As filed with the Securities and Exchange Commission on March 10, 2021
Registration No. 333-
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM S-8
REGISTRATION STATEMENT UNDER THE SECURITIES
ACT OF 1933
Danimer
Scientific, Inc.
(Exact name of registrant as specified in
charter)
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Delaware
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82-1924518
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(State or other jurisdiction
of incorporation or organization)
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(I.R.S. Employer
Identification No.)
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140 Industrial Boulevard
Bainbridge, Georgia
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39817
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(Address of Principal Executive Offices)
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(Zip Code)
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Danimer Scientific, Inc. 2020 Long-Term
Incentive Plan
Danimer Scientific, Inc. Employee Stock
Purchase Plan
Meredian Holdings Group, Inc. 2016 Director
and Executive Officer Stock Incentive Plan,
assumed by Danimer Scientific, Inc.
Meredian Holdings Group, Inc. 2016 Omnibus
Stock Incentive Plan,
assumed by Danimer Scientific, Inc.
(Full title of the plan)
Attn.: Stephen E. Croskrey
Danimer Scientific, Inc.
140 Industrial Boulevard
Bainbridge, Georgia
(Name and address of agent for service)
Copy to:
Robert L. Lawrence, Esq.
Kane Kessler, P.C.
600 Third Avenue
New York, NY 10016
(212) 541-6222
Indicate by check mark whether the registrant
is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions
of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2
of the Exchange Act.
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Large accelerated filer ☐
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Accelerated filer ☐
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Non-accelerated filer ☒
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Smaller reporting company ☒
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Emerging growth company ☒
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If an emerging growth company, indicate by check mark if the
registrant has elected not to use the extended transition period for complying with any new or revised financial accounting
standards provided pursuant to Section 7(a)(2)(B) of the Securities Act. ☒
CALCULATION OF REGISTRATION FEE
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Title of securities to be registered
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Amount to be
registered (1)
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Proposed maximum
offering price
per share
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Proposed maximum
aggregate
offering price
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Amount of
registration fee
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Class A Common Stock, par value $0.0001 per share (“Common Stock”)
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8,572,457
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(3)
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$
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32.13
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(2)
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$
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275,433,044
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(2)
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$
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30,049.75
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(2)
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Common Stock
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2,571,737
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(4)
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$
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27.31
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(5)
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$
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70,234,138
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(5)
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$
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7,662.54
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(5)
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Common Stock
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10,487,283
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(6)
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$
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3.96
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(7)
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$
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41,529,640
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(7)
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$
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4,530.88
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(7)
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Total
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21,618,098
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N/A
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$
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387,143,842
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$
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42,243.17
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(1)
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Pursuant to Rule 416 under the Securities Act of 1933, as amended (the “Securities Act”),
this Registration Statement covers an indeterminable number of additional shares of Common Stock as may hereafter be offered or
issued pursuant to the Danimer Scientific, Inc. 2020 Long-Term Incentive Plan (the “2020 Incentive Plan”), Danimer
Scientific, Inc. Employee Stock Purchase Plan (the “ESPP”), and the Meredian Holdings Group, Inc. 2016 Director and
Executive Officer Stock Incentive Plan and Meredian Holdings Group, Inc. 2016 Omnibus Stock Incentive Plan (collectively, the “Legacy
Plans”) to prevent dilution resulting from stock splits, stock dividends or similar transactions effected without receipt
of consideration. In addition, this Registration Statement registers the resale of shares of Danimer Scientific, Inc.’s (the
“Registrant”) Common Stock by certain selling stockholders identified in the Reoffer Prospectus included in and filed
with this Registration Statement, for which no additional registration fee is required pursuant to Rule 457(h)(3) under the Securities
Act with respect to such of those shares being registered for issuance by the Registrant pursuant to this Registration Statement
and on which a registration fee is already being paid.
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(2)
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Estimated solely for the purpose of calculating the registration fee. Pursuant to Rule 457(c) and
457(h), the proposed maximum offering price per share is based upon a price of $32.13 (the average of the high and low prices of
the Registrant’s Common Stock as reported on The New York Stock Exchange on March 5, 2021).
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(3)
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Represents shares of Common Stock of the Registrant authorized for issuance as awards under the
2020 Incentive Plan.
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(4)
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Represents shares issuable pursuant to the ESPP.
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(5)
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Estimated in accordance with Rule 457(h) under the Securities Act solely for the purpose
of calculating the registration fee on the basis of 85% of the average of the high and low prices of the Registrant’s Common
Stock as reported on The New York Stock Exchange on March 5, 2021. Pursuant to the ESPP, the purchase price of Common Stock will
be at least 85% of the lower of the fair market value of the Common Stock on the first trading day of the offering period or on
the purchase date.
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(6)
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Represents shares of Common Stock issued pursuant to or underlying awards previously granted under
the Legacy Plans, which awards were assumed by the Registrant in connection with the merger consummated on December 29, 2020 (the
“Business Combination”) pursuant to the Agreement and Plan of Merger, dated as of October 3, 2020 (as amended by Amendment
No.1 thereto, dated as of October 8, 2020, and Amendment No. 2 thereto, dated as of December 11, 2020, the “Merger Agreement”),
by and among Live Oak Acquisition Corp., our predecessor company (“Live Oak”), Green Merger Corp., Meredian Holdings
Group, Inc., (“Legacy Danimer”), Live Oak Sponsor Partners, LLC, as representative for Live Oak, for certain purposes
described in the Merger Agreement and John A. Dowdy, Jr., as representative of the shareholders of Legacy Danimer for certain purposes
described in the Merger Agreement.
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(7)
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Computed in accordance with Rule 457(h) of the Securities Act solely for purposes of
calculating the registration fee. The average weighted exercise price at which the options may be exercised for the shares of Common
Stock described above in Footnote 6 is $3.96 per share.
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The Registration Statement shall become
effective upon filing
in accordance with Rule 462 under
the Securities Act.
EXPLANATORY NOTE
Danimer Scientific,
Inc., a Delaware corporation (“Danimer”), has prepared this Registration Statement in accordance with the requirements
of Form S-8 under the Securities Act of 1933, as amended (the “Securities Act”), to register 21,631,477 shares of Class
A Common Stock, $0.0001 par value per share (the “Common Stock”) that are reserved for issuance pursuant to Danimer’s
2020 Long-Term Incentive Plan (the “2020 Incentive Plan”) and were issued or reserved for issuance pursuant to Danimer’s
Employee Stock Purchase Plan (the “ESPP” and together with the 2020 Incentive Plan, the “New Plans”), and
the Meredian Holdings Group, Inc. 2016 Director and Executive Officer Stock Incentive Plan and Meredian Holdings Group, Inc. 2016
Omnibus Stock Incentive Plan (collectively, the “Legacy Plans” and together with the New Plans, the “Plans”).
This Registration Statement
contains two parts. The first part contains a reoffer prospectus pursuant to Form S-3 (in accordance with Section C of the General
Instructions to the Form S-8 and in accordance with the requirements of Part I of Form S-3) (the “Reoffer Prospectus”)
which covers reoffers and resales of “restricted securities” and/or “control securities” (as such terms
are defined in Section C of the General Instructions to Form S-8) of Danimer. This Reoffer Prospectus relates to up to 18,969,978
shares of Common Stock that have been or may be issued to certain officers and directors of Danimer pursuant to the Plans. Accordingly,
this Reoffer Prospectus is a combined prospectus pursuant to Rule 429(a) of the Securities Act. The second part of this Registration
Statement contains information required in the Registration Statement pursuant to Part II of Form S-8 and will be used for offers
of shares of Common Stock of Danimer pursuant to the Plans. The inclusion of such shares herein does not necessarily represent
a present intention to sell any or all such shares of Common Stock.
In accordance with
the requirements of General Instruction C.2.(b) of Form S-8, because we do not satisfy the registrant requirements for use of Form
S-3 at the time of filing the reoffer prospectus included in this Registration Statement, the amount of shares of Common Stock
to be offered or resold by means of the reoffer prospectus, by each person, and any other person with whom he or she is acting
in concert for the purpose of selling our Common Stock, may not exceed, during any three month period, the amount specified in
Rule 144(e) promulgated under the Securities Act.
PART I
INFORMATION REQUIRED IN THE SECTION 10(a)
PROSPECTUS
Item
1. Plan Information.
The document(s) containing
the information specified in Part I of Form S-8 will be sent or given to participants in the Plans as specified by Rule 428(b)(1)
under the Securities Act. Such document(s) are not being filed with the Securities and Exchange Commission, but constitute, along
with the documents incorporated by reference into this Registration Statement, a prospectus that meets the requirements of Section
10(a) of the Securities Act.
Item
2. Company Information and Employee Plan Annual Information.
Danimer will furnish
without charge to each person to whom the prospectus is delivered, upon the written or oral request of such person, a copy of any
and all of the documents incorporated by reference in Item 3 of Part II of this Registration Statement, other than exhibits to
such documents (unless such exhibits are specifically incorporated by reference to the information that is incorporated). Those
documents are incorporated by reference in the Section 10(a) prospectus. Requests should be directed to Danimer Scientific, Inc.,
140 Industrial Boulevard, Bainbridge, Georgia 39817, Attention: Secretary; Telephone number (229) 243-7075.
Note: The reoffer
prospectus referred to in the Explanatory Note follows this page.
REOFFER PROSPECTUS
DANIMER SCIENTIFIC,
INC.
18,969,978 Shares of Class A Common Stock,
par value $0.0001 per share
This Prospectus
relates to shares (the “Shares”) of Class A Common Stock, par value $0.0001 per share (the “Common
Stock”), of Danimer Scientific, Inc., a Delaware corporation (which may be referred to as the “Company,”
“Danimer,” “we,” “our” or “us”), which may be offered and sold from time to
time after the expiration of any applicable lock-up agreements by certain stockholders of ours (the “Selling
Stockholders”) who have acquired or will acquire such Shares pursuant to stock options and stock grants issued or
issuable under the Danimer Scientific, Inc. 2020 Long-Term Incentive Plan (the “2020 Incentive Plan”), the
Danimer Scientific, Inc. Employee Stock Purchase Plan (“ESPP” and together with the 2020 Incentive Plan, the
“New Plans”), and the Meredian Holdings Group, Inc. 2016 Director and Executive Officer Stock Incentive Plan and
Meredian Holdings Group, Inc. 2016 Omnibus Stock Incentive Plan (collectively, the “Legacy Plans” and together
with the New Plans, the “Plans”). See “Selling Stockholders.”
We will not
receive any of the proceeds from sales of the Shares by any of the Selling Stockholders. The Shares may be offered from time
to time after the expiration of any applicable lock-up agreements by any or all of the Selling Stockholders (and their donees
and pledgees) through ordinary brokerage transactions, in negotiated transactions or in other transactions, at such prices as
he or she may determine, which may relate to market prices prevailing at the time of sale or be a negotiated price. See
“Plan of Distribution.” All costs, expenses and fees in connection with the registration of the Shares will be
borne by us. Brokerage commissions and similar selling expenses, if any, attributable to the offer or sale of the Shares will
be borne by the Selling Stockholder (or their donees and pledgees).
Each Selling Stockholder
and any broker executing selling orders on behalf of a Selling Stockholder may be deemed to be an “underwriter” as
defined in the Securities Act of 1933, as amended (the “Securities Act”). If any broker-dealers are used to effect
sales, any commissions paid to broker-dealers and, if broker-dealers purchase any of the Shares as principals, any profits received
by such broker-dealers on the resale of the Shares, may be deemed to be underwriting discounts or commissions under the Securities
Act. In addition, any profits realized by the Selling Stockholders may be deemed to be underwriting commissions.
Our common stock trades
on The New York Stock Exchange (“NYSE”) under the symbol “DNMR.” On March 9, 2021, the last reported sale
price of our shares on the NYSE was $34.58 per share.
Please refer
to “Risk Factors” beginning on page 1 for a description of the risks you should consider when evaluating this investment.
Neither the Securities
and Exchange Commission nor any state securities commission has approved or disapproved of these securities or determined if this
prospectus is truthful or complete. Any representation to the contrary is a criminal offense.
The date of this prospectus is March 10,
2021
You should rely only on the information
included in or incorporated by reference into this prospectus or information we have referred to in this prospectus. We have not
authorized anyone to provide you with information that is different. This prospectus may only be used where it is legal to sell
these securities. This prospectus is not an offer to sell, or a solicitation of an offer to buy, in any state where the offer or
sale is prohibited. The information in this prospectus is accurate on the date of this prospectus and may become obsolete later.
Neither the delivery of this prospectus, nor any sale made under this prospectus will, under any circumstances, imply that the
information in this prospectus is correct as of any date after the date of this prospectus. References to “the Company,”
“Danimer,” “we” or “us” refer to Danimer Scientific, Inc.
TABLE OF CONTENTS
RISK FACTORS
You should carefully consider the risk
factors set forth below as well as the other information contained or incorporated by reference in this prospectus before investing
in our Common Stock. Any of the following risks could materially and adversely affect our business, financial condition or results
of operations. In such a case, you may lose all or part of your investment. The risks described below are not the only risks facing
us. Additional risks and uncertainties not currently known to us or those we currently view to be immaterial may also materially
adversely affect our business, financial condition or results of operations.
Risks Related to the Company
We have a history of net losses and
our future profitability is uncertain.
We have recorded a loss
for the fiscal year ended December 31, 2019, and our future profitability is uncertain. At December 31, 2019, our accumulated deficit
was approximately $49.1 million. Since our inception, we have been engaged primarily in research and development and early-stage
commercial activities. Because we have a limited history of commercial operations and we operate in a rapidly evolving industry,
we cannot be certain that we will generate sufficient revenue to operate our business and become profitable.
Our ability to generate
revenues in the near-term is highly dependent on the successful commercialization of our biopolymer products, which is subject
to many risks and uncertainties as described below. We expect that it will take time for our PHA production to ramp up to an economical
scale while the market for our products expands. As a result, we expect to have significant losses and negative cash flow for at
least the next several years, as we incur additional costs and expenses for the continued development and expansion of our business,
including the costs of establishing manufacturing capacity and ongoing expenses of research and product development. The amount
we spend will impact our ability to become profitable and this will depend, in part, on the number of new products that we attempt
to develop. We may not achieve any or all of these goals and, thus, we cannot provide assurances that we will ever be profitable
or achieve significant revenues.
Even if we can successfully
manufacture and sell our products, whether we will be able to generate a profit on any of these products is highly uncertain and
depends on a number of factors including the cost of production, the price we are able to charge for these products, and the emergence
of competing products.
Our operating results may fluctuate
significantly as a result of a variety of factors, many of which are outside of our control.
We are subject to, among
other things, the following factors that may negatively affect our operating results:
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the announcement or introduction of new products by
our competitors;
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our ability to upgrade and develop our systems and
infrastructure to accommodate growth;
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our ability to attract and retain key personnel in
a timely and cost-effective manner;
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our ability to attract new customer and retain existing
customers;
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technical difficulties;
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the amount and timing of operating costs and capital
expenditures relating to the expansion of our business, operations and infrastructure;
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our ability to identify and enter into relationships
with appropriate and qualified third-party providers of necessary testing and manufacturing services;
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regulation by federal, state or local governments;
and
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general economic conditions, as well as economic conditions
specific to the plastics industry, and other industries related to compostable or biodegradable substitutes for non-biodegradable
plastics.
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As a result of our limited
operating history and the nature of the markets in which we compete, it is difficult for us to forecast our revenues or earnings
accurately. We have based our anticipated future expense levels largely on our investment plans and estimates of future events,
although certain of our expense levels will, to a large extent, become fixed. As a strategic response to changes in the competitive
environment, we may from time to time make certain decisions concerning expenditures, pricing, service or marketing that could
have a material and adverse effect on our business, results of operations and financial condition. Due to the foregoing factors,
our revenues and operating results are difficult to forecast.
We will need to secure additional
funding and may be unable to raise additional capital on favorable terms, if at all.
We expect that we will
have sufficient capital to fund our planned operations through the completion of Phase II of the production capacity buildout at
the Kentucky Facility and anticipated Greenfield plant. Thereafter, we will need to raise additional capital to continue to scale
and expand our manufacturing capability. If we issue equity or debt securities to raise additional funds, (i) we may incur
fees associated with such issuance, (ii) our existing stockholders will experience dilution from the issuance of new equity securities,
(iii) we may incur ongoing interest expense and be required to grant a security interest in our assets in connection with any debt
issuance and (iv) the new equity or debt securities may have rights, preferences and privileges senior to those of our existing
stockholders. In addition, utilization of our net operating loss and research and development credit carryforwards may be subject
to significant annual limitations under Section 382 of the Code due to ownership changes resulting from future equity financing
transactions. If we raise additional funds through collaboration, licensing or other similar arrangements, it may be necessary
to relinquish valuable rights to our potential products or proprietary technologies, or grant licenses on terms that are not favorable
to us. In the event we are unable to obtain additional financing, we may be unable to successfully implement our business plan,
which could have a material and adverse impact on our business, including you losing your entire investment.
Our biopolymer products may not achieve
market success.
We currently have limited
customer commitments for commercial quantities of our biopolymer products. Some prospective customers are currently evaluating
and testing our products prior to making large-scale purchase decisions. The successful commercialization of our biopolymers is
also dependent on our customers’ ability to commercialize the end-products that they make from our biopolymers, which may
never gain market acceptance.
Market acceptance of
our products will depend on numerous factors, many of which are outside of our control, including among others:
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public acceptance of such products;
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our ability to produce products of consistent quality
that offer functionality comparable or superior to existing or new polymer products;
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our ability to produce products fit for their intended
purpose;
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our ability to obtain necessary regulatory approvals
for our products;
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the speed at which potential customers qualify our
biopolymers for use in their products;
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the pricing of our products compared to competitive
products, including petroleum-based plastics;
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the strategic reaction of companies that market competitive
products;
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our reliance on third parties who support or control
distribution channels; and
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general market conditions.
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We produce bio-based products from
renewable resources, whose pricing and availability may be impacted by factors out of our control.
Pricing and availability
of raw materials, including renewable resources, for use in our businesses can be volatile due to numerous factors beyond our control,
including general, domestic and international economic conditions, labor costs, production levels, competition, consumer demand.
Drought, pestilence, severe weather or other “acts of God” may limit our ability to procure raw materials if crops
are lost. This volatility can significantly affect the availability and cost of raw materials for us, and may therefore have a
material adverse effect on our business, results of operations and financial condition.
We sell formulated resins
which include raw materials purchased from third parties, including PLA. We currently source all of our PLA from two suppliers,
NatureWorks LLC and Total Corbion PLA. Due to the high rate of growth in the biopolymer market, the demand for PLA and other raw
materials used in our products may outpace supply, which could result in price increases and deficits in the supply necessary to
meet customer demand. If we are unable to secure the required quantities of PLA and other third-party raw materials, we may not
be able to achieve our financial forecasts and fulfill customer demand.
If our products and product candidates
do not gain market acceptance among key market participants, we may be unable to generate significant revenues, if any.
Even if we obtain regulatory
approval for our product candidates, they may not gain market acceptance among plastics manufacturers or other plastic users. Market
acceptance will depend on our ability to demonstrate the benefits of our approved products in terms of safety, efficacy, convenience,
biodegradability and environmental friendliness, ease of administration and cost effectiveness. In addition, we believe market
acceptance depends on the effectiveness of our marketing strategy and the pricing of our approved products.
We have limited experience producing
PHA in large commercial quantities.
We have limited experience
in producing large quantities of PHA. While we have succeeded in producing smaller amounts of PHA in our pilot plant for customer
trials and testing purposes, we only recently commenced the production of PHA in a large commercial plant with a capacity sufficient
to meet the anticipated needs of prospective customers. We may not be able to cost effectively produce PHA at a scale consistent
with customer demand in a timely or economical manner, or that the quality of the commercial product will be acceptable on a consistent
basis. Further, if the Kentucky Facility is not able to meet customer demands, we will have to expand our facility, which will
disrupt production and deplete our resources.
Some of our PHA products may never
become commercially marketable.
Although we do currently
sell commercial quantities of compostable PLA-based resins, we only recently commenced producing commercially viable quantities
of PHA. Limited research and testing have been completed on some of the products that we may produce using PHA. For some applications,
we will have to go through extensive research and testing to develop specific products and to determine or demonstrate the safety
and effectiveness of their proposed use. Although we have already received food contact approval for some grades of PHA, some of
our product candidates and our proposed testing of those products will require additional regulatory approvals and clearances.
Accordingly, not all of the products we intend to pursue are presently marketable in the fields of use for which we hope to develop
them, and it is possible (or even probable) that some or all of them may never become legally and commercially marketable. The
development and testing of our proposed products is difficult, time-consuming and expensive, and the successful development of
any products based on innovative technologies is subject to inherent uncertainties and risks of failure. These risks include the
possibilities that any or all of the proposed products or procedures may be found to be ineffective, or may otherwise fail to receive
necessary regulatory clearances; that the proposed products or procedures may be uneconomical to produce and market or may never
achieve broad market acceptance; that third parties may hold proprietary rights that preclude us from marketing our intended products
or procedures; or that third parties may develop and market superior or equivalent products and procedures.
We may be unable to obtain certifications
required by certain customers.
Many of our customers
require biopolymer formulations to undergo biodegradability testing to address physical property deterioration in specific environmental
conditions. Biodegradation certification is important for our customers to ensure those products can be effectively marketed and
sold and meet customer demands on environmental protection. If our new PHA based resins to be sold out of the Kentucky Facility
don’t achieve the required certifications in a timely manner, we may experience a delay in going to market. Such a delay
could result in us not achieving our financial forecasts and not fulfilling customer demand.
We may be unable to manage rapid
growth effectively.
Our failure to manage
growth effectively could have a material and adverse effect on our business, results of operations and financial condition. We
anticipate that a period of significant expansion will be required to address potential growth and to handle licensing and research
activities. This expansion will place a significant strain on our management, operational and financial resources. To manage the
expected growth of our operations and personnel, we must establish appropriate and scalable operational and financial systems,
procedures and controls and must establish a qualified finance, administrative and operations staff. Our management may be unable
to hire, train, retain and manage the necessary personnel or to identify, manage and exploit potential strategic relationships
and market opportunities.
We may be delayed in or unable to
procure necessary capital equipment.
While the equipment
we use to produce PHA and our other products is currently widely available, we must rely on outside companies to continue to manufacture
the equipment necessary to produce our products. If our suppliers of capital equipment are unable or unwilling to provide us with
necessary capital equipment to manufacture our products or if we experience significant delays in obtaining the necessary manufacturing
equipment, our business, results of operations and financial condition could be adversely affected.
Our success will be influenced by
the price of petroleum relative to the price of bio-based feedstocks.
Our success may be influenced
by the cost of our products relative to petroleum-based polymers. The cost of petroleum-based polymers is in part based on the
price of petroleum. To date, our PHA biopolymers have been primarily manufactured using canola oil, an agricultural feedstock.
As the price of biobased feedstocks increases and/or the price of petroleum decreases, our biobased products may be less competitive
relative to petroleum-based polymers. A material decrease in the cost of conventional petroleum-based polymers may require a reduction
in the prices of our products for them to remain attractive in the marketplace and/or reduce the size of our addressable market.
Certain contracts granting exclusivity
rights to customers may limit our ability to sell products in certain markets.
We have entered into
certain agreements with customers, which, subject to the terms therein, grant these customers the exclusive right to purchase certain
products and, in some cases, in certain fields and/or territories from us. For example, certain clam-shell food cases we produce
can only be sold to a single customer; certain stirrers and straw products can only be sold to several end-users, subject to the
purchaser maintaining minimum purchase requirements; one customer has an exclusive on water bottles, while another customer has
an exclusive on bottles containing certain alcohol products. These exclusivity arrangements will expire between 2021 and 2026.
These agreements could prevent us from selling products to certain prospective customers or entering certain markets, which could
have a material and adverse impact on our potential revenues and our ability more generally to expand our customer base and product
lines.
The loss of one or more of our significant
customers, a significant reduction in their orders, their inability to perform under their contracts, or a significant deterioration
in their financial condition could have a material adverse effect on our business, results of operations, and financial condition.
A few significant customers
have in the past, and may in the future, account for a significant portion of our revenues in any one year or over a period of
several consecutive years. For example, for the nine months ended September 30, 2020, we had two customers that individually accounted
for more than 10% of our revenue each and collectively accounted for approximately 53% of our revenue, and for the year ended December
31, 2019, we had four customers that individually accounted for more than 10% of our revenue each and collectively accounted for
approximately 65% of our total revenue. The loss of one or more of our significant customers, a substantial reduction in their
orders, their inability to perform under their contracts, or a significant deterioration in their financial condition could have
a material adverse effect on our business, results of operations, and financial condition.
We may rely heavily on future collaborative
partners.
