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a2020plan202006258kfilin

                                PIERIS PHARMACEUTICALS, INC.             2020 EMPLOYEE, DIRECTOR AND CONSULTANT EQUITY INCENTIVE PLAN          1.      DEFINITIONS.          Unless otherwise specified or unless the context otherwise requires, the following terms, as used in this Pieris  Pharmaceuticals, Inc. 2020 Employee, Director and Consultant Equity Incentive Plan, have the following meanings:                  Administrator means the Board of Directors, unless it has delegated power to act on its behalf to the                 Committee, in which case the term “Administrator” means the Committee.                  Affiliate means a corporation which, for purposes of Section 424 of the Code, is a parent or subsidiary                  of the Company, direct or indirect.                  Agreement means an agreement between the Company and a Participant pertaining to a Stock Right                  delivered pursuant to the Plan, in such form as the Administrator shall approve.                  Board of Directors means the Board of Directors of the Company.                  Cause means, with respect to a Participant (a) dishonesty with respect to the Company or any Affiliate,                  (b) insubordination, substantial malfeasance or non feasance of duty, (c) unauthorized disclosure of                confidential information, (d) breach by a Participant of any provision of any employment, consulting,                 advisory, nondisclosure, non-competition or similar agreement between the Participant and the                 Company or any Affiliate, and (e) conduct substantially prejudicial to the business of the Company                 or any Affiliate; provided, however, that any provision in an agreement between a Participant and                 the Company or an Affiliate, which contains a conflicting definition of Cause for termination and                which is in effect at the time of such termination, shall supersede this definition with respect to that                Participant.  The determination of the Administrator as to the existence of Cause will be conclusive                on the Participant and the Company.                  Code means the United States Internal Revenue Code of 1986, as amended including any successor                 statute, regulation and guidance thereto.                  Committee means the committee of the Board of Directors, if any, to which the Board of Directors                  has delegated power to act under or pursuant to the provisions of the Plan.                  Common Stock means shares of the Company’s common stock, $0.001 par value per share.                  Company means Pieris Pharmaceuticals, Inc., a Nevada corporation.                  Consultant means any natural person who is an advisor or consultant that provides bona fide services                 to the Company or its Affiliates, provided that such services are not in connection with the offer or                 sale of securities in a capital raising transaction, and do not directly or indirectly promote or maintain                 a market for the Company’s or its Affiliates’ securities.                  Disability or Disabled means permanent and total disability as defined in Section 22(e)(3) of the                  Code.                  Director means a member of the Board of Directors.                                                   A-1

 

Directors’ Compensation Year means the approximately one-year period beginning on the date of  each regular annual stockholders meeting and ending on the date of the next regular annual  stockholders meeting.  Employee means any employee of the Company or of an Affiliate (including, without limitation, an  employee who is also serving as an officer or Director of the Company or of an Affiliate), designated  by the Administrator to be eligible to be granted one or more Stock Rights under the Plan.  Exchange Act means the Securities Exchange Act of 1934, as amended.  Fair Market Value of a Share of Common Stock means:         (1)    If the Common Stock is listed on a national securities exchange or traded in the  over the counter market and sales prices are regularly reported for the Common Stock, the closing  or, if not applicable, the last price of the Common Stock on the composite tape or other comparable  reporting system for the trading day on the applicable date and if such applicable date is not a trading  day, the last market trading day prior to such date;          (2)    If the Common Stock is not traded on a national securities exchange but is traded  on the over the counter market, if sales prices are not regularly reported for the Common Stock for  the trading day referred to in clause (1), and if bid and asked prices for the Common Stock are regularly  reported, the mean between the bid and the asked price for the Common Stock at the close of trading  in the over-the-counter market for the trading day on which Common Stock was traded on the  applicable date and if such applicable date is not a trading day, the last market trading day prior to  such date; and         (3)    If the Common Stock is neither listed on a national securities exchange nor traded  in the over the counter market, such value as the Administrator, in good faith, shall determine.  ISO means an option intended to qualify as an incentive stock option under Section 422 of the Code.  Non Qualified Option means an option which is not intended to qualify as an ISO.  Option means an ISO or Non Qualified Option granted under the Plan.  Participant means an Employee, Director or Consultant of the Company or an Affiliate to whom one  or more Stock Rights are granted under the Plan. As used herein, “Participant” shall include  “Participant’s Survivors” where the context requires.  Performance Based Award means a Stock Grant or Stock-Based Award which vests based on the  attainment of written Performance Goals as set forth in Paragraph 9 hereof.  Performance Goals means performance goals determined by the Committee in its sole discretion and  set forth in an Agreement. The satisfaction of Performance Goals shall be subject to certification by  the Committee. The Committee has the authority to take appropriate action with respect to the  Performance Goals (including, without limitation, making adjustments to the Performance Goals or  determining the satisfaction of the Performance Goals in connection with a Corporate Transaction)  provided that any such action does not otherwise violate the terms of the Plan.   Plan means this Pieris Pharmaceuticals, Inc. 2020 Employee, Director and Consultant Equity  Incentive Plan.  Securities Act means the Securities Act of 1933, as amended.                                  A-2

 

               Shares means shares of the Common Stock as to which Stock Rights have been or may be granted                 under the Plan or any shares of capital stock into which the Shares are changed or for which they are                 exchanged within the provisions of Paragraph 3 of the Plan.  The Shares issued under the Plan may                 be authorized and unissued shares or shares held by the Company in its treasury, or both.                 Stock-Based Award means a grant by the Company under the Plan of an equity award or an equity                 based award which is not an Option or a Stock Grant.                  Stock Grant means a grant by the Company of Shares under the Plan.                 Stock Right means a right to Shares or the value of Shares of the Company granted pursuant to the                 Plan -- an ISO, a Non-Qualified Option, a Stock Grant or a Stock-Based Award.                 Survivor means a deceased Participant’s legal representatives and/or any person or persons who                 acquired the Participant’s rights to a Stock Right by will or by the laws of descent and distribution.         2.      PURPOSES OF THE PLAN.         The Plan is intended to encourage ownership of Shares by Employees and Directors of and certain Consultants  to the Company and its Affiliates in order to attract and retain such people, to induce them to work for the benefit of  the Company or of an Affiliate and to provide additional incentive for them to promote the success of the Company or  of an Affiliate.  The Plan provides for the granting of ISOs, Non Qualified Options, Stock Grants and Stock-Based  Awards.         3.      SHARES SUBJECT TO THE PLAN.         (a)     The number of Shares which may be issued from time to time pursuant to this Plan shall be the sum  of: (i) 3,500,000 shares of Common Stock and (ii) any shares of Common Stock that are represented by awards granted  under the Company’s 2014 Employee, Director and Consultant Equity Incentive Plan, the 2016 Employee, Director  and Consultant Equity Incentive Plan, the 2018 Employee, Director and Consultant Equity Incentive Plan, and the 2019  Employee, Director and Consultant Equity Incentive Plan that are forfeited, expire or are canceled without delivery of  shares of Common Stock or which result in the forfeiture of shares of Common Stock back to the Company on or after  June 23, 2020, or the equivalent of such number of Shares after the Administrator, in its sole discretion, has interpreted  the effect of any stock split, stock dividend, combination, recapitalization or similar transaction in accordance with  Paragraph 24 of this Plan; provided, however, that no more than 10,121,550 Shares shall be added to the Plan pursuant  to subsection (ii).         (b)     If an Option ceases to be “outstanding”, in whole or in part (other than by exercise), or if the Company  shall reacquire (at not more than its original issuance price) any Shares issued pursuant to a Stock Grant or Stock-Based  Award, or if any Stock Right expires or is forfeited, cancelled, or otherwise terminated or results in any Shares not  being issued, the unissued or reacquired Shares which were subject to such Stock Right shall again be available for  issuance from time to time pursuant to this Plan.  Notwithstanding the foregoing, if a Stock Right is exercised, in whole  or in part, by tender or withholding of Shares or if the Company or an Affiliate’s tax withholding obligation is satisfied  by the tender or withholding of Shares, the number of Shares deemed to have been issued under the Plan for purposes  of the limitation set forth in Paragraph 3(a) above shall be the number of Shares that were subject to the Stock Right  or portion thereof, and not the net number of Shares actually issued.  In addition, Shares repurchased by the Company  with the proceeds of the option exercise price may not be reissued under the Plan.  However, in the case of ISOs, the  foregoing provisions shall be subject to any limitations under the Code.         4.      ADMINISTRATION OF THE PLAN.         The Administrator of the Plan will be the Board of Directors, except to the extent the Board of Directors  delegates its authority to the Committee, in which case the Committee shall be the Administrator.  Subject to the  provisions of the Plan, the Administrator is authorized to:                                                A-3

 

