WASHINGTON, D.C. 20549
This Information Statement is furnished
by the Board of Directors of Yew Bio-Pharm Group, Inc., a Nevada corporation (the “Company”, or “YBP”),
to holders of record of the Company’s common stock, $0.001 par value per share, at the close of business on October 29, 2019.
The purpose of this Information Statement is to inform the Company’s stockholders of certain actions taken by the written
consent of the holders of a majority of the Company’s voting stock, dated as of October 29, 2019, in lieu of an Annual Meeting
of stockholders.
The foregoing actions were approved on
October 29, 2019 by our Board of Directors. In addition, on October 29, 2019 the holder of 52% of the Company’s outstanding
voting securities, as of the record date, approved the foregoing actions. The number of shares voting for the proposals was sufficient
for approval.
Section 78.320 of the Nevada Revised Statutes
(the “NRS”) provides in part that any action required or permitted to be taken at a meeting of the stockholders may
be taken without a meeting if, before or after the action, a written consent thereto is signed by stockholders holding at least
a majority of the voting power, except that if a different proportion of voting power is required for such an action at a meeting,
then that proportion of written consents is required.
In order to eliminate the costs and management
time involved in obtaining proxies and in order to effect the above actions as early as possible in order to accomplish the purposes
of the Company as herein described, the Board consented to the utilization of, and did in fact obtain, the written consent of the
Consenting Stockholders who collectively own shares representing a majority of our Common Stock.
The above actions taken by the Company’s
stockholders will become effective on or about November __, 2019 and are more fully described in the Information Statement accompanying
this Notice. Under the rules of the Securities and Exchange Commission, the above actions cannot become effective until at least
20 days after the accompanying Information Statement has been distributed to the stockholders of the Company.
The entire cost of furnishing this Information
Statement will be borne by the Company. The Company may request brokerage houses, nominees, custodians, fiduciaries and other like
parties to forward this Information Statement to the beneficial owners of the Common Stock held of record by them and will reimburse
such persons for their reasonable charges and expenses in connection therewith.
No action is required by you. The accompanying
Information Statement is furnished only to inform our stockholders of the actions described above before they take place in accordance
with Rule 14c-2 of the Securities Exchange Act of 1934. This Information Statement will be first distributed to you on or about
November __, 2019.
If you have any questions on the enclosed
Information Statement you may contact us directly. We thank you for your continued interest in our Company.
Certain Relationships and Related Transactions
and Director Independence
Transactions with Yew Pharmaceutical
On January 9, 2010,
the Company entered into a Cooperation and Development Agreement (the “Development Agreement”) with Yew Pharmaceutical.
Pursuant to the Development Agreement, for a period of ten years expiring on January 9, 2020, the Company shall supply cultivated
yew raw materials to Yew Pharmaceutical that will be used by Yew Pharmaceutical to make traditional Chinese medicines and other
pharmaceutical products, at price of RMB 1,000,000 (approximately $145,000) per metric ton. In addition, the Company entered into
a series of wood ear mushroom selling agreements with Yew Pharmaceuticals, pursuant to which the Company sells wood ear mushroom
collected from local peasants to Yew Pharmaceuticals for manufacturing of wood ear mushroom products. Furthermore, the Company
entered into a series of yew candles, yew essential oil soap, complex taxus cuspidate extract, composite northeast yew extract,
and pine needle extracts purchase agreements with Yew Pharmaceuticals, pursuant to which the Company purchases yew candles, yew
essential oil soap, complex taxus cuspidate extract, composite northeast yew extract, and pine needle extracts as finished goods
and then sells to third party and related party.
For the years ended
December 31, 2018 and 2017, total revenues from Yew Pharmaceutical under the above agreement amounted to $21,673,772 and $20,180,406.
At December 31, 2018 and 2017, the Company had $1,408,321 and $21,647,828 accounts receivable from Yew Pharmaceutical, respectively.
For the years ended
December 31, 2018 and 2017, the total purchase of yew candles, yew essential oil soap, complex taxus cuspidate extract, composite
northeast yew extract, and pine needle extracts from Yew Pharmaceutical amounted to $22,454,476 and $15,042,178, respectively.
At December 31, 2018
and 2017, HYF had $0 and $39,974, respectively, due to Yew Pharmaceutical, which represents an unsecured loan bearing no interest
and payable on demand and was included in due to related parties in the accompanying consolidated balance sheets.
Transactions with HDS Development
For the years ended
December 31, 2018 and 2017, total revenue from HDS Development amounted to $1,814,169 and $Nil. As of December 31, 2018 and 2017,
the Company had $981,618 and $Nil accounts receivable, which were net of allowance for doubtful account $763,481 and $Nil from
HDS Development, respectively. For the years ended December 31, 2018 and 2017, the Company recorded bad debt expense for HDS development
in the amount of $793,699 and $Nil, respectively.
Transactions with Changzhi Du
For the year ended
2017, HDS purchased yew seedlings from Changzhi Du in the amount of $1,086,281. As of December 31, 2017, the Company had no accounts
payable to Changzhi Du.
Transactions with Jinguo Wang
For the years ended
December 31, 2018 and 2017, HDS purchased yew forest assets and yew seedlings from Jinguo Wang in the amount of $1,405,107 and
$26,121, respectively. As of December 31, 2018 and 2017, the Company had no accounts payable to Jinguo Wang.
Transactions with Wonder Genesis Global
Ltd.
For the years ended
December 31, 2018 and 2017, total revenues from Wonder Genesis Global Ltd. amounted to $2,552,148 and $2,724,818. At December 31,
2018 and 2017, the Company has $Nil and $199,905 accounts receivable from Wonder Genesis Global Ltd., respectively.
Transactions with Lifeforfun Limited
For the years ended
December 31, 2018 and 2017, total revenues from Lifeforfun Limited amounted to $1,159,021 and $Nil. As of December 31, 2018 and
2017, the Company had $1,080,919 and $Nil accounts receivable, which were net of allowance for doubtful account $74,448 and $Nil
from Lifeforfun Limited, respectively. For the years ended December 31, 2018 and 2017, the Company recorded bad debt expense for
Lifeforfun Limited in the amount of $77,395 and $Nil, respectively.
Transactions with DMSU
For the years ended
December 31, 2018 and 2017, total revenues from DMSU amounted to $6,869,966 and $Nil . The Company wrote off accounts receivable
in the amount of $6,782,442 from DMSU due to being uncollectable. As of December 31, 2018 and 2017, the Company had $ Nil and $
Nil accounts receivable from DMSU, respectively. For the years ended December 31, 2018 and 2017, the Company recorded bad debt
expense for DMSU in the amount of $7,050,885 and $Nil, respectively.
Transactions with YIDA
For the years ended
December 31, 2018 and 2017, total revenues from YIDA amounted to $3,085,648 and $Nil . As of December 31, 2018 and 2017, the Company
had $1,108,808 and $Nil accounts receivable from YIDA, respectively.
Transactions with Ai Zhong Jing Mao
For the years ended
December 31, 2018 and 2017, total revenues from Ai Zhong Jing Mao amounted to $10,970 and $0. As of December 31, 2018 and 2017,
the Company had $21,295 and $Nil advance from Ai Zhong Jing Mao.
Transactions with ZTC
For the years ended
December 31, 2018 and 2017, HDS purchased yew forest assets from ZTC in the amount of $6,458,773 and $0, respectively. Since the
assets purchase occurred between entities under common control, the Company recorded the assets received at historical carrying
costs recorded by ZTC, which amounted to $6,415,707. The difference of $43,066 between the actual contract price and carrying costs
is recorded as additional paid-in capital. As of December 31, 2018 and 2017, the Company had no balance payable to ZTC.
Transactions with Xinlin
For the years ended
December 31, 2018 and 2017, HDS purchased yew forest assets from Xinlin in the amount of $2,582,469 and $0, respectively. Since
the assets purchase occurred between entities under common control, the Company recorded the assets received at historical carrying
costs recorded by Xinlin, which amounted to $1,362,252. The difference of $1,220,217 between the actual contract price and carrying
costs is recorded as additional paid-in capital. As of December 31, 2018 and 2017, the Company had no balance payable to Xinlin.
Transactions with Zhiguo Wang
For the years ended
December 31, 2018 and 2017, HDS purchased yew forest assets from Zhiguo Wang in the amount of $1,269,918 and $Nil, respectively.
As of December 31, 2018 and 2017, the Company had no balance payable to Zhiguo Wang. Since the assets purchase occurred between
entities under common control, the Company recorded the assets received at historical carrying costs recorded by Zhiguo Wang, which
amounted to $1,015,935. The difference of $253,983 between the actual contract price and carrying costs is recorded as additional
paid-in capital.
Transactions with Others (Cai Wang,
Jimin Lu, Xue Wang and Chunping Wang)
For the year ended
December 31, 2018, HDS purchased yew forest assets from Cai Wang, Jimin Lu, Xue Wang and Chunping Wang in the amount of $2,324,525,
$2,137,937, $1,863,756 and $3,266,259, respectively. As of December 31, 2018, the Company had no accounts payable to others.
Loans Guaranteed
As of December 31,
2018 and 2017, the Company’s certain loans were guaranteed by related parties (see note 8).
Operating Leases
On March 25, 2005,
the Company entered into an Agreement for the Lease of Seedling Land with ZTC (the “ZTC Lease”). Pursuant to the ZTC
Lease, the Company leased 361 mu of land from ZTC for a period of 30 years, expiring on March 24, 2035. Annual payments under the
ZTC Lease are RMB 162,450 (approximately $24,000). The payment for the first five years of the ZTC Lease was due prior to December
31, 2010 and beginning in 2011, the Company is required to make full payment for the land use rights in advance for each subsequent
five-year period. For the years ended December 31, 2018 and 2017, rent expense related to the ZTC Lease amounted to $24,559 and
$24,042, respectively. At December 31, 2018 and 2017, prepaid rent to ZTC amounted to $29,530 and $56,177 which was included in
prepaid expenses-related parties in the accompanying consolidated balance sheets.
On January 1, 2010,
the Company entered into a lease for office space with Mr. Wang (the “Office Lease”). Pursuant to the Office Lease,
annual payments of RMB15,000 (approximately $2,000) are due for each of the term. The term of the Office Lease is 15 years and
expires on December 31, 2025. For the years ended December 31, 2018 and 2017, rent expense related to the Office Lease amounted
to approximately $2,300 and $2,220, respectively. As of December 31, 2018 and 2017, the unpaid rent was $Nil and $1,881 respectively,
which was included in due to related parties in the accompanying consolidated balance sheets.
On July 1, 2012, the
Company entered into a lease for office space with Mr. Wang (the “JSJ Lease”). Pursuant to the JSJ Lease, JSJ leases
approximately 30 square meter of office space from Mr. Wang in Harbin. Rent under the JSJ Lease is RMB10,000 (approximately $1,500)
annually. The term of the JSJ Lease is three years and expires on June 30, 2015. On July 1, 2015, the Company and Mr. Wang renewed
the JSJ Lease. The renewed lease expires on June 30, 2018. On July 1, 2018, the Company renewed JSJ Lease for three years, which
will now expire on June 30, 2021. Pursuant to the renewed lease agreement, the annual payment will be RMB 10,000 (approximately
$1,500). For the years ended December 31, 2018 and 2017, rent expense related to the JSJ Lease amounted to $1,512 and $1,480, respectively.
As of December 31, 2018 and 2017, the unpaid rent was $6,544 and $5,380, respectively, which was included in due to related parties
in the accompanying consolidated balance sheets.
The Company entered
into two forest land leases with Mr. Wang. Pursuant to the Leases, Mr.Wang leases two forest land with area of 20 mu and 73 mu,
respectively, to the Company for free. The leases terms are for the periods from January 9, 2008 to November 24, 2022 and from
January 30, 2007 to December 30, 2026, respectively.
On January 1, 2015,
HYF entered into an lease agreement with HBP, pursuant to which HBP leases a warehouse, with an area of 225 square meters, and
a workshop, with an area of 50 square meters, both of which are located at No.1 Zisan Road, Shangzhi economic development district,
Shangzhi City, Heilongjiang Province, to HYF in exchange for no consideration for the period from January 1, 2015 to December 31,
2020.
The Company leased
office space in the A’cheng district in Harbin (the “A’cheng Lease”) from HDS Development on March 20,
2002. The A’cheng Lease is for a term of 23 years and expires on March 19, 2025. Pursuant to the A’cheng Lease, lease
payment shall be made as follows:
Period
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Annual lease amount
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Payment due date
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March 2002 to February 2012
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RMB
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25,000
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Before December 2012
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March 2012 to February 2017
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RMB
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25,000
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Before December 2017
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March 2017 to March 2025
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RMB
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25,000
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Before December 2025
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For the years ended
December 31, 2018 and 2017, rent expense related to the A’cheng Lease amounted approximately $3,700 and $3,700, respectively.