We may enter into strategic
partnerships to develop and commercialize our current and future research and development programs with other companies to accomplish
one or more of the following:
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obtain capital, equipment and facilities,
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obtain funding for research and development programs,
product development programs and commercialization activities,
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obtain expertise in relevant markets,
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obtain access to raw materials and/or
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obtain sales and marketing services or support.
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We may not be successful
in establishing or maintaining suitable partnerships, and we may not be able to negotiate collaboration agreements having terms
satisfactory to us or at all. Failure to make or maintain these arrangements or a delay or failure in a collaborative partner’s
performance under any such arrangements could have a material adverse effect on our business and financial condition.
We face and will face substantial
competition.
We face and will face
substantial competition from a variety of companies in the biodegradable, renewable resource-based plastic segment, as well as
from companies in the conventional, non-biodegradable petroleum-based industry segment. Some of their products are suitable for
use in a range of products at a price which may be lower than our product offerings. Many of these companies have longer operating
histories, greater name recognition, larger customer bases and significantly greater financial, sales and marketing, manufacturing,
distribution, technical and other resources than us. Our competitors may be able to adapt more quickly to new or emerging technologies,
changes in customer requirements and changes in laws and regulations. In addition, current and potential competitors have established
or may establish financial or strategic relationships among themselves or with existing or potential customers or other third parties.
Accordingly, new competitors or alliances among competitors could emerge and rapidly acquire significant market share. There can
be no assurance that we can develop products that are more effective or achieve greater market acceptance than competitive products,
or that our competitors will not succeed in developing products and technologies that are more effective than those being developed
by us and that would therefore render our products and technologies less competitive or even obsolete. We cannot assure you that
we will be able to compete successfully against current or new competitors.
We may not be able to complete either
or both phases of the proposed production capacity buildout at our Kentucky Facility.
In December 2018, we
consummated the acquisition of the Kentucky Facility, including the equipment, machinery and other personal property located at
such facility for a purchase price of $23 million, and simultaneously entered into a sale and leaseback transaction with a large,
diversified commercial property REIT (the “REIT”) pursuant to which we sold the Kentucky Facility and certain of our
facilities located in Bainbridge, Georgia to the REIT and leased-back the same properties from the REIT under a net-lease for an
initial term of 20 years with renewal terms up to an additional 20 years at our option. The assets available at the Kentucky Facility
permitted us to embark on a two-phase commissioning strategy, and we commenced production of commercial volumes of PHA in December
2019. Several components of the first phase of the production capacity buildout were completed at the end of the third quarter
of 2020 after investing approximately $54 million since the acquisition of the Kentucky Facility, excluding capitalized interest.
Of this total, $7 million in real-estate improvements for the Kentucky Facility were financed by the REIT and leased back to us
in May 2020. Once Phase I of the Kentucky Facility production capacity is operating at scale, we expect to produce approximately
20 million pounds of finished product per year. We believe that the capacity of the plant can be expanded by another 45 million
additional pounds of finished product, bringing total plant capacity up to approximately 65 million pounds per year, by investing
another $100 million in the future for the Phase II production capacity buildout at such facility. There can be no assurances,
though, that we will be able to achieve such production capacity or raise the additional financing required to complete Phase II
of the production capacity buildout.
We may not be able to identify additional
facilities and assets or secure the funding necessary to acquire them.
Aside from the Kentucky
Facility, we may need to identify other facilities and assets that would be beneficial to our production of PHA at the commercial
scale or our growth in general. We cannot provide assurances that we will be successful in identifying such facilities and assets
or, if we do, securing the funding necessary to acquire them.
Climate Change may impact the availability
of our facilities and, in addition, we may incur substantial costs to comply with climate change legislation and related regulatory
initiatives.
Changing weather patterns
and the increase in frequency of severe storms such as hurricanes and tornadoes could cause disruptions or the complete loss of
our facilities. In addition, climate change concerns, and changes in the regulation of such concerns, including greenhouse gas
emissions, could also subject us to additional costs and restrictions, including increased energy and raw materials costs which
could negatively impact our financial condition and results of operations. The effects of climate change can have an adverse effect
not only to our operations, but also that of our suppliers and customers, and can lead to increased regulations and changes in
consumer preferences, which could adversely affect our business, results of operations and financial condition.
We may be subject to product liability
claims that may not be covered by insurance and could require us to pay substantial sums.
If we are successful
in obtaining regulatory approval for our products and/or otherwise begin marketing them, we will become subject to an inherent
risk of, and adverse publicity associated with, product liability and other liability claims, whether or not such claims are valid.
We intend to obtain product liability insurance coverage in amounts and scope that we believe will be adequate once we begin marketing
any products. However, product liability insurance may not be available on commercially acceptable terms, or at all. Even if such
insurance is available, product liability or other claims may exceed our insurance coverage limits. A successful product liability
claim that exceeds our insurance coverage limits could require us to pay substantial sums and could have a material adverse effect
on us.
Changes in government regulations
encouraging the use of biodegradable alternatives to plastic products may have an adverse effect on our business.
We anticipate one of
the key markets for our products being compostable and biodegradable substitutes for non-biodegradable plastics, which are created
in part by laws, regulations and policies designed to encourage or mandate the increased use of compostable and biodegradable
alternatives to plastics. Several countries and other political subdivisions of countries have enacted or are considering enacting
such laws and regulations. Failure to implement these or similar laws and regulations and changes to existing laws and regulations
may adversely affect the demand for our product candidates in the future.
We may not be able to protect adequately
our patents and other intellectual property assets, which could adversely affect our competitive position and reduce the value
of our products, and litigation to protect our patents and intellectual property assets may be costly.
Our commercial success
may depend in part on our ability to obtain patent protection for technologies and products we develop, to preserve trade secrets
and to operate without infringing the proprietary rights of others. There can be no assurance that any patents or patent applications
that we own, obtain or file or are able to obtain or license from third parties will afford any competitive advantages or will
not be challenged or circumvented by third parties. Furthermore, there can be no assurance that others will not independently develop
similar technologies or duplicate any technology developed by us. Because of the extensive time required for development, testing
and regulatory review of a potential product, it is possible that before any of our potential products can be commercialized, any
related patents may expire or may have only a brief remaining life span following commercialization, thus reducing any advantage
of the patents.
If we are not able to
obtain patent coverage or defend the patent protection for our technologies, then we will not be able to exclude competitors from
developing or marketing competing technologies, and we may not generate enough revenues from product sales to justify the cost
of development of our technologies and to achieve or maintain profitability. The patents currently in the portfolio have expiration
dates ranging from 2022 to 2040 and any patents resulting from pending patent applications are expected to have durations that
will expire between 2038 and 2041.
Our patent position
involves complex legal and factual questions. Accordingly, we cannot predict the breadth of claims that may be allowed or enforced
in our patents or in third-party patents. Patents may not be issued for any pending or future pending patent applications owned
by or licensed to us, and claims allowed under any issued patent or future issued patent owned or licensed by us may not be valid
or sufficiently broad to protect our technologies. Moreover, we may be unable to protect certain of our intellectual property in
the United States or in foreign countries. Foreign jurisdictions may not afford the same protections as U.S. law, and we cannot
ensure that foreign patent applications will have the same scope as the U.S. patents. There will be many countries in which we
will choose not to file or maintain patents because of the costs involved. Competitors may also design around our technology or
develop competing technologies.
Additionally, any issued
patents owned by or licensed to us now or in the future may be challenged, invalidated or circumvented. To the extent competitors
or other third parties develop and market products or procedures that we believe infringe our patents and proprietary rights, we
may be compelled to initiate lawsuits to protect and enforce our intellectual property rights. Such litigation is typically expensive,
time-consuming and uncertain as to outcome, and may involve opponents who have much more extensive financial resources than we
do. An unfavorable outcome of any such litigation could have a material adverse effect on our business and results of operations.
Third parties may claim that we infringe
on their proprietary rights and may prevent us from commercializing and selling our products.
There has been substantial
litigation in the manufacturing industry with respect to the manufacture, use and sale of new products. These lawsuits often involve
claims relating to the validity of patents supporting the new products and/or the validity and alleged infringement of patents
or proprietary rights of third parties. We may be required to defend against challenges to the validity of our patents and against
claims relating to the alleged infringement of patent or proprietary rights of third parties.
Litigation initiated
by a third-party claiming patent invalidity or patent infringement could:
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require us to incur substantial litigation expense,
even if we are successful in the litigation;
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require us to divert significant time and effort of
our management;
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result in the loss of our rights to develop, manufacture
or market our products; and
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require us to pay substantial monetary damages or
royalties in order to license proprietary rights from third parties or to satisfy judgments or to settle actual or threatened
litigation.
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Although patent and
intellectual property disputes within the biopolymer industry have often been settled through licensing or similar arrangements,
costs associated with these arrangements may be substantial and could include the long-term payment of royalties. Furthermore,
the required licenses may not be made available to us on acceptable terms. Accordingly, an adverse determination in a judicial
or administrative proceeding or a failure to obtain necessary licenses could prevent us from manufacturing and selling our products
or increase our costs to market our products.
We rely in part on trade secrets
to protect our technology, and our failure to obtain or maintain trade secret protection could limit our ability to compete.
We rely on trade secrets
to protect some of our technology and proprietary information, especially where we believe patent protection is not appropriate
or obtainable. However, trade secrets are difficult to protect. Litigating a claim that a third party had illegally obtained and
was using our trade secrets would be expensive and time consuming, and the outcome would be unpredictable. Moreover, if our competitors
independently develop similar knowledge, methods and know-how, it will be difficult for us to enforce our rights and our business
could be harmed.
We may not be able to generate sufficient
cash to service all of our debt and operating lease obligations, and may be forced to take other actions to satisfy our obligations
under our debt and operating lease obligations, which may not be successful.
Our ability to make
scheduled payments on or to refinance our debt service and operating lease obligations and other obligations depends on our ability
to generate cash in the future and our financial condition and operating performance, which are subject to prevailing economic
and competitive conditions and to certain financial, business and other factors beyond our control. We cannot assure you that we
will maintain a level of cash flows from operating activities sufficient to permit us to pay the principal, premium, if any, and
interest on our debt, or to pay our operating lease obligations. As of September 30, 2020, we had principal and interest payments
on debt due in the next twelve months of $12.3 million and $3.1 million, respectively.
If our cash flows and
capital resources are insufficient to fund our debt service, operating lease obligations and other obligations, we may be forced
to reduce or delay investments and capital expenditures, or to sell assets, seek additional capital or restructure or refinance
our debt. These alternative measures may not be successful and may not permit us to meet our scheduled debt obligations.
If our operating results and available cash are insufficient to meet our debt service, operating lease obligations and other obligations,
we could face substantial liquidity problems and might be required to dispose of material assets or operations to meet our debt
service and other obligations. We may not be able to consummate those dispositions or to obtain the proceeds sought from
them, and these proceeds may not be adequate to meet any debt service or other obligations then due. Further, we may need
to refinance all or a portion of our debt on or before maturity, and we cannot assure you that we will be able to refinance any
of our debt on commercially reasonable terms or at all. Additionally, if we are unable to service our operating lease payments
for our facilities in Bainbridge, Georgia and Winchester, Kentucky, which we lease pursuant to a sale-leaseback transaction that
was entered into in 2018 with a commercial property REIT, we could lose the ability to occupy and operate those facilities.
Despite our current significant indebtedness,
we may be able to incur more debt in the future, which could further exacerbate the risks of leverage, including the ability to
service our indebtedness.
We may need to incur
additional debt in the future to complete acquisitions of facilities, equipment, machinery and other assets or capital projects
or for working capital. Although the covenants contained in our current indebtedness instruments may impose some limits on our
ability to incur new debt, these agreements may permit the incurrence of significant additional debt if we satisfy certain conditions
or such debt instruments may be amended in the future to do so. If we incur new debt, the risks related to being in a highly leveraged
company that we now face could intensify, including our ability to service such indebtedness.
We are subject to a number of restrictive
debt covenants under our loan agreements.
Many of our loan agreements
contain certain restrictive covenants, which restrict our ability to, among other things, incur additional indebtedness, incur
certain liens on our assets or sell assets, make investments, make capital expenditures, pay dividends and make other restricted
payments. Many of our loan agreements also require us to maintain specified financial ratios under certain conditions and satisfy
financial condition tests, including a consolidated senior leverage ratio and consolidated fixed charge coverage ratio.
Our ability to meet
those financial ratios and tests and otherwise comply with our financial covenants may be affected by the factors described herein
and other factors outside our control, and we may not be able to meet those ratios, tests and covenants. Our ability to generate
sufficient cash from operations to meet our debt obligations will depend upon our future operating performance, which will be affected
by general economic, financial, competitive, business and other factors beyond our control. A breach of any of these covenants,
ratios, tests or restrictions, as applicable, or any inability to pay interest on, or principal of, our outstanding debt as it
becomes due could result in an event of default. Upon an event of default, if not waived by our lenders, our lenders may declare
all amounts outstanding as due and payable. Such an acceleration of the maturity of our indebtedness may, among other things, prevent
or limit us from engaging in transactions that benefit us, including responding to changing business and economic conditions and
taking advantage of attractive business opportunities.
We may not be able to satisfy the
requirements of our participation in a New Markets Tax Credit (“NMTC”) program for funding our plant expansions.
We have entered into
several arrangements under the NMTC program with various third-party financial institutions (the “Investors”) to help
fund various phases of plant expansions at our Bainbridge, Georgia, and Winchester, Kentucky locations. In connection with the
NMTC transactions we received proceeds which were restricted for use on approved capital expenditures and working capital needs
at specific subsidiaries. The NMTCs are subject to 100% recapture of the tax credit for a period of seven years as provided in
the Code. We are required to be in compliance with various regulations and contractual provisions that apply to the NMTC arrangements.
we have agreed to indemnify the Investors for any loss or recapture of the NMTCs until such time as our obligation to deliver tax
benefits is relieved. The maximum potential amount of future payments under this indemnification could be up to the face amount
of the related debt, net of certain leverage loans receivable in connection with the NMTC transactions, which amount totaled $13.2
million as of September 30, 2020. Our obligation to deliver tax benefits is relieved in various stages from April 2026 through
November 2026. Non-compliance with applicable requirements could result in projected tax benefits not being realized by an Investor
and our being required to indemnify such Investor, which could have a material adverse effect on our financial position, results
of operations or liquidity.
We may be unable to obtain forgiveness
of the PPP Loan, in whole or in part, in accordance with the provisions of the CARES Act, which could adversely affect our financial
condition.
In April 2020, we entered
into a promissory note with Truist Bank (“Truist”), under the Paycheck Protection Program of the CARES Act pursuant
to which Truist made a loan to us in the amount of approximately $1.8 million (the “PPP Loan”). The PPP Loan matures
in April 2022, bears interest at a rate of 1.0% per annum. Monthly principal and interest payments are deferred for six months
after the date of disbursement.
The PPP Loan is unsecured
and guaranteed by the Small Business Administration (“SBA”). Under the terms of the PPP Loan, the principal amount
of the loan may be forgiven to the extent it is used for qualifying expenses as described in the CARES Act and we otherwise request
forgiveness in accordance with the terms of the PPP Loan and the requirements of the SBA. While we expect to request that all of
the principal amount of the PPP Loan be forgiven and to comply with all corresponding requirements, we cannot guarantee that we
will be successful in obtaining forgiveness of all or any part of such principal amount. We will be required to repay any principal
amount of the PPP Loan that is not forgiven, together with accrued and unpaid interest. In connection with the closing of the Business
Combination, we deposited funds in an escrow account in an amount to repay the outstanding principal and accrued interest on the
PPP loan.
Our ability to use net operating
losses to offset future taxable income will be subject to certain limitations as a result of the Business Combination, PIPE and
past transactions.
As of December 31, 2019,
we had federal net operating loss carryforwards of $48.0 million of which $47 million will begin to expire in 2028 and $1 million
can be carried forward indefinitely. As of December 31, 2019, we had state net operating loss carryforwards of $45 million which
begin to expire in various amounts in 2028. We may have generated additional net operating losses since then. A portion of
these net operating loss carryforwards could expire unused and be unavailable to offset future income tax liabilities. In addition,
in general, under Section 382 of the Code, a corporation that undergoes an “ownership change” is subject to limitations
on its ability to utilize its pre-change net operating losses (“NOLs”) to offset future taxable income or taxes. For
these purposes, an ownership change generally occurs where the aggregate stock ownership of one or more stockholders or groups
of stockholders who owns at least 5% of a corporation’s stock increases its ownership by more than 50 percentage points over
its lowest ownership percentage within a specified testing period. A portion of our existing NOLs are subject to limitations arising
from previous ownership changes in 2014. In addition, the Business Combination and the PIPE is expected to constitute an ownership
change under Section 382 of the Code. Our NOLs may also be impaired under state law. A portion of our existing NOLs are also subject
to the so called separate-return-limitation-year (“SRLY”) rules that may apply to consolidated tax groups. Although
depending on applicable law and particular computations, it is expected that the amount of our NOLs that we will be able to utilize
per year could be only up to $3.8 million per year. Accordingly, we may not be able to utilize a material portion of our NOLs.
The Company’s
ability to utilize our NOLs is also conditioned upon our attaining profitability and generating U.S. federal and state taxable
income. We have incurred significant net losses in the past, and it is anticipated that we will continue to incur significant losses
for the foreseeable future; therefore, we do not know whether or when we will generate the U.S. federal or state taxable income
necessary to utilize our NOL carryforwards, even to the extent they are not subject to limitation by Section 382 of the Code
or the SRLY rules.
We face various risks related to
the ongoing coronavirus (COVID-19) pandemic and similar public health crises, which may have material adverse effects on our business,
financial position, results of operations and/or liquidity.
We face various risks
related to health epidemics, pandemics and similar outbreaks, including the global outbreak of coronavirus disease 2019 (“COVID-19”).
Such risks include disruptions or restrictions on our employees’ ability to work effectively, as well as temporary closures
of our facilities or the facilities of our customers or suppliers.
It is possible that
the continued spread of COVID-19 could also further cause disruption in our supply chain; cause delay or limit the ability of other
customers to perform, including in making timely payments to us; and, cause other unpredictable events. In addition, the continued
spread of COVID-19 has led to disruption and volatility in the global capital markets, which increases the cost of capital and
adversely impacts access to capital.
We continue to work
with our stakeholders (including customers, employees, suppliers and local communities) to responsibly address this global pandemic.
Our management is focused on mitigating the impact of the pandemic, which has required and will continue to require a substantial
investment of time and resources across Danimer and could delay other value-added initiatives. We continue to monitor the situation,
to assess further possible implications to our business, supply chain and customers, and to take actions in an effort to mitigate
adverse consequences.
The situation surrounding
COVID-19 remains fluid and the ongoing impact on our business and results of operations, financial condition, expected cash flows
and liquidity increases the longer the virus impacts activity levels in the United States and globally, both during the initial
outbreak, as well as if additional outbreaks occur at a later date. For this reason, we cannot reasonably estimate with any degree
of certainty the future impact COVID-19 may have on our results of operations, financial position and liquidity. The extent to
which the COVID-19 pandemic may impact our business, operating results, financial condition or liquidity will depend on future
developments and numerous and evolving factors that are highly uncertain, vary by market and cannot be accurately predicted or
quantified at this time, including the duration and spread of the outbreak; new information concerning its transmission and severity;
government mandated restrictions and regulations; business and workforce disruptions; impact on demand for our products, and the
effectiveness of actions taken to contain and treat the disease; actions taken or that might be taken by governments, businesses
or individuals to contain or reduce its repercussions and mitigate its economic implications; evolving macroeconomic factors, including
general economic uncertainty, unemployment rates and recessionary pressures; decreased consumer spending levels; reduction or changes
in customer demand for our products and services; our ability to manufacture, sell and provide our products and services, including
as a result of travel restrictions, closed borders, operating restrictions imposed on our facilities or reduced ability of our
employees to continue to work efficiently; increased operating costs (whether as a results of changes to our supply chain or increases
in employee costs or otherwise); collectability of customer accounts; additional and prolonged devaluation of other countries’
currencies relative to the dollar; and the general impact of the pandemic on our customers, employees, suppliers, vendors and other
stakeholders. Additionally, customers might defer decision making, delay orders or seek to renegotiate or terminate existing agreements.
The continuing global
pandemic may also result in delays in our ability to apply for and obtain further regulatory approval for our products in various
jurisdictions.
The impact of COVID-19
may also exacerbate other risks discussed herein, any of which could have a material effect on us. This situation is changing rapidly,
and additional impacts may arise that we are not aware of currently.
We depend on key personnel.
We depend greatly on
our executive officers and other employees. Our success will depend, in part, upon our ability to attract and retain additional
skilled personnel, which will require substantial additional funds. There can be no assurance that we will be able to find, attract
and retain additional qualified employees, directors, and advisors having the skills necessary to operate, develop and grow our
business. Our inability to hire qualified personnel, the loss of services of any of our executive officers, or the loss of services
of other key employees, or advisors that may be hired in the future, may have a material and adverse effect on our business.
If we experience a significant disruption
in our information technology systems, including security breaches, or if we fail to implement new systems and software successfully,
our business operations and financial condition could be adversely affected.
We depend on information
technology systems throughout Danimer to, among other functions, control our manufacturing processes, process orders and bill,
collect and make payments, interact with customers and suppliers, manage inventory and otherwise conduct business. We also depend
on these systems to respond to customer inquiries, contribute to our overall internal control processes, maintain records of our
property, plant and equipment and record and pay amounts due to vendors and other creditors. The failure of our information technology
systems to perform as we anticipate could disrupt our business and could result in transaction errors, processing inefficiencies
and the loss of sales and customers. As we upgrade or change systems, we may also experience interruptions in service, loss of
data or reduced functionality and other unforeseen material issues which could adversely impact our ability to provide quotes,
take customer orders and otherwise run our business in a timely manner. In addition, if our new systems fail to provide accurate
and increased visibility into pricing and cost structures, it may be difficult to improve or maximize our profit margins. As a
result, our results of operations could be adversely affected.
In addition, cyber-attacks
or security breaches could compromise confidential, business critical information, cause a disruption in our operations or harm
our reputation. Our information technology systems are subject to potential disruptions, including significant network or power
outages, cyberattacks, computer viruses, other malicious codes and/or unauthorized access attempts, any of which, if successful,
could result in data leaks or otherwise compromise our confidential or proprietary information and disrupt our operations. Despite
our efforts to protect sensitive information and comply with and implement data security measures, there can be no assurance that
any controls and procedures that we have in place will be sufficient to protect us. Further, as cyber threats are continually evolving,
our controls and procedures may become inadequate and we may be required to devote additional resources to modify or enhance our
systems in the future. We may also be required to expend resources to remediate cyber-related incidents or to enhance and strengthen
our cyber security. Any such disruptions to our information technology systems, breaches or compromises of data, and/or misappropriation
of information could result in violation of privacy and other laws, litigation, fines, negative publicity, lost sales or business
delays, any of which could have a material adverse effect on our business, financial condition or results of operations.
Government regulation of our business
is extensive and regulatory approvals are uncertain, expensive and time-consuming.
Our research, development,
testing, manufacturing and marketing of most of our intended products are subject to an extensive regulatory approval process by
the FDA and other regulatory agencies in the U.S. and abroad. The process of obtaining FDA and other required regulatory approvals
is lengthy, expensive and uncertain. There can be no assurance that, even after such time and expenditures, we will be able to
obtain necessary regulatory approvals for the manufacturing or marketing of any products. Even if regulatory clearance is obtained,
a marketed product is subject to continual review, and later discovery of previously unknown safety issues or failure to comply
with the applicable regulatory requirements may result in restrictions on a product’s marketing or withdrawal of the product
from the market, as well as possible civil or criminal sanctions.
Changes in sentiment regarding and
laws and regulations relating to plastic products could reduce demand for our products and/or increase the cost of producing our
products and have an adverse effect on our business.
Plastic products have
recently faced increasingly negative public sentiment and scrutiny. In addition, state and local governments have increasingly
proposed, or in some cases implemented, restrictions or bans on plastic-based products, including single-use plastics, plastic
straws and utensils. Notwithstanding the fact that our bio-plastic products are intended to address many of the concerns regarding
traditional petroleum-based plastics, increased regulation of, or prohibition on, the use of plastics generally, as well as negative
public sentiment regarding such products, could increase the costs incurred by our customers to use such products or otherwise
limit the use of these products, and could lead to a decrease in demand for the products we make or an increase in the cost of
production of such products. Such a decrease in demand could adversely affect our business, operating results and financial condition.
Risks Related to our Common Stock
An active trading market for our
Common Stock may not be available on a consistent basis to provide stockholders with adequate liquidity. Our stock price may be
extremely volatile, and our stockholders could lose a significant part of their investment.
