the Committee, in its sole discretion, shall determine or as otherwise set forth in this Plan. After an Option is granted, the
Committee, in its sole discretion, may accelerate the exercisability of the Option, subject to any restrictions on acceleration
as set forth elsewhere in this Plan.

 

6.6           Payment.
Options shall be exercised by the Participant's delivery of a notice of exercise to the Secretary of the Company, to the Company’s
designated broker, or to another person designated by the Committee setting forth the number of Shares with respect to which the
Option is to be exercised, accompanied by full payment for the Shares. The Option Price upon exercise of any Option shall be payable
to the Company in full in cash or its equivalent. The Committee, in its sole discretion, also may permit exercise (a) by tendering
previously acquired Shares having an aggregate Fair Market Value at the time of exercise equal to the total Option Price (provided
that the Shares which are tendered must have been held by the Participant for at least six (6) months prior to their tender to
satisfy the Option Price), or (b) by any other means which the Committee, in its sole discretion, determines to provide legal consideration
for the Shares, and to be consistent with the Plan's purpose and applicable law. As soon as practicable after receipt of a written
notification of exercise and full payment, the Company shall transfer into the Participant's name, by book entry into Participant’s
brokerage account or by causing a Share certificate(s) to be issued to Participant, the number of Shares purchased under the Option(s).

 

6.7           Restrictions
on Share Transferability. The Committee may impose restrictions on any Shares acquired pursuant to the exercise of an Option
under the Plan, as it may deem advisable, including, without limitation, restrictions under applicable Federal securities laws,
under the requirements of any national securities exchange or system upon which such Shares are then listed and/or traded, and
under any blue sky or state securities laws applicable to such Shares.

 

     

     

    

 

6.8           Certain
Additional Provisions for Incentive Stock Options.

 

6.8.1           Exercisability.
The aggregate Fair Market Value (determined at the time the Option is granted) of the Shares with respect to which Incentive Stock
Options are exercisable for the first time by any Employee during any calendar year (under all plans of the Company and its Subsidiaries)
shall not exceed $100,000, or such other limitation required under Section 422(d) of the Code.

 

6.8.2           Termination
of Employment. Except as otherwise provided in this Plan or any applicable Other Company Plan, no Incentive Stock Option may
be exercised more than three months after the effective date of the Participant's termination of employment for any reason other
than Disability or death, unless (a) the Participant dies during such three-month period, and/or (b) the Award Agreement permits
later exercise. Except as otherwise provided in this Plan or any applicable Other Company Plan, no Incentive Stock Option may be
exercised more than one year after the Participant's termination of employment on account of death or Disability, unless (a) the
Participant dies during such one-year period, and (b) the Award Agreement permits later exercise.

 

6.8.3           Employees
Only. Incentive Stock Options may be granted only to persons who are Employees at the time of grant. Non-Employee Directors
shall not be eligible to receive Incentive Stock Options.

 

6.9           Non-Transferability
of Options. No Option granted under the Plan may be sold, transferred, pledged, assigned, or otherwise alienated or hypothecated,
other than by will, the laws of descent and distribution, or as allowed under Section 14. All Options granted to a Participant
under the Plan shall be exercisable during his or her lifetime only by such Participant.

SECTION 7

APPRECIATION RIGHTS

 

7.1           Grant
of SARs. Subject to the terms and conditions of the Plan, a SAR may be granted to an Employee and/or a Non-Employee Director
on the Date of Grant. The Committee may grant Affiliated SARs, Freestanding SARs, Tandem SARs, or any combination thereof. The
Committee shall have complete discretion to determine the number of SARs granted to any Participant, and consistent with the provisions
of the Plan, the terms and conditions pertaining to such SARs. However, the grant price of any SAR, including Affiliated SARs,
Freestanding SARs, Tandem SARs, or any combination thereof, shall be not less than one-hundred percent (100%) of the Fair Market
Value of a Share on the Date of Grant of the SAR.

 

7.2           Exercise
of Tandem SARs. Tandem SARs may be exercised for all or part of the Shares subject to the related Option upon the surrender
of the right to exercise the equivalent portion of the related Option. A Tandem SAR may be exercised only with respect to the Shares
for which its related Option is then exercisable. Notwithstanding any other provision of this Plan to the contrary, with respect
to a Tandem SAR granted in connection with an ISO: (i) the Tandem SAR will expire no later than the expiration of the underlying
ISO; (ii) the value of the payout with respect to the Tandem SAR may be for no more than one hundred percent (100%) of the difference
between the Option Price of the underlying ISO and the Fair Market Value of the Shares subject to the underlying ISO at the time
the Tandem SAR is exercised; and (iii) the Tandem SAR may be exercised only when the Fair Market Value of the Shares subject to
the ISO exceeds the Option Price of the ISO.

 

7.3           Exercise
of Affiliated SARs. Affiliated SARs shall be deemed to be exercised upon the exercise of the related Options. The deemed exercise
of Affiliated SARs shall not necessitate a reduction in the number of related Options.

 

7.4           Exercise
of Freestanding SARs. Freestanding SARs shall be exercisable on such terms and conditions as shall be determined by the Committee,
in its sole discretion.