       (a)     Interpret the provisions of the Plan and all Stock Rights and to make all rules and determinations  which it deems necessary or advisable for the administration of the Plan;         (b)     Determine which Employees, Directors and Consultants shall be granted Stock Rights provided that  no more than 100,000 Shares may be issued under the Plan as “full value awards” (Stock Grants, restricted stock units,  performance shares and other full value Stock-Based Awards); provided, if a full value award expires, is forfeited, or  otherwise lapses, the shares that were subject to the full value award shall again be available for the grant of full value  awards;         (c)     Determine the number of Shares for which a Stock Right or Stock Rights shall be granted, provided  however that in no event shall Stock Rights to be granted to any non-employee director under the Plan in any calendar  year exceed an aggregate grant date fair value of $400,000 except that the foregoing limitation shall not apply to awards  granted (i) pursuant to an election by a non-employee director to receive the award in lieu of cash for all or a portion  of cash fees to be received for service on the Board or any Committee thereof or (ii) in connection with a non-employee  director initially joining the Board of Directors;         (d)     Specify the terms and conditions upon which a Stock Right or Stock Rights may be granted, provided  that no dividends or dividend equivalents shall be paid on any Stock Right prior to the vesting of the underlying Shares  and no Stock Right shall be granted with a vesting schedule providing for exercisability or the lapsing of restrictions  or repurchase rights over a period of less than one year from the date of grant.  Notwithstanding the foregoing: (i) Stock  Rights may be granted that do not comply with the applicable one-year minimum vesting requirement set forth above  with respect to a maximum of 5% of the Shares reserved for issuance under the Plan; (ii) for purposes of counting  Shares against the 5% limitation, the Share counting rules under Section 3 of the Plan apply; (iii) Stock Rights granted  to non-employee Directors with vesting at the end of a Directors' Compensation Year shall not be counted against the  5% limitation; and (iv) nothing in this Section 4(d) shall limit the authority of the Administrator to provide for the  acceleration of the exercisability of any Stock Right or the lapse of any restrictions relating to any Stock Right, except  as expressly limited by Section 24(e);          (e)     Determine and make any adjustments in the Performance Goals included in any Performance-Based  Awards;         (f)     Amend any term or condition of any outstanding Stock Right, other than reducing the exercise price  or purchase price or extending the expiration date of an Option, provided that (i) such term or condition as amended  is not prohibited by the Plan; (ii) any such amendment shall not impair the rights of a Participant under any Stock Right  previously granted without such Participant’s consent or in the event of death of the Participant the Participant’s  Survivors; and (iii) any such amendment shall be made only after the Administrator determines whether such amendment  would cause any adverse tax consequences to the Participant, including, but not limited to, the annual vesting limitation  contained in Section 422(d) of the Code and described in Paragraph 6(b)(iv) below with respect to ISOs and pursuant  to Section 409A of the Code; and         (g)     Adopt any sub-plans applicable to residents of any specified jurisdiction as it deems necessary or  appropriate in order to comply with or take advantage of any tax or other laws applicable to the Company, any Affiliate  or to Participants or to otherwise facilitate the administration of the Plan, which sub-plans may include additional  restrictions or conditions applicable to Stock Rights or Shares issuable pursuant to a Stock Right; provided, however,  that all such interpretations, rules, determinations, terms and conditions shall be made and prescribed in the context of  not causing any adverse tax consequences under Section 409A of the Code and preserving the tax status under Section  422 of the Code of those Options which are designated as ISOs.  Subject to the foregoing, the interpretation and  construction by the Administrator of any provisions of the Plan or of any Stock Right granted under it shall be final,  unless otherwise determined by the Board of Directors, if the Administrator is the Committee.  In addition, if the  Administrator is the Committee, the Board of Directors may take any action under the Plan that would otherwise be  the responsibility of the Committee.         To the extent permitted under applicable law, the Board of Directors or the Committee may allocate all or any  portion of its responsibilities and powers to any one or more of its members and may delegate all or any portion of its                                                 A-4

 

responsibilities and powers to any other person selected by it. The Board of Directors or the Committee may revoke  any such allocation or delegation at any time.  Notwithstanding the foregoing, only the Board of Directors or the  Committee shall be authorized to grant a Stock Right to any Director of the Company or to any “officer” of the Company  as defined by Rule 16a-1 under the Exchange Act.         5.      ELIGIBILITY FOR PARTICIPATION.         The Administrator will, in its sole discretion, name the Participants in the Plan; provided, however, that each  Participant must be an Employee, Director or Consultant of the Company or of an Affiliate at the time a Stock Right  is granted. Notwithstanding the foregoing, the Administrator may authorize the grant of a Stock Right to a person not  then an Employee, Director or Consultant of the Company or of an Affiliate; provided, however, that the actual grant  of such Stock Right shall be conditioned upon such person becoming eligible to become a Participant at or prior to the  time of the execution of the Agreement evidencing such Stock Right.  ISOs may be granted only to Employees who  are deemed to be residents of the United States for tax purposes.  Non Qualified Options, Stock Grants and Stock- Based Awards may be granted to any Employee, Director or Consultant of the Company or an Affiliate.  The granting  of any Stock Right to any individual shall neither entitle that individual to, nor disqualify him or her from, participation  in any other grant of Stock Rights or any grant under any other benefit plan established by the Company or any Affiliate  for Employees, Directors or Consultants.         6.      TERMS AND CONDITIONS OF OPTIONS.         Each Option shall be set forth in an Option Agreement, duly executed by the Company and, to the extent  required by law or requested by the Company, by the Participant.  The Administrator may provide that Options be  granted subject to such terms and conditions, consistent with the terms and conditions specifically required under this  Plan, as the Administrator may deem appropriate including, without limitation, subsequent approval by the stockholders  of the Company of this Plan or any amendments thereto.  The Option Agreements shall be subject to at least the following  terms and conditions:         (a)     Non Qualified Options:  Each Option intended to be a Non Qualified Option shall be subject to the  terms and conditions which the Administrator determines to be appropriate and in the best interest of the Company,  subject to the following minimum standards for any such Non Qualified Option:                 (i)    Exercise Price: Each Option Agreement shall state the exercise price (per share) of the Shares                        covered by each Option, which exercise price shall be determined by the Administrator and                        shall be at least equal to the Fair Market Value per share of Common Stock on the date of                        grant of the Option.                 (ii)   Number of Shares: Each Option Agreement shall state the number of Shares to which it                        pertains.                 (iii)  Vesting:  Each Option Agreement shall state the date or dates on which it first is exercisable                        and the date after which it may no longer be exercised, and may provide that the Option                        rights accrue or become exercisable in installments over a period of months or years, or                        upon the occurrence of certain performance conditions or the attainment of stated goals or                        events.                 (iv)   Additional Conditions:  Exercise of any Option may be conditioned upon the Participant’s                        execution of a Share purchase agreement in a form satisfactory to the Administrator                        providing for certain protections for the Company and its other stockholders, including                        requirements that:                        A.     The Participant’s or the Participant’s Survivors’ right to sell or transfer the Shares                               may be restricted; and                                                 A-5

 

                      B.     The Participant or the Participant’s Survivors may be required to execute letters of                               investment intent and must also acknowledge that the Shares will bear legends                               noting any applicable restrictions.                 (v)    Term of Option:  Each Option shall terminate not more than ten years from the date of the                        grant or at such earlier time as the Option Agreement may provide.         (b)     ISOs:  Each Option intended to be an ISO shall be issued only to an Employee who is deemed to be  a resident of the United States for tax purposes, and shall be subject to the following terms and conditions, with such  additional restrictions or changes as the Administrator determines are appropriate but not in conflict with Section 422  of the Code and relevant regulations and rulings of the Internal Revenue Service:                 (i)    Minimum standards:  The ISO shall meet the minimum standards required of Non Qualified                        Options, as described in Paragraph 6(a) above, except clause (i) and (v) thereunder.                 (ii)   Exercise Price:  Immediately before the ISO is granted, if the Participant owns, directly or                        by reason of the applicable attribution rules in Section 424(d) of the Code:                        A.     10%  or less of the total combined voting power of all classes of stock of the                               Company or an Affiliate, the exercise price per share of the Shares covered by each                               ISO shall not be less than 100% of the Fair Market Value per share of the Common                               Stock on the date of grant of the Option; or                        B.     More than 10% of the total combined voting power of all classes of stock of the                               Company or an Affiliate, the exercise price per share of the Shares covered by each                               ISO shall not be less than 110% of the Fair Market Value per share of the Common                               Stock on the date of grant of the Option.                 (iii)  Term of Option:  For Participants who own:                        A.     10%  or less of the total combined voting power of all classes of stock of the                               Company or an Affiliate, each ISO shall terminate not more than ten years from                               the date of the grant or at such earlier time as the Option Agreement may provide;                               or                        B.     More than 10% of the total combined voting power of all classes of stock of the                               Company or an Affiliate, each ISO shall terminate not more than five years from                               the date of the grant or at such earlier time as the Option Agreement may provide.                 (iv)   Limitation on Yearly Exercise:  The Option Agreements shall restrict the amount of ISOs                        which may become exercisable in any calendar year (under this or any other ISO plan of                        the Company or an Affiliate) so that the aggregate Fair Market Value (determined on the                        date each ISO is granted) of the stock with respect to which ISOs are exercisable for the                        first time by the Participant in any calendar year does not exceed $100,000.         7.      TERMS AND CONDITIONS OF STOCK GRANTS.         Each Stock Grant to a Participant shall state the principal terms in a Stock Grant Agreement duly executed by  the Company and, to the extent required by law or requested by the Company, by the Participant.  The Stock Grant  Agreement shall be in a form approved by the Administrator and shall contain terms and conditions which the  Administrator determines to be appropriate and in the best interest of the Company, subject to the following minimum  standards:                                                  A-6