An active trading market
for shares of our Common Stock may not be sustained on a consistent basis. The public trading price for our Common Stock will be
affected by a number of factors, including:
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reported progress of our business and technology development,
relative to investor expectations;
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changes in earnings estimates, investors’ perceptions,
recommendations by securities analysts or our failure to achieve analysts’ earnings estimates;
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quarterly variations in our or our competitors’
results of operations;
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general market conditions and other factors unrelated
to our operating performance or the operating performance of our competitors;
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future issuance and/or sale of our common stock or
preferred stock;
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announcements by us, or our competitors, of acquisitions,
new products, significant contracts, commercial relationships or capital commitments;
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commencement of, or involvement in, litigation;
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any major change in our board of directors or management;
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changes in governmental regulations or in the status
of our regulatory approvals;
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announcements related to patents issued to us or our
competitors and to litigation involving our intellectual property;
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a lack of, limited, or negative industry or security
analyst coverage;
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developments in our industry and general economic
conditions;
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short-selling or similar activities by third parties;
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other factors described elsewhere in these “Risk
Factors.”
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As a result of these
factors, our stockholders may not be able to resell their shares of Common Stock at, or above, their purchase price. In addition,
the stock prices of many technology companies have experienced wide fluctuations that have often been unrelated to the operating
performance of those companies. Any negative change in the public’s perception of the prospects of industrial biotechnology
or “clean technology” companies could depress our stock price regardless of our results of operations. These factors
may have a material adverse effect on the market price of our Common Stock.
Concentration of ownership among
our existing executive officers, directors and their affiliates may prevent new investors from influencing significant corporate
decisions.
Our executive officers
and directors as a group beneficially own approximately 20.3% of our outstanding Common Stock. As a result, these shareholders
will be able to exercise a significant level of control over all matters requiring stockholder approval, including the election
of directors, any amendment of the amended and restated certificate of incorporation and approval of significant corporate transactions.
This control could have the effect of delaying or preventing a change of control or changes in management and will make the approval
of certain transactions difficult or impossible without the support of these shareholders.
We do not expect to declare any dividends
in the foreseeable future.
We do not anticipate
declaring any cash dividends to holders of our common stock in the foreseeable future. Consequently, investors may need to rely
on sales of their shares after price appreciation, which may never occur, as the only way to realize any future gains on their
investment.
There can be no assurance that we
will be able to comply with the continued listing standards of NYSE.
If NYSE delists our
securities from trading on its exchange for failure to meet the listing standards, we and our securityholders could face significant
material adverse consequences including:
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a limited availability of market quotations for our
securities;
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a determination that our Common Stock is a “penny
stock” which will require brokers trading in Common Stock to adhere to more stringent rules, possibly resulting in a reduced
level of trading activity in the secondary trading market for shares of our Common Stock;
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a limited amount of analyst coverage; and
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a decreased ability to issue additional securities
or obtain additional financing in the future.
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We may be required to take write-downs
or write-offs, or we may be subject to restructuring, impairment or other charges that could have a significant negative effect
on our financial condition, results of operations and the price of Common Stock, which could cause you to lose some or all of your
investment.
Factors outside of our
control may, at any time, arise. As a result of these factors, we may be forced to later write-down or write-off assets, restructure
our operations or incur impairment or other charges that could result in us reporting losses.
Even though these charges
may be non-cash items and therefore not have an immediate impact on our liquidity, the fact that we report charges of this nature
could contribute to negative market perceptions about us or our securities. In addition, charges of this nature may cause us to
be unable to obtain future financing on favorable terms or at all.
If we do not meet the expectations
of investors or securities analysts, the market price of our securities may decline.
Fluctuations in the
price of our securities could contribute to the loss of all or part of your investment. If an active market for our securities
develops and continues, the trading price of our securities following could be volatile and subject to wide fluctuations in response
to various factors, some of which are beyond our control. Any of the factors listed below could have a material adverse effect
on your investment in our securities and our securities may trade at prices significantly below the price you paid for them. In
such circumstances, the trading price of our securities may not recover and may experience a further decline.
Factors affecting the
trading price of our securities may include:
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actual or anticipated fluctuations in our quarterly
financial results or the quarterly financial results of companies perceived to be similar to us;
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changes in the market’s expectations about our
operating results;
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success of competitors;
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our operating results failing to meet the expectation
of securities analysts or investors in a particular period;
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changes in financial estimates and recommendations
by securities analysts concerning Danimer or the biopolymer industry in general;
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operating and share price performance of other companies
that investors deem comparable to ours;
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our ability to market new and enhanced products and
technologies on a timely basis;
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changes in laws and regulations affecting our business;
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our ability to meet compliance requirements;
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commencement of, or involvement in, litigation involving
us;
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changes in our capital structure, such as future issuances
of securities or the incurrence of additional debt;
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the volume of our shares of common stock available
for public sale;
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any major change in our board of directors or management;
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sales of substantial amounts of our shares of common
stock by our directors, executive officers or significant stockholders or the perception that such sales could occur; and
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general economic and political conditions such as
recessions, interest rates, fuel prices, international currency fluctuations and acts of war or terrorism.
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Broad market and industry
factors may materially harm the market price of our securities irrespective of our operating performance. The stock market in general,
and NYSE in particular, have experienced price and volume fluctuations that have often been unrelated or disproportionate to the
operating performance of the particular companies affected. The trading prices and valuations of these stocks, and of our securities,
may not be predictable. A loss of investor confidence in the market for stocks or the stocks of other companies which investors
perceive to be similar to ours could depress our share price regardless of our business, prospects, financial conditions or results
of operations. A decline in the market price of our securities also could adversely affect our ability to issue additional securities
and our ability to obtain additional financing in the future.
We will incur significant increased
expenses and administrative burdens as a public company, which could have an adverse effect on our business, financial condition
and results of operations.
We will face increased
legal, accounting, administrative and other costs and expenses as a public company that we do not incur as a private company. The
Sarbanes-Oxley Act of 2002 (the “Sarbanes-Oxley Act”), including the requirements of Section 404, as well as rules
and regulations subsequently implemented by the SEC, the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 and
the rules and regulations promulgated and to be promulgated thereunder, the PCAOB and the securities exchanges, impose additional
reporting and other obligations on public companies. Compliance with public company requirements will increase costs and make certain
activities more time-consuming. A number of those requirements will require us to carry out activities we have not done previously.
For example, we will create new board committees and adopt new internal controls and disclosure controls and procedures. In addition,
expenses associated with SEC reporting requirements will be incurred. Furthermore, if any issues in complying with those requirements
are identified (for example, if the auditors identify a material weakness or significant deficiency in the internal control over
financial reporting), we could incur additional costs rectifying those issues, and the existence of those issues could adversely
affect our reputation or investor perceptions of us. It may also be more expensive to obtain director and officer liability insurance.
Risks associated with our status as a public company may make it more difficult to attract and retain qualified persons to serve
on our board of directors or as executive officers. The additional reporting and other obligations imposed by these rules and regulations
will increase legal and financial compliance costs and the costs of related legal, accounting and administrative activities. These
increased costs will require us to divert a significant amount of money that could otherwise be used to expand the business and
achieve strategic objectives. Advocacy efforts by stockholders and third parties may also prompt additional changes in governance
and reporting requirements, which could further increase costs.
Our failure to timely and effectively
implement controls and procedures required by Section 404(a) of the Sarbanes-Oxley Act could have a material adverse effect on
our business.
The standards required
for a public company under Section 404(a) of the Sarbanes-Oxley Act are significantly more stringent than those required of us
as a privately-held company. Management may not be able to effectively and timely implement controls and procedures that adequately
respond to the increased regulatory compliance and reporting requirements. If we are not able to implement the additional requirements
of Section 404(a) in a timely manner or with adequate compliance, we may not be able to assess whether our internal controls over
financial reporting are effective, which may subject us to adverse regulatory consequences and could harm investor confidence and
the market price of our securities.
We qualify as an “emerging
growth company” within the meaning of the Securities Act, and if we takes advantage of certain exemptions from disclosure
requirements available to emerging growth companies, it could make our securities less attractive to investors and may make it
more difficult to compare our performance to the performance of other public companies.
We qualify as an “emerging
growth company” as defined in Section 2(a)(19) of the Securities Act, as modified by the JOBS Act. As such, we are eligible
for and intend to take advantage of certain exemptions from various reporting requirements applicable to other public companies
that are not emerging growth companies for as long as we continue to be an emerging growth company, including (a) the exemption
from the auditor attestation requirements with respect to internal control over financial reporting under Section 404(b) of the
Sarbanes-Oxley Act, (b) the exemptions from say-on-pay, say-on-frequency and say-on-golden parachute voting requirements and (c)
reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements. We will remain an
emerging growth company until the earliest of (i) the last day of the fiscal year in which the market value of Common Stock that
are held by non-affiliates exceeds $700 million as of June 30 of that fiscal year, (ii) the last day of the fiscal year in which
we have total annual gross revenue of $1.07 billion or more during such fiscal year (as indexed for inflation), (iii) the date
on which we have issued more than $1 billion in non-convertible debt in the prior three-year period or (iv) the last day of the
fiscal year following the fifth anniversary of the date of the first sale of Common Stock in the initial public offering of units
of Live Oak Acquisition Corp., our predecessor, consummated on May 5, 2020. In addition, Section 107 of the JOBS Act also provides
that an emerging growth company can take advantage of the exemption from complying with new or revised accounting standards provided
in Section 7(a)(2)(B) of the Securities Act as long as we are an emerging growth company. An emerging growth company can therefore
delay the adoption of certain accounting standards until those standards would otherwise apply to private companies. We have elected
not to opt out of such extended transition period and, therefore, we may not be subject to the same new or revised accounting standards
as other public companies that are not emerging growth companies. Investors may find our Common Stock less attractive because we
will rely on these exemptions, which may result in a less active trading market for our Common Stock and its price may be more
volatile.
Our management has limited experience
in operating a public company.
Our executive officers
have limited experience in the management of a publicly traded company. Our management team may not successfully or effectively
manage our transition to a public company that will be subject to significant regulatory oversight and reporting obligations under
federal securities laws. Their limited experience in dealing with the increasingly complex laws pertaining to public companies
could be a significant disadvantage in that it is likely that an increasing amount of their time may be devoted to these activities
which will result in less time being devoted to our management and growth. We may not have adequate personnel with the appropriate
level of knowledge, experience and training in the accounting policies, practices or internal controls over financial reporting
required of public companies in the United States. The development and implementation of the standards and controls necessary for
us to achieve the level of accounting standards required of a public company in the United States may require costs greater than
expected. It is possible that we will be required to expand our employee base and hire additional employees to support our operations
as a public company which will increase our operating costs in future periods.
The loss of such key personnel could
negatively impact the operations and financial results of our business.
Our ability to successfully
operate our business is dependent upon the efforts of certain key personnel of ours and there can be no assurance that they will
be able to do so. It is possible that we will lose some key personnel, the loss of which could negatively impact our operations
and profitability. Furthermore, certain of our key personnel may be unfamiliar with the requirements of operating a company regulated
by the SEC, which could cause us to have to expend time and resources helping them become familiar with such requirements.
We may issue additional shares of
common stock or preferred shares under an employee incentive plan which would dilute the interest of our stockholders.
Our Fourth Amended and
Restated Certificate of Incorporation authorizes the issuance of 200,000,000 shares of Common Stock, and 10,000,000 shares of preferred
stock, in each case, par value $0.0001 per share. We may issue a substantial number of additional shares of common stock or shares
of preferred stock under an employee incentive plan. The issuance of additional common stock or preferred shares:
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may subordinate the rights of holders of Common Stock
if one or more classes of preferred stock are created, and such preferred shares are issued, with rights senior to those afforded
to Common Stock; and
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could cause a change in control if a substantial number
of shares of common stock are issued, which may affect, among other things, our ability to use our net operating loss carry forwards,
if any, and could result in the resignation or removal of our present officers and directors.
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Our Fourth Amended and Restated Certificate
of Incorporation will provide, subject to limited exceptions, that the courts of the State of Delaware will be the sole and exclusive
forum for certain stockholder litigation matters, which could limit our stockholders’ ability to obtain a favorable judicial
forum for disputes with us or our directors, officers, employees or stockholders.
Our Fourth Amended and
Restated Certificate of Incorporation requires, to the fullest extent permitted by law, that derivative actions brought in our
name, actions against directors, officers and employees for breach of fiduciary duty and other similar actions may be brought in
the state courts in the State of Delaware or, if no state court located within the State of Delaware has jurisdiction, the federal
district court for the District of Delaware. Any person or entity purchasing or otherwise acquiring any interest in shares of our
capital stock shall be deemed to have notice of and consented to the forum provisions in our Fourth Amended and Restated Certificate
of Incorporation. In addition, our Fourth Amended and Restated Certificate of Incorporation provides that this choice of forum
does not apply to any complaint asserting a cause of action under the Securities Act and the Exchange Act. Finally, our Fourth
Amended and Restated Certificate of Incorporation provides that federal district courts of the United States will be the exclusive
forum for the resolution of any complaint asserting a cause of action under the Securities Act or the Exchange Act.
In March 2020, the Delaware
Supreme Court issued a decision in Salzburg et al. v. Sciabacucchi, which found that an exclusive forum provision providing for
claims under the Securities Act to be brought in federal court is facially valid under Delaware law. It is unclear whether this
decision will be appealed, or what the final outcome of this case will be. We intend to enforce this provision, but we do not know
whether courts in other jurisdictions will agree with this decision or enforce it.
This choice of forum
provision may limit a stockholder’s ability to bring a claim in a judicial forum that it finds favorable for disputes with
us or any of our directors, officers, other employees or stockholders, which may discourage lawsuits with respect to such claims.
Alternatively, if a court were to find the choice of forum provision contained in the Fourth Amended and Restated Certificate of
Incorporation to be inapplicable or unenforceable in an action, we may incur additional costs associated with resolving such action
in other jurisdictions, which could harm our business, operating results and financial condition.
Because we have no current plans
to pay cash dividends on Common Stock for the foreseeable future, you may not receive any return on investment unless you sell
Common Stock for a price greater than that which you paid for it.
We may retain future
earnings, if any, for future operations, expansion and debt repayment and have no current plans to pay any cash dividends for the
foreseeable future. Any decision to declare and pay dividends as a public company in the future will be made at the discretion
of our board of directors and will depend on, among other things, our results of operations, financial condition, cash requirements,
contractual restrictions and other factors that our board of directors may deem relevant. In addition, our ability to pay dividends
may be limited by covenants of any existing and future outstanding indebtedness we or our subsidiaries incur. As a result, you
may not receive any return on an investment in Common Stock unless you sell Common Stock for a price greater than that which you
paid for it.
If securities or industry analysts
do not publish or cease publishing research or reports about us, our business, or our market, or if they change their recommendations
regarding our securities adversely, the price and trading volume of our securities could decline.
The trading market for
our securities will be influenced by the research and reports that industry or securities analysts may publish about us, our business,
market or competitors. If no additional securities or industry analysts commence coverage of our share price and trading volume
may be negatively impacted. If any of the analysts who may cover us change their recommendation regarding our shares of common
stock adversely, or provide more favorable relative recommendations about our competitors, the price of our shares of common stock
would likely decline. If any analyst who may cover us were to cease coverage of us or fail to regularly publish reports on us,
we could lose visibility in the financial markets, which in turn could cause our share price or trading volume to decline.
FORWARD-LOOKING STATEMENTS
We make forward-looking
statements in this prospectus and any accompanying prospectus supplement and in documents incorporated herein by reference. All
statements, other than statements of present or historical fact included in or incorporated by reference in this prospectus and
any accompanying prospectus supplement, regarding our future financial performance, as well as our strategy, future operations,
financial position, estimated revenues, and losses, projected costs, prospects, plans and objectives of management are forward-looking
statements. When used in this prospectus and any accompanying prospectus supplement, the words “believe,” “may,”
“will,” “estimate,” “continue,” “anticipate,” “intend,” “expect,”
“should,” “would,” “plan,” “predict,” “potential,” “seem,”
“seek,” “future,” “outlook” the negative of such terms and other similar expressions are intended
to identify forward-looking statements, although not all forward-looking statements contain such identifying words. These forward-looking
statements are based on management’s current expectations, assumptions, hopes, beliefs,
intentions and strategies regarding future events and are based on currently available information as to the outcome and
timing of future events. We caution you that these forward-looking statements are subject to all of the risks and uncertainties,
most of which are difficult to predict and many of which are beyond our control, incident to our business.
These forward-looking
statements are based on information available as of the date of this prospectus and any accompanying prospectus supplement, and
current expectations, forecasts and assumptions, and involve a number of risks and uncertainties. Accordingly, forward-looking
statements in this prospectus and any accompanying prospectus supplement and in any document incorporated herein by reference should
not be relied upon as representing our views as of any subsequent date, and we do not undertake any obligation to update forward-looking
statements to reflect events or circumstances after the date they were made, whether as a result of new information, future events
or otherwise, except as may be required under applicable securities laws.
As a result of a number
of known and unknown risks and uncertainties, our actual results or performance may be materially different from those expressed
or implied by these forward-looking statements. Some factors that could cause actual results to differ include:
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our ability to recognize the anticipated benefits of the business combination between Live Oak and Meredian Holdings Group, Inc. (“Legacy Danimer”), which was effected through the merger of a wholly-owned subsidiary of Live Oak with and into Legacy Danimer with Legacy Danimer surviving as the surviving company and becoming a wholly-owned subsidiary of Live Oak, which upon the closing of such merger was renamed Danimer Scientific, Inc. (the “Business Combination”), and manage growth profitably following the Closing;
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costs related to the Business Combination;
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changes in applicable laws or regulations;
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the outcome of any legal proceedings against us;
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the effect of the COVID-19 pandemic on our business;
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our ability to execute our business model, including, among other things, market acceptance of our planned products and services and construction delays in connection with the expansion of our facilities;
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our ability to raise capital;
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the possibility that we may be adversely affected by other economic, business, and/or competitive factors; and
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other risks and uncertainties set forth in the section entitled “Risk Factors” beginning on page 1 of this prospectus, which is incorporated herein by reference.
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More information on
potential factors that could affect our financial results is included from time to time in our public reports filed with the Securities
and Exchange Commission, including our Annual Report on Form 10-K, Quarterly Reports on Form 10-Q and Current Reports on Form 8-K.
All forward-looking statements included in this prospectus are based upon information available to us as of the date of this prospectus,
and speak only as the date hereof. We assume no obligation to update any forward-looking statements to reflect events or circumstances
after the date of this prospectus.
You should also read
carefully the factors described or referred to in the “Risk Factors” section of this prospectus, any accompanying prospectus
supplement and the documents incorporated by reference herein and therein, to better understand the risks and uncertainties inherent
in our business and underlying any forward-looking statements. Any forward-looking statements that we make in this prospectus,
any accompanying prospectus supplement and the documents incorporated by reference herein as well as other written or oral statements
by us or our authorized officers on our behalf, speak only as of the date of such statement, and we undertake no obligation to
update such statements. Comparisons of results for current and any prior periods are not intended to express any future trends
or indications of future performance, unless expressed as such, and should only be viewed as historical data.
INCORPORATION OF CERTAIN DOCUMENTS BY
REFERENCE
The Commission allows
us to “incorporate by reference” the information we file with it, which means that we can disclose important business,
financial and other information to you in this prospectus by referring you to the publicly filed documents containing this information.
The information incorporated by reference is deemed to be a part of this prospectus, except for any information superseded by information
contained in this prospectus or filed later by us with the Commission. This prospectus incorporates by reference the documents
set forth below that we have previously filed with the Commission, other than any portion of any such filing that is furnished
under the applicable commission rules, which documents contain important information about us and our Common Stock:
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our Quarterly Reports on Form 10-Q for the quarters ended June 30, 2020,
filed with the Commission on July 31, 2020, and September 30, 2020, filed with the Commission on November 5, 2020;
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our Current Reports on Form 8-K filed with the Commission on May 11, 2020, May 14, 2020, May 22, 2020, October 5, 2020, October 9, 2020, December 14, 2020, December 17, 2020, December 28, 2020, December 29, 2020, January 5, 2021 (as amended on January 6, 2021);
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the description of our Common Stock contained in our registration
statement on Form 8-A filed on May 4, 2020, including any amendments or reports filed for the purpose of updating that description;
and
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our definitive Proxy Statement on Schedule 14A with respect to
the Business Combination filed with the Commission on December 16, 2020 (other than those portions of such Proxy Statement not
deemed to be “filed” with the Commission).
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All of such documents
are on file with the Commission. In addition, all documents filed by us pursuant to Sections 13(a), 13(c), 14 and 15(d) of the
Exchange Act, subsequent to the date of this prospectus are incorporated by reference in this prospectus, other than any portion
of any such filing that is furnished under the applicable commission rules, and are a part hereof from the date of filing of such
documents. Any statement contained in a document incorporated or deemed to be incorporated by reference herein shall be deemed
to be modified or superseded for purposes of this prospectus to the extent that a statement contained herein or in any subsequently
filed document that is also incorporated by reference herein modifies or replaces such statement. Any statements so modified or
superseded shall not be deemed, except as so modified or superseded, to constitute a part of this prospectus.
Any information incorporated
by reference herein is available to you without charge upon written or oral request. If you would like a copy of any of this information,
please submit your request to us at Danimer Scientific, Inc., 140 Industrial Boulevard, Bainbridge, Georgia, 39817 Attention: Secretary;
Telephone number (229) 243-7075.
THE COMPANY
Danimer is a performance
polymer company specializing in bioplastic replacements for traditional petrochemical-based plastics. Danimer, through its principal
operating subsidiaries, Meredian, Inc., Danimer Scientific, L.L.C. and Danimer Scientific Kentucky, Inc., brings together innovative
technologies to deliver renewable, environmentally friendly bioplastic materials to global consumer product companies. We have
core competencies in fermentation process engineering, chemical engineering and polymer science. In addition, we have created an
extensive intellectual property portfolio to protect our innovations which, together with our technology, serves as a valuable
foundation for our business and future industry collaborations. We primarily market our products to manufacturers in the plastics
industry seeking to address environmental, public health, renewability, certification, composting and biodegradability concerns
because of customer perceptions or government regulations.
We believe that we
are the only commercial company in the bioplastics market to combine the production of a base polymer along with the reactive extrusion
capacity in order to give customers a “drop-in” replacement for a wide variety of petrochemical-based plastics. Our
process uses sustainably sourced canola oil. Our proprietary extraction and extrusion processes are cost competitive and leave
almost no carbon footprint. Our customized formulations enable us to team up with other makers of biobased products to create an
even wider range of goods. Our scalable production capacity and modular manufacturing model will soon enable us to serve an increasingly
large customer base. An industry leader as gauged by its over 16-year history, a patent portfolio of over 150 patents and pending
patent applications worldwide, supply agreements with some of the largest consumer packaged goods (CPG) companies and numerous
awards, including PLASTICS Industry Association’s 2020 Innovation in Bioplastics award, Danimer is one of the few companies
anywhere in the world to achieve this level of sustainability in biopolymer products and processes.
USE OF PROCEEDS
We will not realize
any proceeds from the sale of the Common Stock which may be sold pursuant to this prospectus for the respective accounts of the
Selling Stockholders. We, however, will derive proceeds upon the exercise of the options granted to Selling Stockholders other
than in the case of exercises made on a cashless or net exercise basis with us. All such proceeds will be available to us for working
capital and general corporate purposes. No assurances can be given however, as to when or if any or all of the options will be
exercised.
SELLING STOCKHOLDERS
This prospectus relates
to shares of Common Stock that are being registered for reoffers and resales by the Selling Stockholders named below who have acquired
or may acquire shares of Common Stock pursuant to the Plans (“Shares”). Selling Stockholders also include certain unnamed
non-affiliates of the Company, each of whom holds less than the lesser of 1000 shares or one percent (1%) of the shares issuable
under the Plans, and who may make reoffers and resales of Shares up to such amount under this prospectus. The Selling Stockholders,
subject to the expiration or waiver of any applicable lock-up agreements, may resell any or all of the Shares at any time they
choose while this prospectus is effective.
Executive officers
and directors, their family members, trusts for their benefit, or entities that they own, that acquire Common Stock under the Plans
may be added to the Selling Stockholder list below by a prospectus supplement filed with the Commission. The number of Shares to
be sold by any Selling Stockholder under this prospectus also may be increased or decreased by a prospectus supplement. Non-affiliates
who purchased restricted securities, as these terms are defined in Rule 144(a) under the Securities Act, under any of our employee
benefit plans and who are not named below may use this prospectus for the offer or sale of their Common Stock if they hold 1,000
shares or less. Although a person’s name is included in the table below, neither that person nor we are making an admission
that the named person is our “affiliate.”