 

7.5           Term
of SARs. The term of a SAR granted under the Plan shall be determined by the Committee, in its sole discretion, provided, however,
that for grants made on or after the Effective Date of this Plan, no SAR may be exercised after the expiration of seven (7) years
from the date the SAR was granted.

 

     

     

    

 

7.6           SAR
Award Agreement. Each SAR grant shall be evidenced by an Award Agreement that shall specify the grant price, the term of the
SAR, the conditions of exercise and such other provisions as the Committee, in its sole discretion, shall determine. After a SAR
is granted, the Committee, in its sole discretion, may accelerate the exercisability of the Option or extend the term of the SAR,
subject to any restrictions on acceleration as set forth elsewhere in this Plan, provided, however, that on or after the Effective
Date of this Plan, no extension shall make the SAR exercisable more than seven (7) years after the date the SAR was granted.

 

7.7           Payment
of SAR Amount. Upon exercise of a SAR, a Participant shall be entitled to receive payment from the Company in an amount determined
by multiplying: (a) the difference between the Fair Market Value of a Share on the date of exercise over the grant price; times
(b) the number of Shares with respect to which the SAR is exercised. At the discretion of the Committee, the payment upon SAR exercise
may be in cash, in Shares of equivalent value, or in some combination thereof.

 

7.8           Restrictions
on Share Transferability. The Committee may impose such restrictions on any Shares acquired pursuant to the exercise of a SAR
under the Plan, as it may deem advisable, including, without limitation, restrictions under applicable Federal securities laws,
under the requirements of any national securities exchange or system upon which such Shares are then listed and/or traded, and
under any blue sky or state securities laws applicable to such Shares.

 

7.9           Non-Transferability
of SARs. No SAR granted under the Plan may be sold, transferred, pledged, assigned, or otherwise alienated or hypothecated,
other than by will, the laws of descent and distribution, or as permitted under Section 14. Further, all SARs granted to a Participant
under the Plan shall be exercisable during his or her lifetime only by such Participant.

SECTION 8

RESTRICTED STOCK AWARDS

 

8.1           Grant
of Restricted Stock Awards. Subject to the terms and provisions of the Plan, the Committee may grant Restricted Stock Awards
to Employees and Non-Employee Directors on the Date of Grant in such amounts as the Committee, in its sole discretion, shall determine.

 

8.2           Restricted
Stock Award Agreement. Each Restricted Stock Award granted pursuant to this Plan shall be evidenced by an Award Agreement that
shall specify the Period (or Periods) of Restriction, the number of Restricted Stock Shares or Restricted Stock Units granted,
and such other terms and conditions as the Committee, in its sole discretion, shall determine.

 

8.3           Non-Transferability
of Restricted Stock Awards. Except as provided in this Plan, Shares of Restricted Stock Awards may not be sold, transferred,
pledged, assigned, or otherwise alienated or hypothecated other than by will, the laws of descent and distribution, or as allowed
under Section 14. All rights with respect to the Restricted Stock Award granted to a Participant under the Plan shall be available
during his or her lifetime only to such Participant.

 

8.4           Other
Restrictions. The Committee, in its sole discretion, may impose such other restrictions on any Restricted Stock Awards as it
may deem advisable including, without limitation, Performance Criteria, Performance Goals (Company-wide, divisional, and/or individual),
stop-transfer order, and/or such other restrictions under applicable Federal or state securities laws, rules and regulations thereunder
or rules of the national securities exchange or system on which the Shares are listed.

 

8.5           Certificate
Legend. The Committee may cause a legend or legends to be placed on any such Restricted Stock Award certificates to make appropriate
reference to any restrictions that may be applicable to Shares. In addition, during any Period of Restriction, or during any period
during which delivery or receipt of a Stock Award or Shares has been deferred by the Committee or a Participant, the Committee
may require the Participant to enter into an agreement providing that certificates representing Shares issuable or issued pursuant
to a Stock Award shall remain in the physical custody of the Company or such other person as the Committee may designate.

 

8.6           Removal
of Restrictions. Except as otherwise provided in this Plan, Restricted Stock Award grants made under the Plan shall become
freely transferable by the Participant after the last day of the Period of Restriction. The Committee, in its discretion, may accelerate
the time at which any restrictions shall lapse, and/or remove any restrictions, subject to the terms of this Plan and any applicable
Other Company Plan. After the Shares are released from restrictions, the Participant shall be entitled to have the applicable legend
or legends required by Section 8.5 removed from his or her Share certificate.

 

     

     

    

 

8.7           Voting
Rights. During the Period of Restriction, Participants holding Restricted Stock Awards granted hereunder may exercise full
voting rights with respect to those Shares unless otherwise provided in the Stock Award Agreement.

 

8.8           Dividends
and Dividend Equivalents. Any Dividends and/or Dividend Equivalents paid by the Company to a Participant holding Restricted
Stock Awards shall be governed by Section 18 of this Plan.

 

8.9           Return
of Restricted Stock to Company. Subject to the applicable Stock Award Agreement and Section 8.6, upon the earlier of (a) the
Participant's termination of employment, or (b) the date set forth in the Stock Award Agreement, the Restricted Stock Award for
which the Period of Restriction has not lapsed shall revert to the Company and, subject to Section 4.2, again shall become available
for grant under the Plan.