 

       (a)     Each Stock Grant Agreement shall state the purchase price per share, if any, of the Shares covered  by each Stock Grant, which purchase price shall be determined by the Administrator but shall not be less than the  minimum consideration required by the laws of the state of Nevada, if any, on the date of the grant of the Stock Grant;         (b)     Each Stock Grant Agreement shall state the number of Shares to which the Stock Grant pertains;         (c)     Each Stock Grant Agreement shall include the terms of any right of the Company to restrict or  reacquire the Shares subject to the Stock Grant, including the time period or attainment of Performance Goals or such  other performance criteria upon which such rights shall accrue and the purchase price therefor, if any; and         (d)     Dividends (other than stock dividends to be issued pursuant to Section 24 of the Plan) may accrue  but shall not be paid prior to the time, and may be paid only to the extent that the restrictions or rights to reacquire the  Shares subject to the Stock Grant lapse.         8.      TERMS AND CONDITIONS OF OTHER STOCK-BASED AWARDS.           The Administrator shall have the right to grant other Stock-Based Awards based upon the Common Stock  having such terms and conditions as the Administrator may determine, including, without limitation, the grant of Shares  based upon certain conditions, the grant of securities convertible into Shares and the grant of stock appreciation rights,  phantom stock awards or stock units.  The principal terms of each Stock-Based Award shall be set forth in a Stock- Based Award Agreement, duly executed by the Company and, to the extent required by law or requested by the Company,  by the Participant.  The Stock-Based Award Agreement shall be in a form approved by the Administrator and shall  contain terms and conditions which the Administrator determines to be appropriate and in the best interest of the  Company. Each Stock-Based Award Agreement shall include the terms of any right of the Company including the right  to terminate the Stock-Based Award without the issuance of Shares, the terms of any vesting conditions, Performance  Goals or events upon which Shares shall be issued, provided that dividends (other than stock dividends to be issued  pursuant to Section 24 of the Plan) or dividend equivalents may accrue but shall not be paid prior to and may be paid  only to the extent that the Shares subject to the Stock-Based Award vest. Under no circumstances may the Agreement  covering stock appreciation rights (a) have an exercise price (per share) that is less than the Fair Market Value per share  of Common Stock on the date of grant or (b) expire more than ten years following the date of grant.         The Company  intends that the Plan and any Stock-Based Awards granted hereunder be exempt from the  application of Section 409A of the Code or meet the requirements of paragraphs (2), (3) and (4) of subsection (a) of  Section 409A of the Code, to the extent applicable, and be operated in accordance with Section 409A so that any  compensation deferred under any Stock-Based Award (and applicable investment earnings) shall not be included in  income under Section 409A of the Code.  Any ambiguities in the Plan shall be construed to effect the intent as described  in this Paragraph 8.         9.      PERFORMANCE BASED AWARDS.         The Committee shall determine whether, with respect to a performance period, the applicable Performance  Goals have been met with respect to a given Participant and, if they have, to so certify and ascertain the amount of the  applicable Performance-Based Award.  No Performance-Based Awards will be issued for such performance period until  such certification is made by the Committee.  The number of Shares issued in respect of a Performance-Based Award  determined by the Committee for a performance period shall be paid to the Participant at such time as determined by  the Committee in its sole discretion after the end of such performance period, and any dividends (other than stock  dividends to be issued pursuant to Section 24 of the Plan) or dividend equivalents that accrue shall only be paid in  respect of the number of Shares earned in respect of such Performance-Based Award.         10.     EXERCISE OF OPTIONS AND ISSUE OF SHARES.         An Option (or any part or installment thereof) shall be exercised by giving written notice to the Company or  its designee (in a form acceptable to the Administrator, which may include electronic notice), together with provision  for payment of the aggregate exercise price in accordance with this Paragraph 10 for the Shares as to which the Option                                                 A-7

 

is being exercised, and upon compliance with any other condition(s) set forth in the Option Agreement.  Such notice  shall be signed by the person exercising the Option (which signature may be provided electronically in a form acceptable  to the Administrator), shall state the number of Shares with respect to which the Option is being exercised and shall  contain any representation required by the Plan or the Option Agreement.  Payment of the exercise price for the Shares  as to which such Option is being exercised shall be made (a) in United States dollars in cash or by check, or (b) at the  discretion of the Administrator, through delivery of shares of Common Stock held for at least six months (if required  to avoid negative accounting treatment) having a Fair Market Value equal as of the date of the exercise to the aggregate  cash exercise price for the number of Shares as to which the Option is being exercised, or (c) at the discretion of the  Administrator, by having the Company retain from the Shares otherwise issuable upon exercise of the Option, a number  of Shares having a Fair Market Value equal as of the date of exercise to the aggregate exercise price for the number of  Shares as to which the Option is being exercised, or (d) at the discretion of the Administrator, in accordance with a  cashless exercise program established with a securities brokerage firm, and approved by the Administrator, or (e) at  the discretion of the Administrator, by any combination of (a), (b), (c) and (d) above or (f) at the discretion of the  Administrator, by payment of such other lawful consideration as the Administrator may determine. Notwithstanding  the foregoing, the Administrator shall accept only such payment on exercise of an ISO as is permitted by Section 422  of the Code.         The Company shall then reasonably promptly deliver the Shares as to which such Option was exercised to  the Participant (or to the Participant’s Survivors, as the case may be).  In determining what constitutes “reasonably  promptly,” it is expressly understood that the issuance and delivery of the Shares may be delayed by the Company in  order to comply with any law or regulation (including, without limitation, state securities or “blue sky” laws) which  requires the Company to take any action with respect to the Shares prior to their issuance.  The Shares shall, upon  delivery, be fully paid, non-assessable Shares.         11.     PAYMENT   IN CONNECTION    WITH  THE  ISSUANCE   OF  STOCK  GRANTS AND     STOCK-                BASED AWARDS AND ISSUE OF SHARES.         Any Stock Grant or Stock-Based Award requiring payment of a purchase price for the Shares as to which such  Stock Grant or Stock-Based Award is being granted shall be made (a) in United States dollars in cash or by check, or  (b) at the discretion of the Administrator, through delivery of shares of Common Stock held for at least six months (if  required to avoid negative accounting treatment) and having a Fair Market Value equal as of the date of payment to  the purchase price of the Stock Grant or Stock-Based Award, or (c) at the discretion of the Administrator, by any  combination of (a) and (b) above; or (d) at the discretion of the Administrator, by payment of such other lawful  consideration as the Administrator may determine.         The Company shall, when required by the applicable Agreement, reasonably promptly deliver the Shares as  to which such Stock Grant or Stock-Based Award was made to the Participant (or to the Participant’s Survivors, as the  case may be), subject to any escrow provision set forth in the applicable Agreement.  In determining what constitutes  “reasonably promptly,” it is expressly understood that the issuance and delivery of the Shares may be delayed by the  Company in order to comply with any law or regulation (including, without limitation, state securities or “blue sky”  laws) which requires the Company to take any action with respect to the Shares prior to their issuance.         12.     RIGHTS AS A STOCKHOLDER.         No Participant to whom a Stock Right has been granted shall have rights as a stockholder with respect to any  Shares covered by such Stock Right except after due exercise of an Option or issuance of Shares as set forth in any  Agreement, tender of the aggregate exercise or purchase price, if any, for the Shares being purchased and registration  of the Shares in the Company’s share register in the name of the Participant.         13.     ASSIGNABILITY AND TRANSFERABILITY OF STOCK RIGHTS.         By its terms, a Stock Right granted to a Participant shall not be transferable by the Participant other than (i)  by will or by the laws of descent and distribution, or (ii) as approved by the Administrator in its discretion and set forth  in the applicable Agreement provided that no Stock Right may be transferred by a Participant for value.  Notwithstanding                                                 A-8