Each of the Selling
Stockholders is an employee or director of Danimer or one of our subsidiaries. The following table sets forth:
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the name and principal position(s), office or other material relationship with the Company and
our predecessors or affiliates, over the last three years of each Selling Stockholder;
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the number of shares of Common Stock each Selling Stockholder beneficially owned as of February
1, 2021;
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the number of shares of Common Stock acquired by each Selling Stockholder in connection with stock
options and stock grants pursuant to the Plans and underlying stock options previously granted pursuant to the Plans and being
registered under this Registration Statement, some or all of which Shares may be sold pursuant to this prospectus; and
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the number of shares of Common Stock and the percentage, if 1% or more, of the total class of Common
Stock outstanding to be beneficially owned by each Selling Stockholder following this offering, assuming the sale pursuant to this
offering of all shares acquired by such Selling Stockholder in connection with grants pursuant the Plans and registered under this
Registration Statement.
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The information
contained in this “Selling Stockholders” section of this prospectus is included pursuant to the requirements of Form
S-8 and includes certain persons eligible to resell “restricted securities” and/or “control securities”
(as such terms are defined in Section C of the General Instructions to Form S-8) pursuant to this prospectus whether or not they
have a present intent to sell any or all such shares hereunder. As of the date hereof, we have not been informed that any of the
Selling Stockholders named below has a present intent to resell any such securities. Furthermore, there is no assurance
that any of the Selling Stockholders will sell any or all of the shares offered by them under this Registration Statement.
The address of each
Selling Stockholder is c/o Danimer Scientific, Inc., 140 Industrial Boulevard, Bainbridge, Georgia, 39817.
Name of Selling
Stockholder
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Relationship to
the Company
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Shares of Common Stock
Beneficially
Owned Before Offering(1)
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Number of Shares
Being Offered (2)
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Shares of Common
Stock Beneficially
Owned
After Offering(1)
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Number(2)
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Percent
(%) (3)
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Number(2)
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Percent
(%) (3)
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Stephen E. Croskrey(4)
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Chairman of the Board and Chief Executive Officer
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8,825,267
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9.5
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8,723,506
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101,761
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*
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Stuart Pratt(5)
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Director
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1,897,283
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3.7
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1,897,283
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—
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—
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Philip Gregory Calhoun(6)
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Director
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3,581,687
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4.1
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55,952
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3,525,735
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4.0
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Isao Noda(7)
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Director
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452,867
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0.5
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401,941
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50,926
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*
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Gregory Hunt(8)
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Director
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65,531
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*
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65,531
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—
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—
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John P. Amboian(9)
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Director
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50,000
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*
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50,000
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—
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—
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Richard J. Hendrix(10)
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Director
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5,050,000
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5.7
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50,000
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5,000,000
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5.7
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John A. Dowdy, III(11)
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Chief Financial Officer
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2,332,440
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2.6
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1,979,768
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352,672
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*
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|
Phillip Van Trump(12)
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|
Chief Science & Technology Officer
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|
|
2,002,662
|
|
|
|
2.2
|
|
|
|
1,979,768
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|
|
|
22,894
|
|
|
|
*
|
|
|
Michael Smith(13)
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|
Chief Operating Officer
|
|
|
2,017,342
|
|
|
|
2.3
|
|
|
|
1,983,000
|
|
|
|
34,342
|
|
|
|
*
|
|
|
Scott Tuten(14)
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|
Chief Marketing & Sustainability Officer
|
|
|
1,924,484
|
|
|
|
2.2
|
|
|
|
1,778,292
|
|
|
|
146,192
|
|
|
|
*
|
|
|
Raymond M. Feldman
|
|
Former Employee
|
|
|
4,937
|
|
|
|
*
|
|
|
|
4,937
|
|
|
|
—
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*
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(1)
|
As used in this table, a beneficial owner of a security includes any person
who, directly or indirectly, through contract, arrangement, understanding, relationship or otherwise has or shares (a) the power
to vote, or direct the voting of, such security or (b) investment power which includes the power to dispose, or to direct the disposition
of, such security. In addition, a person is deemed to be the beneficial owner of a security if that person has the right to acquire
beneficial ownership of such security within 60 days.
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(2)
|
The numbers of shares of Common Stock reflect all shares of Common Stock
acquired or issuable to a person pursuant to applicable grants previously made under the Plans irrespective of whether such grants
are exercisable, vested or convertible as of March 10, 2021 or will become exercisable, vested or convertible within 60
days after March 10, 2021.
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(3)
|
Applicable percentage of ownership for each selling stockholder is based
on 88,007,277 shares of Common Stock outstanding (which is the 84,971,601 shares of Common Stock as of March 2, 2021 plus an aggregate
of 3,035,676 restricted shares of Common Stock which are deemed to be granted to Messrs. Croskrey, Pratt, Dowdy, Van Trump, Smith
and Tuten on the date of effectiveness of this Registration Statement on Form S-8), plus the number of shares of Common Stock of
which such person has the right to acquire pursuant to applicable grants previously made under the Plans irrespective of whether
such grants are exercisable, vested or convertible as of March 10, 2021 or will become exercisable, vested or convertible
within 60 days after March 10, 2021.
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(4)
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Includes 3,726,353 shares underlying options granted pursuant to the 2020
Incentive Plan in connection with the Business Combination that are not presently exercisable and not exercisable within 60 days
of the date hereof, of which 1,154,616 shares underly an option that is not exercisable until the later to occur of February 1,
2024 or the approval by our shareholders of an amendment to the 2020 Incentive Plan to increase the number of shares available
under the 2020 Incentive Plan in an amount sufficient to permit the exercise of such option. Includes 1,509,036 restricted shares
of Common Stock which are deemed to be granted to Mr. Croskrey on the date of effectiveness of this Registration Statement on Form
S-8, one half of which are solely time-based restricted stock and one-half of which are time-based and based on target price thresholds
for the Common Stock, and all of which are deemed to be beneficially owned because Mr. Croskrey has the right to vote such shares.
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(5)
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Includes 50,000 shares underlying options that are or will become exercisable
within 60 days after the date hereof. Includes 12,363 shares underlying Assumed Legacy Danimer Options (as defined herein) that
are or will become exercisable within 60 days after the date hereof. Includes 5,952 shares underlying options issued by Legacy
Danimer and assumed by the Company in connection with the Business Combination (“Assumed Legacy Danimer Options”) and
342,258 shares underlying options granted in connection with the Business Combination that are not presently exercisable and not
exercisable within 60 days of the date hereof, of which 312,258 shares underly an option that is not exercisable until the later
to occur of February 1, 2024 or the approval by our shareholders of an amendment to the 2020 Incentive Plan to increase the number
of shares available under the 2020 Incentive Plan in an amount sufficient to permit the exercise of such option. Mr. Pratt disclaims
any beneficial ownership of the reported shares other than to the extent of any pecuniary interest he may have therein, directly
or indirectly. Includes 17,604 restricted shares of Common Stock which are deemed to be granted to Mr. Pratt on the date of effectiveness
of this Registration Statement on Form S-8, one half of which are solely time-based restricted stock and one-half of which are
time-based and based on target price thresholds for the Common Stock, and all of which are deemed to be beneficially owned because
Mr. Pratt has the right to vote such shares.
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(6)
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Includes 3,226,006 shares held by the Greg Calhoun DGT Family Trusts u/t/a
dated September 22, 2020 GST Exempt Trust and 62,851 shares held by the Greg Calhoun DGT Family Trusts u/t/a dated September 22,
2020 GST Non-Exempt Trust, which may be deemed to be owned by Mr. Calhoun, and 50,000 shares underlying options that are or will
become exercisable within 60 days after the date hereof. Includes 5,952 shares underlying Assumed Legacy Danimer Options that are
not presently exercisable and not exercisable within 60 days of the date hereof. Mr. Calhoun disclaims any beneficial ownership
of the reported shares other than to the extent of any pecuniary interest he may have therein, directly or indirectly.
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(7)
|
Includes 345,989 shares underlying Assumed Legacy Danimer Options and 50,000
shares underlying options that are or will become exercisable within 60 days after the date hereof. Includes 5,952 shares underlying
Assumed Legacy Danimer Options that are not presently exercisable and not exercisable within 60 days after the date hereof.
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(8)
|
Includes 4,579 shares underlying Assumed Legacy Danimer Options and 55,000
shares underlying options that are or will become exercisable within 60 days after the date hereof. Includes 5,952 shares underlying
Assumed Legacy Danimer Options that are not presently exercisable and not exercisable within 60 days after the date hereof.
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(9)
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Includes 50,000 shares underlying options that are or will become exercisable
within 60 days after the date hereof.
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(10)
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Includes 50,000 shares underlying options that are or will become exercisable
within 60 days after the date hereof. Includes 5,000,000 shares held by Live Oak Sponsor Partners, LLC, of which Mr. Hendrix is
a managing member, and as such, has voting and investment discretion with respect to such shares and may be deemed to have shared
beneficial ownership of such shares. Mr. Hendrix disclaims any beneficial ownership of the reported shares other than to the extent
of any pecuniary interest he may have therein, directly or indirectly.
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(11)
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Includes 303,054 shares held by the John Adams Dowdy, III Living Trust, which
shares may be deemed to be owned by Mr. Dowdy, and 917,613 shares underlying Assumed Legacy Danimer Options that are or will become
exercisable within 60 days after the date hereof. Includes 91,580 shares underlying Assumed Legacy Danimer Options and 642,934
shares underlying options granted in connection with the Business Combination that are not presently exercisable and not exercisable
within 60 days after the date hereof. Includes 377,259 restricted shares of Common Stock which are deemed to be granted to Mr.
Dowdy on the date of effectiveness of this Registration Statement on Form S-8, one half of which are solely time-based restricted
stock and one-half of which are time-based and based on target price thresholds for the Common Stock, and all of which are deemed
to be beneficially owned because Mr. Dowdy has the right to vote such shares. Mr. Dowdy disclaims any beneficial ownership of the
reported shares other than to the extent of any pecuniary interest he may have therein, directly or indirectly.
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(12)
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Includes 867,995 shares underlying Assumed Legacy Danimer Options that are
or will become exercisable within 60 days after the date hereof. Includes 91,580 shares underlying Assumed Legacy Danimer Options
and 642,934 shares underlying options granted in connection with the Business Combination that are not presently exercisable and
not exercisable within 60 days after the date hereof. Includes 377,259 restricted shares of Common Stock which are deemed to be
granted to Mr. Van Trump on the date of effectiveness of this Registration Statement on Form S-8, one half of which are solely
time-based restricted stock and one-half of which are time-based and based on target price thresholds for the Common Stock, and
all of which are deemed to be beneficially owned because Mr. Van Trump has the right to vote such shares.
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(13)
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Includes 905,569 shares underlying Assumed Legacy Danimer Options that are
or will become exercisable within 60 days after the date hereof. Includes 91,580 shares underlying Assumed Legacy Danimer Options
and 642,934 shares underlying options granted in connection with the Business Combination that are not presently exercisable and
not exercisable within 60 days after the date hereof. Includes 377,259 restricted shares of Common Stock which are deemed to be
granted to Mr. Smith on the date of effectiveness of this Registration Statement on Form S-8, one half of which are solely time-based
restricted stock and one-half of which are time-based and based on target price thresholds for the Common Stock, and all of which
are deemed to be beneficially owned because Mr. Smith has the right to vote such shares.
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(14)
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Includes and 666,519 shares underlying Assumed Legacy Danimer Options that
are or will become exercisable within 60 days after the date hereof. Includes 91,580 shares underlying Assumed Legacy Danimer Options
and 642,934 shares underlying options granted in connection with the Business Combination that are not presently exercisable and
not exercisable within 60 days after the date hereof. Includes 377,259 restricted shares of Common Stock which are deemed to be
granted to Mr. Tuten on the date of effectiveness of this Registration Statement on Form S-8, one half of which are solely time-based
restricted stock and one-half of which are time-based and based on target price thresholds for the Common Stock, and all of which
are deemed to be beneficially owned because Mr. Tuten has the right to vote such shares. Mr. Tuten disclaims any beneficial ownership
of the reported shares other than to the extent of any pecuniary interest he may have therein, directly or indirectly.
|
We will supplement
this prospectus from time to time as required by the rules of the Commission to include certain information concerning the security
ownership of the Selling Stockholders or any new Selling Stockholders, the number of shares offered for resale and the position,
office or other material relationship which a Selling Stockholder has had within the past three years with us or any of our predecessors
or affiliates.
Other Material Relationships with the Selling Stockholders
Transactions with Certain Directors and
Executive Officers
Stephen E. Croskrey, our
chief executive officer and chairman, leases a house from Danimer in Brinson, Georgia for a nominal rental fee and has an option
to purchase such property from Danimer, which option continues co-terminously with Mr. Croskrey’s employment as chief executive
officer of Danimer.
Mr. Croskrey had acquired 483,977 shares of Legacy Danimer Common
Stock upon exercise of options granted by Legacy Danimer and for which the exercise prices were paid in the form of non-recourse
notes issued by Mr. Croskrey to Legacy Danimer. The aggregate amount of principal and accrued interest payable by Mr. Croskrey
to Legacy Danimer in the amount of approximately $22,848,285 was paid off prior to the closing of the Business Combination (the
“Croskrey Note Payoff”). In connection with the Croskrey Note Payoff, Mr. Croskrey received upon closing of the Business
Combination a new option grant to purchase 1,154,616 shares of Common Stock under the 2020 Incentive Plan, which option will not
be exercisable until the later to occur of February 1, 2024 or the approval by our shareholders of an amendment to the 2020 Incentive
Plan to increase the number of shares available under the 2020 Incentive Plan in an amount sufficient to permit the exercise of
the option.
Stuart Pratt, a director of Danimer and the former chairman
of the board of directors of Legacy Danimer, had acquired 187,147 shares of Legacy Danimer common stock upon exercise of options
granted by Legacy Danimer and for which the exercise prices were paid in the form of non-recourse notes issued by Mr. Pratt to
Legacy Danimer. The aggregate amount of principal and accrued interest payable by Mr. Pratt to Legacy Danimer in the amount of
approximately $5,923,821 was paid off prior to the closing of the Business Combination (the “Pratt Note Payoff”). In
connection with the Pratt Note Payoff, Mr. Pratt received upon closing of the Business Combination a new option grant to purchase
312,258 shares of Common Stock under the 2020 Incentive Plan, which option will not be exercisable until the later to occur of
February 1, 2024 or the approval by our shareholders of an amendment to the 2020 Incentive Plan to increase the number of shares
available under the 2020 Incentive Plan in an amount sufficient to permit the exercise of the option.
Dr. Isao Noda, a former
director of Legacy Danimer, held an aggregate principal amount of $200,000 of Legacy Danimer’s 8% convertible notes, which
converted into shares of Danimer effective as of the closing of the Business Combination.
Employment and Consulting
Relationships
Mr. Croskrey entered into
an employment agreement with us in connection with the Business Combination, Mr. Pratt entered into a consulting agreement with
us in connection with the Business Combination, and each of Messrs. Dowdy, Van Trump, Smith and Tuten entered into an employment
agreement with Legacy Danimer in connection with their respective appointment. Each of Messrs. Croskrey, Pratt, Dowdy, Van Trump,
Smith and Tuten have provided and continue to provide, services to Danimer commensurate with his role.
Lock-Up
Agreement
In connection with the closing of the Business Combination,
on December 29, 2020, the Company and Messrs. Croskrey, Pratt, Dowdy, Van Trump, Smith and Tuten entered into a Lock-Up Agreement
(the “Lock-Up Agreement”). The terms of the Lock-Up Agreement provide that our securities held by these individuals
that were acquired pursuant to the Merger Agreement or otherwise issued pursuant to the Merger Agreement will be locked-up until
the earlier of (i) one year after the closing of the Business Combination or (ii) subsequent to the closing of the Business Combination,
(x) if the reported closing price of the Common Stock equals or exceeds $12.00 per share (as adjusted for stock splits, stock dividends,
reorganizations, recapitalizations and the like) for any twenty (20) trading days within any 30-trading day period commencing at
least one hundred fifty (150) days after the closing of the Business Combination, or (y) the date on which Danimer completes a
liquidation, merger, capital stock exchange, reorganization or other similar transaction that results in all of Danimer’s
stockholders having the right to exchange their shares of Common Stock for cash, securities or other property.
The Company has agreed that the restrictions in the Lock-Up
Agreement will not apply to (i) the delivery to the Company by Messrs. Croskrey or Pratt of the amounts of Common Stock needed
to effect the Croskrey Note Payoff or Pratt Note Payoff, respectively, and (ii) the sale of Common Stock by either of Messrs. Croskrey
or Pratt to satisfy their respective tax obligations in connection with the foregoing clause (i).
Indemnification Agreements
We entered into separate
indemnification agreements with our directors and executive officers, including each of Messrs. Croskrey, Pratt, Calhoun, Noda,
Hunt, Amboian, Hendrix, Dowdy, Van Trump, Smith and Tuten. These agreements, among other things, require us to indemnify our directors
and executive officers for certain expenses, including attorneys’ fees, judgments, fines and settlement amounts incurred
by a director or executive officer in any action or proceeding arising out of their services as one of Danimer’s directors
or executive officers or as a director or executive officer of any other company or enterprise to which the person provides services
at our request.
Sponsor Agreements
Live Oak Sponsor Partners,
LLC, a Delaware limited liability company (the “Sponsor”) that is affiliated with a member of our board of directors,
has entered certain agreements with Live Oak, our predecessor company.
Founder Shares
In June 2019, the Sponsor purchased 5,031,250 shares (the “Founder
Shares”) of Live Oak’s Class B common stock for an aggregate price of $25,000. On January 14, 2020, the Sponsor contributed
back to Live Oak, for no consideration, 718,750 Founder Shares. In February 2020, Live Oak effected a stock dividend for 0.333333333
shares for each Founder Share outstanding, resulting in the Sponsor holding an aggregate of 5,750,000 Founder Shares, 750,000 of
which were later forfeited, resulting in 5,000,000 Founder Shares outstanding. Upon the closing of the Business Combination, each
of the Founder Shares converted into a share of Common Stock on a one-for-one basis.
Private
Warrants
Simultaneously with the
closing of Live Oak’s initial public offering, the Sponsor purchased an aggregate of 6,000,000 warrants from Live Oak (each,
a “Private Warrant”) at a price of $1.00 per Private Warrant, for an aggregate purchase price of $6,000,000. Each Private
Warrant is exercisable to purchase one share of Common Stock at a price of $11.50 per share.
Registration
Rights Agreement
Pursuant to a registration
rights agreement entered into on May 5, 2020, the holders of the Private Warrants (and the shares of Class A common stock underlying
such Private Warrants) and shares of Common Stock issued upon conversion of the Founder Shares have registration rights to require
us to register a sale of any of such holders’ securities held by them. As of the date of this Registration Statement, the
Sponsor holds 3 million Private Warrants and 5 million shares of Common Stock issued upon conversion of the Founder Shares.
Subscription Agreement
In connection with the execution of the Merger Agreement, Live Oak
entered into Subscription Agreements with a number of subscribers, pursuant to which the subscribers agreed to purchase, and Live
Oak agreed to sell to the subscribers, an aggregate of 21,000,000 shares of Live Oak Class A Common Stock, for a purchase
price of $10.00 per share and an aggregate purchase price of $210,000,000, in a private placement (the “PIPE”). Live
Oak ValFund Plastics Fund LLC, which was affiliated with a member of our board of directors, purchased 4,905,000 shares of Live
Oak Class A Common Stock in the PIPE for a total purchase price of $49,050,000.
DESCRIPTION OF COMMON STOCK
The following description
of our Common Stock does not purport to be complete and is subject in all respects to applicable Delaware law and qualified by
reference to the provisions of our Fourth Amended and Restated Certificate of Incorporation, as amended (the “Certificate
of Incorporation”) and Amended and Restated Bylaws, as amended (the “Bylaws”). Copies of our Certificate of Incorporation
and Bylaws are incorporated by reference and will be sent to stockholders upon request. See “Where Can You Find More Information.”
Authorized and Outstanding Stock
We have authorized
200,000,000 shares of our Common Stock. As of March 2, 2021 there were 84,971,601 shares of our Common Stock outstanding and no
shares of preferred stock outstanding.
Voting Power
Except as otherwise
required by law or as otherwise provided in any certificate of designation for any series of preferred stock, the holders of our
Common Stock possess all voting power for the election of our directors and all other matters requiring stockholder action. Holders
of common stock are entitled to one vote per share on matters to be voted on by stockholders.
Dividends
Holders of Common Stock
will be entitled to receive such dividends, if any, as may be declared from time to time by our board of directors in its discretion
out of funds legally available therefor. In no event will any stock dividends or stock splits or combinations of stock be declared
or made on common stock unless the shares of common stock at the time outstanding are treated equally and identically.
We have not paid any
cash dividends on any class of our common stock to date and do not intend to pay cash dividends. The payment of cash dividends
in the future will be dependent upon our revenues and earnings, if any, capital requirements and general financial conditions.
The payment of any cash dividends will be within the discretion of our board of directors at such time. Further, if we incur any
indebtedness, our ability to declare dividends may be limited by restrictive covenants we may agree to in connection therewith.
Liquidation, Dissolution and Winding Up
In the event of our
voluntary or involuntary liquidation, dissolution, distribution of assets or winding-up, the holders of the Common Stock will be
entitled to receive an equal amount per share of all of our assets of whatever kind available for distribution to stockholders,
after the rights of the holders of the preferred stock have been satisfied.
Preemptive or Other Rights
Our stockholders have
no preemptive or other subscription rights and there are no sinking fund or redemption provisions applicable to the Common Stock.
Election of Directors
Our board of directors
will be composed of single class of eight directors, each of whom will generally serve for a term of one year. There is no cumulative
voting with respect to the election of directors, with the result that the holders of more than 50% of the shares voted for the
election of directors can elect all of the directors.
Anti-Takeover Effects of Certain Provisions of Delaware Law
and Our Certificate of Incorporation and Bylaws
We are subject to the
provisions of Section 203 of the Delaware General Corporation Law (“DGCL”) regulating corporate takeovers. This
statute prevents certain Delaware corporations, under certain circumstances, from engaging in a “business combination”
with:
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●
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a stockholder who owns 15% or more of our outstanding
voting stock (otherwise known as an “interested stockholder”);
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an affiliate of an interested stockholder; or
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an associate of an interested stockholder, for three
years following the date that the stockholder became an interested stockholder.
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A “business combination”
includes a merger or sale of more than 10% of our assets. However, the above provisions of Section 203 do not apply if:
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●
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our board of directors approves the transaction that
made the stockholder an “interested stockholder,” prior to the date of the transaction;
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after the completion of the transaction that resulted
in the stockholder becoming an interested stockholder, that stockholder owned at least 85% of our voting stock outstanding at
the time the transaction commenced, other than statutorily excluded shares of common stock; or
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●
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on or subsequent to the date of the transaction, the
initial business combination is approved by our board of directors and authorized at a meeting of our stockholders, and not by
written consent, by an affirmative vote of at least two-thirds of the outstanding voting stock not owned by the interested stockholder.
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Our authorized but unissued
Common Stock and preferred stock are available for future issuances without stockholder approval and could be utilized for a variety
of corporate purposes, including future offerings to raise additional capital, acquisitions and employee benefit plans. The existence
of authorized but unissued and unreserved common stock and preferred stock could render more difficult or discourage an attempt
to obtain control of us by means of a proxy contest, tender offer, merger or otherwise.
PLAN OF DISTRIBUTION
The Selling
Stockholders, which as used herein includes donees, pledgees, transferees or other successors-in-interest selling shares of
our Common Stock or interests in shares of our Common Stock received after the date of this prospectus from a Selling
Stockholder as a gift, pledge, partnership distribution or other transfer, may, after the expiration of any applicable
lock-up agreements and from time to time, sell, transfer or otherwise dispose of any or all of their shares of our Common
Stock or interests in shares of our Common Stock on any stock exchange, market or trading facility on which the shares are
traded, in private transactions or through a combination of such methods. These dispositions may be at fixed prices, at
prevailing market prices at the time of sale, at prices related to the prevailing market price, at varying prices determined
at the time of sale, or at negotiated prices.
The Selling Stockholders
may use any one or more of the following methods when disposing of shares or interests therein:
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market transactions in accordance with the rules of NYSE or any other available
markets or exchanges;
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ordinary brokerage transactions and transactions in which the broker-dealer
solicits purchasers;
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block trades in which the broker-dealer will attempt to sell the shares as
agent, but may position and resell a portion of the block as principal to facilitate the transaction;
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purchases by a broker-dealer as principal and resale by the broker-dealer
for its account;
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an exchange distribution in accordance with the rules of the applicable exchange;
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privately negotiated transactions;
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short sales entered into after the date of this prospectus;
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through the writing or settlement of options or other hedging transactions,
whether through an options exchange or otherwise;
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distributions to the partners and/or members of the Selling Stockholders;
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redemptions or repurchases of interests owned by partners and/or members
of the Selling Stockholders;
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broker-dealers may agree with the Selling Stockholders to sell a specified
number of such shares at a stipulated price per share;
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a combination of any such methods of sale; and
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any other method permitted pursuant to applicable law.