At December 31, 2018 and 2017, the prepaid (unpaid) rent was $1,818 and $(1,921), respectively, which was included in due to related
parties in the accompanying consolidated balance sheets.
The Company leased
an apartment the Nangang district (the “Jixing Lease”) in Harbin from Ms. Qi on October 1, 2016. The term of Jixing
Lease is one year. On October 1, 2017, the Company and Ms. Qi renewed the Jixing Lease. The renewed lease expires on September
30, 2018. On October 1, 2018, the Company and Ms. Qi renewed the Lease. The renewed lease expires on September 30, 2019. For the
years ended December 31, 2018 and 2017, rent expense related to the Jixing Lease amounted $1,512 and $1,480, respectively. As of
December 31, 2018 and 2017, the prepaid rent to Ms. Qi amounted to $970 and $1,025 respectively, which was included in prepaid
expenses-related parties in the accompanying consolidated balance sheets.
Due to Related Parties
The Company’s
officers, directors and other related parties, from time to time, provided advances to the Company for working capital purpose.
These advances and payables are usually short-term in nature, non-interest bearing, unsecured and payable on demand. As of December
31, 2018, the Company had balance of due to Mr.Wang and HBP in the amount of $8,100 and $102,770, respectively. During the year
ended December 31, 2017, the Company transferred a car with carrying amount of $82,491 to Zhiguo Wang to settle the same amount
due to him. Due to Zhiguo Wang and Madame Qi, excluding the unpaid rents disclosed above and the borrowings from Madame Qi as disclosed
below, amounted to $41,051 and $41,051 at December 31, 2018 and 2017, respectively, which was included in due to related parties
in the accompanying consolidated balance sheets.
On May 15, 2015, the
Company borrowed $648,000 from Madame Qi through the issuance of a subordinated promissory note. The note bears 2% interest per
annum and shall be payable on or before November 15, 2015 (“Due Date”). Interest payment shall be made with principal
on Due Date. On September 28, 2015, Madame Qi and the Company agreed to extend the Due Date to January 31, 2016, with the remaining
terms of the note unchanged. On January 15, 2016, 2017 and 2018, the Company and Madame Qi entered into agreements to further extend
the Due Date of the note to December 31, 2016, 2017 and 2018, respectively. During the years ended December 31, 2018 and 2017,
the Company made repayments of $0 and $170,875 to Madame Qi, respectively. As of December 31, 2018 and 2017, the total borrowings
including the interest were $428,095 and $428,095, which was included in due to related parties in the accompanying consolidated
balance sheets.
The original structuring
of the Company and the second restructure of the Company that we implemented in 2010 (the “Second Restructure”) involved
transactions between the Company and Zhiguo Wang, Guifang Qi, who are also our directors and executive officers, and Xingming Han,
a former director of the Company (collectively, the “HDS Shareholders”). These transactions were not negotiated at
arm’s length. While we have not discovered any precedent under Nevada law for a transaction like the Second Restructure,
it is possible that the Second Restructure should have been approved by YBP’s shareholders because it may be viewed as having
involved the sale of all or substantially all of YBP’s assets in that the stock of HDS was transferred from a wholly-owned
subsidiary, JSJ, to the HDS Shareholders. However, because the Company was not yet subject to the reporting obligations of the
Exchange Act, YBP was unable to issue a proxy statement to its shareholders in connection with such approval. The Company sought
and obtained shareholder ratification of the Second Restructure and all of the transactions effected in connection therewith at
the Special Meeting on December 13, 2012.
The terms of the Founders’ Options
have not been determined as a result of arm’s-length negotiations. The Board of Directors of YBP, which consists of the same
persons who are the HDS Shareholders and the grantees of the Founders’ Options, sought and obtained shareholder approval
of the issuance of the Founders’ Options at the Special Meeting on December 13, 2012. The Board extended the expiration date
of the options for Mr. Wang and Ms. Qi to December 31, 2019.
WHERE YOU CAN FIND MORE INFORMATION
The Company is subject to the informational
requirements of the Exchange Act and files reports and other information with the SEC. Such reports and other information filed
by the Company may be inspected and copied at the SEC’s Public Reference Room at 100 F Street, N.E., Washington, DC 20549-2736.
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By order of the Board of Directors
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/s/ Zhiguo Wang
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Zhiguo Wang, Chief Executive Officer
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November__, 2019
El Monte, California
Exhibit A
CERTIFICATE OF AMENDMENT
OF
ARTICLES OF INCORPORATION
OF
YEW BIO-PHARM GROUP, INC.
Yew Bio-Pharm Group, Inc., a corporation
organized and existing under the laws of the State of Nevada (the “Corporation”), does hereby certify as follows:
1. The name of the Corporation is Yew
Bio-Pharm Group, Inc.
2. Article 4 of the Articles of
Incorporation of the Corporation, as amended to date, is hereby amended by replacing the first paragraph thereof with the
following:
“The total number of shares
of all classes of stock which the Corporation shall have the authority to issue 140,000,000 shares of the par value of $.001 each
are to be of a class designated Common Stock (the “Common Stock”).
Upon the filing and effectiveness
(the “Effective Time”) of this amendment to the Corporation’s Articles of Incorporation pursuant to the Nevada
Corporation Law, each _______________ shares of the Common Stock (the “Old Common Stock”) issued immediately prior
to the Effective Time shall be reclassified and combined into one validly issued, fully paid and non-assessable share of the Corporation’s
common stock, $.001 par value per share (the “New Common Stock”), without any action by the holder thereof (the “Reverse
Stock Split”). Any shareholder who owns one or fewer shares will be rounded-up to one whole share. No fractional shares will
be issued. Each certificate that theretofore represented shares of Old Common Stock shall thereafter represent that number of shares
of New Common Stock into which the shares of Old Common Stock, represented by such certificate shall have been reclassified and
combined; provided, that each person holding of record a stock certificate or certificates that represented shares of Old Common
Stock shall receive, upon surrender of such certificate or certificates, a new certificate or certificates evidencing and representing
the number of shares of New Common Stock to which such person is entitled under the foregoing reclassification and combination.”
3. This Certificate of Amendment has
been duly adopted by the Board of Directors and stockholders of the Corporation in accordance with Section ___ of the
Corporation Law of the State of Nevada.
4. This
Certificate of Amendment shall become effective at ____________ ___. m. Pacific Time on ___________, _________.
IN WITNESS WHEREOF, the Corporation has
caused its duly authorized officer to execute this Certificate of Amendment on this _____ day of _________, _________.
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Yew Bio-Pharm Group, Inc.
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By:
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Name:
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Title:
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Exhibit
B
YEW BIO-PHARM GROUP, INC.
2019 EQUITY INCENTIVE PLAN
ADOPTED BY THE BOARD OF DIRECTORS:
OCTOBER 29, 2019
APPROVED BY THE STOCKHOLDERS:
October 29, 2019
EFFECTIVE DATE OF PLAN: November __,
2019
TABLE OF CONTENTS
1. GENERAL.
(a) 2019
Equity Incentive Plan. The 2019 Equity Incentive Plan shall become effective after such time as it is has been approved
by the Board of Directors and ratified or approved by the shareholders of the Company and on the effective date listed above (the
“Adoptive Date”).
(b) Plan
Purpose. The Company, by means of the Plan, seeks to secure and retain the services of Employees, Directors and Consultants,
to provide incentives for such persons to exert maximum efforts for the success of the Company and any Affiliate and to provide
a means by which such persons may be given an opportunity to benefit from increases in value of the Common Stock through the granting
of Awards.
(c) Available
Awards. The Plan provides for the grant of the following Awards: (i) Incentive Stock Options; (ii) Non-statutory
Stock Options; (iii) SARs; (iv) Restricted Stock Awards; (v) RSU Awards; (vi) Performance Awards; and (vii) Other
Awards.
(d) Adoption
Date; Effective Date. The Plan will come into existence on the Adoption Date, but no Award may be granted prior to the
Effective Date.
2. SHARES SUBJECT TO THE PLAN.
(a) Share
Reserve. Subject to adjustment in accordance with Section 2(c) and any adjustments as necessary to implement any
Capitalization Adjustments, the aggregate number of shares of Common Stock that may be issued pursuant to Awards will not exceed
5,000,000 shares.
(b) Aggregate
Incentive Stock Option Limit. Notwithstanding anything to the contrary in Section 2(a) and subject to any adjustments
as necessary to implement any Capitalization Adjustments, the aggregate maximum number of shares of Common Stock that may be issued
pursuant to the exercise of Incentive Stock Options is 5,000,000 shares.
(c) Share Reserve Operation.
(i) Limit
Applies to Common Stock Issued Pursuant to Awards. For clarity, the Share Reserve is a limit on the number of shares of
Common Stock that may be issued pursuant to Awards and does not limit the granting of Awards, except that the Company will keep
available at all times the number of shares of Common Stock reasonably required to satisfy its obligations to issue shares pursuant
to such Awards. Shares may be issued in connection with a merger or acquisition as permitted by, as applicable, NASDAQ Listing
Rule 5635(c), NYSE Listed Company Manual Section 303A.08, AMEX Company Guide Section 711 or other applicable rule, and
such issuance will not reduce the number of shares available for issuance under the Plan.
(ii) Actions
that Do Not Constitute Issuance of Common Stock and Do Not Reduce Share Reserve. The following actions do not result in
an issuance of shares under the Plan and accordingly do not reduce the number of shares subject to the Share Reserve and available
for issuance under the Plan: (a) the expiration or termination of any portion of an Award without the shares covered by such
portion of the Award having been issued, (b) the settlement of any portion of an Award in cash (i.e., the Participant
receives cash rather than Common Stock), (c) the withholding of shares that would otherwise be issued by the Company to satisfy
the exercise, strike or purchase price of an Award; (d) the withholding of shares that would otherwise be issued by the Company
to satisfy a tax withholding obligation in connection with an Award.
(iii) Reversion
of Previously Issued Shares of Common Stock to Share Reserve. The following shares of Common Stock previously issued pursuant
to an Award and accordingly initially deducted from the Share Reserve will be added back to the Share Reserve and again become
available for issuance under the Plan: (a) any shares that are forfeited back to or repurchased by the Company because of
a failure to meet a contingency or condition required for the vesting of such shares; (b) any shares that are reacquired by
the Company to satisfy the exercise, strike or purchase price of an Award; and (c) any shares that are reacquired by the Company
to satisfy a tax withholding obligation in connection with an Award.
3. ELIGIBILITY AND LIMITATIONS.
(a) Eligible
Award Recipients. Subject to the terms of the Plan, Employees, Directors and Consultants are eligible to receive Awards.
(b) Specific Award
Limitations.
(i) Limitations
on Incentive Stock Option Recipients. Incentive Stock Options may be granted only to Employees of the Company or a “parent
corporation” or “subsidiary corporation” thereof (as such terms are defined in Sections 424(e) and (f) of
the Code).
(ii) Incentive
Stock Option $100,000 Limitation. To the extent that the aggregate Fair Market Value (determined at the time of grant)
of Common Stock with respect to which Incentive Stock Options are exercisable for the first time by any Optionholder during any
calendar year (under all plans of the Company and any Affiliates) exceeds $100,000 (or such other limit established in the Code)
or otherwise does not comply with the rules governing Incentive Stock Options, the Options or portions thereof that exceed such
limit (according to the order in which they were granted) or otherwise do not comply with such rules will be treated as Non-statutory
Stock Options, notwithstanding any contrary provision of the applicable Option Agreement(s).
(iii) Limitations
on Incentive Stock Options Granted to Ten Percent Stockholders. A Ten Percent Stockholder may not be granted an Incentive
Stock Option unless (i) the exercise price of such Option is at least 110% of the Fair Market Value on the date of grant of
such Option and (ii) the Option is not exercisable after the expiration of five years from the date of grant of such Option.
(iv) Limitations
on Non-statutory Stock Options and SARs. Non-statutory Stock Options and SARs may not be granted to Employees, Directors
and Consultants who are providing Continuous Service only to any “parent” of the Company (as such term is defined in
Rule 405) unless the stock underlying such Awards is treated as “service recipient stock” under Section 409A
because the Awards are granted pursuant to a corporate transaction (such as a spin off transaction) or unless such Awards otherwise
comply with the distribution requirements of Section 409A.
(c) Aggregate
Incentive Stock Option Limit. The aggregate maximum number of shares of Common Stock that may be issued pursuant to the
exercise of Incentive Stock Options is the number of shares specified in Section 2(b).
(d) Non-Employee Director
Compensation Limit. The aggregate value of all compensation granted or paid, as applicable, to any individual for service
as a Non-Employee Director with respect to any calendar year, including Awards granted and cash fees paid by the Company
to such Non-Employee Director, will not exceed $750,000 in total value, calculating the value of any equity awards based
on the grant date fair value of such equity awards for financial reporting purposes.