 

the foregoing, an ISO transferred except in compliance with clause (i) above shall no longer qualify as an ISO.  The  designation of a beneficiary of a Stock Right by a Participant, with the prior approval of the Administrator and in such  form as the Administrator shall prescribe, shall not be deemed a transfer prohibited by this Paragraph 13.  Except as  provided above during the Participant’s lifetime a Stock Right shall only be exercisable by or issued to such Participant  (or his or her legal representative) and shall not be assigned, pledged or hypothecated in any way (whether by operation  of law or otherwise) and shall not be subject to execution, attachment or similar process.  Any attempted transfer,  assignment, pledge, hypothecation or other disposition of any Stock Right or of any rights granted thereunder contrary  to the provisions of this Plan, or the levy of any attachment or similar process upon a Stock Right, shall be null and  void.         14.     EFFECT  ON  OPTIONS  OF  TERMINATION    OF SERVICE  OTHER   THAN   FOR CAUSE   OR                 DEATH OR DISABILITY.         Except as otherwise provided in a Participant’s Option Agreement, in the event of a termination of service  (whether as an Employee, Director or Consultant) with the Company or an Affiliate before the Participant has exercised  an Option, the following rules apply:         (a)     A Participant who ceases to be an Employee, Director or Consultant of the Company or of an Affiliate  (for any reason other than termination for Cause, Disability, or death for which events there are special rules in Paragraphs  15, 16, and 17, respectively), may exercise any Option granted to him or her to the extent that the Option is exercisable  on the date of such termination of service, but only within such term as the Administrator has designated in a Participant’s  Option Agreement.         (b)     Except as provided in Subparagraph (c) below, or Paragraph 16 or 17, in no event may an Option  intended to be an ISO, be exercised later than three months after the Participant’s termination of employment.         (c)     The provisions of this Paragraph 14, and not the provisions of Paragraph 16 or 17, shall apply to a  Participant who subsequently becomes Disabled or dies after the termination of employment, director status or  consultancy; provided, however, in the case of a Participant’s Disability or death within three months after the termination  of employment, director status or consultancy, the Participant or the Participant’s Survivors may exercise the Option  within one year after the date of the Participant’s termination of service, but in no event after the date of expiration of  the term of the Option.         (d)     Notwithstanding anything herein to the contrary, if subsequent to a Participant’s termination of  employment, termination of director status or termination of consultancy, but prior to the exercise of an Option, the  Administrator determines that, either prior or subsequent to the Participant’s termination, the Participant engaged in  conduct which would constitute Cause, then such Participant shall forthwith cease to have any right to exercise any  Option.         (e)     A Participant to whom an Option has been granted under the Plan who is absent from the Company  or an Affiliate because of temporary disability (any disability other than a Disability as defined in Paragraph 1 hereof),  or who is on leave of absence for any purpose, shall not, during the period of any such absence, be deemed, by virtue  of such absence alone, to have terminated such Participant’s employment, director status or consultancy with the  Company or with an Affiliate, except as the Administrator may otherwise expressly provide; provided, however, that,  for ISOs, any leave of absence granted by the Administrator of greater than three months, unless pursuant to a contract  or statute that guarantees the right to reemployment, shall cause such ISO to become a Non-Qualified Option on the  date that is six months following the commencement of such leave of absence.         (f)     Except as required by law or as set forth in a Participant’s Option Agreement, Options granted under  the Plan shall not be affected by any change of a Participant’s status within or among the Company and any Affiliates,  so long as the Participant continues to be an Employee, director or Consultant of the Company or any Affiliate.                                                  A-9

 

       15.     EFFECT ON OPTIONS OF TERMINATION OF SERVICE FOR CAUSE.         Except as otherwise provided in a Participant’s Option Agreement, the following rules apply if the Participant’s  service (whether as an Employee, director or Consultant) with the Company or an Affiliate is terminated for Cause  prior to the time that all his or her outstanding Options have been exercised:         (a)     All outstanding and unexercised Options as of the time the Participant is notified his or her service  is terminated for Cause will immediately be forfeited.         (b)     Cause is not limited to events which have occurred prior to a Participant’s termination of service, nor  is it necessary that the Administrator’s finding of Cause occur prior to termination.  If the Administrator determines,  subsequent to a Participant’s termination of service but prior to the exercise of an Option, that either prior or subsequent  to the Participant’s termination the Participant engaged in conduct which would constitute Cause, then the right to  exercise any Option is forfeited.         16.     EFFECT ON OPTIONS OF TERMINATION OF SERVICE FOR DISABILITY.         Except as otherwise provided in a Participant’s Option Agreement:         (a)     A Participant who ceases to be an Employee, director or Consultant of the Company or of an Affiliate  by reason of Disability may exercise any Option granted to such Participant:                 (i)    To the extent that the Option has become exercisable but has not been exercised on the date                        of the Participant’s termination of service due to Disability; and                 (ii)   In the event rights to exercise the Option accrue periodically, to the extent of a pro rata                        portion through the date of the Participant’s termination of service due to Disability of any                        additional vesting rights that would have accrued on the next vesting date had the Participant                        not become Disabled.  The proration shall be based upon the number of days accrued in the                        current vesting period prior to the date of the Participant’s termination of service due to                        Disability.         (b)     A Disabled Participant may exercise the Option only within the period ending one year after the date  of the Participant’s termination of service due to Disability, notwithstanding that the Participant might have been able  to exercise the Option as to some or all of the Shares on a later date if the Participant had not been terminated due to  Disability and had continued to be an Employee, director or Consultant or, if earlier, within the originally prescribed  term of the Option.         (c)     The Administrator shall make the determination both of whether Disability has occurred and the date  of its occurrence (unless a procedure for such determination is set forth in another agreement between the Company  and such Participant, in which case such procedure shall be used for such determination).  If requested, the Participant  shall be examined by a physician selected or approved by the Administrator, the cost of which examination shall be  paid for by the Company.         17.     EFFECT ON OPTIONS OF DEATH WHILE AN EMPLOYEE, DIRECTOR OR CONSULTANT.         Except as otherwise provided in a Participant’s Option Agreement:         (a)     In the event of the death of a Participant while the Participant is an Employee, director or Consultant  of the Company or of an Affiliate, such Option may be exercised by the Participant’s Survivors:                 (i)    To the extent that the Option has become exercisable but has not been exercised on the date                        of death; and                                                A-10

 

               (ii)   In the event rights to exercise the Option accrue periodically, to the extent of a pro rata                        portion through the date of death of any additional vesting rights that would have accrued                        on the next vesting date had the Participant not died.  The proration shall be based upon the                        number of days accrued in the current vesting period prior to the Participant’s date of death.         (b)     If the Participant’s Survivors wish to exercise the Option, they must take all necessary steps to exercise  the Option within one year after the date of death of such Participant, notwithstanding that the decedent might have  been able to exercise the Option as to some or all of the Shares on a later date if he or she had not died and had continued  to be an Employee, director or Consultant or, if earlier, within the originally prescribed term of the Option.         18.     EFFECT  OF  TERMINATION    OF  SERVICE   ON  STOCK   GRANTS   AND   STOCK-BASED                 AWARDS.         In the event of a termination of service (whether as an Employee, Director or Consultant) with the Company  or an Affiliate for any reason before the Participant has accepted a Stock Grant or a Stock-Based Award and paid the  purchase price, if required, such grant shall terminate.          For purposes of this Paragraph 18, a Participant to whom a Stock Grant or Stock-Based Award has been issued  under the Plan who is absent from work with the Company or with an Affiliate because of temporary disability (any  disability other than a Disability as defined in Paragraph 1 hereof), or who is on leave of absence for any purpose, shall  not, during the period of any such absence, be deemed, by virtue of such absence alone, to have terminated such  Participant’s employment, director status or consultancy with the Company or with an Affiliate, except as the  Administrator may otherwise expressly provide.         In addition, for purposes of this Paragraph 18 any change of employment or other service within or among  the Company and any Affiliates shall not be treated as a termination of employment, director status or consultancy so  long as the Participant continues to be an Employee, Director or Consultant of the Company or any Affiliate.         Except as otherwise provided in a Participant’s Agreement, in the event of a termination of service for any  reason (whether as an Employee, Director or Consultant), other than termination for Cause, death or Disability for  which there are special rules in Paragraphs 19, 20, and 21 below, before all forfeiture provisions or Company rights of  repurchase shall have lapsed, then the Company shall have the right to cancel or repurchase that number of Shares  subject to a Stock Grant or Stock-Based Award as to which the Company’s forfeiture or repurchase rights have not  lapsed.         19.     EFFECT  ON  STOCK   GRANTS    AND  STOCK-BASED    AWARDS    OF  TERMINATION    OF                 SERVICE FOR CAUSE.         Except as otherwise provided in a Participant’s Agreement, the following rules apply if the Participant’s service  (whether as an Employee, Director or Consultant) with the Company or an Affiliate is terminated for Cause:         (a)     All Shares subject to any Stock Grant or Stock-Based Award that remain subject to forfeiture  provisions or as to which the Company shall have a repurchase right shall be immediately forfeited to the Company as  of the time the Participant is notified his or her service is terminated for Cause.         (b)     Cause is not limited to events which have occurred prior to a Participant’s termination of service, nor  is it necessary that the Administrator’s finding of Cause occur prior to termination.  If the Administrator determines,  subsequent to a Participant’s termination of service, that either prior or subsequent to the Participant’s termination the  Participant engaged in conduct which would constitute Cause, then all Shares subject to any Stock Grant or Stock- Based Award that remained subject to forfeiture provisions or as to which the Company had a repurchase right on the  date of termination shall be immediately forfeited to the Company.                                                 A-11

 