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To the extent permitted,
this prospectus may be amended or supplemented from time to time to describe a specific plan of distribution. In connection with
the sale of our Common Stock or interests therein, the Selling Stockholders may enter into hedging transactions with broker-dealers
or other financial institutions, which may in turn engage in short sales of our Common Stock in the course of hedging the positions
they assume with the selling stockholders. The Selling Stockholders may also sell shares of our Common Stock short and deliver
these securities to close out their short positions, or loan or pledge our Common Stock to broker-dealers that in turn may sell
these securities. The Selling Stockholders may also enter into option or other transactions with broker-dealers or other financial
institutions or the creation of one or more derivative securities which require the delivery to such broker-dealer or other financial
institution of shares offered by this prospectus, which shares such broker-dealer or other financial institution may resell pursuant
to this prospectus (as supplemented or amended to reflect such transaction).
Short selling occurs
when a person sells shares of stock which the person does not yet own and promises to buy stock in the future to cover the sale.
The general objective of the person selling the shares short is to make a profit by buying the shares later, at a lower price,
to cover the sale. Significant amounts of short selling, or the perception that a significant amount of short sales could occur,
could depress the market price of our Common Stock. In contrast, purchases to cover a short position may have the effect of preventing
or retarding a decline in the market price of our Common Stock, and together with the imposition of the penalty bid, may stabilize,
maintain or otherwise affect the market price of our Common Stock. As a result, the price of our Common Stock may be higher than
the price that otherwise might exist in the open market. If these activities are commenced, they may be discontinued at any time.
These transactions may be effected on NYSE, in the over-the-counter market or otherwise.
The aggregate proceeds
to the Selling Stockholders from the sale of our Common Stock offered by them will be the purchase price of our Common Stock less
discounts or commissions, if any. Each of the Selling Stockholders reserves the right to accept and, together with their agents
from time to time, to reject, in whole or in part, any proposed purchase of our Common Stock to be made directly or through agents.
We will not receive any of the proceeds from this offering.
The Selling Stockholders
also may resell all or a portion of the shares in open market transactions in reliance upon Rule 144 under the Securities Act,
provided that they meet the criteria and conform to the requirements of that rule.
The Selling Stockholders
and any underwriters, broker-dealers or agents that participate in the sale of our Common Stock or interests therein may be “underwriters”
within the meaning of Section 2(11) of the Securities Act. Any discounts, commissions, concessions or profits they earn on any
resale of the shares may be underwriting discounts and commissions under the Securities Act. Selling Stockholders who are “underwriters”
within the meaning of Section 2(11) of the Securities Act will be subject to the prospectus delivery requirements of the Securities
Act.
To the extent required,
the shares of our Common Stock to be sold, the names of the Selling Stockholders, the respective purchase prices and public offering
prices, the names of any agents, dealers or underwriters, any applicable commissions or discounts with respect to a particular
offer will be set forth in an accompanying prospectus supplement or, if appropriate, a post-effective amendment to the registration
statement that includes this prospectus.
In order to comply
with the securities laws of some states, if applicable, our Common Stock may be sold in these jurisdictions only through registered
or licensed brokers or dealers. In addition, in some states our Common Stock may not be sold unless it has been registered or qualified
for sale or an exemption from registration or qualification requirements is available and is complied with.
We have advised the
Selling Stockholders that the anti-manipulation rules of Regulation M under the Exchange Act may apply to sales of shares in the
market and to the activities of the Selling Stockholders and their affiliates. In addition, we will make copies of this prospectus
(as it may be supplemented or amended from time to time) available to the Selling Stockholders for the purpose of satisfying the
prospectus delivery requirements of the Securities Act. The Selling Stockholders may indemnify any broker-dealer that participates
in transactions involving the sale of the shares against certain liabilities, including liabilities arising under the Securities
Act.
WHERE YOU CAN FIND MORE INFORMATION
We are subject to the
informational requirements of the Exchange Act, and in accordance therewith we are required to file periodic reports, proxy statements
and other information with the Commission. Such reports, proxy statements and other information filed by us can be inspected and
copied at the Commission’s Public Reference Room located at 100 F Street, N.E. Washington, D.C. 20549, at the prescribed
rates. The Commission also maintains a site on the World Wide Web that contains reports, proxy and information statements and other
information regarding registrants that file electronically. The address of such site is http://www.sec.gov. Please call 1-800-SEC-0330
for further information on the operation of the Commission’s Public Reference Room.
Our Common Stock is
traded on NYSE under the symbol “DNMR.” Certain materials filed by us may be inspected at The New York Stock Exchange
at 11 Wall St, New York, NY 10005.
This prospectus omits
certain information that is contained in the registration statement on file with the Commission, of which this prospectus is a
part. For further information with respect to us and our Common Stock, reference is made to the registration statement, including
the exhibits incorporated therein by reference or filed therewith. Statements herein contained concerning the provisions of any
document are not necessarily complete and, in each instance, reference is made to the copy of such document filed as an exhibit
or incorporated by reference to the registration statement. The registration statement and the exhibits may be inspected without
charge at the offices of the Commission or copies thereof obtained at prescribed rates from the public reference section of the
Commission at the addresses set forth above.
We incorporate information
into this prospectus by reference, which means that we disclose important information to you by referring you to another document
filed separately with the Securities and Exchange Commission (the “Commission”) by us. The information incorporated
by reference is deemed to be part of this prospectus, except to the extent superseded by information contained in this prospectus
or by information contained in documents filed with the SEC after the date of this prospectus. This prospectus incorporates by
reference the documents set forth below that have been previously filed with the Commission; provided, however, that, except as
noted below, we are not incorporating any documents or information deemed to have been furnished rather than filed in accordance
with the rules of the Commission. These documents contain important information about us and our financial condition.
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our Quarterly Reports on Form 10-Q for the quarters ended June 30, 2020,
filed with the Commission on July 31, 2020, and September 30, 2020, filed with the Commission on November 5, 2020;
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our Current Reports on Form 8-K filed with the Commission on May 11, 2020, May 14, 2020, May 22, 2020, October 5, 2020, October 9, 2020, December 14, 2020, December 17, 2020, December 28, 2020, December 29, 2020, January 5, 2021 (as amended on January 6, 2021) and February 4, 2021 (excluding “furnished” and
not “filed” information); and
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the
description of our Common Stock contained in our registration statement on Form
8-A filed on May 4, 2020, including any amendments or reports filed for the purpose of updating that description.
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All documents subsequently
filed by us with the Commission pursuant to Sections 13(a), 13(c), 14, or 15(d) of the Securities Exchange Act of 1934, as amended,
prior to the filing of a post-effective amendment to the registration statement of which this prospectus forms a part which indicates
that all securities offered have been sold or which deregisters all securities then remaining unsold, shall be deemed incorporated
by reference into this prospectus and to be a part hereof from the date of the filing of such documents, except that information
furnished to the Commission under Item 2.02 or Item 7.01 in Current Reports on Form 8-K and any exhibit relating to such information,
shall not be deemed to be incorporated by reference in this prospectus.
For purposes of this
prospectus, any statement contained in a document incorporated, or deemed to be incorporated, by reference herein shall be deemed
to be modified or superseded for purposes of this prospectus to the extent that a statement contained herein or in any other subsequently
filed document which also is, or is deemed to be, incorporated by reference herein modifies or supersedes such statement. Any such
statement so modified or superseded shall not be deemed, except as so modified or superseded, to constitute a part of this prospectus.
We will provide without
charge upon written or oral request to each person, including any beneficial owner, to whom a prospectus is delivered, a copy of
any and all of the documents which are incorporated by reference in this prospectus but not delivered with this prospectus (other
than exhibits unless such exhibits are specifically incorporated by reference in such documents). You may request a copy of these
documents by writing or telephoning us at:
Danimer Scientific, Inc.
140 Industrial Boulevard
Bainbridge, Georgia 39817
(229) 243-7075
EXPERTS
The consolidated financial
statements of Legacy Danimer as of December 31, 2019 and 2018, and for each of the two years in the period ended December 31, 2019,
incorporated in this prospectus by reference to the Company’s Current Report on Form 8-K filed with the Commission on
January 5, 2021, have been audited by Thomas Howell Ferguson P.A., independent registered public accounting firm, as stated in
their report which is incorporated herein by reference (which report expresses an unqualified opinion on the financial statements
and includes an explanatory paragraph referring to the entity’s adoption of ASU No. 2014-09, Revenue from Contracts with
Customers (Topic 606)), and are so included in reliance upon such report given on the authority of such firm as experts in accounting
and auditing.
The financial
statements as of December 31, 2019 and for the period from May 24, 2019 (inception) through December 31, 2019 of Live Oak
Acquisition Corp. incorporated in this prospectus by reference to the Company’s Current Report on Form 8-K filed with
the Commission on January 5, 2021 have been audited by WithumSmith+Brown, PC, an independent registered public
accounting firm, as stated in their report thereon dated February 28, 2020 and referred to in this prospectus, in reliance
upon such report and upon the authority of such firm as experts in accounting and auditing.
LEGAL MATTERS
The validity of the
shares of Common Stock offered hereby will be passed upon for us by Kane Kessler, P.C., New York, New York.
REOFFER PROSPECTUS
DANIMER SCIENTIFIC,
INC.
18,969,978 Shares of Class A Common Stock,
par value $0.0001 per share
March 10, 2021
No dealer, salesperson or other person
is authorized to give any information or to represent anything not contained in this prospectus. You must not rely on any unauthorized
information or representations. This prospectus is an offer to sell only the shares offered hereby, but only under circumstances
and in jurisdictions where it is lawful to do so. The information contained in this prospectus is current only as of its date.
PART II
INFORMATION REQUIRED IN THE REGISTRATION
STATEMENT
Item 3. Incorporation of Documents by
Reference.
The following documents
filed with the Securities and Exchange Commission (the “Commission”) by Danimer Scientific, Inc., a Delaware corporation
(the “Registrant”), are incorporated by reference into the Registration Statement:
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the Registrant’s Quarterly Reports on Form 10-Q for the quarters ended June
30, 2020, filed with the Commission on July 31, 2020, and September
30, 2020, filed with the Commission on November 5, 2020;
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the Registrant’s Current
Reports on Form 8-K filed with the Commission on May
11, 2020, May
14, 2020, May
22, 2020, October 5,
2020, October 9,
2020, December 14,
2020, December 17,
2020, December 28,
2020, December
29, 2020, January
5, 2021 (as amended on January
6, 2021) and February
4, 2021 (excluding “furnished” and not “filed” information); and
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the
description of the Registrant’s Common Stock contained in the Registrant’s registration statement on Form
8-A filed on May 4, 2020, including any amendments or reports filed for the purpose of updating that description.
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All of such documents
are on file with the Commission. In addition, all documents filed by us pursuant to Sections 13(a), 13(c), 14 and 15(d) of the
Exchange Act, subsequent to the date of this Registration Statement and prior to the filing of a post-effective amendment which
indicates that all the securities offered hereby have been sold or which deregisters all securities then remaining unsold shall
be deemed to be incorporated by reference in this Registration Statement and are a part hereof from the date of filing of such
documents, except that information furnished to the Commission under Item 2.02 or Item 7.01 in Current Reports on Form 8-K and
any exhibit relating to such information, shall not be deemed to be incorporated by reference in this prospectus. Any statement
contained in a document incorporated or deemed to be incorporated by reference herein shall be deemed to be modified or superseded
for purposes of this prospectus to the extent that a statement contained herein or in any subsequently filed document that is also
incorporated by reference herein modifies or replaces such statement. Any statements so modified or superseded shall not be deemed,
except as so modified or superseded, to constitute a part of this Registration Statement.
Item 4. Description of Securities.
Not applicable.
Item 5. Interests of Named Experts and Counsel.
Not applicable.
Item 6. Indemnification of Directors and Officers.
Section 145(a)
of the Delaware General Corporation Law (“DGCL”) provides, in general, that a corporation may indemnify any person
who was or is a party to or is threatened to be made a party to any threatened, pending or completed action, suit or proceeding,
whether civil, criminal, administrative or investigative (other than an action by or in the right of the corporation), because
he or she is or was a director, officer, employee or agent of the corporation, or is or was serving at the request of the corporation
as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise, against
expenses (including attorneys’ fees), judgments, fines and amounts paid in settlement actually and reasonably incurred by
the person in connection with such action, suit or proceeding, if he or she acted in good faith and in a manner he or she reasonably
believed to be in or not opposed to the best interests of the corporation and, with respect to any criminal action or proceeding,
had No reasonable cause to believe his or her conduct was unlawful.
Section 145(b)
of the DGCL provides, in general, that a corporation may indemnify any person who was or is a party or is threatened to be made
a party to any threatened, pending or completed action or suit by or in the right of the corporation to procure a judgment in its
favor because the person is or was a director, officer, employee or agent of the corporation, or is or was serving at the request
of the corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other
enterprise, against expenses (including attorneys’ fees) actually and reasonably incurred by the person in connection with
the defense or settlement of such action or suit if he or she acted in good faith and in a manner he or she reasonably believed
to be in or not opposed to the best interests of the corporation, except that no indemnification shall be made with respect
to any claim, issue or matter as to which he or she shall have been adjudged to be liable to the corporation unless and only to
the extent that the Court of Chancery or other adjudicating court determines that, despite the adjudication of liability but in
view of all of the circumstances of the case, he or she is fairly and reasonably entitled to indemnity for such expenses that the
Court of Chancery or other adjudicating court shall deem proper.
Section 145(g)
of the DGCL provides, in general, that a corporation may purchase and maintain insurance on behalf of any person who is or was
a director, officer, employee or agent of the corporation, or is or was serving at the request of the corporation as a director,
officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise against any liability
asserted against such person and incurred by such person in any such capacity, or arising out of his or her status as such, whether
or not the corporation would have the power to indemnify the person against such liability under Section 145 of the DGCL.
The Registrant has
entered into indemnification agreements with each of its directors and executive officers. These agreements provide that the Registrant
will indemnify each of its directors and such officers to the fullest extent permitted by law and its charter and its bylaws.
The Registrant also
maintains a general liability insurance policy, which will cover certain liabilities of directors and officers of the Registrant
arising out of claims based on acts or omissions in their capacities as directors or officers.
Item 7. Exemption from Registration Claimed.
The shares being reoffered and resold pursuant
to the Reoffer Prospectus were deemed to be exempt from registration under the Securities Act in reliance on Section 4(a)(2) of
the Securities Act and/or Rule 701 promulgated thereunder, as transactions by an issuer not involving a public offering or pursuant
to a written compensatory benefit plan.
Item 8. Exhibits.
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4.7
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Form of Restricted Stock Agreement under the Danimer Scientific, Inc. 2020 Long-Term Incentive Plan (incorporated by reference to Exhibit 10.30 to Current Report on Form 8-K (Commission File No. 001-39280) filed on January 5, 2021).
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4.8
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Meredian Holdings Group, Inc. 2016 Director and Executive Officer Stock Incentive Plan, assumed by Danimer Scientific, Inc. (1)
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4.9
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Meredian Holdings Group, Inc. 2016 Omnibus Stock Incentive Plan, assumed by Danimer Scientific, Inc. (1)
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5.1
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Opinion of Kane Kessler, P.C. (1)
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23.1
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Consent of WithumSmith+Brown, PC. (1)
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23.2
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Consent of Thomas Howell Ferguson P.A. (1)
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23.2
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Consent of Kane Kessler, P.C. (Included in Exhibit 5.1). (1)
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24.1
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Power of Attorney (included on the signature page of the Registration Statement hereto). (1)
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Item 9. Undertakings
1. The
undersigned Registrant hereby undertakes:
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(a)
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To file, during any period in which offers or sales are being made, a post-effective amendment
to this registration statement:
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(i)
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to include any prospectus required by Section 10(a)(3) of the Securities Act;
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(ii)
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to reflect in the prospectus any facts or events arising after the effective date of the registration
statement (or the most recent post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental
change in the information set forth in the registration statement. Notwithstanding the foregoing, any increase or decrease in volume
of securities offered (if the total dollar value of securities offered would not exceed that which was registered) and any deviation
from the low or high end of the estimated maximum offering range may be reflected in the form of prospectus filed with the Commission
pursuant to Rule 424(b) if, in the aggregate, the changes in volume and price represent no more than a 20 percent change in the
maximum aggregate offering price set forth in the “Calculation of Registration Fee” table in the effective registration
statement; and
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(iii)
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to include any material information with respect to the plan of distribution not previously disclosed
in the registration statement or any material change to such information in the registration statement;
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provided, however, that
paragraphs (a)(i) and (a)(ii) do not apply if the information required to be included in a post-effective amendment by those paragraphs
is contained in periodic reports filed with or furnished to the Commission by the Registrant pursuant to Section 13 or 15(d)
of the Exchange Act that are incorporated by reference in the registration statement.
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(b)
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that, for the purpose of determining any liability under the Securities Act, each such post-effective
amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such
securities at that time shall be deemed to be the initial bona fide offering thereof; and
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(c)
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to remove from registration by means of a post-effective amendment any of the securities being
registered which remain unsold at the termination of the offering.
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2.
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The undersigned Registrant hereby undertakes that, for purposes of determining any liability under
the Securities Act, each filing of the Registrant’s annual report pursuant to Section 13(a) or Section 15(d) of the Exchange
Act (and, where applicable, each filing of an employee benefit plan’s annual report pursuant to Section 15(d) of the Exchange
Act) that is incorporated by reference in the registration statement shall be deemed to be a new registration statement relating
to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide
offering thereof.
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3.
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Insofar as indemnification for liabilities arising under the Securities Act may be permitted to
directors, officers and controlling persons of the undersigned Registrant pursuant to the provisions described in Item 6 or otherwise,
the Registrant has been advised that in the opinion of the Commission such indemnification is against public policy as expressed
in the Securities Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities
(other than the payment by the Registrant of expenses incurred or paid by a director, officer or controlling person of the Registrant
in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection
with the securities being registered, the Registrant will, unless in the opinion of its counsel the matter has been settled by
controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against
public policy as expressed in the Securities Act and will be governed by the final adjudication of such issue.
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SIGNATURES
Pursuant to the requirements
of the Securities Act of 1933, as amended, the undersigned registrant certifies that it has reasonable grounds to believe that
it meets all of the requirements for filing on Form S-8 and has duly caused this registration statement to be signed on its behalf
by the undersigned, thereunto duly authorized, in the City of Bainbridge, State of Georgia, on March 10, 2021.
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DANIMER SCIENTIFIC, INC.
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By:
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/s/ Stephen E. Croskrey
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Name: Stephen E. Croskrey
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Title: Chief Executive Officer
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POWER OF ATTORNEY
KNOW ALL PERSONS BY
THESE PRESENTS, that each person whose signature appears below hereby constitutes and appoints Stephen E. Croskrey and John A.
Dowdy, III, and each of them, his or her true and lawful attorneys-in-fact and agents, each with full power of substitution and
resubstitution, for him or her and in his or her name, place and stead, in any and all capacities, to sign any and all amendments,
including post-effective amendments, to this registration statement on Form S-8, and to file the same, with exhibits thereto and
other documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorneys-in-fact and
agents, and each of them, full power and authority to do and perform each and every act and thing requisite and necessary to be
done, as fully for all intents and purposes as he or she might or could do in person, hereby ratifying and confirming all that
each of said attorneys-in-fact and agents, or his or her substitute or substitutes may lawfully do or cause to be done by virtue
hereof.
Pursuant to the requirements
of the Securities Act of 1933, as amended, this registration statement has been signed below by the following persons in the capacities
and on the date indicated.
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Signature
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Title
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Date
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/s/ Stephen E. Croskrey
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Chief Executive Officer, Director and Chairman of the Board
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March 10, 2021
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Stephen E. Croskrey
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(Principal Executive Officer)
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/s/ John A. Dowdy, III
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Chief Financial Officer
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March 10, 2021
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John A. Dowdy, III
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(Principal Financial Officer and Principal Accounting Officer)
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/s/ John P. Amboian
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Director
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March 10, 2021
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John P. Amboian
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/s/ Richard J. Hendrix
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Director
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March 10, 2021
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Richard J. Hendrix
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/s/ Christy Basco
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Director
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March 10, 2021
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Christy Basco
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/s/ Philip Gregory Calhoun
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Director
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March 10, 2021
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Philip Gregory Calhoun
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/s/ Gregory Hunt
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Director
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March 10, 2021
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Gregory Hunt
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/s/ Dr. Isao Noda
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Director
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March 10, 2021
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Dr. Isao Noda
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/s/ Stuart Pratt
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Director
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March 10, 2021
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Stuart Pratt
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II-4
Exhibit 4.8
MEREDIAN HOLDINGS GROUP, INC.
2016 DIRECTOR AND EXECUTIVE OFFICER
STOCK INCENTIVE PLAN
MEREDIAN
HOLDINGS GROUP, INC.
2016 DIRECTOR AND EXECUTIVE OFFICER
STOCK INCENTIVE PLAN
In addition to other
terms defined herein or in an Award Agreement, the following terms shall have the meanings given below:
(a) Administrator
means the Board, and, upon its delegation of all or part of its authority to administer the Plan to the Committee, the Committee.
(b) Affiliate
means any Parent or Subsidiary of the Company, and also includes any other business entity which is controlled by, under common
control with or controls the Company; provided, however, that the term “Affiliate” shall be construed in a manner in
accordance with the registration provisions of applicable federal securities laws if and to the extent required.
(c) Applicable
Law means any applicable laws, rules or regulations (or similar guidance), including but not limited to the Georgia Business
Corporate Code, the Securities Act, the Exchange Act, the Code (including, without limitation, Code Section 162(m)) and the listing
or other rules of any applicable stock exchange, in each case if and to the extent applicable to the Company. References to any
applicable laws, rules and regulations, including references to any sections or other provisions of applicable laws, rules and
regulations, shall also refer to any successor provisions thereto unless the Administrator determines otherwise.
(d) Award
means, individually or collectively, a grant under the Plan of an Option (including an Incentive Option or a Nonqualified Option);
a Stock Appreciation Right (including a Related SAR or a Freestanding SAR); a Restricted Award (including a Restricted Stock Award
or a Restricted Unit Award); a Performance Award (including a Performance Share Award or a Performance Unit Award); a Phantom Stock
Award, an Other Stock-Based Award; a Dividend Equivalent Award; a Substitute Award and/or any other award granted under the Plan.
(e) Award
Agreement means an award agreement (which may be in written or electronic form, in the Administrator’s discretion, and
which includes any amendment or supplement thereto) between the Company and a Participant specifying the terms, conditions and
restrictions of an Award granted to the Participant. An Award Agreement may also state such other terms, conditions and restrictions,
including but not limited to terms, conditions and restrictions applicable to shares of Common Stock or any other benefit underlying
an Award, as may be established by the Administrator.
(f) Base
Price means, with respect to a SAR, the initial price assigned to the SAR.
(g) Board
or Board of Directors means the Board of Directors of the Company.
(h) Cause
means, unless the Administrator determines otherwise, a Participant’s termination of employment or service resulting from
the Participant’s (i) termination for “Cause” as defined under the Participant’s employment, change in
control, consulting or other agreement with the Company or an Affiliate, if any, or (ii) if the Participant has not entered into
any such agreement (or, if any such agreement does not define “Cause”), then the Participant’s termination shall
be for “Cause” if termination results due to the Participant’s (A) dishonesty; (B) refusal or failure to perform
his duties for the Company or an Affiliate; or (C) engaging in fraudulent conduct or conduct that could be materially damaging
to the Company without a reasonable good faith belief that such conduct was in the best interest of the Company. The determination
of “Cause” shall be made by the Administrator and its determination shall be final and conclusive. Without in any way
limiting the effect of the foregoing, for purposes of the Plan and an Award, a Participant’s employment or service shall
be deemed to have terminated for Cause if, after the Participant’s employment or service has terminated, facts and circumstances
are discovered that would have justified, in the opinion of the Administrator, a termination for Cause.