4. OPTIONS AND STOCK APPRECIATION RIGHTS.
Each Option and SAR
will have such terms and conditions as determined by the Board. Each Option will be designated in writing as an Incentive Stock
Option or Non-statutory Stock Option at the time of grant; provided, however, that if an Option is not so designated,
then such Option will be a Non-statutory Stock Option, and the shares purchased upon exercise of each type of Option will be separately
accounted for. Each SAR will be denominated in shares of Common Stock equivalents. The terms and conditions of separate Options
and SARs need not be identical; provided, however, that each Option Agreement and SAR Agreement will conform (through
incorporation of provisions hereof by reference in the Award Agreement or otherwise) to the substance of each of the following
provisions:
(a) Term. Subject
to Section 3(b) regarding Ten Percent Stockholders, no Option or SAR will be exercisable after the expiration of ten years from
the date of grant of such Award or such shorter period specified in the Award Agreement.
(b) Exercise or
Strike Price. Subject to Section 3(b) regarding Ten Percent Stockholders, the exercise or strike price of each Option or SAR
will not be less than 100% of the Fair Market Value on the date of grant of such Award. Notwithstanding the foregoing, an Option
or SAR may be granted with an exercise or strike price lower than 100% of the Fair Market Value on the date of grant of such Award
if such Award is granted pursuant to an assumption of or substitution for another option or stock appreciation right pursuant to
a Corporate Transaction and in a manner consistent with the provisions of Sections 409A and, if applicable, 424(a) of the Code.
(c) Exercise
Procedure and Payment of Exercise Price for Options. In order to exercise an Option, the Participant must provide notice
of exercise to the Plan Administrator in accordance with the procedures specified in the Option Agreement or otherwise provided
by the Company. The Board has the authority to grant Options that do not permit all of the following methods of payment (or otherwise
restrict the ability to use certain methods) and to grant Options that require the consent of the Company to utilize a particular
method of payment. The exercise price of an Option may be paid, to the extent permitted by Applicable Law and as determined by
the Board, by one or more of the following methods of payment to the extent set forth in the Option Agreement:
(i) by
cash or check, bank draft or money order payable to the Company;
(ii) pursuant
to a “cashless exercise” program developed under Regulation T as promulgated by the Federal Reserve Board that, prior
to the issuance of the Common Stock subject to the Option, results in either the receipt of cash (or check) by the Company or the
receipt of irrevocable instructions to pay the exercise price to the Company from the sales proceeds;
(iii) by
delivery to the Company (either by actual delivery or attestation) of shares of Common Stock that are already owned by the Participant
free and clear of any liens, claims, encumbrances or security interests, with a Fair Market Value on the date of exercise that
does not exceed the exercise price, provided that (A) at the time of exercise the Common Stock is publicly traded, (B) any
remaining balance of the exercise price not satisfied by such delivery is paid by the Participant in cash or other permitted form
of payment, (C) such delivery would not violate any Applicable Law or agreement restricting the redemption of the Common Stock,
(D) any certificated shares are endorsed or accompanied by an executed assignment separate from certificate, and (E) such
shares have been held by the Participant for any minimum period necessary to avoid adverse accounting treatment as a result of
such delivery;
(iv) if
the Option is a Non-statutory Stock Option, by a “net exercise” arrangement pursuant to which the Company will reduce
the number of shares of Common Stock issuable upon exercise by the largest whole number of shares with a Fair Market Value on the
date of exercise that does not exceed the exercise price, provided that (A) such shares used to pay the exercise price will
not be exercisable thereafter and (B) any remaining balance of the exercise price not satisfied by such net exercise is paid
by the Participant in cash or other permitted form of payment; or
(v) in
any other form of consideration that may be acceptable to the Board and permissible under Applicable Law.
(d) Exercise
Procedure and Payment of Appreciation Distribution for SARs. In order to exercise any SAR, the Participant must provide
notice of exercise to the Plan Administrator in accordance with the SAR Agreement. The appreciation distribution payable to a Participant
upon the exercise of a SAR will not be greater than an amount equal to the excess of (i) the aggregate Fair Market Value on
the date of exercise of a number of shares of Common Stock equal to the number of Common Stock equivalents that are vested and
being exercised under such SAR, over (ii) the strike price of such SAR. Such appreciation distribution may be paid to the
Participant in the form of Common Stock or cash (or any combination of Common Stock and cash) or in any other form of payment,
as determined by the Board and specified in the SAR Agreement.
(e) Transferability. Options
and SARs may not be transferred to third party financial institutions for value. The Board may impose such additional limitations
on the transferability of an Option or SAR as it determines. In the absence of any such determination by the Board, the following
restrictions on the transferability of Options and SARs will apply, provided that except as explicitly provided herein, neither
an Option nor a SAR may be transferred for consideration and provided, further, that if an Option is an Incentive Stock
Option, such Option may be deemed to be a Non-statutory Stock Option as a result of such transfer:
(i) Restrictions
on Transfer. An Option or SAR will not be transferable, except by will or by the laws of descent and distribution, and
will be exercisable during the lifetime of the Participant only by the Participant; provided, however, that the Board
may permit transfer of an Option or SAR in a manner that is not prohibited by applicable tax and securities laws upon the Participant’s
request, including to a trust if the Participant is considered to be the sole beneficial owner of such trust (as determined under
Section 671 of the Code and applicable state law) while such Option or SAR is held in such trust, provided that the Participant
and the trustee enter into a transfer and other agreements required by the Company.
(ii) Domestic
Relations Orders. Notwithstanding the foregoing, subject to the execution of transfer documentation in a format acceptable
to the Company and subject to the approval of the Board or a duly authorized Officer, an Option or SAR may be transferred pursuant
to a domestic relations order.
(f) Vesting. The
Board may impose such restrictions on or conditions to the vesting and/or exercisability of an Option or SAR as determined by the
Board and which may vary. Except as otherwise provided in the Award Agreement or other written agreement between a Participant
and the Company or an Affiliate, vesting of Options and SARs will cease upon termination of the Participant’s Continuous
Service.
(g) Termination
of Continuous Service for Cause. Except as explicitly otherwise provided in the Award Agreement or other written agreement
between a Participant and the Company or an Affiliate, if a Participant’s Continuous Service is terminated for Cause, the
Participant’s Options and SARs will terminate and be forfeited immediately upon such termination of Continuous Service, and
the Participant will be prohibited from exercising any portion (including any vested portion) of such Awards on and after the date
of such termination of Continuous Service and the Participant will have no further right, title or interest in such forfeited Award,
the shares of Common Stock subject to the forfeited Award, or any consideration in respect of the forfeited Award.
(h) Post-Termination
Exercise Period Following Termination of Continuous Service For Reasons Other than Cause. Subject to Section 4(i),
if a Participant’s Continuous Service terminates for any reason other than for Cause, the Participant may exercise his or
her Option or SAR to the extent vested, but only within the following period of time or, if applicable, such other period of time
provided in the Award Agreement or other written agreement between a Participant and the Company or an Affiliate; provided,
however, that in no event may such Award be exercised after the expiration of its maximum term (as set forth in Section 4(a)):
(i) three
months following the date of such termination if such termination is a termination without Cause (other than any termination due
to the Participant’s Disability or death);
(ii) 12
months following the date of such termination if such termination is due to the Participant’s Disability;
(iii) 18
months following the date of such termination if such termination is due to the Participant’s death; or
(iv) 18
months following the date of the Participant’s death if such death occurs following the date of such termination but during
the period such Award is otherwise exercisable (as provided in (i) or (ii) above).
Following the date of such termination,
to the extent the Participant does not exercise such Award within the applicable Post-Termination Exercise Period (or, if earlier,
prior to the expiration of the maximum term of such Award), such unexercised portion of the Award will terminate, and the Participant
will have no further right, title or interest in terminated Award, the shares of Common Stock subject to the terminated Award,
or any consideration in respect of the terminated Award.
(i) Restrictions
on Exercise; Extension of Exercisability. A Participant may not exercise an Option or SAR at any time that the issuance
of shares of Common Stock upon such exercise would violate Applicable Law. Except as otherwise provided in the Award Agreement
or other written agreement between a Participant and the Company or an Affiliate, if a Participant’s Continuous Service terminates
for any reason other than for Cause and, at any time during the last thirty days of the applicable Post-Termination Exercise Period:
(i) the exercise of the Participant’s Option or SAR would be prohibited solely because the issuance of shares of Common
Stock upon such exercise would violate Applicable Law, or (ii) the immediate sale of any shares of Common Stock issued upon
such exercise would violate the Company’s Trading Policy, then the applicable Post-Termination Exercise Period will be extended
to the last day of the calendar month that commences following the date the Award would otherwise expire, with an additional extension
of the exercise period to the last day of the next calendar month to apply if any of the foregoing restrictions apply at any time
during such extended exercise period, generally without limitation as to the maximum permitted number of extensions; provided,
however, that in no event may such Award be exercised after the expiration of its maximum term (as set forth in Section 4(a)).
(j) Non-Exempt Employees.
No Option or SAR, whether or not vested, granted to an Employee who is a non-exempt employee for purposes of the Fair
Labor Standards Act of 1938, as amended, will be first exercisable for any shares of Common Stock until at least six months following
the date of grant of such Award. Notwithstanding the foregoing, in accordance with the provisions of the Worker Economic Opportunity
Act, any vested portion of such Award may be exercised earlier than six months following the date of grant of such Award in the
event of (i) such Participant’s death or Disability, (ii) a Corporate Transaction in which such Award is not assumed,
continued or substituted, (iii) a Change in Control, or (iv) such Participant’s retirement (as such term may be
defined in the Award Agreement or another applicable agreement or, in the absence of any such definition, in accordance with the
Company’s then current employment policies and guidelines). This Section 4(j) is intended to operate so that any income
derived by a non-exempt employee in connection with the exercise or vesting of an Option or SAR will be exempt from his
or her regular rate of pay.
(k) Whole
Shares. Options and SARs may be exercised only with respect to whole shares of Common Stock or their equivalents.
5. AWARDS OTHER THAN OPTIONS AND STOCK APPRECIATION RIGHTS.
(a) Restricted
Stock Awards and RSU Awards. Each Restricted Stock Award and RSU Award will have such terms and conditions as determined
by the Board which need not be identical; provided, however, that each Restricted Stock Award Agreement and RSU Award
Agreement will conform (through incorporation of the provisions hereof by reference in the Award Agreement or otherwise) to the
substance of each of the following provisions:
(i) Form of Award.
(1) RSAs:
To the extent consistent with the Company’s Bylaws, at the Board’s election, shares of Common Stock subject to a Restricted
Stock Award may be (i) held in book entry form subject to the Company’s instructions until such shares become vested
or any other restrictions lapse, or (ii) evidenced by a certificate, which certificate will be held in such form and manner
as determined by the Board. Unless otherwise determined by the Board, a Participant will have voting and other rights as a stockholder
of the Company with respect to any shares subject to a Restricted Stock Award.
(2) RSUs:
A RSU Award represents a Participant’s right to be issued on a future date the number of shares of Common Stock that is equal
to the number of restricted stock units subject to the RSU Award. As a holder of a RSU Award, a Participant is an unsecured creditor
of the Company with respect to the Company’s unfunded obligation, if any, to issue shares of Common Stock in settlement of
such Award and nothing contained in the Plan or any RSU Agreement, and no action taken pursuant to its provisions, will create
or be construed to create a trust of any kind or a fiduciary relationship between a Participant and the Company or an Affiliate
or any other person. A Participant will not have voting or any other rights as a stockholder of the Company with respect to any
RSU Award (unless and until shares are actually issued in settlement of a vested RSU Award).
(ii)
Consideration.
(1) RSA:
A Restricted Stock Award may be granted in consideration for (A) cash or check, bank draft or money order payable to the Company,
(B) past services to the Company or an Affiliate, or (C) any other form of consideration (including future services)
as the Board may determine and permissible under Applicable Law.
(2) RSU:
Unless otherwise determined by the Board at the time of grant, a RSU Award will be granted in consideration for the Participant’s
services to the Company or an Affiliate, such that the Participant will not be required to make any payment to the Company (other
than such services) with respect to the grant or vesting of the RSU Award, or the issuance of any shares of Common Stock pursuant
to the RSU Award. If, at the time of grant, the Board determines that any consideration must be paid by the Participant (in a form
other than the Participant’s services to the Company or an Affiliate) upon the issuance of any shares of Common Stock in
settlement of the RSU Award, such consideration may be paid in any form of consideration as the Board may determine and permissible
under Applicable Law.