 

SECTION 9

RESTRICTED STOCK UNIT AWARDS

 

9.1           Grant
of Restricted Stock Unit Awards. Subject to the terms and provisions of the Plan, the Committee may grant Restricted Stock
Unit Awards to Employees and Non-Employee Directors on the Date of Grant in such amounts as the Committee, in its sole discretion,
shall determine.

 

9.2           Restricted
Stock Unit Award Agreement. Each Restricted Stock Unit Award granted pursuant to this Plan shall be evidenced by an Award Agreement
that shall specify the Period (or Periods) of Restriction, the number of Restricted Stock Units granted, and such other terms and
conditions as the Committee, in its sole discretion, shall determine.

 

9.3           Non-Transferability
of Restricted Stock Unit Awards. Except as provided in this Plan, Restricted Stock Unit Awards may not be sold, transferred,
pledged, assigned, or otherwise alienated or hypothecated other than by will, the laws of descent and distribution, or as allowed
under Section 14. All rights with respect to the Restricted Stock Award granted to a Participant under the Plan shall be available
during his or her lifetime only to such Participant.

 

9.4           Restrictions
on Share Transferability. The Committee may impose restrictions on any Shares acquired pursuant to any Restricted Stock Unit
Award granted under this Section 9 as it may deem advisable, including, without limitation, restrictions under applicable Federal
securities laws, under the requirements of any national securities exchange or system upon which such Shares are then listed and/or
traded, and under any blue sky or state securities laws applicable to such Shares.

 

9.5           Other
Restrictions. The Committee, in its sole discretion, may impose such other restrictions on any Restricted Stock Unit Awards
as it may deem advisable including, without limitation, Performance Criteria, Performance Goals (Company-wide, divisional, and/or
individual), stop-transfer order, and/or such other restrictions under applicable Federal or state securities laws, rules and regulations
thereunder or rules of the national securities exchange or system on which the Shares are listed.

 

9.6           Removal
of Restrictions. Except as otherwise provided in this Plan, Shares underlying each Restricted Stock Unit Award under the Plan
shall be issued to the Participant after the Period of Restriction. The Committee, in its discretion, may accelerate the time at
which any Period of Restriction shall lapse, and/or remove any restrictions, subject to the terms of this Plan and any Other Company
Plan. After the Shares are released from restrictions, the Participant shall be entitled to receive Shares.

 

9.7           Voting
Rights. Unless and until the Company provides issuance of Shares in respect of Restricted Stock Units Awards, a Participant
holding outstanding Restricted Stock Unit Awards shall not be entitled to exercise any voting rights with respect to such Restricted
Stock Unit Awards.

 

9.8           Dividends
and Dividend Equivalents. Any Dividends and/or Dividend Equivalents paid by the Company to a Participants holding Restricted
Stock Unit Awards granted hereunder shall be governed by Section 18 of this Plan..

 

9.9           Return
of Restricted Stock Units to Company. Subject to the applicable Stock Award Agreement and Section 9.6, upon the earlier of
(a) the Participant's termination of employment, or (b) the date set forth in the Stock Award Agreement, the Shares underlying
the Restricted Stock Unit Award for which the Period of Restriction has not lapsed shall revert to the Company and, subject to
Section 4.2, again shall become available for grant under the Plan.

     

     

    

 

SECTION 10

PERFORMANCE STOCK UNIT AWARDS

 

10.1         Grant
of Performance Stock Unit Awards. Subject to the terms of the Plan, Performance Stock Unit Awards may be granted to Employees
and Non-Employee Directors on the Date of Grant. The Committee shall have complete discretion in determining the number of Performance
Stock Unit Awards granted to each Participant, subject to the Committee’s delegation of its powers, including to the Management
Committee, as set forth in this Plan. With respect to Covered Employees, Performance Stock Unit Awards are intended to be “qualified
performance-based compensation” within the meaning of Section 162(m) of the Code and shall be paid solely on account of the
attainment of one or more pre-established Performance Criteria and/or Performance Goals within the meaning of Section 162(m) and
the regulations thereunder. The payout of any such Award to a Covered Employee may be reduced, but not increased, based on the
degree of attainment of other performance criteria or otherwise at the direction of the Committee.

 

10.2         Maximum
Individual Performance Stock Unit Awards. No Employee may be granted more than the maximum number of Shares set forth in Section
12, which are subject to any combination of Performance Stock Unit Awards in any given calendar year. The maximum payout for any
Covered Employee for a Performance Stock Unit Award paid in cash is set forth in Section 12.2.2. The Share amounts in this Section
10.2 are subject to the Share amount set forth in Section 4.1 and the adjustment provisions under Section 4.3. The Committee shall
determine the applicable Performance Goals.

 

10.3         Value
of Performance Units/Shares. Each Performance Stock Unit Award shall have an initial value equal to one-hundred percent (100%)
of the Fair Market Value of a Share on the Date of Grant. The Committee shall set Performance Goals in its discretion which, depending
on the extent to which they are met, will determine the number and/or value of Shares that will be paid out to the Participants
upon vesting. Performance Periods of Performance Stock Unit Awards granted to Insiders shall, in all cases, exceed one (1) year
in length, unless the Performance Stock Unit Awards were granted by a committee comprised solely of two or more Non-Employee Directors.