(i) A
Change of Control shall (except as may be otherwise provided in an individual Award Agreement or as may be otherwise required,
if at all, under Code Section 409A) be deemed to have occurred on the earliest of the following dates:
(i) The
date any entity or person shall have become the beneficial owner of, or shall have obtained voting control over, more than fifty
percent (50%) of the total voting power of the Company’s then outstanding voting stock;
(ii) The
date of the consummation of (A) a merger, consolidation or reorganization of the Company (or similar transaction involving the
Company), in which the holders of the Common Stock immediately prior to the transaction do not have voting control over more than
fifty percent (50%) of the voting securities of the surviving corporation immediately after such transaction, or (B) the sale or
disposition of all or substantially all the assets of the Company; or
(iii) The
date there shall have been a change in a majority of the Board of Directors of the Company within a 12-month period unless the
nomination for election by the Company’s shareholders of each new Director was approved by the vote of two-thirds of the
members of the Board (or a committee of the Board, if nominations are approved by a Board committee rather than the Board) then
still in office who were in office at the beginning of the 12-month period.
(For the purposes herein, the
term “person” shall mean any individual, corporation, partnership, group, association or other person, as such term
is defined in Section 13(d)(3) or Section 14(d)(2) of the Exchange Act, other than the Company, a Subsidiary of the Company or
any employee benefit plan(s) sponsored or maintained by the Company or any Subsidiary thereof, and the term “beneficial owner”
shall have the meaning given the term in Rule 13d-3 under the Exchange Act.)
For the purposes of clarity,
a transaction shall not constitute a Change of Control if its principal purpose is to change the state of the Company’s incorporation,
create a holding company that would be owned in substantially the same proportions by the persons who held the Company’s
securities immediately before such transaction or is another transaction of other similar effect.
Notwithstanding the preceding
provisions of Section 1(i), in the event that any Awards granted under the Plan are deemed to be deferred compensation subject
to (and not exempt from) the provisions of Code Section 409A, then distributions related to such Awards to be made upon a Change
of Control may be permitted, in the Administrator's discretion, upon the occurrence of one or more of the following events (as
they are defined and interpreted under Code Section 409A): (A) a change in the ownership of the Company; (B) a change in effective
control of the Company; or (C) a change in the ownership of a substantial portion of the assets of the Company.
The Administrator shall have
full and final authority, in its discretion (subject to any Code Section 409A considerations), to determine whether a Change of
Control of the Company has occurred, the date of the occurrence of such Change of Control and any incidental matters relating thereto.
(j) Code
means the Internal Revenue Code of 1986, as amended. Any reference herein to a specific Code section shall be deemed to include
all related regulations or other guidance with respect to such Code section.
(k) Committee
means the Compensation Committee of the Board or other committee of the Board which may be appointed to administer the Plan in
whole or in part.
(l) Common
Stock means the common stock of Meredian Holdings Group, Inc., $0.001 par value, or any successor securities thereto.
(m) Company
means Meredian Holdings Group, Inc., a Georgia corporation, together with any successor thereto.
(n) Covered
Employee shall have the meaning given the term in Code Section 162(m).
(o) Director
means a member of the Board or of the board of directors of an Affiliate.
(p) Disability
shall, except as may be otherwise determined by the Administrator (taking into account any Code Section 409A considerations), as
applied to any Participant, having the meaning given in any Award Agreement, employment agreement, change in control agreement,
consulting agreement or other similar agreement, if any, to which the Participant is a party, or, if there is no such agreement
(or if such agreement does not define “Disability”), “Disability” shall mean the inability of the Participant
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.
The Administrator shall have authority to determine if a Disability has occurred.
(q) Displacement
shall, except as may be otherwise determined by the Administrator (taking into account any Code Section 409A considerations), as
applied to any Participant, be as defined in any Award Agreement, employment agreement, change in control agreement, consulting
agreement or other similar agreement, if any, to which the Participant is a party, or, if there is no such agreement (or if such
agreement does not define “Displacement”), “Displacement” shall mean the termination of the Participant’s
employment or service due to the elimination of the Participant’s job or position without fault on the part of the Participant.
The Administrator shall have authority to determine if a Displacement has occurred.
(r) Dividend
Equivalent Awards shall mean a right granted to a Participant pursuant to Section 13 to receive the equivalent value (in cash
or shares of Common Stock) of dividends paid on Common Stock.
(s) Effective
Date means the effective date of the Plan, as provided in Section 4.
(t) Exchange
Act means the Securities Exchange Act of 1934, as amended.
(u) Executive
Officer means any person who is deemed by the Board or the Committee to be an executive officer of the Company or any Affiliate
(including entities which become Affiliates after the Effective Date of the Plan).
(v) Fair
Market Value per share of the Common Stock shall be established in good faith by the Administrator and, unless otherwise determined
by the Administrator, the Fair Market Value shall be determined in accordance with the following provisions: (A) if the shares
of Common Stock are listed for trading on The NASDAQ Stock Market (“Nasdaq”) or another national or regional stock
exchange, the Fair Market Value shall be the closing sales price per share of the shares on Nasdaq or other principal stock exchange
on which such securities are listed on the date an Award is granted or other determination is made (such date of determination
being referred to herein as a “valuation date”), or, if there is no transaction on such date, then on the trading
date nearest preceding the valuation date for which closing price information is available, and, provided further, if the shares
are not listed for trading on Nasdaq or another stock exchange but are regularly quoted on an automated quotation system (including
the OTC Bulletin Board) or by a recognized securities dealer, the Fair Market Value shall be the closing sales price for such shares
as quoted on such system or by such securities dealer on the valuation date, but if selling prices are not reported, the Fair Market
Value of a share of Common Stock shall be the mean between the high bid and low asked prices for the Common Stock on the valuation
date (or, if no such prices were reported on that date, on the last date such prices were reported), as reported in The Wall Street
Journal or such other source as the Administrator deems reliable; or (B) if the shares of Common Stock are not listed or reported
in any of the foregoing, then the Fair Market Value shall be determined by the Administrator based on such valuation measures or
other factors as it deems appropriate. Notwithstanding the foregoing, (i) with respect to the grant of Incentive Options, the Fair
Market Value shall be determined by the Administrator in accordance with the applicable provisions of Section 20.2031-2 of the
Federal Estate Tax Regulations, or in any other manner consistent with the Code Section 422; and (ii) Fair Market Value shall be
determined in accordance with Code Section 409A if and to the extent required.
(w) Freestanding
SAR means an SAR that is granted without relation to an Option, as provided in Section 8.
(x) Good
Reason means, unless otherwise provided in an Award Agreement or determined by the Administrator, in the context of a Change
of Control, a Participant’s termination of employment or service resulting from the Participant’s (i) termination for
“Good Reason” as defined under the Participant’s employment, change in control, consulting or other similar agreement
with the Company or an Affiliate, if any, or (ii) if the Participant has not entered into any agreement (or, if any such agreement
does not define “Good Reason”), then, a Participant’s termination shall be for “Good Reason” if termination
results due to any of the following without the Participant’s consent: (A) a material reduction in the Participant’s
base salary as in effect immediately prior to the date of the Change of Control, (B) the assignment to the Participant of duties
or responsibilities materially inconsistent with (other than in the context of a promotion), or a material diminution in, the Participant’s
position, authority, duties or responsibilities as in effect immediately prior to the Change of Control, or (C) the relocation
of the Participant’s principal place of employment by more than 50 miles from the location at which the Participant was stationed
immediately prior to the Change of Control. Notwithstanding the foregoing, with respect to Directors, unless the Administrator
determines otherwise, a Director’s termination from service on the Board shall be for “Good Reason” if the Participant
ceases to serve as a Director, or, if the Company is not the surviving company in the Change of Control event, a member of the
board of directors of the surviving entity, in either case, due to the Participant’s failure to be nominated to serve as
a director of such entity or the Participant’s failure to be elected to serve as a director of such entity, but not due to
the Participant’s decision not to continue service on the Board of Directors of the Company or the board of directors of
the surviving entity, as the case may be. An event or condition that would otherwise constitute “Good Reason” shall
constitute Good Reason only if the Company fails to rescind or cure such event or condition within 30 days after receipt from the
Participant of written notice of the event which constitutes Good Reason, and Good Reason shall cease to exist for any event or
condition described herein on the 60th day following the later of the occurrence or the Participant’s knowledge
thereof, unless the Participant has given the Company written notice thereof prior to such date. In the context other than a Change
of Control, “Good Reason” shall be as defined by the Administrator and set forth in the applicable Award Agreement.
The determination of “Good Reason” shall be made by the Administrator and its determination shall be final and conclusive.
(y) Incentive
Option means an Option that is designated by the Administrator as an Incentive Option pursuant to Section 7 and intended to
meet the requirements of incentive stock options under Code Section 422.
(z) Nonqualified
Option means an Option granted under Section 7 that is not intended to qualify as an incentive stock option under Code Section
422.
(aa) Option
means a stock option granted under Section 7 that entitles the holder to purchase from the Company a stated number of shares of
Common Stock at the Option Price, and subject to such terms and conditions, as may be set forth in the Plan or an Award Agreement
or established by the Administrator.
(bb) Option
Period means the term of an Option, as provided in Section 7(d).
(cc) Option
Price means the price at which an Option may be exercised, as provided in Section 7(b).
(dd) Other
Stock-Based Award means a right, granted to a Participant under Section 12, that relates to or is valued by referenced to shares
of Common Stock or other Awards relating to shares of Common Stock.
(ee) Parent
shall mean a “parent corporation,” whether now or hereafter existing, as defined in Code Section 424(e).
(ff) Participant
means an individual who is a Director or Executive Officer who satisfies the requirements of Section 6 and is selected by the Administrator
to receive an Award under the Plan.
(gg) Performance
Award means a Performance Share Award and/or a Performance Unit Award, as provided in Section 10.
(hh) Performance
Measures mean one or more performance factors which may be established by the Administrator with respect to an Award. Performance
factors may be based on such corporate, business unit or division and/or individual performance factors and criteria as the Administrator
in its discretion may deem appropriate; provided, however, that, if and to the extent required by Applicable Law with respect to
Awards granted to Covered Employees that are intended to qualify as “performance-based compensation” under Code Section
162(m), such performance factors shall be objective and shall be based upon one or more of the following criteria (as determined
by the Administrator in its discretion): (i) revenues or sales; (ii) gross margins; (iii) earnings per share; (iv)
product production or shipments; (v) consolidated earnings before or after taxes (including earnings before interest, taxes, depreciation
and amortization); (vi) net income; (vii) operating income; (viii) book value per share; (ix) return on shareholders' equity; (x)
return on investment; (xi) return on capital; (xii) capital raising and improvements in capital structure; (xiii) expense management;
(xiv) operating margins; (xv) maintenance or improvement of gross margins or operating margins; (xvi) stock price or total
shareholder return; (xvii) market share; (xviii) profitability; (xix) costs; (xx) cash flow or free cash flow; (xxi) working
capital; (xxii) return on assets; (xxiii) economic wealth created, and/or (xxiv) strategic business criteria, based on meeting
specified goals or objectives related to market penetration, geographic business expansion, cost targets, customer satisfaction,
employee satisfaction, management of employment practices and employee benefits, management of litigation, management of information
technology, goals relating to acquisitions or divestitures of products, product lines, subsidiaries, affiliates or joint ventures,
quality matrices, customer service matrices, execution of pre-approved corporate strategy and/or such other performance based factors
deemed reasonable and appropriate by the Board. In addition, with respect to Participants who are not Covered Employees, the Administrator
may approve performance objectives based on other criteria, which may or may not be objective. If and to the extent that Code Section
162(m) is applicable to the Company, the Administrator shall, within the time and in the manner prescribed by Code Section 162(m),
define in an objective fashion the manner of calculating the Performance Measures it selects to use for Covered Employees during
any specific performance period. The foregoing criteria may relate to the Company, one or more of its Affiliates or one or more
of its divisions, units, partnerships, joint venturers or minority investments, facilities, product lines or products or any combination
of the foregoing. The targeted level or levels of performance with respect to such business criteria may be established at such
levels and on such terms as the Administrator may determine, in its discretion, including but not limited to on an absolute basis,
in relation to performance in a prior performance period, and/or relative to one or more peer group companies or indices, or any
combination thereof.
(ii) Performance
Share means an Award granted under Section 10, in an amount determined by the Administrator and specified in an Award Agreement,
stated with reference to a specified number of shares of Common Stock, that entitles the holder to receive shares of Common Stock,
a cash payment or a combination of Common Stock and cash (as determined by the Administrator), subject to the terms of the Plan
and the terms and conditions established by the Administrator.
(jj) Performance
Unit means an Award granted under Section 10, in an amount determined by the Administrator and specified in an Award Agreement,
that entitles the holder to receive shares of Common Stock, a cash payment or a combination of Common Stock and cash (as determined
by the Administrator), subject to the terms of the Plan and the terms and conditions established by the Administrator.
(kk) Phantom
Stock Award means an Award granted under Section 11, entitling a Participant to a payment in cash, shares of Common Stock or
a combination of cash and Common Stock (as determined by the Administrator), following the completion of the applicable vesting
period and compliance with the terms of the Plan and other terms and conditions established by the Administrator. The unit value
of a Phantom Stock Award shall be based on the Fair Market Value of a share of Common Stock.
(ll) Plan
means the Meredian Holdings Group, Inc. 2016 Omnibus Stock Incentive Plan, as it may be hereafter amended and/or restated.
(mm) Related
SAR means an SAR granted under Section 8 that is granted in relation to a particular Option and that can be exercised only
upon the surrender to the Company, unexercised, of that portion of the Option to which the SAR relates.
(nn) Restricted
Award means a Restricted Stock Award and/or a Restricted Stock Unit Award, as provided in Section 9.
(oo) Restricted
Stock Award means an Award of shares of Common Stock granted to a Participant under Section 9. Shares of Common Stock subject
to a Restricted Stock Award shall cease to be restricted when, in accordance with the terms of the Plan and the terms and conditions
established by the Administrator, the shares vest and become transferable and free of substantial risks of forfeiture.
(pp) Restricted
Stock Unit means a Restricted Award granted to a Participant pursuant to Section 9 which is settled, if at all, (i) by the
delivery of one share of Common Stock for each Restricted Stock Unit, (ii) in cash in an amount equal to the Fair Market Value
of one share of Common Stock for each Restricted Stock Unit, or (iii) in a combination of cash and shares equal to the Fair Market
Value of one share of Common Stock for each Restricted Stock Unit, as determined by the Administrator. A Restricted Stock Unit
represents the promise of the Company to deliver shares of Common Stock, cash or a combination thereof, as applicable, at the end
of the applicable restriction period if and only to the extent the Award vests and ceases to be subject to forfeiture, subject
to compliance with the terms of the Plan and Award Agreement and any terms and conditions established by the Administrator.
(qq) Retirement
shall, except as may be otherwise determined by the Administrator (taking into account any Code Section 409A considerations), as
applied to any Participant, have the meaning given in an Award Agreement, employment agreement, change in control agreement, consulting
agreement or other similar agreement, if any, to which the Participant is a party, or, if there is no such agreement (or if such
agreement does not define “Retirement”), then “Retirement” shall, unless the Administrator determines otherwise,
mean retirement in accordance with the retirement policies and procedures established by the Company. The Administrator shall have
authority to determine if a Retirement has occurred.
(rr) SAR
means a stock appreciation right granted under Section 8 entitling the Participant to receive, with respect to each share of Common
Stock encompassed by the exercise of such SAR, the excess, if any, of the Fair Market Value on the date of exercise over the Base
Price, subject to the terms of the Plan and Award Agreement and any other terms and conditions established by the Administrator.
References to “SARs” include both Related SARs and Freestanding SARs, unless the context requires otherwise.
(ss) Securities
Act means the Securities Act of 1933, as amended.
(tt) Subsidiary
shall mean a “subsidiary corporation,” whether now or hereafter existing, as defined in Code Section 424(f).
(uu) Substitute
Award means an Award granted by the Company in assumption of, or in substitution or exchange for, an award previously granted,
or the right or obligation to make a future award, by a corporation acquired by the Company or any Subsidiary or with which the
Company or any Subsidiary combines.
(vv) Termination
Date means the date of termination of a Participant’s employment or service for any reason, as determined by the Administrator
(taking into account any Code Section 409A considerations).
The purposes of the
Plan are to encourage and enable selected Directors and Executive Officers of the Company and its Affiliates to acquire or to increase
their holdings of Common Stock and other equity-based interests in the Company in order to promote a closer identification of their
interests with those of the Company and its shareholders, and to provide flexibility to the Company in its ability to motivate,
attract and retain the services of Participants upon whose judgment, interest and special effort the successful conduct of its
operation largely depends. These purposes may be carried out through the granting of Awards to selected Participants, including
the granting of Options in the form of Incentive Stock Options and/or Nonqualified Options; SARs in the form of Freestanding SARs
and/or Related SARs; Restricted Awards in the form of Restricted Stock Awards and/or Restricted Stock Units; Performance Awards
in the form of Performance Shares and/or Performance Units; Phantom Stock Awards; Other Stock-Based Awards; and/or Dividend Equivalent
Awards.
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3.
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Administration of the Plan
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(a) The
Plan shall be administered by the Board or, upon its delegation, by the Committee (or a subcommittee thereof). If and to the extent
the Company is subject to Rule 16b-3 adopted under the Exchange Act, the Committee shall, to the extent required by Rule 16b-3
adopted under the Exchange Act, be comprised solely of two or more “non-employee directors,” as such term is defined
in Rule 16b-3, or as may otherwise be permitted under Rule 16b-3. Further, if and to the extent required by Applicable Law, the
Plan shall be administered by a committee comprised of two or more “outside directors” (as such term is defined in
Code Section 162(m)) or as may otherwise be permitted under Code Section 162(m). In addition, Committee members shall qualify as
“independent directors” under applicable stock exchange rules if and to the extent required.
(b) Subject
to the provisions of the Plan, the Administrator shall have full and final authority in its discretion to take any action with
respect to the Plan including, without limitation, the authority to (i) determine all matters relating to Awards, including selection
of individuals to be granted Awards, the types of Awards, the number of shares of Common Stock, if any, subject to an Award, and
all terms, conditions, restrictions and limitations of an Award; (ii) prescribe the form or forms of Award Agreements evidencing
any Awards granted under the Plan; (iii) establish, amend and rescind rules and regulations for the administration of the Plan;
(iv) correct any defect, supply any omission or reconcile any inconsistency in the Plan or in any Award or Award Agreement; and
(v) construe and interpret the Plan, Awards and Award Agreements made under the Plan, to interpret rules and regulations for administering
the Plan and to make all other determinations deemed necessary or advisable for administering the Plan. In addition, (i) the Administrator
shall have the authority, in its sole discretion, to accelerate the date that any Award which was not otherwise exercisable, vested
or earned shall become exercisable, vested or earned in whole or in part without any obligation to accelerate such date with respect
to any other Award granted to any recipient; and (ii) the Administrator may in its sole discretion modify or extend the terms and
conditions for exercise, vesting or earning of an Award (in each case, taking into account any Code Section 409A considerations).
The Administrator’s authority to grant Awards and authorize payments under the Plan shall not in any way restrict the authority
of the Company to grant compensation to Directors or Executive Officers under any other compensation plan, program or arrangement
of the Company or an Affiliate. The Administrator may determine that a Participant’s rights, payments and/or benefits with
respect to an Award (including but not limited to any shares issued or issuable and/or cash paid or payable with respect to an
Award) shall be subject to reduction, cancellation, forfeiture or recoupment upon the occurrence of certain specified events, in
addition to any otherwise applicable vesting or performance conditions of an Award. Such events may include, but shall not be limited
to, termination of employment for Cause, violation of policies of the Company or an Affiliate, breach of non-solicitation, noncompetition,
confidentiality or other restrictive covenants that may apply to the Participant, other conduct by the Participant that is determined
by the Administrator to be detrimental to the business or reputation of the Company or any Affiliate, and/or other circumstances
where such reduction, cancellation, forfeiture or recoupment is required by Applicable Law. In addition, the Administrator shall
have the authority and discretion to establish terms and conditions of Awards (including but not limited to the establishment of
subplans) as the Administrator determines to be necessary or appropriate to conform to the applicable requirements or practices
of jurisdictions outside of the United States. In addition to action by meeting in accordance with Applicable Law, any action of
the Administrator with respect to the Plan may be taken by a written instrument signed by all of the members of the Board or Committee,
as appropriate, and any such action so taken by written consent shall be as fully effective as if it had been taken by a majority
of the members at a meeting duly held and called. All determinations of the Administrator with respect to the Plan and any Award
or Award Agreement will be final and binding on the Company and all persons having or claiming an interest in any Award granted
under the Plan. No member of the Board or Committee, as applicable, shall be liable while acting as Administrator for any action
or determination made in good faith with respect to the Plan, an Award or an Award Agreement. The members of the Board or Committee,
as applicable, shall be entitled to indemnification and reimbursement in the manner and to the fullest extent provided in the Company’s
articles of incorporation and/or bylaws and/or pursuant to Applicable Law.
(c) The
Administrator may adjust or modify Performance Measures or other performance factors or criteria due to extraordinary items, transactions,
events or developments, or in recognition of any other unusual or infrequent events affecting the Company or the financial statements
of the Company, or in response to changes in Applicable Law, accounting principles or business conditions, in each case as determined
by the Administrator (provided that should Code Section 162(m) become applicable, any adjustment or modification involving Covered
Employees for compensation that is intended to qualify as “performance-based compensation” under Code Section 162(m)
shall be subject to any applicable Code Section 162(m) restrictions). By way of example but not limitation, the Administrator may
provide with respect to any Award that any evaluation of performance shall exclude or otherwise objectively adjust for any specified
circumstance or event that occurs during a performance period, including circumstances or events such as the following: (i) asset
write-downs or impairment charges; (ii) significant litigation or claim judgments or settlements; (iii) the effect of changes in
tax laws, accounting standards or principles or other laws or regulatory rules; (iv) any reorganization and restructuring programs;
(v) extraordinary nonrecurring items as described in then-current accounting principles; (vi) extraordinary nonrecurring items
as described in management’s discussion and analysis of financial condition and results of operations appearing in the Company’s
annual report to shareholders; (vii) acquisitions or divestitures; (viii) a change in the Company’s fiscal year; (ix) any
other specific unusual or infrequent events or objectively determinable category thereof; and/or (x) foreign exchange gains and
losses.
(d) Notwithstanding
the other provisions of Section 3, the Board may expressly delegate to one or more officers of the Company or a special committee
consisting of one or more directors who are also officers of the Company the authority, within specified parameters, to grant Awards
to eligible Participants, and to make any or all of the determinations reserved for the Administrator in the Plan and summarized
in Section 3(b) with respect to such Awards (subject to any restrictions imposed by Applicable Law and such terms and conditions
as may be established by the Administrator); provided, however, that, if and to the extent required by Section 16 of the Exchange
Act or Code Section 162(m), the Participant, at the time of said grant or other determination, (i) is not deemed to be an officer
or director of the Company within the meaning of Section 16 of the Exchange Act; and (ii) is not deemed to be a Covered Employee
as defined under Code Section 162(m). To the extent that the Administrator has delegated authority to grant Awards pursuant to
this Section 3(e) to an officer and/or a special committee, references to the “Administrator” shall include references
to such officer(s) and/or special committee, subject, however, to the requirements of the Plan, Rule 16b-3, Code Section 162(m)
and other Applicable Law.
The Effective Date
of the Plan shall be May 5, 2016 (the “Effective Date”). Awards may be granted on or after the Effective Date, but
no Awards may be granted after May 4, 2026. Awards that are outstanding at the end of the Plan term (or such earlier termination
date as may be established by the Board pursuant to Section 16(a)) shall continue in accordance with their terms, unless otherwise
provided in the Plan or an Award Agreement.
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5.
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Shares of Stock Subject to the Plan; Award Limitations
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(a) Shares
of Stock Subject to the Plan: Subject to adjustments as provided in Section 5(d), the maximum aggregate number of shares of
Common Stock that may be issued pursuant to Awards granted under the Plan shall initially not exceed 890,000 shares, which number
of shares of Common Stock available for issuance under the Plan shall automatically increase on January 1 of each year, beginning
on January 1, 2017 and continuing through January 1, 2026, by a number of shares of Common Stock equal to four and one-half percent
(4.50%) of the total number of shares of Common Stock outstanding on December 31 of the immediately preceding December. Shares
delivered under the Plan shall be authorized but unissued shares or shares purchased on the open market or by private purchase.
The Company hereby reserves sufficient authorized shares of Common Stock to meet the grant of Awards hereunder.
(b) Award
Limitations: Notwithstanding any provision in the Plan to the contrary, the following limitations shall apply to Awards granted
under the Plan, in each case subject to adjustments pursuant to Section 5(d):
(i) The
maximum aggregate number of shares of Common Stock that may be issued under the Plan pursuant to the grant of Incentive Options
shall not exceed 890,000 shares;
(ii) If
and to the extent required under Code Section 162(m), in any 12-month period, no Participant may be granted Options and SARs that
are not related to an Option for more than 890,000 shares of Common Stock (or the equivalent value thereof based on the Fair Market
Value per share of the Common Stock on the date of grant of an Award);
(iii) If
and to the extent required under Code Section 162(m), in any 12-month period, no Participant may be granted Awards other than Options
or SARs that are settled in shares of Common Stock for more than 890,000 shares of Common Stock (or the equivalent value thereof
based on the Fair Market Value per share of the Common Stock on the date of grant of an Award).