       20.     EFFECT  ON  STOCK   GRANTS    AND  STOCK-BASED    AWARDS    OF  TERMINATION    OF                 SERVICE FOR DISABILITY.         Except as otherwise provided in a Participant’s Agreement, the following rules apply if a Participant ceases  to be an Employee, Director or Consultant of the Company or of an Affiliate by reason of Disability:  to the extent the  forfeiture provisions or the Company’s rights of repurchase have not lapsed on the date of Disability, they shall be  exercisable; provided, however, that in the event such forfeiture provisions or rights of repurchase lapse periodically,  such provisions or rights shall lapse to the extent of a pro rata portion of the Shares subject to such Stock Grant or  Stock-Based Award through the date of Disability as would have lapsed had the Participant not become Disabled.  The  proration shall be based upon the number of days accrued prior to the date of Disability.         The Administrator shall make the determination both as to whether Disability has occurred and the date of its  occurrence (unless a procedure for such determination is set forth in another agreement between the Company and such  Participant, in which case such procedure shall be used for such determination).  If requested, the Participant shall be  examined by a physician selected or approved by the Administrator, the cost of which examination shall be paid for  by the Company.         21.     EFFECT  ON  STOCK   GRANTS   AND   STOCK-BASED    AWARDS    OF  DEATH  WHILE   AN                 EMPLOYEE, DIRECTOR OR CONSULTANT.         Except as otherwise provided in a Participant’s Agreement, the following rules apply in the event of the death  of a Participant while the Participant is an Employee, Director or Consultant of the Company or of an Affiliate:  to the  extent the forfeiture provisions or the Company’s rights of repurchase have not lapsed on the date of death, they shall  be exercisable; provided, however, that in the event such forfeiture provisions or rights of repurchase lapse periodically,  such provisions or rights shall lapse to the extent of a pro rata portion of the Shares subject to such Stock Grant or  Stock-Based Award through the date of death as would have lapsed had the Participant not died.  The proration shall  be based upon the number of days accrued prior to the Participant’s date of death.         22.     PURCHASE FOR INVESTMENT.         Unless the offering and sale of the Shares shall have been effectively registered under the Securities Act, the  Company shall be under no obligation to issue Shares under the Plan unless and until the following conditions have  been fulfilled:         (a)     The person who receives a Stock Right shall warrant to the Company, prior to the receipt of Shares,  that such person is acquiring such Shares for his or her own account, for investment, and not with a view to, or for sale  in connection with, the distribution of any such Shares, in which event the person acquiring such Shares shall be bound  by the provisions of the following legend (or a legend in substantially similar form) which shall be endorsed upon the  certificate evidencing the Shares issued pursuant to such exercise or such grant of a Stock Right:                        “The shares represented by this certificate have been taken for investment and they may not                        be sold or otherwise transferred by any person, including a pledgee, unless (1) either (a) a                        Registration Statement with respect to such shares shall be effective under the Securities                        Act of 1933, as amended, or (b) the Company shall have received an opinion of counsel                        satisfactory to it that an exemption from registration under such Act is then available, and                        (2) there shall have been compliance with all applicable state securities laws.”         (b)     At the discretion of the Administrator, the Company shall have received an opinion of its counsel  that the Shares may be issued in compliance with the Securities Act without registration thereunder.         23.     DISSOLUTION OR LIQUIDATION OF THE COMPANY.         Upon the dissolution or liquidation of the Company, all Options granted under this Plan which as of such date  shall not have been exercised and all Stock Grants and Stock-Based Awards which have not been accepted, to the extent                                                A-12

 

required under the applicable Agreement, will terminate and become null and void; provided, however, that if the rights  of a Participant or a Participant’s Survivors have not otherwise terminated and expired, the Participant or the Participant’s  Survivors will have the right immediately prior to such dissolution or liquidation to exercise or accept any Stock Right  to the extent that the Stock Right is exercisable or subject to acceptance as of the date immediately prior to such  dissolution or liquidation.  Upon the dissolution or liquidation of the Company, any outstanding Stock-Based Awards  shall immediately terminate unless otherwise determined by the Administrator or specifically provided in the applicable  Agreement.         24.     ADJUSTMENTS.         Upon the occurrence of any of the following events, a Participant’s rights with respect to any Stock Right  granted to him or her hereunder shall be adjusted as hereinafter provided, unless otherwise specifically provided in a  Participant’s Agreement.         (a)     Stock Dividends and Stock Splits.  If (i) the shares of Common Stock shall be subdivided or combined  into a greater or smaller number of shares or if the Company shall issue any shares of Common Stock as a stock dividend  on its outstanding Common Stock, or (ii) additional shares or new or different shares or other securities of the Company  or other non-cash assets are distributed with respect to such shares of Common Stock, each Stock Right and the number  of shares of Common Stock deliverable thereunder shall be appropriately increased or decreased proportionately, and  appropriate adjustments shall be made including, in the exercise or purchase price per share and the Performance Goals  applicable to outstanding Performance-Based Awards, to reflect such events.  The number of Shares subject to the  limitations in Paragraph 3(a) and 4(c) shall also be proportionately adjusted upon the occurrence of such events.         (b)     Corporate Transactions.  If the Company is to be consolidated with or acquired by another entity in  a merger, consolidation, or sale of all or substantially all of the Company’s assets or the acquisition of all of the  outstanding voting stock of the Company in a single transaction or a series of related transactions by a single entity  other than a transaction to merely change the state of incorporation (a “Corporate Transaction”), the Administrator or  the board of directors of any entity assuming the obligations of the Company hereunder (the “Successor Board”), shall,  as to outstanding Options, either (i) make appropriate provision for the continuation of such Options by substituting  on an equitable basis for the Shares then subject to such Options either the consideration payable with respect to the  outstanding shares of Common Stock in connection with the Corporate Transaction or securities of any successor or  acquiring entity; or (ii) upon written notice to the Participants, provide that such Options must be exercised (either (A)  to the extent then exercisable or, (B) at the discretion of the Administrator, any such Options being made partially or  fully exercisable for purposes of this Subparagraph), within a specified number of days of the date of such notice, at  the end of which period such Options which have not been exercised shall terminate; or (iii) terminate such Options  in exchange for payment of an amount equal to the consideration payable upon consummation of such Corporate  Transaction to a holder of the number of shares of Common Stock into which such Option would have been exercisable  (either (A) to the extent then exercisable or, (B) at the discretion of the Administrator, any such Options being made  partially or fully exercisable for purposes of this Subparagraph) less the aggregate exercise price thereof.  For purposes  of determining the payments to be made pursuant to Subclause (iii) above, in the case of a Corporate Transaction the  consideration for which, in whole or in part, is other than cash, the consideration other than cash shall be valued at the  fair value thereof as determined in good faith by the Board of Directors.         With respect to outstanding Stock Grants, the Administrator or the Successor Board, shall make appropriate  provision for the continuation of such Stock Grants on the same terms and conditions by substituting on an equitable  basis for the Shares then subject to such Stock Grants either the consideration payable with respect to the outstanding  Shares of Common Stock in connection with the Corporate Transaction or securities of any successor or acquiring  entity.  In lieu of the foregoing, in connection with any Corporate Transaction, the Administrator may provide that,  upon consummation of the Corporate Transaction, each outstanding Stock Grant shall be terminated in exchange for  payment of an amount equal to the consideration payable upon consummation of such Corporate Transaction to a holder  of the number of shares of Common Stock comprising such Stock Grant (to the extent such Stock Grant is no longer  subject to any forfeiture or repurchase rights then in effect or, at the discretion of the Administrator, all forfeiture and  repurchase rights being waived upon such Corporate Transaction).                                                A-13

 