 

10.4         Earning
of Performance Stock Unit Awards. After the applicable Performance Period has ended, the holder of Performance Stock Unit Awards
shall be entitled to receive a payout of the number of Shares, if any, earned by the Participant over the Performance Period, to
be determined as a function of the extent to which the corresponding Performance Goals have been achieved.

 

10.5         Form
and Timing of Payment of Performance Stock Unit Awards. The settlement of any earned Performance Stock Unit Awards shall be
made in a single lump sum, within forty-five (45) calendar days following the close of the applicable Performance Period. The Committee,
in its sole discretion, may pay earned Performance Stock Unit Awards in the form of cash, in Shares (which have an aggregate Fair
Market Value equal to the value of the earned Performance Stock Unit Awards at the close of the applicable Performance Period)
or in a combination thereof. Prior to the beginning of each Performance Period, Participants may, in the discretion of the Committee,
elect to defer the receipt of any Performance Stock Unit Award payout upon such terms as the Committee shall determine.

 

10.6         Cancellation
of Performance Stock Unit Awards. Subject to the applicable Award Agreement, upon the earlier of (a) the Participant's termination
of employment, or (b) the date set forth in the Award Agreement, all remaining Performance Stock Unit Awards shall be forfeited
by the Participant to the Company, and subject to Section 4.2, the Shares subject thereto shall again be available for grant under
the Plan.

 

10.7         Performance
Stock Unit Award Agreement. Each Performance Stock Unit Award granted pursuant to this Plan shall be evidenced by an Award
Agreement that shall specify the Performance Criteria, the Performance Goals, the Performance Period and the Period (or Periods)
of Restriction, the number of Performance Stock Unit Award Shares granted, and such other terms and conditions as the Committee,
in its sole discretion, shall determine.

 

10.8         Non-Transferability
of Performance Stock Unit Awards. Performance Stock Unit Awards may not be sold, transferred, pledged, assigned, or otherwise
alienated or hypothecated, other than by will or by the laws of descent and distribution or as allowed under Section 14. Further,
a Participant's rights under the Plan shall be exercisable during the Participant's lifetime only by the Participant or the Participant's
legal representative.

 

     

     

    

 

10.9         Restrictions
on Share Transferability. The Committee may impose restrictions on any Shares acquired pursuant to any Performance Stock Unit
Award granted under this Section 10 as it may deem advisable, including, without limitation, restrictions under applicable Federal
securities laws, under the requirements of any national securities exchange or system upon which such Shares are then listed and/or
traded, and under any blue sky or state securities laws applicable to such Shares.

 

10.10       Voting
Rights. Unless and until the Company provides issuance of Shares in respect of Performance Stock Unit Awards, a Participant
holding outstanding Performance Stock Unit Awards shall not be entitled to exercise any voting rights with respect to such Performance
Stock Unit Awards.

 

10.11       Dividends
and Dividend Equivalents. Any Dividends and/or Dividend Equivalents paid by the Company to Participants holding Performance
Stock Unit Awards granted hereunder shall be governed by Section 18 of this Plan.

 

10.12      Cancellation
of Performance Stock Unit Awards. All Performance Stock Unit Awards for which a Performance Goal has not been met shall not
be deemed earned by a Participant. Additionally, if the Performance Goal is met for the applicable Performance Period, but the
Participant’s employment is terminated, whether such termination is voluntary or involuntary, prior to the date such Performance
Stock Unit Award is distributed to all Participants, unless otherwise determined by the Committee or the Board, the Shares underlying
such terminated Participant’s Performance Stock Unit Award shall be forfeited by the Participant immediately upon such termination.

 

SECTION 11

PERFORMANCE CASH AWARDS

 

11.1         Grant
of a Performance Cash Awards. A Performance Cash Award is a cash award (for a dollar value not in excess of that set forth
in Section 11.2.2) that is payable contingent upon the attainment during a Performance Period of certain Performance Criteria and/or
Performance Goals. At the time of grant of a Performance Cash Award, the length of any Performance Period, the Performance Criteria
and/or Performance Goals to be achieved during the Performance Period, and the measure of whether and to what degree such Performance
Criteria and/or Performance Goals have been attained will be conclusively determined by the Committee (or, if not required for
compliance with Section 162(m) of the Code, the Board), in its sole discretion.

 

11.2         Maximum
Individual Performance Cash Awards. No Performance Cash Award may exceed the maximum amount to any Employee set forth in Section
11.2.2 in any given calendar year.

 

11.3         Form
and Timing of Payment of Performance Cash Awards. The Committee or the Board may specify the form of payment of Performance
Cash Awards, which may be cash or other property, or may provide for a Participant to have the option for his or her Performance
Cash Award, or such portion thereof as the Committee or the Board may specify, to be paid in whole or in part in cash or other
property. Any earned Performance Cash Award shall be made in a single lump sum, within forty-five (45) calendar days following
the close of the applicable Performance Period.