(For purposes of Section 5(b)(ii)
and (iii), an Option and Related SAR shall be treated as a single Award.)
(c) Shares
Not Subject to Limitations: The following will not be applied to the share limitations of Section 5(a) above: (i) dividends,
including dividends paid in shares, or dividend equivalents paid in cash in connection with outstanding Awards; (ii) Awards which
are settled in cash rather than the issuance of shares; (iii) any shares subject to an Award if the Award is forfeited, cancelled,
terminated, expires or lapses for any reason without the issuance of shares underlying the Award or any shares subject to an Award
which shares are forfeited to, or repurchased or reacquired by, the Company; and (iv) any shares surrendered by a Participant or
withheld by the Company to pay the Option Price or purchase price for an Award or shares used to satisfy any tax withholding requirements
in connection with the exercise, vesting or earning of an Award if, in accordance with the terms of the Plan, a Participant pays
such Option Price or purchase price or satisfies such tax withholding requirements by either tendering previously owned shares
or having the Company withhold shares. Further, (i) shares issued under the Plan through the settlement, assumption or substitution
of outstanding awards granted by another entity or obligations to grant future awards as a condition of or in connection with a
merger, acquisition or similar transaction involving the Company acquiring another entity shall not reduce the maximum number of
shares of Common Stock available for delivery under the Plan; and (ii) available shares under a shareholder approved plan of an
acquired company (as appropriately adjusted to reflect the transaction) may be used for Awards under the Plan (subject to applicable
stock exchange listing requirements) and will not reduce the maximum number of shares available under the Plan.
(d) Adjustments;
Right to Issue Additional Securities: If there is any change in the outstanding shares of Common Stock because of a merger,
consolidation or reorganization involving the Company, or if the Board declares a stock dividend, stock split distributable in
shares of Common Stock, other distribution (other than regular or ordinary cash dividends) or reverse stock split, combination
or reclassification of the Common Stock, or if there is a similar change in the capital stock structure of the Company affecting
the Common Stock (excluding conversion of convertible securities by the Company and/or the exercise of warrants by their holders),
then the number of shares of Common Stock reserved for issuance under the Plan shall be correspondingly adjusted, and the Administrator
shall make such adjustments to Awards or to any provisions of this Plan as the Administrator deems equitable to prevent dilution
or enlargement of Awards or as may otherwise be advisable. Nothing in the Plan, an Award or an Award Agreement shall limit the
ability of the Company to issue additional securities (including but not limited to the issuance of other options or other derivative
securities, warrants, additional shares or classes of Common Stock, preferred stock and/or other convertible securities).
(e) Substitute
Awards: Substitute Awards shall not reduce the Common Stock authorized for issuance under the Plan or authorized for grant
to Participants in any calendar year. Additionally, in the event that a corporation acquired by the Company or any Subsidiary,
or with which the Company or any Subsidiary, has shares available under a pre-existing plan approved by stockholders and not adopted
in contemplation of such acquisition or combination, the shares available for grant pursuant to the terms of such pre-existing
plan (as adjusted, to the extent appropriate, using the exchange ratio or other adjustment or valuation ratio or formula used in
such acquisition or combination to determine the consideration payable to the holders of common stock of the entities party to
such acquisition or combination) may be used for Awards under the Plan and shall not reduce the Common Stock authorized for issuance
under the Plan; provided the Awards using such available shares shall not be made after the date awards or grants could have been
made under the terms of the pre-existing plan, absent the acquisition or combination, and shall only be made to individuals who
were not Directors or Executive Officers of the Company or its Subsidiaries immediately before such acquisition or combination.
An Award may be granted
only to an individual who satisfies all of the following eligibility requirements on the date the Award is granted:
(a) The
individual is either (i) a Director or (ii) an Executive Officer, provided that in each case such person is an “accredited
investor” within the meaning of Rule 501(a) promulgated under the Securities Act.
(b) With
respect to the grant of Incentive Options, the individual is otherwise eligible to participate under this Section 6, is an Employee
of the Company or a Parent or Subsidiary and does not own, immediately before the time that the Incentive Option is granted, stock
possessing more than 10% of the total combined voting power of all classes of stock of the Company or a Parent or Subsidiary. Notwithstanding
the foregoing, an Employee who owns more than 10% of the total combined voting power of the Company or a Parent or Subsidiary may
be granted an Incentive Option if the Option Price is at least 110% of the Fair Market Value of the Common Stock, and the Option
Period does not exceed five years. For this purpose, an individual will be deemed to own stock which is attributable to him under
Code Section 424(d).
(c) With
respect to the grant of Substitute Awards or assumption of awards in connection with a merger, consolidation, acquisition, reorganization
or similar business transaction involving the Company or an Affiliate, the recipient is otherwise eligible to receive the Award
and the terms of the award are consistent with the Plan and Applicable Law (including, to the extent necessary, the federal securities
laws registration provisions, Code Section 409A and Code Section 424(a)).
(d) The
individual, being otherwise eligible under this Section 6, is selected by the Administrator as an individual to whom an Award shall
be granted (as defined above, a “Participant”).
(a) Grant
of Options: Subject to the limitations of the Plan, the Administrator may in its discretion grant Options to such eligible
Participants in such numbers, subject to such terms and conditions, and at such times as the Administrator shall determine. Both
Incentive Options and Nonqualified Options may be granted under the Plan, as determined by the Administrator; provided, however,
that Incentive Options may only be granted to Employees of the Company or a Parent or Subsidiary. To the extent that an Option
is designated as an Incentive Option but does not qualify as such under Code Section 422, the Option (or portion thereof) shall
be treated as a Nonqualified Option. An Option may be granted with or without a Related SAR.
(b) Option
Price: The Option Price per share at which an Option may be exercised shall be established by the Administrator and stated
in the Award Agreement evidencing the grant of the Option; provided, that (i) the Option Price of an Option shall be no less than
100% of the Fair Market Value per share of the Common Stock as determined on the date the Option is granted (or 110% of the Fair
Market Value with respect to Incentive Options granted to an Employee who owns stock possessing more than 10% of the total combined
voting power of all classes of stock of the Company or a Parent or Subsidiary, as provided in Section 6(b)); and (ii) in no event
shall the Option Price per share of any Option be less than the par value, if any, per share of the Common Stock. Notwithstanding
the foregoing, the Administrator may in its discretion authorize the grant of substitute or assumed options of an acquired entity
with an Option Price not equal to 100% of the Fair Market Value of the stock on the date of grant, if the terms of such substitution
or assumption otherwise comply, to the extent deemed applicable, with Code Section 409A and/or Code Section 424(a).
(c) Date
of Grant: An Option shall be considered to be granted on the date that the Administrator acts to grant the Option, or on such
later date as may be established by the Administrator in accordance with Applicable Law.
(d) Option
Period and Limitations on the Right to Exercise Options:
(i) The
Option Period shall be determined by the Administrator at the time the Option is granted and shall be stated in the Award Agreement.
The Option Period shall not extend more than 10 years from the date on which the Option is granted (or five years with respect
to Incentive Options granted to an Employee who owns stock possessing more than 10% of the total combined voting power of all classes
of stock of the Company or a Parent or Subsidiary, as provided in Section 6(b)). Any Option or portion thereof not exercised before
expiration of the Option Period shall terminate. The period or periods during which, and the terms and conditions pursuant to which,
an Option may vest and become exercisable shall be determined by the Administrator in its discretion, subject to the terms of the
Plan.
(ii) An
Option may be exercised by giving written notice to the Company in form acceptable to the Administrator at such place and subject
to such conditions as may be established by the Administrator or its designee. Such notice shall specify the number of shares to
be purchased pursuant to an Option and the aggregate purchase price to be paid therefor and shall be accompanied by payment of
such purchase price. Unless an Award Agreement provides otherwise, such payment shall be in the form of cash or cash equivalent;
provided that, except where prohibited by the Administrator or Applicable Law (and subject to such terms and conditions as may
be established by the Administrator), payment may also be made:
(A) By
delivery (by either actual delivery or attestation) of shares of Common Stock owned by the Participant for such time period, if
any, as may be determined by the Administrator;
(B) By
shares of Common Stock withheld upon exercise;
(C) With
respect only to purchases upon exercise of an Option after a Public Market for the Common Stock exists, by delivery of written
notice of exercise to the Company and delivery to a broker of written notice of exercise and irrevocable instructions to promptly
deliver to the Company the amount of sale or loan proceeds to pay the Option Price;
(D) By
such other payment methods as may be approved by the Administrator and which are acceptable under Applicable Law; or
(E) By
any combination of the foregoing methods.
Shares delivered or withheld
in payment on the exercise of an Option shall be valued at their Fair Market Value on the date of exercise, as determined by the
Administrator or its designee. For the purposes of the Plan, a “Public Market” for the Common Stock shall be deemed
to exist (i) upon consummation of a firm commitment underwritten public offering of the Common Stock (or successor securities thereto)
pursuant to an effective registration statement under the Securities Act, or (ii) if the Administrator otherwise determines that
there is an established public market for the Common Stock.
(iii) The
Administrator shall determine the extent, if any, to which a Participant may have the right to exercise an Option following termination
of the Participant’s employment or service with the Company. Such rights, if any, shall be subject to the sole discretion
of the Administrator, shall be stated in the individual Award Agreement, need not be uniform among all Options issued pursuant
to this Section 7, and may reflect distinctions based on the reasons for termination of employment or service. The Administrator
also shall have authority, in its sole discretion (taking into account any Code Section 409A considerations), to accelerate the
date for exercising all or any part of an Option which was not otherwise vested and exercisable, extend the period during which
an Option may be exercised, modify the other terms and conditions of exercise, or any combination of the foregoing.
(e) Notice
of Disposition: If shares of Common Stock acquired upon exercise of an Incentive Option are disposed of within two years following
the date of grant or one year following the transfer of such shares to a Participant upon exercise, the Participant shall, promptly
following such disposition, notify the Company in writing of the date and terms of such disposition and provide such other information
regarding the disposition as the Administrator may reasonably require.
(f) Limitation
on Incentive Options: In no event shall there first become exercisable by an Employee in any one calendar year Incentive Options
granted by the Company or any Parent or Subsidiary with respect to shares having an aggregate Fair Market Value (determined at
the time an Incentive Option is granted) greater than $100,000; provided that, if such limit is exceeded, then the first $100,000
of shares to become exercisable in such calendar year will be Incentive Options and the Options (or portion thereof) for shares
with a value in excess of $100,000 that first became exercisable in that calendar year will be Nonqualified Options. In the event
the Code or the regulations promulgated thereunder are amended after the Effective Date of the Plan to provide for a different
limitation on the Fair Market Value of shares permitted to be subject to Incentive Options, then such different limit shall be
automatically incorporated herein. To the extent that any Incentive Options are first exercisable by a Participant in excess of
the limitation described herein, the excess shall be considered a Nonqualified Option.
(g) Nontransferability
of Options: Incentive Options shall not be transferable (including by sale, assignment, pledge or hypothecation) other than
transfers by will or the laws of intestate succession or, in the Administrator’s discretion, such transfers as may otherwise
be permitted in accordance with Treasury Regulation Section 1.421-1(b)(2) or Treasury Regulation Section 1.421-2(c) or any successor
provisions thereto. Nonqualified Options shall not be transferable (including by sale, assignment, pledge or hypothecation) other
than by will or the laws of intestate succession, except for transfers if and to the extent permitted by the Administrator in a
manner consistent with the registration provisions of the Securities Act. Except as may be permitted by the preceding, an Option
shall be exercisable during the Participant’s lifetime only by him or by his guardian or legal representative. The designation
of a beneficiary in accordance with the Plan does not constitute a transfer.
(h) Modification,
Extension or Renewal. The Board may modify, extend or renew outstanding Options and authorize the grant of new Options in substitution
therefor, provided that, (a) except as expressly provided for in the Plan or an Award Agreement, any such action may not, without
the written consent of a Participant, impair any of such Participant’s rights under any Option previously granted and (b)
except pursuant to the provisions of Section 7(b) of the Plan, Options issued hereunder will not be repriced, replaced or regranted
through cancellation or by lowering the Exercise Price of a previously granted Award without prior approval of the Company’s
stockholders. Any outstanding Incentive Option that is modified, extended, renewed or otherwise altered will be treated in accordance
with Section 424(h) of the Code.
(i) Limitations
on Exercise. The Board may specify a reasonable minimum number of Shares that may be purchased on any exercise of an Option,
provided that such minimum number will not prevent Participant from exercising the Option for the full number of Shares for which
it is then exercisable.
(j) No
Disqualification. Notwithstanding any other provision in this Plan, no term of this Plan relating to Incentive Options will
be interpreted, amended or altered, nor will any discretion or authority granted under this Plan be exercised, so as to disqualify
this Plan under Section 422 of the Code or, without the consent of the Participant affected, to disqualify any Incentive Option
under Section 422 of the Code.
(k) Lapsed
Grants. Notwithstanding anything in the Plan to the contrary, the Company may, in its sole discretion, allow the exercise of
a lapsed grant if the Company determines that: (a) the lapse was the result of the Company’s inability to timely execute
the exercise of an Option award prior to its lapse and (b) the Participant made valid and reasonable efforts to exercise the Award.
In the event the Company makes such a determination, the Company shall allow the exercise to occur as promptly as possible following
its receipt of exercise instructions subsequent to such determination; provided, however, that in no event shall
any such exercise be permitted to occur later than the tenth anniversary of the date of grant of such award.
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8.
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Stock Appreciation Rights
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(a) Grant
of SARs: Subject to the limitations of the Plan, the Administrator may in its discretion grant SARs to such eligible Participants,
in such numbers, upon such terms and at such times as the Administrator shall determine. SARs may be granted to the holder of an
Option (a “Related Option”) with respect to all or a portion of the shares of Common Stock subject to the Related
Option (a “Related SAR”) or may be granted separately, without relationship to an Option, to an eligible individual
(a “Freestanding SAR”). The Base Price per share of a SAR shall be no less than 100% of the Fair Market Value
per share of the Common Stock on the date the SAR is granted. Notwithstanding the foregoing, the Administrator may in its discretion
authorize the grant of substitute or assumed SARs of an acquired entity with a Base Price per share not equal to at least 100%
of the Fair Market Value of the stock on the date of grant, if the terms of such substitution or assumption otherwise comply, to
the extent deemed applicable, with Code Section 409A and/or Code Section 424(a). A SAR shall be considered to be granted on the
date that the Administrator acts to grant the SAR, or on such other date as may be established by the Administrator in accordance
with Applicable Law.
(b) Related
SARs: A Related SAR may be granted either concurrently with the grant of the Related Option or (if the Related Option is a
Nonqualified Option) at any time thereafter prior to the complete exercise, termination, expiration or cancellation of such Related
Option. The Base Price of a Related SAR shall be equal to the Option Price of the Related Option. Related SARs shall be exercisable
only at the time and to the extent that the Related Option is exercisable (and may be subject to such additional limitations on
exercisability as the Administrator may provide in an Award Agreement), and in no event after the complete termination or full
exercise of the Related Option. Notwithstanding the foregoing, a Related SAR that is related to an Incentive Option may be exercised
only to the extent that the Related Option is exercisable and only when the Fair Market Value exceeds the Option Price of the Related
Option. Upon the exercise of a Related SAR granted in connection with a Related Option, the Option shall be canceled to the extent
of the number of shares as to which the SAR is exercised, and upon the exercise of a Related Option, the Related SAR shall be canceled
to the extent of the number of shares as to which the Related Option is exercised or surrendered.
(c) Freestanding
SARs: An SAR may be granted without relationship to an Option (as defined above, a “Freestanding SAR”) and,
in such case, will be exercisable upon such terms and subject to such conditions as may be determined by the Administrator, subject
to the terms of the Plan.
(d) Exercise
of SARs:
(i) Subject
to the terms of the Plan, SARs shall be vested and exercisable in whole or in part upon such terms and conditions as may be established
by the Administrator. The period during which a SAR may be exercisable shall not exceed 10 years from the date of grant or, in
the case of Related SARs, such shorter Option Period as may apply to the Related Option. Any SAR or portion thereof not
exercised before expiration of the period established by the Administrator shall terminate.
(ii) SARs
may be exercised by giving written notice to the Company in form acceptable to the Administrator at such place and subject to such
terms and conditions as may be established by the Administrator or its designee. Unless the Administrator determines otherwise,
the date of exercise of a SAR shall mean the date on which the Company shall have received proper notice from the Participant of
the exercise of such SAR.
(iii) The
Administrator shall determine the extent, if any, to which a Participant may have the right to exercise a SAR following termination
of the Participant’s employment or service with the Company. Such rights, if any, shall be determined in the sole discretion
of the Administrator, shall be stated in the individual Award Agreement, need not be uniform among all SARs issued pursuant to
this Section 8, and may reflect distinctions based on the reasons for termination of employment or service. The Administrator also
may, in its sole discretion (taking into account any Code Section 409A considerations), accelerate the date for exercising all
or any part of a SAR which was not otherwise exercisable on the Termination Date, extend the period during which a SAR may be exercised,
modify the terms and conditions to exercise, or any combination of the foregoing.
(e) Payment
Upon Exercise: Subject to the limitations of the Plan, upon the exercise of a SAR, a Participant shall be entitled to receive
payment from the Company in an amount determined by multiplying (i) the excess, if any, of the Fair Market Value of a share of
Common Stock on the date of exercise of the SAR over the Base Price of the SAR, by (ii) the number of shares of Common Stock with
respect to which the SAR is being exercised. The consideration payable upon exercise of a SAR shall be paid in cash, shares of
Common Stock (valued at Fair Market Value on the date of exercise of the SAR) or a combination of cash and shares of Common Stock,
as determined by the Administrator.
(f) Nontransferability:
Unless the Administrator determines otherwise, SARs shall not be transferable (including by sale, assignment, pledge or hypothecation)
other than by will or the laws of intestate succession, except for transfers if and to the extent permitted by the Administrator
in a manner consistent with the registration provisions of the Securities Act. Except as may be permitted by the preceding sentence,
SARs may be exercised during the Participant’s lifetime only by him or by his guardian or legal representative. The designation
of a beneficiary in accordance with the Plan does not constitute a transfer.
(a) Grant
of Restricted Awards: Subject to the limitations of the Plan, the Administrator may in its discretion grant Restricted Awards
to such eligible Participants, for such numbers of shares of Common Stock, upon such terms and at such times as the Administrator
shall determine. Such Restricted Awards may be in the form of Restricted Stock Awards and/or Restricted Stock Units that are subject
to certain conditions, which conditions must be met in order for the Restricted Award to vest and be earned (in whole or in part)
and no longer subject to forfeiture. Restricted Stock Awards shall be payable in shares of Common Stock. Restricted Stock Units
shall be payable in cash or shares of Common Stock, or partly in cash and partly in shares of Common Stock, in accordance with
the terms of the Plan and the discretion of the Administrator. The Administrator shall determine the nature, length and starting
date of the period, if any, during which a Restricted Award may be earned (the “Restriction Period”), and shall
determine the conditions which must be met in order for a Restricted Award to be granted or to vest or be earned (in whole or in
part), which conditions may include, but are not limited to, payment of a stipulated purchase price, attainment of performance
objectives, continued service or employment for a certain period of time, a combination of attainment of performance objectives
and continued service, Retirement, Displacement, Disability, death, or any combination of such conditions. In the case of Restricted
Awards based upon performance criteria, or a combination of performance criteria and continued service, the Administrator shall
determine the Performance Measures applicable to such Restricted Awards (subject to Section 1(ii)).
(b) Vesting
of Restricted Awards: Subject to the terms of the Plan (and taking into account any Code Section 409A considerations), the
Administrator shall have sole authority to determine whether and to what degree Restricted Awards have vested and been earned and
are payable and to establish and interpret the terms and conditions of Restricted Awards. The Administrator, in its sole discretion,
may (subject to any Code Section 409A considerations) accelerate the date that any Restricted Award granted to a Participant shall
be deemed to be vested or earned in whole or in part, without any obligation to accelerate such date with respect to other Restricted
Awards granted to any Participant.
(c) Termination
of Employment or Service; Forfeiture: Unless the Administrator determines otherwise, if the employment or service of a Participant
shall be terminated for any reason (whether by the Company or the Participant and whether voluntary or involuntary) and all or
any part of a Restricted Award has not vested or been earned pursuant to the terms of the Plan and related Award Agreement, such
Award, to the extent not then vested or earned, shall be forfeited immediately upon such termination and the Participant shall
have no further rights with respect thereto.
(d) Share
Certificates; Escrow: Unless the Administrator determines otherwise, a certificate or certificates representing the shares
of Common Stock subject to a Restricted Stock Award shall be issued in the name of the Participant (or, in the case of uncertificated
shares, other written evidence of ownership in accordance with Applicable Law shall be provided) after the Award has been granted.
Notwithstanding the foregoing, the Administrator may require that (i) a Participant deliver the certificate(s) (or other instruments)
for such shares to the Administrator or its designee to be held in escrow until the Restricted Stock Award vests and is no longer
subject to a substantial risk of forfeiture (in which case the shares will be promptly released to the Participant) or is forfeited
(in which case the shares shall be returned to the Company); and/or (ii) a Participant deliver to the Company a stock power, endorsed
in blank (or similar instrument), relating to the shares subject to the Restricted Stock Award which are subject to forfeiture.
Unless the Administrator determines otherwise, a certificate or certificate representing shares of Common Stock issuable pursuant
to a Restricted Stock Unit shall be issued in the name of the Participant (or, in the case of uncertificated shares, other written
evidence of ownership in accordance with Applicable Law shall be provided) promptly after the Award (or portion thereof) has vested
and is distributable.
(e) Nontransferability:
Unless the Administrator determines otherwise, Restricted Awards that have not vested shall not be transferable (including by sale,
assignment, pledge or hypothecation) other than transfers by will or the laws of intestate succession, and the recipient of a Restricted
Award shall not sell, transfer, assign, pledge or otherwise encumber shares subject to the Award until the Restriction Period has
expired and until all conditions to vesting have been met. The designation of a beneficiary in accordance with the Plan does not
constitute a transfer.
(a) Grant
of Performance Awards: Subject to the terms of the Plan, the Administrator may in its discretion grant Performance Awards to
such eligible Participants upon such terms and conditions and at such times as the Administrator shall determine. Performance Awards
may be in the form of Performance Shares and/or Performance Units. An Award of a Performance Share is a grant of a right to receive
shares of Common Stock, the cash value thereof, or a combination thereof (in the Administrator’s discretion), which is contingent
upon the achievement of performance or other objectives during a specified period and which has a value on the date of grant equal
to the Fair Market Value of a share of Common Stock. An Award of a Performance Unit is a grant of a right to receive shares of
Common Stock or a designated dollar value amount of Common Stock which is contingent upon the achievement of performance or other
objectives during a specified period, and which has an initial value determined in a dollar amount established by the Administrator
at the time of grant. Subject to Section 5(b), the Administrator shall have discretion to determine the number of Performance Units
and/or Performance Shares granted to any Participant. The Administrator shall determine the nature, length and starting date of
the period during which a Performance Award may be earned (the “Performance Period”), and shall determine the
conditions which must be met in order for a Performance Award to be granted or to vest or be earned (in whole or in part), which
conditions may include but are not limited to payment of a stipulated purchase price, attainment of performance objectives, continued
service or employment for a certain period of time, or a combination of any such conditions. Subject to Section 1(ii), the Administrator
shall determine the Performance Measures to be used in valuing Performance Awards.
(b) Earning
of Performance Awards: Subject to the terms of the Plan (and taking into account any Code Section 409A considerations), the
Administrator shall have sole authority to determine whether and to what degree Performance Awards have been earned and are payable
and to interpret the terms and conditions of Performance Awards and the provisions of Section 10. The Administrator, in its sole
discretion, may (subject to any Code Section 409A considerations) accelerate the date that any Performance Award granted to a Participant
shall be deemed to be earned in whole or in part, without any obligation to accelerate such date with respect to other Awards granted
to any Participant.
(c) Form
of Payment: Payment of the amount to which a Participant shall be entitled upon earning a Performance Award shall be made in
cash, shares of Common Stock, or a combination of cash and shares of Common Stock, as determined by the Administrator in its sole
discretion. Payment may be made in a lump sum or upon such terms as may be established by the Administrator (taking into account
any Code Section 409A considerations).