(iii) Vesting. The
Board may impose such restrictions on or conditions to the vesting of a Restricted Stock Award or RSU Award as determined by the
Board and which may vary. Except as otherwise provided in the Award Agreement or other written agreement between a Participant
and the Company or an Affiliate, vesting of Restricted Stock Awards and RSU Awards will cease upon termination of the Participant’s
Continuous Service.
(iv) Termination
of Continuous Service. Except as otherwise provided in the Award Agreement or other written agreement between a Participant
and the Company or an Affiliate, if a Participant’s Continuous Service terminates for any reason, (i) the Company may
receive through a forfeiture condition or a repurchase right any or all of the shares of Common Stock held by the Participant under
his or her Restricted Stock Award that have not vested as of the date of such termination as set forth in the Restricted Stock
Award Agreement and (ii) any portion of his or her RSU Award that has not vested will be forfeited upon such termination and
the Participant will have no further right, title or interest in the RSU Award, the shares of Common Stock issuable pursuant to
the RSU Award, or any consideration in respect of the RSU Award.
(v) Dividends
and Dividend Equivalents. Dividends or dividend equivalents may be paid or credited, as applicable, with respect to any
shares of Common Stock subject to a Restricted Stock Award or RSU Award, as determined by the Board and specified in the Award
Agreement).
(vi) Settlement
of RSU Awards. A RSU Award may be settled by the issuance of shares of Common Stock or cash (or any combination thereof) or
in any other form of payment, as determined by the Board and specified in the RSU Award Agreement. At the time of grant, the Board
may determine to impose such restrictions or conditions that delay such delivery to a date following the vesting of the RSU Award.
(b) Performance
Awards. With respect to any Performance Award, the length of any Performance Period, the Performance Goals to be achieved during
the Performance Period, the other terms and conditions of such Award, and the measure of whether and to what degree such Performance
Goals have been attained will be determined by the Board.
(c) Other
Awards. Other forms of Awards valued in whole or in part by reference to, or otherwise based on, Common Stock, including the
appreciation in value thereof (e.g., options or stock rights with an exercise price or strike price less than 100% of the Fair
Market Value at the time of grant) may be granted either alone or in addition to Awards provided for under Section 4 and the
preceding provisions of this Section 5. Subject to the provisions of the Plan, the Board will have sole and complete discretion
to determine the persons to whom and the time or times at which such Other Awards will be granted, the number of shares of Common
Stock (or the cash equivalent thereof) to be granted pursuant to such Other Awards and all other terms and conditions of such Other
Awards.
6. ADJUSTMENTS UPON CHANGES IN COMMON STOCK;
OTHER CORPORATE EVENTS.
(a) Capitalization
Adjustments. In the event of a Capitalization Adjustment, the Board shall appropriately and proportionately adjust: (i) the
class(es) and maximum number of shares of Common Stock subject to the Plan and the maximum number of shares by which the Share
Reserve may annually increase pursuant to Section 2(a), (ii) the class(es) and maximum number of shares that may be issued
pursuant to the exercise of Incentive Stock Options pursuant to Section 2(a), and (iii) the class(es) and number of securities
and exercise price, strike price or purchase price of Common Stock subject to outstanding Awards. The Board shall make such adjustments,
and its determination shall be final, binding and conclusive. Notwithstanding the foregoing, no fractional shares or rights for
fractional shares of Common Stock shall be created in order to implement any Capitalization Adjustment. The Board shall determine
an equivalent benefit for any fractional shares or fractional shares that might be created by the adjustments referred to in the
preceding provisions of this Section.
(b) Dissolution
or Liquidation. Except as otherwise provided in the Award Agreement, in the event of a dissolution or liquidation of the Company,
all outstanding Awards (other than Awards consisting of vested and outstanding shares of Common Stock not subject to a forfeiture
condition or the Company’s right of repurchase) will terminate immediately prior to the completion of such dissolution or
liquidation, and the shares of Common Stock subject to the Company’s repurchase rights or subject to a forfeiture condition
may be repurchased or reacquired by the Company notwithstanding the fact that the holder of such Award is providing Continuous
Service, provided, however, that the Board may determine to cause some or all Awards to become fully vested, exercisable
and/or no longer subject to repurchase or forfeiture (to the extent such Awards have not previously expired or terminated) before
the dissolution or liquidation is completed but contingent on its completion.
(c) Corporate
Transaction. The following provisions will apply to Awards in the event of a Corporate Transaction unless otherwise provided
in the instrument evidencing the Award or any other written agreement between the Company or any Affiliate and the Participant
or unless otherwise expressly provided by the Board at the time of grant of an Award.
(i) Awards
May Be Assumed. In the event of a Corporate Transaction, any surviving corporation or acquiring corporation (or the surviving
or acquiring corporation’s parent company) may assume or continue any or all Awards outstanding under the Plan or may substitute
similar awards for Awards outstanding under the Plan (including but not limited to, awards to acquire the same consideration paid
to the stockholders of the Company pursuant to the Corporate Transaction), and any reacquisition or repurchase rights held by the
Company in respect of Common Stock issued pursuant to Awards may be assigned by the Company to the successor of the Company (or
the successor’s parent company, if any), in connection with such Corporate Transaction. A surviving corporation or acquiring
corporation (or its parent) may choose to assume or continue only a portion of an Award or substitute a similar award for only
a portion of an Award, or may choose to assume or continue the Awards held by some, but not all Participants. The terms of any
assumption, continuation or substitution will be set by the Board.
(ii) Awards
Held by Current Participants. In the event of a Corporate Transaction in which the surviving corporation or acquiring
corporation (or its parent company) does not assume or continue such outstanding Awards or substitute similar awards for such outstanding
Awards, then with respect to Awards that have not been assumed, continued or substituted and that are held by Participants whose
Continuous Service has not terminated prior to the effective time of the Corporate Transaction (referred to as the “Current
Participants”), the vesting of such Awards (and, with respect to Options and Stock Appreciation Rights, the time
when such Awards may be exercised) will be accelerated in full to a date prior to the effective time of such Corporate Transaction
(contingent upon the effectiveness of the Corporate Transaction) as the Board determines (or, if the Board does not determine such
a date, to the date that is five (5) days prior to the effective time of the Corporate Transaction), and such Awards will
terminate if not exercised (if applicable) at or prior to the effective time of the Corporate Transaction, and any reacquisition
or repurchase rights held by the Company with respect to such Awards will lapse (contingent upon the effectiveness of the Corporate
Transaction). With respect to Performance Awards which will accelerate vesting in connection with a Corporate Transaction pursuant
to this subsection (ii) and which Awards have multiple vesting levels depending on the level of performance, unless otherwise
provided in the Award Agreement, such Performance Awards will accelerate vesting at 100% of the target level. With respect to Awards
which will accelerate vesting in connection with a Corporate Transaction pursuant to this subsection (ii) and which Awards
are settled in the form of a cash payment, such cash payment will be made no later than thirty (30) days following the effectiveness
of the Corporate Transaction.
(iii) Awards
Held by Persons other than Current Participants. In the event of a Corporate Transaction in which the surviving corporation
or acquiring corporation (or its parent company) does not assume or continue such outstanding Awards or substitute similar awards
for such outstanding Awards, then with respect to Awards that have not been assumed, continued or substituted and that are held
by persons other than Current Participants, such Awards will terminate if not exercised (if applicable) prior to the effective
time of the Corporate Transaction; provided, however, that any reacquisition or repurchase rights held by the Company
with respect to such Awards will not terminate and may continue to be exercised notwithstanding the Corporate Transaction.
(iv) Payment
for Awards in Lieu of Exercise. Notwithstanding the foregoing, in the event an Award will terminate if not exercised prior
to the effective time of a Corporate Transaction, the Board may provide, in its sole discretion, that the holder of such Award
may not exercise such Award but will receive a payment, in such form as may be determined by the Board, equal in value, at the
effective time, to the excess, if any, of (A) the value of the property the Participant would have received upon the exercise
of the Award (including, at the discretion of the Board, any unvested portion of such Award), over (B) any exercise price
payable by such holder in connection with such exercise.
(d) Appointment
of Stockholder Representative. As a condition to the receipt of an Award under this Plan, a Participant will be deemed
to have agreed that the Award will be subject to the terms of any agreement governing a Corporate Transaction involving the Company,
including, without limitation, a provision for the appointment of a stockholder representative that is authorized to act on the
Participant’s behalf with respect to any escrow, indemnities and any contingent consideration.
(e) No
Restriction on Right to Undertake Transactions. The grant of any Award under the Plan and the issuance of shares pursuant to
any Award does not affect or restrict in any way the right or power of the Company or the stockholders of the Company to make or
authorize any adjustment, recapitalization, reorganization or other change in the Company’s capital structure or its business,
any merger or consolidation of the Company, any issue of stock or of options, rights or options to purchase stock or of bonds,
debentures, preferred or prior preference stocks whose rights are superior to or affect the Common Stock or the rights thereof
or which are convertible into or exchangeable for Common Stock, or the dissolution or liquidation of the Company, or any sale or
transfer of all or any part of its assets or business, or any other corporate act or proceeding, whether of a similar character
or otherwise.
7. ADMINISTRATION.
(a) Administration
by Board. The Board will administer the Plan unless and until the Board delegates administration of the Plan to a Committee
or Committees, as provided in subsection (c) below.
(b) Powers
of Board. The Board will have the power, subject to, and within the limitations of, the express provisions of the Plan:
(i) To
determine from time to time (A) which of the persons eligible under the Plan will be granted Awards; (B) when and how
each Award will be granted; (C) what type or combination of types of Award will be granted; (D) the provisions of each
Award granted (which need not be identical), including the time or times when a person will be permitted to receive an issuance
of Common Stock or other payment pursuant to an Award; (E) the number of shares of Common Stock or cash equivalent with respect
to which an Award will be granted to each such person; (F) the Fair Market Value applicable to an Award; and (G) the
terms of any Performance Award that is not valued in whole or in part by reference to, or otherwise based on, the Common Stock,
including the amount of cash payment or other property that may be earned and the timing of payment.
(ii) To
construe and interpret the Plan and Awards granted under it, and to establish, amend and revoke rules and regulations for its administration.
The Board, in the exercise of this power, may correct any defect, omission or inconsistency in the Plan or in any Award Agreement,
in a manner and to the extent it deems necessary or expedient to make the Plan or Award fully effective.
(iii) To
settle all controversies regarding the Plan and Awards granted under it.
(iv) To
accelerate the time at which an Award may first be exercised or the time during which an Award or any part thereof will vest, notwithstanding
the provisions in the Award Agreement stating the time at which it may first be exercised or the time during which it will vest.
(v) To
prohibit the exercise of any Option, SAR or other exercisable Award during a period of up to thirty days prior to the consummation
of any pending stock dividend, stock split, combination or exchange of shares, merger, consolidation or other distribution (other
than normal cash dividends) of Company assets to stockholders, or any other change affecting the shares of Common Stock or the
share price of the Common Stock including any Corporate Transaction, for reasons of administrative convenience.
(vi) To
suspend or terminate the Plan at any time. Suspension or termination of the Plan will not Materially Impair rights and obligations
under any Award granted while the Plan is in effect except with the written consent of the affected Participant.
(vii) To
amend the Plan in any respect the Board deems necessary or advisable; provided, however, that stockholder approval
will be required for any amendment to the extent required by Applicable Law. Except as provided above, rights under any Award granted
before amendment of the Plan will not be Materially Impaired by any amendment of the Plan unless (1) the Company requests
the consent of the affected Participant, and (2) such Participant consents in writing.
(viii) To
submit any amendment to the Plan for stockholder approval.
(ix) 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 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.
(x) 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.
(xi) To
adopt such procedures and sub-plans as are necessary or appropriate to permit and facilitate participation in the Plan
by, or take advantage of specific tax treatment for Awards granted to, Employees, Directors or Consultants who are foreign nationals
or employed outside the United States (provided that Board approval will not be necessary for immaterial modifications to the Plan
or any Award Agreement to ensure or facilitate compliance with the laws of the relevant foreign jurisdiction).
(xii) To
effect, at any time and from time to time, subject to the consent of any Participant whose Award is Materially Impaired by such
action, (A) the reduction of the exercise price (or strike price) of any outstanding Option or SAR under the Plan; (B) the
cancellation of any outstanding Option or SAR under the Plan and the grant in substitution therefore of (1) a new Option or
SAR under the Plan or another equity plan of the Company covering the same or a different number of shares of Common Stock, (2) a
Restricted Stock Award, (3) a RSU Award, (4) an Other Award, (5) cash and/or (6) other valuable consideration
(as determined by the Board); or (C) any other action that is treated as a repricing under generally accepted accounting principles.
(c) Delegation
to Committee.