 

11.4         Performance
Cash Award Agreement. Each Performance Cash Award granted pursuant to this Plan shall be evidenced by an Award Agreement that
shall specify the Performance Criteria, the Performance Goals, the Performance Period and the Period (or Periods) of Restriction,
and such other terms and conditions as the Committee, in its sole discretion, shall determine.

 

11.5         Committee
and Board Discretion. The Committee and the Board each retains the discretion to reduce or eliminate the compensation or economic
benefit due upon attainment of Performance Goals and to define the manner of calculating the Performance Criteria it selects to
use for a Performance Period.

 

11.6         Cancellation
of Performance Cash Awards. All Performance Cash Awards for which a Performance Criteria and/or Performance Goal has not been
met shall not be deemed earned by a Participant. Additionally, if the Performance Criteria and/or Performance Goal is met for the
applicable Performance Period, but the Participant’s employment is terminated, whether such termination is voluntary or involuntary,
prior to the date such Performance Cash Award is distributed to all Participants, unless otherwise determined by the Committee
or the Board, such terminated Participant’s Performance Cash Award shall be forfeited by the Participant immediately upon
such termination.

 

     

     

    

 

SECTION 12

APPLICATION OF CODE SECTION 162(m)

 

12.1         Section 162(m)
Compliance. Unless otherwise permitted in compliance with Section 162(m) of the Code with respect to an Award intended to qualify
as “performance-based compensation” thereunder, the Committee will establish the Performance Goals applicable to, and
the formula for calculating the amount payable under, the Award no later than the earlier of (A) the date ninety (90) days after
the commencement of the applicable Performance Period, and (B) the date on which twenty-five percent (25%) of the Performance Period
has elapsed, and in any event at a time when the achievement of the applicable Performance Goals remains substantially uncertain.
Prior to the payment of any compensation under an Award intended to qualify as “performance-based compensation” under
Section 162(m) of the Code, the Committee will certify the extent to which any Performance Goals and any other material terms under
such Award have been satisfied (other than in cases where the Performance Goals relate solely to the increase in the value of the
Common Stock).

 

12.2           Section
162(m) Limitations. At such time as the Company may be subject to the applicable provisions of Section 162(m) of the Code,
and subject to the provisions of Sections 4.1 and 4.3, the following limitations will apply:

 

12.2.1           A
maximum of one million five hundred thousand (1,500,000) Shares of Common Stock subject to Options or SARs may be granted to any
Employee during any fiscal year. A maximum of one million five hundred and thousand (1,500,000) Shares of Common Stock subject
to Performance Stock Unit Awards (other than Options or SARs) may be granted to any one Employee during any one fiscal year (whether
the grant, vesting or exercise is contingent upon the attainment during the Performance Period of the Performance Goals).

 

12.2.2           The
maximum payout with respect to a Performance Cash Award to any one Employee during any one fiscal year is two million ($2,000,000)
dollars.

 

SECTION 13

OTHER STOCK-BASED AWARDS

 

13.1         Other
Stock-Based Awards. The Committee is authorized to grant to Participants such other Awards that are denominated or payable
in, valued in whole or in part by reference to, or otherwise based on or related to, Shares, as deemed by the Committee to be consistent
with the purposes of the Plan, including without limitation, Shares awarded purely as a “bonus” and not subject to
any restrictions or conditions, other rights convertible or exchangeable into Shares, purchase rights and Awards valued by reference
to book value of Shares or the performance of specified Subsidiaries.

 

13.2         Terms
and Conditions. The Committee shall determine the terms and conditions of such Other Stock-Based Awards, which may include
Performance Criteria and Performance Goals. Shares delivered pursuant to an Award in the nature of a purchase right granted under
this Section 13 shall be purchased for such consideration, paid for at such times, by such methods, and in such forms, including,
without limitation, cash, Shares, other Awards, or other property, as the Committee shall determine.

 

13.3         Restrictions
on Share Transferability. The Committee may impose restrictions on any Shares acquired pursuant to any Other Stock-Based Award
granted under this Section 13 as it may deem advisable, including, without limitation, restrictions under applicable Federal securities
laws, under the requirements of any national securities exchange or system upon which such Shares are then listed and/or traded,
and under any blue sky or state securities laws applicable to such Shares.

 

13.4         Other
Restrictions. The Committee, in its sole discretion, may impose such other restrictions on any Other Stock-Based Awards as
it may deem advisable including, without limitation, Performance Criteria, Performance Goals (Company-wide, divisional, and/or
individual), stop-transfer order, and/or such other restrictions under applicable Federal or state securities laws, rules and regulations
thereunder or rules of the national securities exchange or system on which the Shares are listed.

 

13.5         Removal
of Restrictions. Except as otherwise provided in this Plan, if the Other Stock-Based Awards are subject to a Period of Restriction,
the Committee, in its discretion, may accelerate the time at which any Period of Restriction shall lapse, and/or remove any restrictions,
subject to the terms of this Plan and any Other Company Plan. After the Shares are released from restrictions, the Participant
shall be entitled to receive Shares.

 

     

     

    

 

13.6         Voting
Rights. Unless and until the Company provides issuance of Shares in respect of Other Stock-Based Awards, a Participant holding
outstanding Other Stock-Based Awards shall not be entitled to exercise any voting rights with respect to such Other Stock-Based
Awards.