       In taking any of the actions permitted under this Paragraph 24(b), the Administrator shall not be obligated by  the Plan to treat all Stock Rights, all Stock Rights held by a Participant, or all Stock Rights of the same type, identically.         (c)     Recapitalization or Reorganization.  In the event of a recapitalization or reorganization of the  Company other than a Corporate Transaction pursuant to which securities of the Company or of another corporation  are issued with respect to the outstanding shares of Common Stock, a Participant upon exercising an Option or accepting  a Stock Grant after the recapitalization or reorganization shall be entitled to receive for the price paid upon such exercise  or acceptance if any, the number of replacement securities which would have been received if such Option had been  exercised or Stock Grant accepted prior to such recapitalization or reorganization.         (d)     Adjustments to Stock-Based Awards.  Upon the happening of any of the events described in  Subparagraphs (a), (b) or (c) above, any outstanding Stock-Based Award shall be appropriately adjusted to reflect the  events described in such Subparagraphs.  The Administrator or the Successor Board shall determine the specific  adjustments to be made under this Paragraph 24, including, but not limited to the effect of any, Corporate Transaction and, subject to Paragraph 4, its determination shall be conclusive.         (e)     Modification of Options.  Notwithstanding the foregoing, any adjustments made pursuant to  Subparagraph (a), (b) or (c) above with respect to Options shall be made only after the Administrator determines whether  such adjustments would (i) constitute a “modification” of any ISOs (as that term is defined in Section 424(h) of the  Code) or (ii) cause any adverse tax consequences for the holders of Options, including, but not limited to, pursuant to  Section 409A of the Code.  If the Administrator determines that such adjustments made with respect to Options would  constitute a modification or other adverse tax consequence, it may refrain from making such adjustments, unless the  holder of an Option specifically agrees in writing that such adjustment be made and such writing indicates that the  holder has full knowledge of the consequences of such “modification” on his or her income tax treatment with respect  to the Option.  This paragraph shall not apply to the acceleration of the vesting of any ISO that would cause any portion  of the ISO to violate the annual vesting limitation contained in Section 422(d) of the Code, as described in Paragraph  6(b)(iv).         25.     ISSUANCES OF SECURITIES.         Except as expressly provided herein, no issuance by the Company of shares of stock of any class, or securities  convertible into shares of stock of any class, shall affect, and no adjustment by reason thereof shall be made with respect  to, the number or price of shares subject to Stock Rights.  Except as expressly provided herein, no adjustments shall  be made for dividends paid in cash or in property (including without limitation, securities) of the Company prior to  any issuance of Shares pursuant to a Stock Right.         26.     FRACTIONAL SHARES.         No fractional shares shall be issued under the Plan and the person exercising a Stock Right shall receive from  the Company cash in lieu of such fractional shares equal to the Fair Market Value thereof.         27.     CONVERSION OF ISOs INTO NON     QUALIFIED OPTIONS; TERMINATION OF ISOs.         The Administrator, at the written request of any Participant, may in its discretion take such actions as may be  necessary to convert such Participant’s ISOs (or any portions thereof) that have not been exercised on the date of  conversion into Non Qualified Options at any time prior to the expiration of such ISOs, regardless of whether the  Participant is an Employee of the Company or an Affiliate at the time of such conversion.  At the time of such conversion,  the Administrator (with the consent of the Participant) may impose such conditions on the exercise of the resulting  Non Qualified Options as the Administrator in its discretion may determine, provided that such conditions shall not be  inconsistent with this Plan.  Nothing in the Plan shall be deemed to give any Participant the right to have such Participant’s  ISOs converted into Non Qualified Options, and no such conversion shall occur until and unless the Administrator  takes appropriate action.  The Administrator, with the consent of the Participant, may also terminate any portion of any  ISO that has not been exercised at the time of such conversion.                                                A-14

 

       28.     WITHHOLDING.         In the event that any federal, state, or local income taxes, employment taxes, Federal Insurance Contributions  Act (“F.I.C.A.”) withholdings or other amounts are required by applicable law or governmental regulation to be withheld  from the Participant’s salary, wages or other remuneration in connection with the issuance of a Stock Right or Shares  under the Plan or for any other reason required by law, the Company may withhold from the Participant’s compensation,  if any, or may require that the Participant advance in cash to the Company, or to any Affiliate of the Company which  employs or employed the Participant, the statutory minimum amount of such withholdings unless a different withholding  arrangement, including the use of shares of the Company’s Common Stock or a promissory note, is authorized by the  Administrator (and permitted by law).  For purposes hereof, the fair market value of the shares withheld for purposes  of payroll withholding shall be determined in the manner set forth under the definition of Fair Market Value provided  in Paragraph 1 above, as of the most recent practicable date prior to the date of exercise.  If the Fair Market Value of  the shares withheld is less than the amount of payroll withholdings required, the Participant may be required to advance  the difference in cash to the Company or the Affiliate employer.  The Administrator in its discretion may condition the  exercise of an Option for less than the then Fair Market Value on the Participant’s payment of such additional withholding.           29.     NOTICE TO COMPANY OF DISQUALIFYING DISPOSITION.         Each Employee who receives an ISO must agree to notify the Company in writing immediately after the  Employee makes a Disqualifying Disposition of any Shares acquired pursuant to the exercise of an ISO.  A Disqualifying  Disposition is defined in Section 424(c) of the Code and includes any disposition (including any sale or gift) of such  Shares before the later of (a) two years after the date the Employee was granted the ISO, or (b) one year after the date  the Employee acquired Shares by exercising the ISO, except as otherwise provided in Section 424(c) of the Code.  If  the Employee has died before such Shares are sold, these holding period requirements do not apply and no Disqualifying  Disposition can occur thereafter.         30.     TERMINATION OF THE PLAN.         The Plan will terminate on April 11, 2030, the date which is ten years from the earlier of the date of its adoption  by the Board of Directors and the date of its approval by the stockholders of the Company.  The Plan may be terminated  at an earlier date by vote of the stockholders or the Board of Directors of the Company; provided, however, that any  such earlier termination shall not affect any Agreements executed prior to the effective date of such termination.   Termination of the Plan shall not affect any Stock Rights theretofore granted.         31.     AMENDMENT OF THE PLAN AND AGREEMENTS.         The Plan may be amended by the stockholders of the Company.  The Plan may also be amended by the  Administrator, provided that any amendment approved by the Administrator which the Administrator determines is of  a scope that requires stockholder approval shall be subject to obtaining such stockholder approval including, without  limitation, to the extent necessary to qualify any or all outstanding Stock Rights granted under the Plan or Stock Rights  to be granted under the Plan for favorable federal income tax treatment as may be afforded incentive stock options  under Section 422 of the Code and to the extent necessary to qualify the Shares issuable under the Plan for listing on  any national securities exchange or quotation in any national automated quotation system of securities dealers.  Other  than as set forth in Paragraph 24 of the Plan, the Administrator may not without stockholder approval reduce the exercise  price of an Option or cancel any outstanding Option in exchange for a replacement option having a lower exercise  price, any Stock Grant, any other Stock-Based Award or for cash. In addition, the Administrator may not take any other  action that is considered a direct or indirect “repricing” for purposes of the stockholder approval rules of the applicable  securities exchange or inter-dealer quotation system on which the Shares are listed, including any other action that is  treated as a repricing under generally accepted accounting principles.  Any modification or amendment of the Plan  shall not, without the consent of a Participant, adversely affect his or her rights under a Stock Right previously granted  to him or her, unless such amendment is required by applicable law or necessary to preserve the economic value of  such Stock Right.  With the consent of the Participant affected, the Administrator may amend outstanding Agreements  in a manner which may be adverse to the Participant but which is not inconsistent with the Plan.  In the discretion of  the Administrator, outstanding Agreements may be amended by the Administrator in a manner which is not adverse to                                                A-15

 

the Participant.  Nothing in this Paragraph 31 shall limit the Administrator’s authority to take any action permitted  pursuant to Paragraph 24.         32.     EMPLOYMENT OR OTHER RELATIONSHIP.         Nothing in this Plan or any Agreement referred to herein shall be deemed to prevent the Company or an  Affiliate from terminating the employment, consultancy or director status of a Participant, nor to prevent a Participant  from terminating his or her own employment, consultancy or director status or to give any Participant a right to be  retained in employment or other service by the Company or any Affiliate for any period of time.         33.     SECTION 409A.         If a Participant is a “specified employee” as defined in Section 409A of the Code (and as applied according  to procedures of the Company and its Affiliates) as of his separation from service, to the extent any payment under this  Plan or pursuant to the grant of a Stock-Based Award constitutes deferred compensation (after taking into account any  applicable exemptions from Section 409A of the Code), and to the extent required by Section 409A of the Code, no  payments due under this Plan or pursuant to a Stock-Based Award may be made until the earlier of: (i) the first day of  the seventh month following the Participant’s separation from service, or (ii) the Participant’s date of death; provided,  however, that any payments delayed during this six-month period shall be paid in the aggregate in a lump sum, without  interest, on the first day of the seventh month following the Participant’s separation from service.         The Administrator shall administer the Plan with a view toward ensuring that Stock Rights under the Plan that  are subject to Section 409A of the Code comply with the requirements thereof and that Options under the Plan be  exempt from the requirements of Section 409A of the Code, but neither the Administrator nor any member of the Board,  nor the Company nor any of its Affiliates, nor any other person acting hereunder on behalf of the Company, the  Administrator or the Board shall be liable to a Participant or any Survivor by reason of the acceleration of any income,  or the imposition of any additional tax or penalty, with respect to a Stock Right, whether by reason of a failure to satisfy  the requirements of Section 409A of the Code or otherwise.         34.     CLAWBACK.         Notwithstanding anything to the contrary contained in this Plan, the Company may recover from a Participant  any compensation received from any Stock Right (whether or not settled) or cause a Participant to forfeit any Stock  Right (whether or not vested) in the event that the Company’s Clawback Policy then in effect is triggered.         35.     GOVERNING LAW.         This Plan shall be construed and enforced in accordance with the law of the state of Nevada, without giving  effect to the conflict of law principles thereof.                                                  A-16exhibit04_03.htm - Generated by SEC Publisher for SEC Filing

EXHIBIT
4.3

 

INFORMATION
IN THIS EXHIBIT IDENTIFIED BY [***] IS CONFIDENTIAL AND HAS BEEN EXCLUDED
PURSUANT TO ITEM 601(B)(10)(iv) OF REGULATION S-K BECAUSE IT IS BOTH
(I) NOT MATERIAL AND (II) WOULD LIKELY CAUSE COMPETITIVE HARM TO THE
REGISTRANT IF PUBLICLY DISCLOSED

 

SIXTH AMENDMENT TO THE PROMISSORY AGREEMENT
FOR PURCHASE AND SALE AND OTHER COVENANTS entered into by and between:

 

PETROBRAS DISTRIBUIDORA S.A.,
headquartered at Rua Correia Vasques, 250 – 6th floor, in the City
of Rio de Janeiro, enrolled with the Brazilian Corporate Taxpayer Registry
under No. CNPJ 34.274.233/0001-02, herein represented, according to its
Articles of Association, by its Executive Manager for Aviation Products, Mrs.
Érica Saião Caputo and by its Marketing Manager for Air Companies, Mr. Julio
Cesar Abrahão, hereinafter referred to as “BR” and, on the other side:

 

GOL LINHAS AÉREAS S.A.
(previously named VRG Linhas Aéreas S.A.), a corporation organized and existing
under the laws of Brazil, headquartered at Praça Senador Salgado Filho, s/n,
Aeroporto Santos Dumont, Térreo, Área Pública, entre os eixos 46-48/O-P, Sala
Gerência - Back Office, CEP 20021-340, City and State of Rio de Janeiro,
enrolled with the Brazilian Corporate Taxpayer Registry under No. CNPJ/MF
07.575.651/0001-59 and branch office at Praça Comandante Lineu Gomes, s/n,
Portaria 3, Aeroporto, CEP 04626-020, City and State of São Paulo, enrolled
with the Brazilian Corporate Taxpayer Registry under No. CNPJ/MF 07.575.651/0004-00i,
herein represented by its directors duly elected at the shareholders' general
meeting, hereinafter referred to as the “PROMISING PURCHASER” and/or “GOL”,
have mutually agreed to enter into this Amendment, which shall be governed
according to the following clauses and conditions:

 

Whereas:

(i) BR and the PROMISING PURCHASER
entered into a Promissory Agreement for Purchase and Sale and Other Covenants
(the “Agreement”) on July 28, 2015, covering the supply of aviation kerosene
(JET A-1) by BR for a period of thirty-six (36) months, to become retroactively
effective as of January 1, 2015 until January 1, 2019;

 

(ii) The Parties entered into the 1st
Amendment to the Agreement on January 15, 2016 in order to: (i) amend Clause
1.1 of the Agreement; (ii) fully delete Clauses 1.1.1 and 1.1.2; (iii) amend
Clause 1.3 of the Agreement; (iv) include Clauses 1.5 1 1.6; (v) amend Clause
2.3.7 of the Agreement; (vi) fully delete Clauses 2.1.1 and 2.3.2 and, as a
result, renumber Clauses 2.3.3 to 2.3.7 of the Agreement; (vii) amend the
payment term to ten years plus 20 days (average term of 25 days), amending this
Clause 4.1; and (viii) delete Clause 8.1.1 and amend Clause 8.1.2;

 

(iii) The Parties entered into the 2nd
Amendment to the Agreement on April 20, 2016, in which they amended Clause 1.1
and changed the period for average selling price of the U.S. Dollar for conversion
purposes into Reais of the value per liter of the aviation kerosene, thus
changing Clause 3.2.2 of the Agreement;

 

(iv) The Parties entered into the 3rd
Amendment to the Agreement on August 16, 2016, in order to change the amounts
of the “Differential” and “BR Percentage” shown on the table of Annex I for
Brasilia (BSB) base;

 

(v) The Parties entered into the 4th
Amendment to the Agreement on October 6, 2016, in order to establish the conditions
of parameterization for tax benefits in some Brazilian States granting the
reduction of the tax basis/rate in the internal sales of QAV (Special Taxation
System), made by fuel distribution companies intended for the consumption of
cargo or passenger air carriers.

 

The Parties entered into the 5th
Amendment to the Agreement on December 27, 2018, in order to establish the
Differential and BR Percentage table, SLA, Table of Financial Charges, without
limitation thereto;

 

 

(vi) The Parties
intend to establish new provisions to the Agreement, with respect to Annex II –
SLA – BR, entered herein by operation of the 5th Amendment to the
Agreement;

 

The Parties mutually resolve to enter into
this 6th Amendment to the Agreement, which shall be governed by the
following clauses and conditions:

 

CLAUSE ONE: PURPOSE

 

1.              
The
purpose to this 6th Amendment to the Agreement is to agree on new
premises for the following indexes of SLA – Annex II to the 5th
Amendment to the Agreement:

 

1.2.
TIMELINESS.

 

1.2.1. It
is hereby agreed the 6-month grace period for the enforcement of the SLA, as
from the date of execution to the 5th Amendment to the Agreement.

 

1.2.2. It
is hereby agreed the [***] limit for the enforcement of penalty due to the
failure to achieve this index.

 

1.3.
COMPLIANCE WITH AUDIT REQUIREMENTS

 

1.3.1.   SLA
shall be, for this index, only enforceable to the audits carried out by GOL.

 

1.4.
SHORTAGE OF SUPPLY

 

1.4.1.
This clause shall become effective as soon as the Parties set out and approve
the calculation and reimbursement criterion of the losses caused by the
shortage of supply.

 

CLAUSE TWO: MISCELLANEOUS

 

2.1.          
The
Parties declare that this amendment represents the free statement of will of
the Parties, prevailing over any written or verbal negotiations previously held
between the Parties as for the purpose of the agreement under this amendment.

 

2.2.          
The
Parties hereto expressly ratify all the clauses and conditions to the agreement
under amendment that have not been amended herein.

 

In witness whereof, the Parties execute this
instrument in three (3) counterparts, in the presence of the two undersigned
witnesses.

 

 

São
Paulo, June 6, 2019.

 

 

____________________________________________________________

PETROBRAS
DISTRIBUIDORA S.A.

Name: 

Title: 

 

 

____________________________________________________________

GOL LINHAS AÉREAS

Name: 

Title: 

 

 

 

 

SEVENTH AMENDMENT TO
THE PROMISSORY AGREEMENT FOR PURCHASE AND SALE AND OTHER COVENANTS entered into
by and between:

 

PETROBRAS DISTRIBUIDORA S.A.,
headquartered at Rua Correia Vasques, 250 – 6th floor, in the City
of Rio de Janeiro, enrolled with the Brazilian Corporate Taxpayer Registry
under No. CNPJ 34.274.233/0001-02, herein represented, according to its
Articles of Association, by its Executive Manager for Aviation Products, Mrs.
Érica Saião Caputo and by its Marketing Manager for Air Companies, Mr. Julio
Cesar Abrahão, hereinafter referred to as “BR” and, on the other side:

 

GOL LINHAS AÉREAS S.A.
(previously named VRG Linhas Aéreas S.A.), a corporation organized and existing
under the laws of Brazil, headquartered at Praça Senador Salgado Filho, s/n,
Aeroporto Santos Dumont, Térreo, Área Pública, entre os eixos 46-48/O-P, Sala
Gerência - Back Office, CEP 20021-340, City and State of Rio de Janeiro,
enrolled with the Brazilian Corporate Taxpayer Registry under No. CNPJ/MF
07.575.651/0001-59 and branch office at Praça Comandante Lineu Gomes, s/n,
Portaria 3, Aeroporto, CEP 04626-020, City and State of São Paulo, enrolled
with the Brazilian Corporate Taxpayer Registry under No. CNPJ/MF 07.575.651/0004-00i,
herein represented by its directors duly elected at the shareholders' general
meeting, hereinafter referred to as the “PROMISING PURCHASER” and/or “GOL”,
have mutually agreed to enter into this Amendment, which shall be governed
according to the following clauses and conditions:

 

Whereas:

(i) BR and the PROMISING PURCHASER
entered into a Promissory Agreement for Purchase and Sale and Other Covenants
(the “Agreement”) on July 28, 2015, covering the supply of aviation kerosene
(JET A-1) by BR for a period of thirty-six (36) months, to become retroactively
effective as of January 1, 2015 and until January 1, 2019;

 

(ii) The Parties entered into the 1st
Amendment to the Agreement on January 15, 2016 in order to: (i) amend Clause
1.1 of the Agreement; (ii) fully delete Clauses 1.1.1 and 1.1.2; (iii) amend
Clause 1.3 of the Agreement; (iv) include Clauses 1.5 1 1.6; (v) amend Clause
2.3.7 of the Agreement; (vi) fully delete Clauses 2.1.1 and 2.3.2 and, as a
result, renumber Clauses 2.3.3 to 2.3.7 of the Agreement; (vii) amend the
payment term to ten years plus 20 days (average term of 25 days), amending this
Clause 4.1; and (viii) delete Clause 8.1.1 and amend Clause 8.1.2;

 

(iii) The Parties entered into the 2nd
Amendment to the Agreement on April 20, 2016, in which they amended Clause 1.1
and changed the period for average selling price of the U.S. Dollar for conversion
purposes into Reais of the value per liter of the aviation kerosene, thus
changing Clause 3.2.2 of the Agreement;

 

(iv) The Parties entered into the 3rd
Amendment to the Agreement on August 16, 2016, in order to change the amounts
of the “Differential” and “BR Percentage” shown on the table of Annex I for
Brasilia (BSB) base;

 

(v) The Parties entered into the 4th
Amendment to the Agreement on October 6, 2016, in order to establish the conditions
of parameterization for tax benefits in some Brazilian States granting the
reduction of the tax basis/rate in the internal sales of QAV (Special Taxation
System), made by fuel distribution companies intended for the consumption of
cargo or passenger air carriers.