(i) General. The
Board may delegate some or all of the administration of the Plan to a Committee or Committees. If administration of the Plan is
delegated to a Committee, the Committee will have, in connection with the administration of the Plan, the powers theretofore possessed
by the Board that have been delegated to the Committee, including the power to delegate to a subcommittee of the Committee any
of the administrative powers the Committee is authorized to exercise (and references in this Plan to the Board will thereafter
be to the Committee or subcommittee), subject, however, to such resolutions, not inconsistent with the provisions of the Plan,
as may be adopted from time to time by the Board. The Committee may, at any time, abolish the subcommittee and/or revest in the
Committee any powers delegated to the subcommittee. The Board may retain the authority to concurrently administer the Plan with
the Committee and may, at any time, revest in the Board some or all of the powers previously delegated.
(ii) Rule 16b-3 Compliance. The
Committee may consist solely of two or more Non-Employee Directors, in accordance with Rule 16b-3.In addition, the
Board or the Committee, in its sole discretion, may delegate to a Committee who need not be Non-Employee Directors the
authority to grant Awards to eligible persons who are not then subject to Section 16 of the Exchange Act.
(d) Effect
of Board’s Decision. All determinations, interpretations and constructions made by the Board or any Committee in
good faith will not be subject to review by any person and will be final, binding and conclusive on all persons.
(e) Delegation
to an Officer. The Board or any Committee may delegate to one or more Officers the authority to do one or both of the
following (i) designate Employees who are not Officers to be recipients of Options and SARs (and, to the extent permitted
by Applicable Law, other Awards) and, to the extent permitted by Applicable Law, the terms thereof, and (ii) determine the
number of shares of Common Stock to be subject to such Awards granted to such
Employees; provided, however, that
the resolutions evidencing such delegation will specify the total number of shares of Common Stock that may be subject to the Awards
granted by such Officer and that such Officer may not grant an Award to himself or herself. Any such Awards will be granted on
the form of Award Agreement most recently approved for use by the Board or the Committee, unless otherwise provided in the resolutions
approving the delegation authority. Notwithstanding anything to the contrary herein, neither the Board nor any Committee may delegate
to an Officer who is acting solely in the capacity of an Officer (and not also as a Director) the authority to determine the Fair
Market Value.
8. TAX WITHHOLDING.
(a) Withholding
Authorization. As a condition to acceptance of any Award under the Plan, a Participant authorizes withholding from payroll
and any other amounts payable to such Participant, and otherwise agree to make adequate provision for (including), any sums required
to satisfy any U.S. federal, state, local and/or foreign tax or social insurance contribution withholding obligations of the Company
or an Affiliate, if any, which arise in connection with the exercise, vesting or settlement of such Award, as applicable. Accordingly,
a Participant may not be able to exercise an Award even though the Award is vested, and the Company shall have no obligation to
issue shares of Common Stock subject to an Award, unless and until such obligations are satisfied.
(b) Satisfaction
of Withholding Obligation. To the extent permitted by the terms of an Award Agreement, the Company may, in its sole discretion,
satisfy any U.S. federal, state, local and/or foreign tax or social insurance withholding obligation relating to an Award by any
of the following means or by a combination of such means: (i) causing the Participant to tender a cash payment; (ii) withholding
shares of Common Stock from the shares of Common Stock issued or otherwise issuable to the Participant in connection with the Award;
(iii) withholding cash from an Award settled in cash; (iv) withholding payment from any amounts otherwise payable to
the Participant; (v) by allowing a Participant to effectuate a “cashless exercise” pursuant to a program developed
under Regulation T as promulgated by the Federal Reserve Board, or (vi) by such other method as may be set forth in the Award
Agreement.
(c) No
Obligation to Notify or Minimize Taxes; No Liability to Claims. Except as required by Applicable Law the Company has no
duty or obligation to any Participant to advise such holder as to the time or manner of exercising such Award. Furthermore, the
Company has no duty or obligation to warn or otherwise advise such holder of a pending termination or expiration of an Award or
a possible period in which the Award may not be exercised. The Company has no duty or obligation to minimize the tax consequences
of an Award to the holder of such Award and will not be liable to any holder of an Award for any adverse tax consequences to such
holder in connection with an Award. As a condition to accepting an Award under the Plan, each Participant (i) agrees to not
make any claim against the Company, or any of its Officers, Directors, Employees or Affiliates related to tax liabilities arising
from such Award or other Company compensation and (ii) acknowledges that such Participant was advised to consult with his
or her own personal tax, financial and other legal advisors regarding the tax consequences of the Award and has either done so
or knowingly and voluntarily declined to do so. Additionally, each Participant acknowledges any Option or SAR granted under the
Plan is exempt from Section 409A only if the exercise or strike price is at least equal to the “fair market value”
of the Common Stock on the date of grant as determined by the Internal Revenue Service and there is no other impermissible deferral
of compensation associated with the Award. Additionally, as a condition to accepting an Option or SAR granted under the Plan, each
Participant agrees not make any claim against the Company, or any of its Officers, Directors, Employees or Affiliates in the event
that the Internal Revenue Service asserts that such exercise price or strike price is less than the “fair market value”
of the Common Stock on the date of grant as subsequently determined by the Internal Revenue Service.
(d) Withholding
Indemnification. As a condition to accepting an Award under the Plan, in the event that the amount of the Company’s
and/or its Affiliate’s withholding obligation in connection with such Award was greater than the amount actually withheld
by the Company and/or its Affiliates, each Participant agrees to indemnify and hold the Company and/or its Affiliates harmless
from any failure by the Company and/or its Affiliates to withhold the proper amount.
9. MISCELLANEOUS.
(a) Source
of Shares. The stock issuable under the Plan will be shares of authorized but unissued or reacquired Common Stock, including
shares repurchased by the Company on the open market or otherwise.
(b) Use
of Proceeds from Sales of Common Stock. Proceeds from the sale of shares of Common Stock pursuant to Awards will constitute
general funds of the Company.
(c) Corporate
Action Constituting Grant of Awards. Corporate action constituting a grant by the Company of an Award to any Participant
will be deemed completed as of the date of such corporate action, unless otherwise determined by the Board, regardless of when
the instrument, certificate, or letter evidencing the Award is communicated to, or actually received or accepted by, the Participant.
In the event that the corporate records (e.g., Board consents, resolutions or minutes) documenting the corporate action approving
the grant contain terms (e.g., exercise price, vesting schedule or number of shares) that are inconsistent with those in the Award
Agreement or related grant documents as a result of a clerical error in the Award Agreement or related grant documents, the corporate
records will control and the Participant will have no legally binding right to the incorrect term in the Award Agreement or related
grant documents.
(d) Stockholder
Rights. No Participant will be deemed to be the holder of, or to have any of the rights of a holder with respect to, any
shares of Common Stock subject to such Award unless and until (i) such Participant has satisfied all requirements for exercise
of the Award pursuant to its terms, if applicable, and (ii) the issuance of the Common Stock subject to such Award is reflected
in the records of the Company.
(e) No
Employment or Other Service Rights. Nothing in the Plan, any Award Agreement or any other instrument executed thereunder
or in connection with any Award granted pursuant thereto will confer upon any Participant any right to continue to serve the Company
or an Affiliate in the capacity in effect at the time the Award was granted or affect the right of the Company or an Affiliate
to terminate at will and without regard to any future vesting opportunity that a Participant may have with respect to any Award
(i) the employment of an Employee with or without notice and with or without cause, (ii) the service of a Consultant
pursuant to the terms of such Consultant’s agreement with the Company or an Affiliate, or (iii) the service of a Director
pursuant to the Bylaws of the Company or an Affiliate, and any applicable provisions of the corporate law of the state or foreign
jurisdiction in which the Company or the Affiliate is incorporated, as the case may be. Further, nothing in the Plan, any Award
Agreement or any other instrument executed thereunder or in connection with any Award will constitute any promise or commitment
by the Company or an Affiliate regarding the fact or nature of future positions, future work assignments, future compensation or
any other term or condition of employment or service or confer any right or benefit under the Award or the Plan unless such right
or benefit has specifically accrued under the terms of the Award Agreement and/or Plan.
(f) Change
in Time Commitment. In the event a Participant’s regular level of time commitment in the performance of his or her services
for the Company and any Affiliates is reduced (for example, and without limitation, if the Participant is an Employee of the Company
and the Employee has a change in status from a full-time Employee to a part-time Employee or takes an extended leave of absence)
after the date of grant of any Award to the Participant, the Board may determine, to the extent permitted by Applicable Law, to
(i) make a corresponding reduction in the number of shares or cash amount subject to any portion of such Award that is scheduled
to vest or become payable after the date of such change in time commitment, and (ii) in lieu of or in combination with such
a reduction, extend the vesting or payment schedule applicable to such Award. In the event of any such reduction, the Participant
will have no right with respect to any portion of the Award that is so reduced or extended.
(g) Execution
of Additional Documents. As a condition to accepting an Award under the Plan, the Participant agrees to execute any additional
documents or instruments necessary or desirable, as determined in the Plan Administrator’s sole discretion, to carry out
the purposes or intent of the Award, or facilitate compliance with securities and/or other regulatory requirements, in each case
at the Plan Administrator’s request.
(h) Electronic
Delivery and Participation. Any reference herein or in an Award Agreement 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). By accepting any Award the Participant consents to receive documents by electronic delivery and to participate in
the Plan through any on-line electronic system established and maintained by the Plan Administrator or another third
party selected by the Plan Administrator. The form of delivery of any Common Stock (e.g., a stock certificate or electronic
entry evidencing such shares) shall be determined by the Company.
(i) Clawback/Recovery.
All Awards granted under the Plan will be subject to recoupment in accordance with any clawback policy that the Company is required
to adopt 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
and any clawback policy that the Company otherwise adopts, to the extent applicable and permissible under Applicable Law. In addition,
the Board may impose such other clawback, recovery or recoupment provisions in an Award Agreement as the Board determines necessary
or appropriate, including but not limited to a reacquisition right in respect of previously acquired shares of Common Stock or
other cash or property upon the occurrence of Cause. No recovery of compensation under such a clawback policy will be an event
giving rise to a Participant’s right to voluntary terminate employment upon a “resignation for good reason,”
or for a “constructive termination” or any similar term under any plan of or agreement with the Company.
(j) Securities
Law Compliance. A Participant will not be issued any shares in respect of an Award unless either (i) the shares are
registered under the Securities Act; or (ii) the Company has determined that such issuance would be exempt from the registration
requirements of the Securities Act. Each Award also must comply with other Applicable Law governing the Award, and a Participant
will not receive such shares if the Company determines that such receipt would not be in material compliance with Applicable Law.
(k) Transfer
or Assignment of Awards; Issued Shares. Except as expressly provided in the Plan or the form of Award Agreement, Awards
granted under the Plan may not be transferred or assigned by the Participant. After the vested shares subject to an Award have
been issued, or in the case of Restricted Stock and similar awards, after the issued shares have vested, the holder of such shares
is free to assign, hypothecate, donate, encumber or otherwise dispose of any interest in such shares provided that any such actions
are in compliance with the provisions herein, the terms of the Trading Policy and Applicable Law.
(l) Effect
on Other Employee Benefit Plans. The value of any Award granted under the Plan, as determined upon grant, vesting or settlement,
shall not be included as compensation, earnings, salaries, or other similar terms used when calculating any Participant’s
benefits under any employee benefit plan sponsored by the Company or any Affiliate, except as such plan otherwise expressly provides.
The Company expressly reserves its rights to amend, modify, or terminate any of the Company’s or any Affiliate’s employee
benefit plans.
(m) Deferrals. To
the extent permitted by Applicable Law, 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 also establish
programs and procedures for deferral elections to be made by Participants. Deferrals will be made in accordance with the requirements
of Section 409A.
(n) Section
409A. Unless otherwise expressly provided for in an Award Agreement, the Plan and Award Agreements will be interpreted
to the greatest extent possible in a manner that makes the Plan and the Awards granted hereunder exempt from Section 409A,
and, to the extent not so exempt, in compliance with the requirements of Section 409A. If the Board determines that any Award
granted hereunder is not exempt from and is therefore subject to Section 409A, the Award Agreement evidencing such Award will
incorporate the terms and conditions necessary to avoid the consequences specified in Section 409A(a)(1) of the Code, and
to the extent an Award Agreement is silent on terms necessary for compliance, such terms are hereby incorporated by reference into
the Award Agreement. 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 if a Participant holding an Award that constitutes “deferred
compensation” under Section 409A is a “specified employee” for purposes of Section 409A, no distribution
or payment of any amount that is due because of a “separation from service” (as defined in Section 409A without
regard to alternative definitions thereunder) will be issued or paid before the date that is six months and one day following the
date of such Participant’s “separation from service” or, if earlier, the date of the Participant’s death,
unless such distribution or payment can be made in a manner that complies with Section 409A, and any amounts so deferred will
be paid in a lump sum on the day after such six month period elapses, with the balance paid thereafter on the original schedule.