 

13.7         Dividends
and Dividend Equivalents. Any Dividends and/or Dividend Equivalents paid by the Company to a Participants holding Other Stock-Based
Awards granted hereunder shall be governed by Section 18 of this Plan.

 

SECTION 14

BENEFICIARY DESIGNATION

 

As provided in this
Section 14, each Participant under the Plan may name a beneficiary or beneficiaries (who may be named contingently or successively)
to whom any benefit under the Plan is to be paid in case of the Participant's death before he or she receives any or all of such
benefit and/or who may exercise any vested Stock Award under the Plan following the Participant's death. Each such designation
shall revoke all prior designations by the same Participant and must be in a form and manner acceptable to the Committee. In the
absence of any such designation, benefits remaining unpaid at the Participant's death shall be paid to the Participant's estate
and, subject to the terms of the Plan, any unexercised vested Stock Award may be exercised by the administrator or executor of
the Participant's estate.

 

SECTION 15

DEFERRALS

 

The Committee, in its
sole discretion, may require or permit a Participant to defer such Participant's receipt of the payment of cash or the delivery
of Shares that would otherwise be due to such Participant by virtue of the exercise of an Option or SAR, the lapse or waiver of
restrictions with respect to Restricted Stock, or the satisfaction of any requirements or goals with respect to Performance Stock
Unit Awards. Any such deferral elections shall be subject to such rules and procedures as shall be determined by the Committee
from time to time.

 

SECTION 16

RIGHTS OF PARTICIPANTS

 

Nothing in the Plan
shall interfere with or limit in any way the right of the Company to terminate any Participant's employment or any Non-Employee
Director’s service with the Company, or any Subsidiary thereof, at any time, with or without cause. For purposes of the Plan,
transfer of employment of a Participant between the Company and any one of its Subsidiaries (or between Subsidiaries) shall not
be deemed a termination of employment.

 

SECTION 17

AMENDMENT, SUSPENSION, OR TERMINATION AND
REPRICING

 

17.1         Amendment/Suspension/Termination.
The Board or the Committee, in its sole discretion, may alter, amend or terminate the Plan, or any part thereof, at any time and
for any reason, including, without limitation, by adopting amendments relating to Incentive Stock Options and certain nonqualified
deferred compensation under Section 409A of the Code and/or to make the Plan or Awards granted under the Plan compliant with the
requirements for Incentive Stock Options or exempt from or compliant with the requirements for nonqualified deferred compensation
under Section 409A of the Code, subject to the limitations, if any, of applicable law; provided, however, that without further
stockholder approval, no such alteration or amendment shall (a) materially increase the benefits accruing to Participants under
the Plan, (b) materially increase the number of securities which may be issued under the Plan, or (c) materially modify the requirements
as to eligibility for participation in the Plan; provided, further, that stockholder approval is not required if such approval
is not required in order to assure the Plan's continued qualification under Rule 16b-3 promulgated under the 1934 Act; to submit
any amendment to the Plan for stockholder approval, including, but not limited to, amendments to the Plan intended to satisfy the
requirements of (A) Section 162(m) of the Code regarding the exclusion of performance-based compensation from the limit on corporate
deductibility of compensation paid to Covered Employees, (B) Section 422 of the Code regarding incentive stock options or (C) Rule
16b-3 promulgated under the Exchange Act to approve forms of Award Agreements for use under the Plan and to amend the terms of
any one or more Awards, including, but not limited to, amendments to provide terms more favorable to the Participant than previously
provided in the Award Agreement, subject to any specified limits in the Plan that are not subject to Committee or Board discretion;
provided, however, that a Participant’s rights under any Award will not be impaired by any such amendment unless
(A) the Company requests the consent of the affected Participant, and (B) such Participant consents in writing. Notwithstanding
the foregoing, (1) a Participant’s rights will not be deemed to have been impaired by any such amendment if the Committee
or the Board, in its sole discretion, determines that the amendment, taken as a whole, does not materially impair the Participant’s
rights, and (2) subject to the limitations of applicable law, if any, the Board may amend the terms of any one or more Awards without
the affected Participant’s consent (A) to maintain the qualified status of the Award as an Incentive Stock Option under Section
422 of the Code; (B) to change the terms of an Incentive Stock Option, if such change results in impairment of the Award solely
because it impairs the qualified status of the Award as an Incentive Stock Option under Section 422 of the Code; (C) to clarify
the manner of exemption from, or to bring the Award into compliance with, Section 409A of the Code; or (D) to comply with other
applicable laws or listing requirements; and generally, to exercise such powers and to perform such acts as the Committee or the
Board deems necessary or expedient to promote the best interests of the Company and that are not in conflict with the provisions
of the Plan or Awards.

 

     

     

    

 

17.2         No
Re-pricing. Notwithstanding anything in the Plan to the contrary, neither the Board nor the Committee shall amend the Plan,
or any part thereof, to permit a transaction that would have the effect of repricing an Option or Stock Appreciation Right without
obtaining shareholder approval of such amendment. For this purpose “repricing” means (i) any transaction that would
have the effect of repricing an Option or Stock Appreciation Right under applicable financial accounting standards, or (ii) with
respect to an Option with an exercise price equal to or greater than the Fair Market Value of the underlying stock, either the
Company’s cancellation of such Option in exchange for another Award or the Company’s purchase of such Option for cash.
Neither the amendment, suspension, nor termination of the Plan shall, without the consent of the Participant, alter or impair any
material rights or obligations under any Award theretofore granted. No Award may be granted during any period of suspension, or
after termination, of the Plan.