 

(vi) The Parties entered into the 5th
Amendment to the Agreement on December 27, 2018, in order to establish the
Differential and BR Percentage table, SLA, Table of Financial Charges, without
limitation thereto;

 

(vii) The Parties entered into the 6th
Amendment to the Agreement on June 6, 2019, in order to establish new
provisions to the Agreement, with respect to Annex II – SLA – BR, entered
herein by operation of the 5th Amendment to the Agreement;

 

(viii) The Parties intend to include new
bases of the PROMISING PURCHASER to the Agreement;

 

 

The Parties mutually
resolve to enter into this 7th Amendment to the Agreement (“7th
Amendment to the Agreement”), which shall be governed by the following clauses
and conditions:

 

CLAUSE ONE: PURPOSE

 

1.1.      The purpose of this 7th
Amendment to the Agreement is to include the following conditions to the
Agreement:

 

1.1.1. The
Parties resolve to include the SINOP (OPS) and Vitória da Conquista (VDC)
bases, for which BR shall distribute Aviation Kerosene as set forth in the
Agreement.

 

1.1.1.1.
In virtue of the inclusion of new bases, the table in Annex I shall be included
with the following information: 

 

	
  Base (IATA)

  	
  Monthly Volume (L)

  	
  Annual Volume (L)

  	
  BR Percentage (%)

  	
  Fixed differential 

  BRL/liter

   

  Jan/2019 Base

   

  
	
  OPS

  	
  [***]

  	
  [***]

  	
  [***]

  	
  [***]

  
	
  VDC

  	
  [***]

  	
  [***]

  	
  [***]

  	
  [***]

  

 

1.1.2. The
Parties further decide to include the São José dos Campos (SJK) base, which
shall be only used as an alternate base of the PROMISING PURCHASER.

 

1.1.2.1. Due
to the SJK base being only an alternate route of the PROMISING PURCHASER, there
shall be no volume compromise and BR undertakes to supply fuel in the same
quality to be supplied to the other bases.

 

CLAUSE TWO: MISCELLANEOUS

 

2.1.          
The
Parties declare that this 7th Amendment to the Agreement represents
the free statement of will of the Parties, prevailing over any written or
verbal negotiations previously held between the Parties.

 

2.2.          
The
Parties hereto expressly ratify all the clauses and conditions to the agreement
under amendment that have not been amended herein.

 

In witness whereof, the Parties execute this
instrument in three (3) counterparts, in the presence of the two undersigned
witnesses.

 

 

São
Paulo, June 12, 2019.

 

 

____________________________________________________________

PETROBRAS
DISTRIBUIDORA S.A.

Name: 

Title: 

 

 

 

 

____________________________________________________________

GOL LINHAS AÉREAS

Name: 

Title: 

 

 

 

 

 

EIGHTH AMENDMENT TO THE PROMISSORY AGREEMENT
FOR PURCHASE AND SALE AND OTHER COVENANTS entered into by and between:

 

PETROBRAS DISTRIBUIDORA S.A.,
headquartered at Rua Correia Vasques, 250 – 6th floor, in the City
of Rio de Janeiro, enrolled with the Brazilian Corporate Taxpayer Registry
under No. CNPJ 34.274.233/0001-02, herein represented, according to its
Articles of Association, by its Executive Manager for Aviation Products, Mrs.
Érica Saião Caputo and by its Marketing Manager for Air Companies, Mr. Julio
Cesar Abrahão, hereinafter referred to as “BR” and, on the other side:

 

GOL LINHAS AÉREAS S.A.
(previously named VRG Linhas Aéreas S.A.), a corporation organized and existing
under the laws of Brazil, headquartered at Praça Senador Salgado Filho, s/n,
Aeroporto Santos Dumont, Térreo, Área Pública, entre os eixos 46-48/O-P, Sala
Gerência - Back Office, CEP 20021-340, City and State of Rio de Janeiro,
enrolled with the Brazilian Corporate Taxpayer Register under No. CNPJ/MF
07.575.651/0001-59 and branch office at Praça Comandante Lineu Gomes, s/n,
Portaria 3, Aeroporto, CEP 04626-020, City and State of São Paulo, enrolled
with the Brazilian Corporate Taxpayer Register under No. CNPJ/MF 07.575.651/0004-00i,
herein represented by its directors duly elected at the shareholders' general
meeting, hereinafter referred to as the “PROMISING PURCHASER” and/or “GOL”,
have mutually agreed to enter into this Amendment, which shall be governed
according to the following clauses and conditions:

 

Whereas:

(i) BR and the PROMISING PURCHASER
entered into a Promissory Agreement for Purchase and Sale and Other Covenants
(the “Agreement”) on July 28, 2015, covering the supply of aviation kerosene
(JET A-1) by BR for a period of 36 (thirty-six) months, to become retroactively
effective as of January 1, 2015 until January 1, 2019;

 

(ii) The Parties entered into the 1st
Amendment to the Agreement on January 15, 2016 in order to: (i) amend Clause
1.1 of the Agreement; (ii) fully delete Clauses 1.1.1 and 1.1.2; (iii) amend
Clause 1.3 of the Agreement; (iv) include Clauses 1.5 1 1.6; (v) amend Clause
2.3.7 of the Agreement; (vi) fully delete Clauses 2.1.1 and 2.3.2 and, as a
result, renumber Clauses 2.3.3 to 2.3.7 of the Agreement; (vii) amend the
payment term to ten years plus 20 days (average term of 25 days), amending this
Clause 4.1; and (viii) delete Clause 8.1.1 and amend Clause 8.1.2;

 

(iii) The Parties entered into the 2nd
Amendment to the Agreement on April 20, 2016, in which they amended Clause 1.1
and changed the period for average selling price of the U.S. Dollar for
conversion purposes into Reais of the value per liter of the aviation kerosene,
thus changing Clause 3.2.2 of the Agreement;

 

(iv) The Parties entered into the 3rd
Amendment to the Agreement on August 16, 2016, in order to change the amounts
of the “Differential” and “BR Percentage” shown on the table of Annex I for
Brasilia (BSB) base;

 

(v) The Parties entered into the 4th
Amendment to the Agreement on October 6, 2016, in order to establish the
conditions of parameterization for tax benefits in some Brazilian States
granting the reduction of the tax basis/rate in the internal sales of QAV
(Special Taxation System), made by fuel distribution companies intended for the
consumption of cargo or passenger air carriers.

 

(vi) The Parties entered into the 5th
Amendment to the Agreement on December 27, 2018, in order to establish the
Differential and BR Percentage table, SLA, Table of Financial Charges, without
limitation thereto;

 

(vii) The Parties entered into the 6th
Amendment to the Agreement on June 06, 2019, in order to establish new
provisions to the Agreement, with respect to Annex II – SLA – BR, entered
herein by operation of the 5th Amendment to the Agreement;

 

 

  

(viii) The Parties entered into the 7th Amendment to the Agreement on June 12, 2019, in order to include new bases into Annex I – SINOP (OPS) and Vitória da Conquista (VDC);

 

(ix) The Parties intend to include new bases of the PROMISING PURCHASER to the Agreement;

 

The Parties mutually resolve to enter into this 8th Amendment to the Agreement (“8th Amendment to the Agreement”), which shall be governed by the following clauses and conditions:

 

CLAUSE ONE: PURPOSE

 

1.1.      The purpose of this 8th Amendment to the Agreement is to include the following conditions to the Agreement:

 

1.1.1. The Parties resolve to include the following bases, for which BR shall distribute Aviation Kerosene as set forth in the Agreement:

 

            - Araçatuba (ARU);

            - Dourados (DOU).

 

1.1.1.1. Due to the inclusion of new bases, the table in Annex I shall be included with the following information: 

 

	

   Base (IATA)
	

   Monthly Volume (L)
	

   Annual Volume (L)
	

   BR Percentage (%)
	

   Fixed differential 
BRL/liter

    

   Jan/2019 Base

    

	

   ARU
	

   [***]
	

   [***]
	

   [***]
	

   [***]

	

   DOU
	

   [***]
	

   [***]
	

   [***]
	

   [***]

 

 

CLAUSE TWO: MISCELLANEOUS

 

2.1.           The Parties declare that this 8th Amendment to the Agreement represents the free statement of will of the Parties, prevailing over any written or verbal negotiations previously held between the Parties.

 

2.2.           The Parties hereto expressly ratify all the clauses and conditions to the agreement under amendment that have not been amended herein.

 

In witness whereof, the Parties execute this instrument in three (3) counterparts, in the presence of the two undersigned witnesses.

 

 

São Paulo, July 18, 2019.

 

 

____________________________________________________________

PETROBRAS DISTRIBUIDORA S.A.

Name: 

Title: 

 

 

 

 

____________________________________________________________

GOL LINHAS AÉREAS

Name: 

Title:

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