(o) CHOICE OF LAW. This
Plan and any controversy arising out of or relating to this Plan shall be governed by, and construed in accordance with, the internal
laws of the State of California, without regard to conflict of law principles that would result in any application of any law other
than the law of the State of California
10. COVENANTS OF THE COMPANY.
(a) Compliance
with Law. The Company will seek to obtain from each regulatory commission or agency, as may be deemed to be necessary,
having jurisdiction over the Plan such authority as may be required to grant Awards and to issue and sell shares of Common Stock
upon exercise or vesting of the Awards; provided, however, that this undertaking will not require the Company to register
under the Securities Act the Plan, any Award or any Common Stock issued or issuable pursuant to any such Award. If, after reasonable
efforts and at a reasonable cost, the Company is unable to obtain from any such regulatory commission or agency the authority that
counsel for the Company deems necessary or advisable for the lawful issuance and sale of Common Stock under the Plan, the Company
will be relieved from any liability for failure to issue and sell Common Stock upon exercise or vesting of such Awards unless and
until such authority is obtained. A Participant is not eligible for the grant of an Award or the subsequent issuance of Common
Stock pursuant to the Award if such grant or issuance would be in violation of any Applicable Law.
11. ADDITIONAL RULES FOR AWARDS SUBJECT TO SECTION 409A.
(a) Application. Unless
the provisions of this Section of the Plan are expressly superseded by the provisions in the form of Award Agreement, the provisions
of this Section shall apply and shall supersede anything to the contrary set forth in the Award Agreement for a Non-Exempt Award.
(b) Non-Exempt Awards
Subject to Non-Exempt Severance Arrangements. To the extent a Non-Exempt Award is subject to Section 409A
due to application of a Non-Exempt Severance Arrangement, the following provisions of this subsection (b) apply.
(i) If
the Non-Exempt Award vests in the ordinary course during the Participant’s Continuous Service in accordance with
the vesting schedule set forth in the Award Agreement, and does not accelerate vesting under the terms of a Non-Exempt Severance
Arrangement, in no event will the shares be issued in respect of such Non-Exempt Award any later than the later of: (i) December
31st of the calendar year that includes the applicable vesting date, or (ii) the 60th day
that follows the applicable vesting date.
(ii) If
vesting of the Non-Exempt Award accelerates under the terms of a Non-Exempt Severance Arrangement in connection
with the Participant’s Separation from Service, and such vesting acceleration provisions were in effect as of the date of
grant of the Non-Exempt Award and, therefore, are part of the terms of such Non-Exempt Award as of the date
of grant, then the shares will be earlier issued in settlement of such Non-Exempt Award upon the Participant’s
Separation from Service in accordance with the terms of the Non-Exempt Severance Arrangement, but in no event later than
the 60th day that follows the date of the Participant’s Separation from Service. However, if at the time
the shares would otherwise be issued the Participant is subject to the distribution limitations contained in Section 409A
applicable to “specified employees,” as defined in Section 409A(a)(2)(B)(i) of the Code, such shares shall not
be issued before the date that is six months following the date of such Participant’s Separation from Service, or, if earlier,
the date of the Participant’s death that occurs within such six month period.
(iii) If
vesting of a Non-Exempt Award accelerates under the terms of a Non-Exempt Severance Arrangement in connection
with a Participant’s Separation from Service, and such vesting acceleration provisions were not in effect as of the date
of grant of the Non-Exempt Award and, therefore, are not a part of the terms of such Non-Exempt Award on the
date of grant, then such acceleration of vesting of the Non-Exempt Award shall not accelerate the issuance date of the
shares, but the shares shall instead be issued on the same schedule as set forth in the Grant Notice as if they had vested in the
ordinary course during the Participant’s Continuous Service, notwithstanding the vesting acceleration of the Non-Exempt Award.
Such issuance schedule is intended to satisfy the requirements of payment on a specified date or pursuant to a fixed schedule,
as provided under Treasury Regulations Section 1.409A-3(a)(4).
(c) Treatment
of Non-Exempt Awards Upon a Corporate Transaction for Employees and Consultants. The provisions of this subsection
(c) shall apply and shall supersede anything to the contrary set forth in the Plan with respect to the permitted treatment
of any Non-Exempt Award in connection with a Corporate Transaction if the Participant was either an Employee or Consultant
upon the applicable date of grant of the Non-Exempt Award.
(i) Vested Non-Exempt Awards. The
following provisions shall apply to any Vested Non-Exempt Award in connection with a Corporate Transaction:
(1) If
the Corporate Transaction is also a Section 409A Change in Control then the Acquiring Entity may not assume, continue or substitute
the Vested Non-Exempt Award. Upon the Section 409A Change of Control the settlement of the Vested Non-Exempt Award
will automatically be accelerated and the shares will be immediately issued in respect of the Vested Non-Exempt Award.
Alternatively, the Company may instead provide that the Participant will receive a cash settlement equal to the Fair Market Value
of the shares that would otherwise be issued to the Participant upon the Section 409A Change of Control.
(2) If
the Corporate Transaction is not also a Section 409A Change of Control, then the Acquiring Entity must either assume, continue
or substitute each Vested Non-Exempt Award. The shares to be issued in respect of the Vested Non-Exempt Award
shall be issued to the Participant by the Acquiring Entity on the same schedule that the shares would have been issued to the Participant
if the Corporate Transaction had not occurred. In the Acquiring Entity’s discretion, in lieu of an issuance of shares, the
Acquiring Entity may instead substitute a cash payment on each applicable issuance date, equal to the Fair Market Value of the
shares that would otherwise be issued to the Participant on such issuance dates, with the determination of the Fair Market Value
of the shares made on the date of the Corporate Transaction.
(ii) Unvested Non-Exempt Awards. The
following provisions shall apply to any Unvested Non-Exempt Award unless otherwise determined by the Board pursuant to
subsection (e) of this Section.
(1) In
the event of a Corporate Transaction, the Acquiring Entity shall assume, continue or substitute any Unvested Non-Exempt Award.
Unless otherwise determined by the Board, any Unvested Non-Exempt Award will remain subject to the same vesting and forfeiture
restrictions that were applicable to the Award prior to the Corporate Transaction. The shares to be issued in respect of any Unvested Non-Exempt Award
shall be issued to the Participant by the Acquiring Entity on the same schedule that the shares would have been issued to the Participant
if the Corporate Transaction had not occurred. In the Acquiring Entity’s discretion, in lieu of an issuance of shares, the
Acquiring Entity may instead substitute a cash payment on each applicable issuance date, equal to the Fair Market Value of the
shares that would otherwise be issued to the Participant on such issuance dates, with the determination of Fair Market Value of
the shares made on the date of the Corporate Transaction.
(2) If
the Acquiring Entity will not assume, substitute or continue any Unvested Non-Exempt Award in connection with a Corporate
Transaction, then such Award shall automatically terminate and be forfeited upon the Corporate Transaction with no consideration
payable to any Participant in respect of such forfeited Unvested Non-Exempt Award. Notwithstanding the foregoing, to
the extent permitted and in compliance with the requirements of Section 409A, the Board may in its discretion determine to
elect to accelerate the vesting and settlement of the Unvested Non-Exempt Award upon the Corporate Transaction, or instead
substitute a cash payment equal to the Fair Market Value of such shares that would otherwise be issued to the Participant, as further
provided in subsection (e)(ii) below. In the absence of such discretionary election by the Board, any Unvested Non-Exempt Award
shall be forfeited without payment of any consideration to the affected Participants if the Acquiring Entity will not assume, substitute
or continue the Unvested Non-Exempt Awards in connection with the Corporate Transaction.
(3) The
foregoing treatment shall apply with respect to all Unvested Non-Exempt Awards upon any Corporate Transaction, and regardless
of whether or not such Corporate Transaction is also a Section 409A Change of Control.
(d) Treatment
of Non-Exempt Awards Upon a Corporate Transaction for Non-Employee Directors. The following provisions
of this subsection (d) shall apply and shall supersede anything to the contrary that may be set forth in the Plan with respect
to the permitted treatment of a Non-Exempt Director Award in connection with a Corporate Transaction.
(i) If
the Corporate Transaction is also a Section 409A Change of Control then the Acquiring Entity may not assume, continue or substitute
the Non-Exempt Director Award. Upon the Section 409A Change of Control the vesting and settlement of any Non-Exempt Director
Award will automatically be accelerated and the shares will be immediately issued to the Participant in respect of the Non-Exempt Director
Award. Alternatively, the Company may provide that the Participant will instead receive a cash settlement equal to the Fair Market
Value of the shares that would otherwise be issued to the Participant upon the Section 409A Change of Control pursuant to
the preceding provision.
(ii) If
the Corporate Transaction is not also a Section 409A Change of Control, then the Acquiring Entity must either assume, continue
or substitute the Non-Exempt Director Award. Unless otherwise determined by the Board, the Non-Exempt Director
Award will remain subject to the same vesting and forfeiture restrictions that were applicable to the Award prior to the Corporate
Transaction. The shares to be issued in respect of the Non-Exempt Director Award shall be issued to the Participant by
the Acquiring Entity on the same schedule that the shares would have been issued to the Participant if the Corporate Transaction
had not occurred. In the Acquiring Entity’s discretion, in lieu of an issuance of shares, the Acquiring Entity may instead
substitute a cash payment on each applicable issuance date, equal to the Fair Market Value of the shares that would otherwise be
issued to the Participant on such issuance dates, with the determination of Fair Market Value made on the date of the Corporate
Transaction.
(e) If
the RSU Award is a Non-Exempt Award, then the provisions in this Section 11(e) shall apply and supersede anything
to the contrary that may be set forth in the Plan or the Award Agreement with respect to the permitted treatment of such Non-Exempt Award:
(i) Any
exercise by the Board of discretion to accelerate the vesting of a Non-Exempt Award shall not result in any acceleration
of the scheduled issuance dates for the shares in respect of the Non-Exempt Award unless earlier issuance of the shares
upon the applicable vesting dates would be in compliance with the requirements of Section 409A.
(ii) The
Company explicitly reserves the right to earlier settle any Non-Exempt Award to the extent permitted and in compliance
with the requirements of Section 409A, including pursuant to any of the exemptions available in Treasury Regulations Section 1.409A-3(j)(4)(ix).
(iii) To
the extent the terms of any Non-Exempt Award provide that it will be settled upon a Change in Control or Corporate Transaction,
to the extent it is required for compliance with the requirements of Section 409A, the Change in Control or Corporate Transaction
event triggering settlement must also constitute a Section 409A Change of Control. To the extent the terms of a Non-Exempt Award
provides that it will be settled upon a termination of employment or termination of Continuous Service, to the extent it is required
for compliance with the requirements of Section 409A, the termination event triggering settlement must also constitute a Separation
From Service. However, if at the time the shares would otherwise be issued to a Participant in connection with a “separation
from service” such Participant is subject to the distribution limitations contained in Section 409A applicable to “specified
employees,” as defined in Section 409A(a)(2)(B)(i) of the Code, such shares shall not be issued before the date that
is six months following the date of the Participant’s Separation From Service, or, if earlier, the date of the Participant’s
death that occurs within such six month period.
(iv) The
provisions in this subsection (e) for delivery of the shares in respect of the settlement of a RSU Award that is a Non-Exempt Award
are intended to comply with the requirements of Section 409A so that the delivery of the shares to the Participant in respect
of such Non-Exempt Award will not trigger the additional tax imposed under Section 409A, and any ambiguities herein
will be so interpreted.
12. SEVERABILITY.
If all or any part
of the Plan or any Award Agreement is declared by any court or governmental authority to be unlawful or invalid, such unlawfulness
or invalidity shall not invalidate any portion of the Plan or such Award Agreement not declared to be unlawful or invalid. Any
Section of the Plan or any Award Agreement (or part of such a Section) so declared to be unlawful or invalid shall, if possible,
be construed in a manner which will give effect to the terms of such Section or part of a Section to the fullest extent possible
while remaining lawful and valid.
13. TERMINATION OF THE PLAN.
The Board may suspend
or terminate the Plan at any time.
No Incentive Stock
Options may be granted after the tenth anniversary of the earlier of: (i) the Adoption Date, or (ii) the date the Plan
is approved by the Company’s stockholders.
No Awards may be granted
under the Plan while the Plan is suspended or after it is terminated.
14. DEFINITIONS.
As used in the Plan,
the following definitions apply to the capitalized terms indicated below:
(a) “Acquiring
Entity” means the surviving or acquiring corporation (or its parent company) in connection with a Corporate Transaction.
(b) “Adoption
Date” means the date the Plan is first approved by the Board or Compensation Committee.
(c) “Affiliate”
means, at the time of determination, any “parent” or “subsidiary” of the Company as such terms are defined
in Rule 405 promulgated under the Securities Act. The Board may determine the time or times at which “parent” or “subsidiary”
status is determined within the foregoing definition.