 

SECTION 18

DIVIDENDS AND DIVIDEND EQUIVALENTS

 

If the Company pays
a Dividend, any Dividend (or, at the Committee’s sole discretion, a Dividend Equivalent) shall accrue to any Restricted Stock
Award, Restricted Stock Unit Award or Performance Stock Unit Award for which the Period of Restriction has not lapsed or been satisfied.
Such Dividend or Dividend Equivalent shall not be paid unless or until Shares are transferred to a Participant in settlement of
a Stock Award. No interest will accrue or otherwise be payable with respect to any Dividends.: Dividend Equivalents will be subject
to the same vesting terms and conditions as the underlying Restricted Stock Unit Awards or Performance Stock Unit Awards to which
they relate. Nothing in this Section 18 shall limit or restrict the Committee’s or the Board’s ability to make any
adjustment pursuant to Section 4.3 or Section 22 of the Plan. If any distributions on Common Stock are paid in Shares or other
securities, the Shares or other securities shall be subject to the same restrictions, including restrictions on transferability
and forfeitability, as the underlying Stock Awards with respect to which such distributions were paid.

SECTION 19

WITHHOLDING

 

19.1         Tax
Withholding. Prior to the delivery of any Shares or cash pursuant to the Plan, the Company shall have the power and the right
to deduct or withhold, or require a Participant to remit to the Company, an amount sufficient to satisfy Federal, state, and local
taxes (including the Participant's FICA obligation) required by law to be withheld with respect to any Awards.

 

19.2         Shares
Withholding. The Committee may, in its absolute discretion, permit a Participant to satisfy such tax withholding obligation,
in whole or in part, by electing to have the Company withhold Shares having a value equal to the amount required to be withheld
or by delivering to the Company already-owned shares to satisfy the withholding requirement. The amount of the withholding requirement
shall be deemed to include any amount which the Committee agrees may be withheld at the time the election is made, not to exceed
the amount determined by using the maximum Federal, state or local marginal income tax rates applicable to the Participant with
respect to the Award on the date that the amount of tax to be withheld is to be determined (the "Tax Date"). The value
of the Shares to be withheld or delivered will be based on their Fair Market Value on the Tax Date. Such elections will be subject
to the following restrictions: (1) the election must be made on or before the Tax Date; (2) the election will be irrevocable; and
(3) the election will be subject to the disapproval of the Committee.

 

     

     

    

 

19.3         Shares
Withholding Election for Insiders. Notwithstanding anything to the contrary contained in Section 19.2 above or other Sections
of this Plan, an Insider rather than the Committee or the Company, shall have the sole right to determine and direct the Company
to withhold Shares to satisfy any applicable taxes and fees attributable to the settlement of any Stock Award in Shares, provided
that: (1) the Insider makes such election prior to Tax Date;(2) the Insider makes the election during an open trading window set
by the Company; and (3) the election will be irrevocable once made, unless any modification of such election is made during an
open trading window.

 

19.4         No
Tax Gross-Ups. In no event will the Company pay, reimburse or provide any “gross-up” payment to, the Participant
for taxes on the income recognized as a result of the grant, vesting, exercise or sale of any Award.

 

SECTION 20

INDEMNIFICATION

 

Each person who is
or shall have been a member of the Committee, or of the Board, or who had been delegated a duty by them under the Plan including,
without limitation, the Management Committee, shall be indemnified and held harmless by the Company against and from any loss,
cost, liability, or expense that may be imposed upon or reasonably incurred by him or her in connection with or resulting from
any claim, notion, suit, or proceeding to which he or she may be a party, or in which he or she may be involved by reason of any
action taken or failure to act, which such person took or failed to take, in good faith, in carrying out his or her duties under
the Plan or any Award Agreement, and against and from any and all amounts paid by him or her in settlement thereof, with the Company's
approval, or paid by him or her in satisfaction of any judgment in any such action, suit, or proceeding against him or her, provided
he or she shall give the Company an opportunity, at its own expense, to handle and defend the same before he or she undertakes
to handle and defend it on his or her own behalf. The foregoing right of indemnification shall not be exclusive of any other rights
of indemnification to which such persons may be entitled under the Company's Articles of Incorporation or Bylaws, as a matter of
law, or otherwise, or any power that the Company may have to indemnify them or hold them harmless.

 

SECTION 21

SUCCESSORS

 

All obligations of
the Company under the Plan, with respect to Awards granted hereunder, shall be binding on any successor to the Company, whether
the existence of such successor is the result of a direct or indirect purchase, merger, consolidation, or otherwise, of all or
substantially all of the business and/or assets of the Company.