(d) “Applicable
Law” means shall mean any applicable securities, federal, state, foreign, material local or municipal or other law,
statute, constitution, principle of common law, resolution, ordinance, code, edict, decree, rule, listing rule, regulation, judicial
decision, ruling or requirement issued, enacted, adopted, promulgated, implemented or otherwise put into effect by or under the
authority of any Governmental Body (or under the authority of the NASDAQ Stock Market or the Financial Industry Regulatory Authority).
(e) “Award”
means any right to receive Common Stock, cash or other property granted under the Plan (including an Incentive Stock Option, a
Non-statutory Stock Option, a Restricted Stock Award, a RSU Award, a SAR, a Performance Award or any Other Award).
(f) “Award
Agreement” means a written agreement between the Company and a Participant evidencing the terms and conditions of
an Award. The Award Agreement generally consists of the Grant Notice and the agreement containing the written summary of the general
terms and conditions applicable to the Award and which is provided to a Participant along with the Grant Notice.
(g) “Board”
means the Board of Directors of the Company (or its designee). Any decision or determination made by the Board shall be a decision
or determination that is made in the sole discretion of the Board (or its designee), and such decision or determination shall be
final and binding on all Participants.
(h) “Capitalization
Adjustment” means any change that is made in, or other events that occur with respect to, the Common Stock subject
to the Plan or subject to any Award after the Effective Date without the receipt of consideration by the Company through merger,
consolidation, reorganization, recapitalization, reincorporation, stock dividend, dividend in property other than cash, large nonrecurring
cash dividend, stock split, reverse stock split, liquidating dividend, combination of shares, exchange of shares, change in corporate
structure or any similar equity restructuring transaction, as that term is used in Statement of Financial Accounting Standards
Board Accounting Standards Codification Topic 718 (or any successor thereto). Notwithstanding the foregoing, the conversion of
any convertible securities of the Company will not be treated as a Capitalization Adjustment.
(i) “Capital
Stock” means each and every class of common stock of the Company, regardless of the number of votes per share.
(j) “Cause”
has the meaning ascribed to such term in any written agreement between the Participant and the Company defining such term and,
in the absence of such agreement, such term means, with respect to a Participant, the occurrence of any of the following actions
or events by such Participant: (i) attempted commission of, or participation in, a fraud or act of dishonesty against the
Company and/or its Affiliates; (ii) material violation of any contract or agreement between the Participant and the Company
and/or its Affiliates or of any statutory duty owed to the Company and/or its Affiliates or such Participant’s material failure
to comply with the Company’s and/or its Affiliate’s written policies or rules; (iii) unauthorized use or disclosure
of the Company’s and/or its Affiliate’s confidential information or trade secrets; (iv) conviction of, or plea
of “guilty” or “no contest” to a felony; (v) willful and continuing failure to perform assigned duties
after receiving written notification from the Company and/or its Affiliates of the failure; (vi) gross negligence or gross
misconduct; or (vii) failure to cooperate in good faith with a governmental or internal investigation of the Company and/or
its Affiliates or its directors, officers or employees, if the Company requests cooperation. The determination that a termination
of the Participant’s Continuous Service is either for Cause or without Cause will be made by the Board with respect to Participants
who are executive officers of the Company and by the Company’s Chief Executive Officer with respect to Participants who are
not executive officers of the Company. Any determination by the Company that the Continuous Service of a Participant was terminated
with or without Cause for the purposes of outstanding Awards held by such Participant will have no effect upon any determination
of the rights or obligations of the Company or such Participant for any other purpose.
(k) “Change
in Control” or “Change of Control” means the occurrence, in a single transaction or in
a series of related transactions, of any one or more of the following events; provided, however, to the extent necessary to avoid
adverse personal income tax consequences to the Participant in connection with an Award, also constitutes a Section 409A Change
of Control:
(i) any
Exchange Act Person becomes the Owner, directly or indirectly, of securities of the Company representing more than 50% of the combined
voting power of the Company’s then outstanding securities other than by virtue of a merger, consolidation or similar transaction.
Notwithstanding the foregoing, a Change in Control shall not be deemed to occur (A) on account of the acquisition of securities
of the Company directly from the Company, (B) on account of the acquisition of securities of the Company by an investor, any
affiliate thereof or any other Exchange Act Person that acquires the Company’s securities in a transaction or series of related
transactions the primary purpose of which is to obtain financing for the Company through the issuance of equity securities, or
(C) solely because the level of Ownership held by any Exchange Act Person (the “Subject Person”) exceeds
the designated percentage threshold of the outstanding voting securities as a result of a repurchase or other acquisition of voting
securities by the Company reducing the number of shares outstanding, provided that if a Change in Control would occur (but for
the operation of this sentence) as a result of the acquisition of voting securities by the Company, and after such share acquisition,
the Subject Person becomes the Owner of any additional voting securities that, assuming the repurchase or other acquisition had
not occurred, increases the percentage of the then outstanding voting securities Owned by the Subject Person over the designated
percentage threshold, then a Change in Control shall be deemed to occur;
(ii) there
is consummated a merger, consolidation or similar transaction involving (directly or indirectly) the Company and, immediately after
the consummation of such merger, consolidation or similar transaction, the stockholders of the Company immediately prior thereto
do not Own, directly or indirectly, either (A) outstanding voting securities representing more than 50% of the combined outstanding
voting power of the surviving Entity in such merger, consolidation or similar transaction or (B) more than 50% of the combined
outstanding voting power of the parent of the surviving Entity in such merger, consolidation or similar transaction, in each case
in substantially the same proportions as their Ownership of the outstanding voting securities of the Company immediately prior
to such transaction;
(iii) the
stockholders of the Company approve or the Board approves a plan of complete dissolution or liquidation of the Company, or a complete
dissolution or liquidation of the Company shall otherwise occur, except for a liquidation into a parent corporation;
(iv) there
is consummated a sale, lease, exclusive license or other disposition of all or substantially all of the consolidated assets of
the Company and its Subsidiaries, other than a sale, lease, license or other disposition of all or substantially all of the consolidated
assets of the Company and its Subsidiaries to an Entity, more than 50% of the combined voting power of the voting securities of
which are Owned by stockholders of the Company in substantially the same proportions as their Ownership of the outstanding voting
securities of the Company immediately prior to such sale, lease, license or other disposition; or
(v) individuals
who, on the date the Plan is adopted by the Board, are members of the Board (the “Incumbent Board”) cease
for any reason to constitute at least a majority of the members of the Board; provided, however, that if the appointment
or election (or nomination for election) of any new Board member was approved or recommended by a majority vote of the members
of the Incumbent Board then still in office, such new member shall, for purposes of this Plan, be considered as a member of the
Incumbent Board.
Notwithstanding the
foregoing or any other provision of this Plan, (A) the term Change in Control shall not include a sale of assets, merger or
other transaction effected exclusively for the purpose of changing the domicile of the Company, and (B) the definition of
Change in Control (or any analogous term) in an individual written agreement between the Company or any Affiliate and the Participant
shall supersede the foregoing definition with respect to Awards subject to such agreement; provided, however, that
if no definition of Change in Control or any analogous term is set forth in such an individual written agreement, the foregoing
definition shall apply.
(l) “Code”
means the Internal Revenue Code of 1986, as amended, including any applicable regulations and guidance thereunder.
(m) “Committee”
means the Compensation Committee and any other committee of Directors to whom authority has been delegated by the Board or Compensation
Committee in accordance with the Plan.
(n) “Common
Stock” means the common stock of the Company.
(o) “Company”
means Yew Bio-Pharm Group, Inc., a Nevada corporation.
(p) “Compensation
Committee” means the Compensation Committee of the Board.
(q) “Consultant”
means any person, including an advisor, who is (i) engaged by the Company or an Affiliate to render consulting or advisory
services and is compensated for such services, or (ii) serving as a member of the board of directors of an Affiliate and is
compensated for such services. However, service solely as a Director, or payment of a fee for such service, will not cause a Director
to be considered a “Consultant” for purposes of the Plan. Notwithstanding the foregoing, a person is treated as a Consultant
under this Plan only if a Form S-8 Registration Statement under the Securities Act is available to register either the
offer or the sale of the Company’s securities to such person.
(r) “Continuous
Service” means that the Participant’s service with the Company or an Affiliate, whether as an Employee, Director
or Consultant, is not interrupted or terminated. A change in the capacity in which the Participant renders service to the Company
or an Affiliate as an Employee, Director or Consultant or a change in the Entity for which the Participant renders such service,
provided that there is no interruption or termination of the Participant’s service with the Company or an Affiliate, will
not terminate a Participant’s Continuous Service; provided, however, that if the Entity for which a Participant
is rendering services ceases to qualify as an Affiliate, as determined by the Board, such Participant’s Continuous Service
will be considered to have terminated on the date such Entity ceases to qualify as an Affiliate. For example, a change in status
from an Employee of the Company to a Consultant of an Affiliate or to a Director will not constitute an interruption of Continuous
Service. To the extent permitted by law, the Board or the chief executive officer of the Company, in that party’s sole discretion,
may determine whether Continuous Service will be considered interrupted in the case of (i) any leave of absence approved by
the Board or chief executive officer, including sick leave, military leave or any other personal leave, or (ii) transfers
between the Company, an Affiliate, or their successors. Notwithstanding the foregoing, a leave of absence will be treated as Continuous
Service for purposes of vesting in an Award only to such extent as may be provided in the Company’s leave of absence policy,
in the written terms of any leave of absence agreement or policy applicable to the Participant, or as otherwise required by law.
In addition, to the extent required for exemption from or compliance with Section 409A, the determination of whether there
has been a termination of Continuous Service will be made, and such term will be construed, in a manner that is consistent with
the definition of “separation from service” as defined under Treasury Regulation Section 1.409A-1(h) (without
regard to any alternative definition thereunder).
(s) “Corporate
Transaction” means the consummation, in a single transaction or in a series of related transactions, of any one or
more of the following events:
(i) a
sale or other disposition of all or substantially all, as determined by the Board, of the consolidated assets of the Company and
its Subsidiaries;
(ii) a
sale or other disposition of at least 50% of the outstanding securities of the Company;
(iii) a
merger, consolidation or similar transaction following which the Company is not the surviving corporation; or
(iv) a
merger, consolidation or similar transaction following which the Company is the surviving corporation but the shares of Common
Stock outstanding immediately preceding the merger, consolidation or similar transaction are converted or exchanged by virtue of
the merger, consolidation or similar transaction into other property, whether in the form of securities, cash or otherwise.
(t) “Director”
means a member of the Board.
(u) “determine”
or “determined” means as determined by the Board or the Committee (or its designee) in its sole discretion.
(v) “Disability”
means, with respect to a Participant, such Participant is unable to engage in any substantial gainful activity by reason of any
medically determinable physical or mental impairment which can be expected to result in death or which has lasted or can be expected
to last for a continuous period of not less than 12 months, as provided in Section 22(e)(3) of the Code, and will be determined
by the Board on the basis of such medical evidence as the Board deems warranted under the circumstances.
(w) “Effective
Date” means the date that this Plan is approved by the Company’s stockholders.
(x) “Employee”
means any person employed by the Company or an Affiliate. However, service solely as a Director, or payment of a fee for such services,
will not cause a Director to be considered an “Employee” for purposes of the Plan.
(y) “Employer”
means the Company or the Affiliate of the Company that employs the Participant.
(z) “Entity”
means a corporation, partnership, limited liability company or other entity.
(aa) “Exchange
Act” means the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder.
(bb) “Exchange
Act Person” means any natural person, Entity or “group” (within the meaning of Section 13(d) or
14(d) of the Exchange Act), except that “Exchange Act Person” will not include (i) the Company or any Subsidiary
of the Company, (ii) any employee benefit plan of the Company or any Subsidiary of the Company or any trustee or other fiduciary
holding securities under an employee benefit plan of the Company or any Subsidiary of the Company, (iii) an underwriter temporarily
holding securities pursuant to a registered public offering of such securities, (iv) an Entity Owned, directly or indirectly,
by the stockholders of the Company in substantially the same proportions as their Ownership of stock of the Company; or (v) any
natural person, Entity or “group” (within the meaning of Section 13(d) or 14(d) of the Exchange Act) that, as
of the Effective Date, is the Owner, directly or indirectly, of securities of the Company representing more than 50% of the combined
voting power of the Company’s then outstanding securities.
(cc) “Fair
Market Value” means, as of any date, unless otherwise determined by the Board, the value of the Common Stock (as
determined on a per share or aggregate basis, as applicable) determined as follows:
(i) If
the Common Stock is listed on any established stock exchange or traded on any established market, the Fair Market Value will be
the closing sales price for such stock as quoted on such exchange or market (or the exchange or market with the greatest volume
of trading in the Common Stock) on the date of determination, as reported in a source the Board deems reliable.
(ii) If
there is no closing sales price for the Common Stock on the date of determination, then the Fair Market Value will be the closing
selling price on the last preceding date for which such quotation exists.
(iii) In
the absence of such markets for the Common Stock, or if otherwise determined by the Board, the Fair Market Value will be determined
by the Board in good faith and in a manner that complies with Sections 409A and 422 of the Code.
(dd) “Governmental Body”
means any: (a) nation, state, commonwealth, province, territory, county, municipality, district or other jurisdiction of any
nature; (b) federal, state, local, municipal, foreign or other government; (c) governmental or regulatory body, or quasi-governmental
body of any nature (including any governmental division, department, administrative agency or bureau, commission, authority, instrumentality,
official, ministry, fund, foundation, center, organization, unit, body or Entity and any court or other tribunal, and for the avoidance
of doubt, any Tax authority) or other body exercising similar powers or authority; or (d) self-regulatory organization (including
the NASDAQ Stock Market and the Financial Industry Regulatory Authority).
(ee) “Grant
Notice” means the notice provided to a Participant that he or she has been granted an Award under the Plan and which
includes the name of the Participant, the type of Award, the date of grant of the Award, number of shares of Common Stock subject
to the Award or potential cash payment right, (if any), the vesting schedule for the Award (if any) and other key terms applicable
to the Award.
(ff) “Incentive
Stock Option” means an option granted pursuant to Section 4 of the Plan that is intended to be, and qualifies
as, an “incentive stock option” within the meaning of Section 422 of the Code.
(gg) “IPO
Date” means the date of the underwriting agreement between the Company and the underwriter(s) managing the initial
public offering of the Common Stock, pursuant to which the Common Stock is priced for the initial public offering.
(hh) “Materially
Impair” means any amendment to the terms of the Award that materially adversely affects the Participant’s rights
under the Award. A Participant’s rights under an Award will not be deemed to have been Materially Impaired by any such amendment
if the Board, in its sole discretion, determines that the amendment, taken as a whole, does not materially impair the Participant’s
rights. For example, the following types of amendments to the terms of an Award do not Materially Impair the Participant’s
rights under the Award: (i) imposition of reasonable restrictions on the minimum number of shares subject to an Option that
may be exercised, (ii) to maintain the qualified status of the Award as an Incentive Stock Option under Section 422 of
the Code; (iii) to change the terms of an Incentive Stock Option in a manner that disqualifies, impairs or otherwise affects
the qualified status of the Award as an Incentive Stock Option under Section 422 of the Code; (iv) to clarify the manner
of exemption from, or to bring the Award into compliance with or qualify it for an exemption from, Section 409A; or (v) to
comply with other Applicable Laws.
(ii) “Non-Employee Director”
means a Director who either (i) is not a current employee or officer of the Company or an Affiliate, does not receive compensation,
either directly or indirectly, from the Company or an Affiliate for services rendered as a consultant or in any capacity other
than as a Director (except for an amount as to which disclosure would not be required under Item 404(a) of Regulation S-K promulgated
pursuant to the Securities Act (“Regulation S-K”)), does not possess an interest in any other transaction
for which disclosure would be required under Item 404(a) of Regulation S-K, and is not engaged in a business relationship
for which disclosure would be required pursuant to Item 404(b) of Regulation S-K; or (ii) is otherwise considered
a “non-employee director” for purposes of Rule 16b-3.
(jj) “Non-Exempt Award”
means any Award that is subject to, and not exempt from, Section 409A, including as the result of (i) a deferral of the
issuance of the shares subject to the Award which is elected by the Participant or imposed by the Company, (ii) the terms
of any Non-Exempt Severance Agreement.
(kk) “Non-Exempt Director
Award” means a Non-Exempt Award granted to a Participant who was a Director but not an Employee on the
applicable grant date.
(ll) “Non-Exempt Severance
Arrangement” means a severance arrangement or other agreement between the Participant and the Company that provides
for acceleration of vesting of an Award and issuance of the shares in respect of such Award upon the Participant’s termination
of employment or separation from service (as such term is defined in Section 409A(a)(2)(A)(i) of the Code (and without regard
to any alternative definition thereunder) (“Separation from Service”)) and such severance benefit does
not satisfy the requirements for an exemption from application of Section 409A provided under Treasury Regulations Section 1.409A-1(b)(4), 1.409A-1(b)(9) or
otherwise.
(mm) “Non-statutory
Stock Option” means any option granted pursuant to Section 4 of the Plan that does not qualify as an Incentive
Stock Option.
(nn) “Officer”
means a person who is an officer of the Company within the meaning of Section 16 of the Exchange Act.
(oo) “Option”
means an Incentive Stock Option or a Non-statutory Stock Option to purchase shares of Common Stock granted pursuant to the Plan.
(pp) “Option
Agreement” means a written agreement between the Company and the Optionholder evidencing the terms and conditions
of the Option grant. The Option Agreement includes the Grant Notice for the Option and the agreement containing the written summary
of the general terms and conditions applicable to the Option and which is provided to a Participant along with the Grant Notice.
Each Option Agreement will be subject to the terms and conditions of the Plan.
(qq) “Optionholder”
means a person to whom an Option is granted pursuant to the Plan or, if applicable, such other person who holds an outstanding
Option.
(rr) “Other
Award” means an award based in whole or in part by reference to the Common Stock which is granted pursuant to the
terms and conditions of Section 5(c).
(ss) “Other
Award Agreement” means a written agreement between the Company and a holder of an Other Award evidencing the terms
and conditions of an Other Award grant. Each Other Award Agreement will be subject to the terms and conditions of the Plan.
(tt) “Own,”
“Owned,” “Owner,” “Ownership” means that a person
or Entity will be deemed to “Own,” to have “Owned,” to be the “Owner” of, or to have acquired
“Ownership” of securities if such person or Entity, directly or indirectly, through any contract, arrangement, understanding,
relationship or otherwise, has or shares voting power, which includes the power to vote or to direct the voting, with respect to
such securities.
(uu) “Participant”
means an Employee, Director or Consultant to whom an Award is granted pursuant to the Plan or, if applicable, such other person
who holds an outstanding Award.
(vv) “Performance
Award” means an Award that may vest or may be exercised or a cash award that may vest or become earned and paid contingent
upon the attainment during a Performance Period of certain Performance Goals and which is granted under the terms and conditions
of Section 5(b) pursuant to such terms as are approved by the Board. In addition, to the extent permitted by Applicable Law
and set forth in the applicable Award Agreement, the Board may determine that cash or other property may be used in payment of
Performance Awards. Performance Awards that are settled in cash or other property are not required to be valued in whole or in
part by reference to, or otherwise based on, the Common Stock.
(ww) “Performance
Criteria” means the one or more criteria that the Board 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 measure of performance selected by the Board.
(xx) “Performance
Goals” means, for a Performance Period, the one or more goals established by the Board for the Performance Period
based upon the Performance Criteria. Performance Goals may be based on a Company-wide basis, with respect to one or more business
units, divisions, Affiliates, or business segments, and in either absolute terms or relative to the performance of one or more
comparable companies or the performance of one or more relevant indices. Unless specified otherwise by 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 generally accepted accounting principles;
(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 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. In addition, the Board 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 such Performance Period. Partial achievement of the specified criteria may result in the payment or vesting
corresponding to the degree of achievement as specified in the Award Agreement or the written terms of a Performance Cash Award.
(yy) “Performance
Period” means the period of time selected by 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 vesting or exercise of an Award. Performance Periods
may be of varying and overlapping duration, at the sole discretion of the Board.
(zz) “Plan”
means this Yew Bio-Pharm Group, Inc. 2019 Equity Incentive Plan, as amended from time to time.
(aaa) “Plan
Administrator” means the person, persons, and/or third-party administrator designated by the Company to administer
the day to day operations of the Plan and the Company’s other equity incentive programs.
(bbb) “Post-Termination
Exercise Period” means the period following termination of a Participant’s Continuous Service within which
an Option or SAR is exercisable, as specified in Section 4(h).
(ccc) Not
Used in this Agreement
(ddd) Not
Used in this Agreement
(eee) “Prospectus”
means the document containing the Plan information specified in Section 10(a) of the Securities Act.
(fff) “Restricted
Stock Award” or “RSA” means an Award of shares of Common Stock which is granted pursuant
to the terms and conditions of Section 5(a).
(ggg) “Restricted
Stock Award Agreement” means a written agreement between the Company and a holder of a Restricted Stock Award evidencing
the terms and conditions of a Restricted Stock Award grant. The Restricted Stock Award Agreement includes the Grant Notice for
the Restricted Stock Award and the agreement containing the written summary of the general terms and conditions applicable to the
Restricted Stock Award and which is provided to a Participant along with the Grant Notice. Each Restricted Stock Award Agreement
will be subject to the terms and conditions of the Plan.
(hhh) “Returning
Shares” means shares subject to outstanding stock awards granted that following the Effective Date: (A) are
not issued because such stock award or any portion thereof expires or otherwise terminates without all of the shares covered by
such stock award having been issued; (B) are not issued because such stock award or any portion thereof is settled in cash;
(C) are forfeited back to or repurchased by the Company because of the failure to meet a contingency or condition required
for the vesting of such shares; (D) are withheld or reacquired to satisfy the exercise, strike or purchase price; or (E) are
withheld or reacquired to satisfy a tax withholding obligation. Returning Shares of Class B common stock that become available
for grant under this Plan shall convert on a one-for-one basis into shares of Common Stock.
(iii) “RSU
Award” or “RSU” means an Award of restricted stock units representing the right to receive
an issuance of shares of Common Stock which is granted pursuant to the terms and conditions of Section 5(a).
(jjj) “RSU
Award Agreement” means a written agreement between the Company and a holder of a RSU Award evidencing the terms and
conditions of a RSU Award grant. The RSU Award Agreement includes the Grant Notice for the RSU Award and the agreement containing
the written summary of the general terms and conditions applicable to the RSU Award and which is provided to a Participant along
with the Grant Notice. Each RSU Award Agreement will be subject to the terms and conditions of the Plan.
(kkk) “Rule 16b-3”
means Rule 16b-3 promulgated under the Exchange Act or any successor to Rule 16b-3, as in effect from time
to time.
(lll) “Rule
405” means Rule 405 promulgated under the Securities Act.
(mmm) “Section 409A”
means Section 409A of the Code and the regulations and other guidance thereunder.
(nnn) “Section 409A
Change of Control” means a change in the ownership or effective control of the Company, or in the ownership of a
substantial portion of the Company’s assets, as provided in Section 409A(a)(2)(A)(v) of the Code and Treasury Regulations Section 1.409A-3(i)(5)(without
regard to any alternative definition thereunder).
(ooo) “Securities
Act” means the Securities Act of 1933, as amended.
(ppp) “Share
Reserve” means the number of shares available for issuance under the Plan as set forth in Section 2(a).
(qqq) “Stock
Appreciation Right” or “SAR” means a right to receive the appreciation on Common Stock
that is granted pursuant to the terms and conditions of Section 4.
(rrr) “SAR
Agreement” means a written agreement between the Company and a holder of a SAR evidencing the terms and conditions
of a SAR grant. The SAR Agreement includes the Grant Notice for the SAR and the agreement containing the written summary of the
general terms and conditions applicable to the SAR and which is provided to a Participant along with the Grant Notice. Each SAR
Agreement will be subject to the terms and conditions of the Plan.
(sss) “Subsidiary”
means, with respect to the Company, (i) any corporation of which more than 50% of the outstanding capital stock having ordinary
voting power to elect a majority of the board of directors of such corporation (irrespective of whether, at the time, stock of
any other class or classes of such corporation will have or might have voting power by reason of the happening of any contingency)
is at the time, directly or indirectly, Owned by the Company, and (ii) any partnership, limited liability company or other
entity in which the Company has a direct or indirect interest (whether in the form of voting or participation in profits or capital
contribution) of more than 50%.
(ttt) “Ten
Percent Stockholder” means a person who Owns (or is deemed to Own pursuant to Section 424(d) of the Code) stock
possessing more than 10% of the total combined voting power of all classes of stock of the Company or any Affiliate.
(uuu) “Trading
Policy” means the Company’s policy permitting certain individuals to sell Company shares only during certain
“window” periods and/or otherwise restricts the ability of certain individuals to transfer or encumber Company shares,
as in effect from time to time.
(vvv) “Unvested Non-Exempt Award”
means the portion of any Non-Exempt Award that had not vested in accordance with its terms upon or prior to the date
of any Corporate Transaction.
(www) “Vested Non-Exempt Award”
means the portion of any Non-Exempt Award that had vested in accordance with its terms upon or prior to the date of a
Corporate Transaction.
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