 

SECTION 22

CHANGE IN CONTROL RESTRICTIONS

 

Notwithstanding anything
to the contrary contained in this Plan, and subject to the terms of any Other Company Plan, in no event may the Committee accelerate
the vesting and exercisability of any Award in the event of a Change in Control unless such vesting and exercisability is conditioned
on the consummation of such Change in Control and either (i) the Participant’s employment with the Company is terminated
(except a termination for Cause) in connection with a Change in Control, or (ii) the Committee or the Board determines that (A)
such outstanding Awards will not be continued, assumed, converted and/or substituted, or (B) it is in the best interests of the
Company to vest such outstanding Awards.

 

SECTION 23

ELECTRONIC DELIVERY

 

Any reference herein
to a “written” agreement or document will include any agreement or document delivered electronically, filed publicly
at www.sec.gov (or any successor website thereto) or posted on the Company’s intranet (or other shared electronic medium
controlled by the Company to which the Participant has access).

 

     

     

    

 

SECTION 24

DEFERRALS AND COMPLIANCE WITH
SECTION 409A OF THE CODE

 

24.1         To
the extent permitted by applicable law, the Committee or the Board, in its sole discretion, may determine that the delivery of
Common Stock or the payment of cash, upon the exercise, vesting or settlement of all or a portion of any Award may be deferred
and may establish programs and procedures for deferral elections to be made by Participants. Deferrals by Participants will be
made in accordance with Section 409A of the Code. Consistent with Section 409A of the Code, the Committee Board may provide for
distributions while a Participant is still an Employee or otherwise providing services to the Company. The Board is authorized
to make deferrals of Awards and determine when, and in what annual percentages, Participants may receive payments, including lump
sum payments, following the Participant’s termination of Continuous Service, and implement such other terms and conditions
consistent with the provisions of the Plan and in accordance with applicable law. The Committee or the Board may also provide that
deferred settlements include the payment or crediting of interest or other earnings on the deferral amounts, or the payment or
crediting of Dividend Equivalents where the deferred amounts are denominated in Shares.

 

24.2         To
the extent that the Committee or the Board determines that any Award granted hereunder is subject to Section 409A of the Code,
the Award Agreement evidencing such Award shall incorporate the terms and conditions necessary to avoid the consequences specified
in Section 409A(a)(1) of the Code. To the extent applicable, the Plan and Award Agreements shall be interpreted in accordance with
Section 409A of the Code. Notwithstanding anything to the contrary in this Plan (and unless the Award Agreement specifically provides
otherwise), if the shares of Common Stock are publicly traded and a Participant holding an Award that constitutes “deferred
compensation” under Section 409A of the Code is a “specified employee” for purposes of Section 409A of the Code,
no distribution or payment of any amount shall be made upon a “separation from service” before a date that is six (6)
months following the date of such Participant’s “separation from service” (as defined in Section 409A of the
Code without regard to alternative definitions thereunder) or, if earlier, the date of the Participant’s death.

 

SECTION 25

CLAWBACK/RECOVERY

 

Any Performance Stock
Unit Awards and Performance Cash Awards granted under the Plan will be subject to recoupment in accordance with any clawback policy
that the Company has in effect when the Performance Criteria and/or Performance Goals are satisfied, or is required to adopt or
modify, pursuant to the listing standards of any national securities exchange or association on which the Company’s securities
are listed or as is otherwise required by the Dodd-Frank Wall Street Reform and Consumer Protection Act or other applicable law
(“Clawback Policy”). In addition, the Committee or the Board may impose such clawback, recovery or recoupment provisions
in an Award Agreement as the Committee or the Board determines necessary or appropriate, including but not limited to a reacquisition
right in respect of previously acquired Shares or other cash or property as set forth in the Award Agreement, subject to the Clawback
Policy. No recovery of compensation under such a Clawback Policy will be an event giving rise to a right to resign for “good
reason” or “constructive termination” (or similar term) under any applicable Other Company Plan or otherwise
with the Company.

 

SECTION 26

LEGAL CONSTRUCTION

 

26.1         Gender
and Number. Except where otherwise indicated by the context, any masculine term used herein also shall include the feminine;
the plural shall include the singular and the singular shall include the plural.

 

26.2         Severability.
In the event any provision of the Plan shall be held illegal or invalid for any reason, the illegality or invalidity shall not
affect the remaining parts of the Plan, and the Plan shall be construed and enforced as if the illegal or invalid provision had
not been included.

 

26.3          Requirements
of Law. The granting of Awards and the issuance of Shares under the Plan shall be subject to all applicable laws, rules, and
regulations, and to such approvals by any governmental agencies or national securities exchanges or systems as may be required.

 

26.4          Securities
Law Compliance. With respect to Insiders, transactions under this Plan are intended to comply with all applicable conditions
of Rule 16b-3 promulgated under the Exchange Act or its successors under the Exchange Act. To the extent any provision of the
Plan, Award Agreement or action by the Committee fails to so comply, it shall be deemed null and void, to the extent permitted
by law and deemed advisable by the Committee.

 

     

     

    

 

26.5         Governing
Law. The Plan and all Award Agreements hereunder, shall be construed in accordance with and governed by the laws of the State
of California (without giving effect to principles of conflicts of laws thereof) and applicable Federal law.

 

26.6        Captions.
Captions are provided herein for convenience only, and are not to serve as a basis for interpretation or construction of the Plan.

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