(d) Termination
of Employment or Service; Forfeiture: Unless the Administrator determines otherwise (taking into account any Code Section 409A
considerations), if the employment or service of a Participant shall terminate for any reason (whether by the Company or the Participant
and whether voluntary or involuntary) and the Participant has not earned all or part of a Performance Award pursuant to the terms
of the Plan and related Award Agreement, such Award, to the extent not then earned, shall be forfeited immediately upon such termination
and the Participant shall have no further rights with respect thereto.
(e) Nontransferability:
Unless the Administrator determines otherwise, Performance Awards which have not been earned shall not be transferable (including
by sale, assignment, pledge or hypothecation) other than transfers by will or the laws of intestate succession, and the recipient
of a Performance Award shall not sell, transfer, assign, pledge or otherwise encumber any shares or any other benefit subject to
the Award until the Performance Period has expired and the conditions to earning the Award have been met. The designation of a
beneficiary in accordance with the Plan does not constitute a transfer.
(a) Grant
of Phantom Stock Awards: Subject to the terms of the Plan, the Administrator may in its discretion grant Phantom Stock Awards
to such eligible Participants, in such numbers, upon such terms and at such times as the Administrator shall determine. A Phantom
Stock Award is an Award to a Participant of a number of hypothetical share units with respect to shares of Common Stock, with a
value based on the Fair Market Value of a share of Common Stock.
(b) Vesting
of Phantom Stock Awards: Subject to the terms of the Plan (and taking into account any Code Section 409A considerations), the
Administrator shall have sole authority to determine whether and to what degree Phantom Stock Awards have vested and are payable
and to interpret the terms and conditions of Phantom Stock Awards. The Administrator, in its sole discretion, may (subject to any
Code Section 409A considerations) accelerate the date that any Phantom Stock Award granted to a Participant shall be deemed to
be earned in whole or in part, without any obligation to accelerate such date with respect to other Awards granted to any Participant.
(c) Termination
of Employment or Service; Forfeiture: Unless the Administrator determines otherwise (taking into account any Code Section 409A
considerations), if the employment or service of a Participant shall be terminated for any reason (whether by the Company or the
Participant and whether voluntary or involuntary) and all or any part of a Phantom Stock Award has not vested and become payable
pursuant to the terms of the Plan and related Award Agreement, such Award, to the extent not then vested or earned, shall be forfeited
immediately upon such termination and the Participant shall have no further rights with respect thereto.
(d) Payment
of Phantom Stock Awards: Upon vesting of all or a part of a Phantom Stock Award and satisfaction of such other terms and conditions
as may be established by the Administrator, the Participant shall be entitled to a payment of an amount equal to the Fair Market
Value of one share of Common Stock with respect to each such Phantom Stock unit which has vested and is payable. Payment may be
made, in the discretion of the Administrator, in cash or in shares of Common Stock valued at their Fair Market Value on the applicable
vesting date or dates (or other date or dates determined by the Administrator), or in a combination thereof. Payment may be made
in a lump sum or upon such terms as may be established by the Administrator (taking into account any Code Section 409A considerations).
(e) Nontransferability:
Unless the Administrator determines otherwise, (i) Phantom Stock Awards shall not be transferable (including by sale, assignment,
pledge or hypothecation) other than transfers by will or the laws of intestate succession and (ii) shares of Common Stock (if any)
subject to a Phantom Stock Award may not be sold, transferred, assigned, pledged or otherwise encumbered until the Phantom Stock
Award has vested and all other conditions established by the Administrator have been met. The designation of a beneficiary in accordance
with the Plan does not constitute a transfer.
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12.
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Other Stock-Based Awards
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The Administrator shall
have the authority to grant Other Stock-Based Awards to one or more eligible Participants. Such Other Stock-Based Awards may be
valued in whole or in part by reference to, or otherwise based on or related to, shares of Common Stock or Awards for shares of
Common Stock, including but not limited to Other Stock-Based Awards granted in lieu of bonus, salary or other compensation, Other
Stock-Based Awards granted with vesting or performance conditions, and/or Other Stock-Based Awards granted without being subject
to vesting or performance conditions. Subject to the provisions of the Plan, the Administrator shall determine the number of shares
of Common Stock to be awarded to a Participant under (or otherwise related to) such Other Stock-Based Awards; whether such Other
Stock-Based Awards shall be settled in cash, shares of Common Stock or a combination of cash and shares of Common Stock; and the
other terms and conditions of such Awards. Unless the Administrator determines otherwise, (i) Other Stock-Based Awards shall not
be transferable (including by sale, assignment, pledge or hypothecation) other than transfers by will or the laws of intestate
succession, and (ii) shares of Common Stock (if any) subject to an Other Stock-Based Award may not be sold, transferred, assigned,
pledged or otherwise encumbered until the Other Stock-Based Award has vested and all other conditions established by the Administrator
have been met. The designation of a beneficiary in accordance with the Plan does not constitute a transfer.
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13.
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Dividends and Dividend Equivalents
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The Administrator may,
in its sole discretion, provide that Awards other than Options and SARs earn dividends or dividend equivalents. Such dividends
or dividend equivalents may be paid currently or may be credited to a Participant’s account. Any crediting of dividends or
dividend equivalents may be subject to such additional restrictions and conditions as the Administrator may establish, including
reinvestment in additional shares of Common Stock or share equivalents. Notwithstanding the other provisions herein, any dividends
or dividend equivalent rights related to an Award shall be structured in a manner so as to avoid causing the Award and related
dividends or dividend equivalents to be subject to Code Section 409A or shall otherwise be structured so that the Award and dividends
or dividend equivalents are in compliance with Code Section 409A.
The Administrator shall
(taking into account any Code Section 409A considerations) have sole discretion to determine at any time the effect, if any, on
an Award, including but not limited to the vesting, earning and/or exercisability of an Award (in whole or in part), in the event
of a Change of Control. Without limiting the effect of the foregoing, the Administrator’s discretion shall include, but shall
in no way be limited to, the discretion to determine with respect to all or any portion of an Award that (a) the Award shall
vest, be earned and/or become exercisable upon a Change of Control, (b) vesting, earning and/or exercisability of the Award
shall accelerate upon a Change of Control, (c) exercise of the Award must occur, if at all, within time period(s) specified
by the Administrator, after which time period(s) the Award shall, unless the Administrator determines otherwise, terminate, (d) the
Award shall be assumed or substituted for another award, (e) the Award shall be cancelled without the payment of consideration,
(f) the Award shall be cancelled in exchange for a cash payment or other consideration in an amount determined by the Administrator,
(g) the Award shall be subject to such treatment (including but not limited to cancellation, cashout, assumption or substitution)
as is provided under the terms of the agreement or other instrument establishing terms of the Change of Control transaction (e.g.,
a merger agreement); and/or (h) other actions (or no action) shall be taken with respect to the Award. The Administrator also
has discretion to determine that acceleration or any other effect of a Change of Control on an Award shall be subject to both the
occurrence of a Change of Control event and termination of employment or service of the Participant upon such terms and conditions
as may be established by the Administrator. Any such determinations of the Administrator may be, but shall not be required to be,
stated in an individual Award Agreement.
The Company shall withhold
all required local, state, federal, foreign and other taxes and any other amount required to be withheld by any governmental authority
or law from any amount payable in cash with respect to an Award. Prior to the delivery or transfer of any certificate for shares
or any other benefit conferred under the Plan, the Company shall require any Participant or other person to pay to the Company
in cash the amount of any tax or other amount required by any governmental authority to be withheld and paid over by the Company
to such authority for the account of such recipient. Notwithstanding the foregoing, the Administrator may in its discretion establish
procedures to permit a recipient to satisfy such obligation in whole or in part, and any local, state, federal, foreign or other
income tax obligations relating to such an Award, by electing (the “election”) to have the Company withhold
shares of Common Stock from the shares to which the recipient is otherwise entitled. The number of shares to be withheld shall
have a Fair Market Value as of the date that the amount of tax to be withheld is determined as nearly equal as possible to (but
not exceeding) the amount of such obligations being satisfied. Each election must be made in writing to the Administrator in accordance
with election procedures established by the Administrator.
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16.
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Amendment and Termination of the Plan and Awards
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(a) Amendment
and Termination of Plan: The Plan may be amended, altered, suspended and/or terminated at any time by the Board; provided,
that approval of an amendment to the Plan by the shareholders of the Company shall be required to the extent, if any, that shareholder
approval of such amendment is required by Applicable Law.
(b) Amendment
and Termination of Awards: The Administrator may amend, alter, suspend and/or terminate any Award granted under the Plan, prospectively
or retroactively, but (except as otherwise provided in Section 16(c) or Section 16(d)) such amendment, alteration, suspension or
termination of an Award shall not, without the written consent of the recipient of an outstanding Award, materially adversely affect
the rights of the recipient with respect to the Award.
(c) Unilateral
Authority of Administrator to Modify Plan and Awards: Notwithstanding Section 16(a) and Section 16(b) herein, the following
provisions shall apply:
(i) The
Administrator shall have unilateral authority to amend the Plan and any Award (without Participant consent) to the extent necessary
to comply with Applicable Law or changes to Applicable Law (including but in no way limited to Code Section 409A, Code Section
422 and federal securities laws).
(ii) The
Administrator shall have unilateral authority to make adjustments to the terms and conditions of Awards in recognition of unusual
or nonrecurring events affecting the Company or any Affiliate, or the financial statements of the Company or any Affiliate, or
of changes in Applicable Law, or accounting principles, if the Administrator determines that such adjustments are appropriate in
order to prevent dilution or enlargement of the benefits or potential benefits intended to be made available under the Plan or
necessary or appropriate to comply with applicable accounting principles or Applicable Law.
(d) Cash
Settlement: Notwithstanding any provision of the Plan, an Award or an Award Agreement to the contrary, the Administrator shall
have unilateral discretion to cause any Award (or portion thereof) granted under the Plan to be canceled in consideration of an
alternative award or cash payment of an equivalent cash value, as determined by the Administrator in its sole discretion, made
to the holder of such canceled Award. Without in any way limiting the authority of the Administrator described in the preceding
sentence, in the case of Options and SARs, the Administrator may determine that (i) the difference between the Fair Market Value
per share of the Common Stock at the time of cancellation (or as of such other date determined by the Administrator) and the Option
Price or Base Price, as the case may be, shall constitute an equivalent cash value, and (ii) if the calculation described in Section
16(d)(i) herein does not result in a positive number, the Option or SAR, as the case may be, may be canceled for no consideration.
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17.
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Restrictions on Awards and Shares; Compliance with Applicable Law
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(a) General:
As a condition to the issuance and delivery of Common Stock hereunder, or the grant of any benefit pursuant to the Plan, the Company
may require a Participant or other person at any time and from time to time to become a party to an Award Agreement, other agreement(s)
restricting the transfer, purchase, repurchase and/or voting of shares of Common Stock of the Company, and any employment agreements,
consulting agreements, noncompetition agreements, confidentiality agreements, nonsolicitation agreements, nondisparagement agreements
or other agreements imposing such restrictions as may be required by the Company. In addition, without in any way limiting the
effect of the foregoing, each Participant or other holder of shares issued under the Plan shall be permitted to transfer such shares
only if such transfer is in accordance with the Plan, the Award Agreement, any other applicable agreements and Applicable Law.
The acquisition of shares of Common Stock under the Plan by a Participant or any other holder of shares shall be subject to, and
conditioned upon, the agreement of the Participant or other holder of such shares to the restrictions described in the Plan, the
Award Agreement and any other applicable agreements and Applicable Law.
(b) Compliance
with Applicable Law, Rules and Regulations: The Company may impose such restrictions on Awards, shares of Common Stock and
any other benefits underlying Awards hereunder as it may deem advisable, including without limitation restrictions under the federal
securities laws, the requirements of any stock exchange or similar organization and any blue sky, state or foreign securities or
other laws applicable to such securities. Notwithstanding any other Plan provision to the contrary, the Company shall not be obligated
to issue, deliver or transfer shares of Common Stock under the Plan, make any other distribution of benefits under the Plan, or
take any other action, unless such delivery, distribution or action is in compliance with Applicable Law (including but not limited
to the requirements of the Securities Act). The Company will be under no obligation to register shares of Common Stock or other
securities with the Securities and Exchange Commission or to effect compliance with the exemption, registration, qualification
or listing requirements of any state securities laws, stock exchange or similar organization, and the Company will have no liability
for any inability or failure to do so. The Company may cause a restrictive legend or legends to be placed on any certificate issued
pursuant to an Award hereunder in such form as may be prescribed from time to time by Applicable Law or as may be advised by legal
counsel.
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18.
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No Right or Obligation of Continued Employment or Service or to Awards;
Compliance with the Plan
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Neither the Plan, an
Award, an Award Agreement nor any other action related to the Plan shall confer upon a Participant any right to continue in the
employ or service of the Company or an Affiliate as a Director or Executive Officer, or to interfere in any way with the right
of the Company or an Affiliate to terminate the Participant’s employment or service at any time. Except as otherwise provided
in the Plan, an Award Agreement or as may be determined by the Administrator, all rights of a Participant with respect to an Award
shall terminate upon the termination of the Participant’s employment or service. In addition, no person shall have any right
to be granted an Award, and the Company shall have no obligation to treat Participants or Awards uniformly. By participating in
the Plan, each Participant shall be deemed to have accepted all of the conditions of the Plan and the terms and conditions of any
rules and regulations adopted by the Administrator and shall be fully bound thereby. Any Award granted hereunder is not intended
to be compensation of a continuing or recurring nature, or part of a Participant’s normal or expected compensation, and in
no way represents any portion of a Participant’s salary, compensation or other remuneration for purposes of pension benefits,
severance, redundancy, resignation or any other purpose.
(a) Shareholder
Rights: Except as otherwise determined by the Administrator (and subject to the provisions of Section 9(d) regarding Restricted
Awards), a Participant and his legal representative, legatees or distributees shall not be deemed to be the holder of any shares
of Common Stock subject to an Award and shall not have any rights of a shareholder unless and until certificates for such shares
have been issued and delivered to him or them under the Plan. A certificate or certificates for shares of Common Stock acquired
upon exercise of an Option or SAR shall be issued in the name of the Participant or his beneficiary and distributed to the Participant
or his beneficiary (or, in the case of uncertificated shares, other written notice of ownership in accordance with Applicable Law
shall be provided) as soon as practicable following receipt of notice of exercise and, with respect to Options, payment of the
Option Price (except as may otherwise be determined by the Company in the event of payment of the Option Price pursuant to Section
7(d)(ii)(C)). Except as otherwise provided in Section 9(d) regarding Restricted Stock Awards or otherwise determined by the Administrator,
a certificate for any shares of Common Stock issuable pursuant to a Restricted Award, Performance Award, Phantom Stock Award or
Other Stock-Based Award shall be issued in the name of the Participant or his beneficiary and distributed to the Participant or
his beneficiary (or, in the case of uncertificated shares, other written notice of ownership in accordance with Applicable Law
shall be provided) after the Award (or portion thereof) has vested and been earned.
(b)
Section 16(b) Compliance: If and to the extent that any Participants in the Plan are subject
to Section 16(b) of the Exchange Act, it is the general intention of the Company that transactions under the Plan shall comply
with Rule 16b-3 under the Exchange Act and that the Plan shall be construed in favor of such Plan transactions meeting the requirements
of Rule 16b-3 or any successor rules thereto. Notwithstanding anything in the Plan to the contrary, the Administrator, in its sole
and absolute discretion, may bifurcate the Plan so as to restrict, limit or condition the use of any provision of the Plan to Participants
who are officers or directors subject to Section 16 of the Exchange Act without so restricting, limiting or conditioning the Plan
with respect to other Participants.
(c) Code
Section 162(m) Performance-Based Compensation. If and to the extent to which Code Section 162(m) is applicable, the Company
intends that compensation paid under the Plan to Covered Employees will, to the extent practicable, constitute “qualified
performance-based compensation” within the meaning of Code Section 162(m), unless otherwise determined by the Administrator.
Accordingly, Awards granted to Covered Employees which are intended to qualify for the performance-based exception under Code Section
162(m) shall be deemed to include any such additional terms, conditions, limitations and provisions as are necessary to comply
with the performance-based compensation exemption of Code Section 162(m), unless the Administrator, in its discretion, determines
otherwise.
(d) Unfunded
Plan; No Effect on Other Plans:
(i) The
Plan shall be unfunded, and the Company shall not be required to create a trust or segregate any assets that may at any time be
represented by Awards under the Plan. The Plan shall not establish any fiduciary relationship between the Company and any Participant
or other person. Neither a Participant nor any other person shall, by reason of the Plan, acquire any right in or title to any
assets, funds or property of the Company or any Affiliate, including, without limitation, any specific funds, assets or other property
which the Company or any Affiliate, in their discretion, may set aside in anticipation of a liability under the Plan. A Participant
shall have only a contractual right to shares of Common Stock or other amounts, if any, payable under the Plan, unsecured by any
assets of the Company or any Affiliate. Nothing contained in the Plan shall constitute a guarantee that the assets of such entities
shall be sufficient to pay any benefits to any person.
(ii) The
amount of any compensation deemed to be received by a Participant pursuant to an Award shall not constitute compensation with respect
to which any other employee benefits of such Participant are determined, including, without limitation, benefits under any bonus,
pension, profit sharing, life insurance or salary continuation plan, except as otherwise specifically provided by the terms of
such plan or as may be determined by the Administrator.
(iii) The
adoption of the Plan shall not affect any other stock incentive or other compensation plans in effect for the Company or any Affiliate,
nor shall the Plan preclude the Company from establishing any other forms of stock incentive or other compensation for employees
or service providers of the Company or any Affiliate.
(e) Governing
Law: The Plan shall be governed by and construed in accordance with the laws of the State of Georgia, without regard to the
conflict of laws provisions of any state, and in accordance with applicable federal laws of the United States.
(f) Beneficiary
Designation: The Administrator may, in its discretion, permit a Participant to designate in writing a person or persons as
beneficiary, which beneficiary shall be entitled to receive settlement of Awards (if any) to which the Participant is otherwise
entitled in the event of death. In the absence of such designation by a Participant, and in the event of the Participant’s
death, the estate of the Participant shall be treated as beneficiary for purposes of the Plan, unless the Administrator determines
otherwise. The Administrator shall have discretion to approve and interpret the form or forms of such beneficiary designation.
A beneficiary, legal guardian, legal representative or other person claiming any rights pursuant to the Plan is subject to all
terms and conditions of the Plan and any Award Agreement applicable to the Participant, except to the extent that the Plan and/or
Award Agreement provide otherwise, and to any additional restrictions deemed necessary or appropriate by the Administrator.
(g) Gender
and Number: Except where otherwise indicated by the context, words in any gender shall include any other gender, words in the
singular shall include the plural and words in the plural shall include the singular.
(h) Severability:
If any provision of the Plan or an Award Agreement shall be held illegal or invalid for any reason, such illegality or invalidity
shall not affect the remaining parts of the Plan or the Award Agreement, and the Plan or the Award Agreement shall be construed
and enforced as if the illegal or invalid provision had not been included.
(i) Rules
of Construction: Headings are given to the sections of the Plan solely as a convenience to facilitate reference. The reference
to any statute, regulation or other provision of law shall (unless the Administrator determines otherwise) be construed to refer
to any amendment to or successor of such provision of law.
(j) Successors
and Assigns: The Plan shall be binding upon the Company, its successors and assigns, and Participants, their executors, administrators
and permitted transferees and beneficiaries.
(k) Award
Agreement: The grant of any Award under the Plan shall be evidenced by an Award Agreement between the Company and the Participant.
Such Award Agreement may state terms, conditions and restrictions applicable to the Award and any may state such other terms, conditions
and restrictions, including but not limited to terms, conditions and restrictions applicable to shares of Common Stock (or other
benefits) subject to an Award, as may be established by the Administrator.
(l) Right
of Offset: Notwithstanding any other provision of the Plan or an Award Agreement, the Company may at any time (subject to any
Code Section 409A considerations) reduce the amount of any payment or benefit otherwise payable to or on behalf of a Participant
by the amount of any obligation of the Participant to or on behalf of the Company or an Affiliate that is or becomes due and payable.
(m) Uncertified
Shares: Notwithstanding anything in the Plan to the contrary, to the extent the Plan provides for the issuance of stock certificates
to reflect the issuance of shares of Common Stock, the issuance may, in the Company’s discretion, be effected on a non-certificated
basis, to the extent not prohibited by the Company’s articles of incorporation or bylaws or by Applicable Law (including
but not limited to applicable state corporate law and the applicable rules of any stock exchange on which the Common Stock may
be traded).
(n) Income
and Other Taxes: Participants are solely responsible and liable for the satisfaction of all taxes and penalties that may arise
in connection with Awards (including but not limited to any taxes arising under Code Section 409A), and the Company shall not have
any obligation to indemnify or otherwise hold any Participant harmless from any or all of such taxes. The Company shall have no
responsibility to take or refrain from taking any actions in order to achieve a certain tax result for a Participant or any other
person.
(o) Effect
of Certain Changes in Status: Notwithstanding the other terms of the Plan or an Award Agreement, the Administrator has sole
discretion to determine (taking into account any Code Section 409A considerations), at the time of grant of an Award or at any
time thereafter, the effect, if any, on Awards (including but not limited to modifying the vesting, exercisability and/or earning
of Awards) granted to a Participant if the Participant’s status as a Director or Executive Officer changes, including but
not limited to a change from full-time to part-time, or vice versa, or if other similar changes in the nature or scope of the Participant’s
employment or service occur.
(p) Shareholder
Approval: The Plan is subject to approval by the shareholders of the Company, which approval must occur, if at all, within
12 months of the Effective Date of the Plan. Awards granted prior to such shareholder approval shall be conditioned upon and shall
be effective only upon approval of the Plan by such shareholders on or before such date.
(q) Deferrals:
Subject to the provisions of this Section 19(q) and Section 20, the Administrator may permit or require a Participant to defer
such Participant’s receipt of the payment of cash or the delivery of shares of Common Stock that would otherwise be payable
with respect to an Award. Any such deferral shall be subject to such terms and conditions as may be established by the Administrator
and to any applicable Code Section 409A requirements.
(r) Fractional
Shares: Except as otherwise provided in an Award Agreement or determined by the Administrator, (i) the total number of shares
issuable pursuant to the exercise, vesting or earning of an Award shall be rounded down to the nearest whole share, and (ii) no
fractional shares shall be issued. The Administrator may, in its discretion, determine that a fractional share shall be settled
in cash.
(s) Compliance
with Recoupment, Ownership and Other Policies or Agreements: Notwithstanding anything in the Plan to the contrary, the Administrator
may, at any time, consistent with, but without limiting, the authority granted in Section 3(b) herein, in its discretion provide
that an Award or benefits related to an Award shall be forfeited and/or recouped if the Participant, during employment or service
or following termination of employment or service for any reason, engages in certain specified conduct, including but not limited
to violation of policies of the Company or an Affiliate, breach of non-solicitation, noncompetition, confidentiality or other restrictive
covenants, or other conduct by the Participant that is determined by the Administrator to be detrimental to the business or reputation
of the Company or any Affiliate. In addition, without limiting the effect of the foregoing, as a condition to the grant of an Award
or receipt or retention of shares of Common Stock, cash or any other benefit under the Plan, the Administrator may, at any time,
require that a Participant agree to abide by any equity retention policy, stock ownership guidelines, compensation recovery policy
and/or other policies adopted by the Company or an Affiliate, each as in effect from time to time and to the extent applicable
to the Participant. Further, each Participant shall be subject to such compensation recovery, recoupment, forfeiture or other similar
provisions as may apply under Applicable Law.
(t) Nonexclusivity
of the Plan. Neither the adoption of this Plan by the Board, the submission of this Plan to the stockholders of the Company
for approval, nor any provision of this Plan will be construed as creating any limitations on the power of the Board to adopt such
incentive arrangements as it may deem desirable, including, without limitation, the granting of stock options and bonuses otherwise
than under this Plan, and such arrangements may be either generally applicable or applicable only in specific cases.
(u) Employees
Based Outside of the United States. Notwithstanding any provision of the Plan to the contrary, in order to foster and promote
achievement of the purposes of the Plan or to comply with provisions of laws in other countries in which the Company and its Subsidiaries
operate or have employees, the Board, in its sole discretion, shall have the power and authority to (i) determine which Directors
and Executive Officers employed outside the United States are eligible to participate in the Plan, (ii) modify the terms and conditions
of Awards granted to Directors and Executive Officers who are employed outside the United States, and (iii) establish subplans
(through the addition of schedules to the Plan or otherwise), modify option exercise procedures and other terms and procedures
to the extent such actions may be necessary or advisable.
(v) Adjustment
of Performance Goals and Targets. Notwithstanding any provision of the Plan to the contrary, the Board shall have the authority
to adjust any performance-based goals and targets or other performance-based criteria established with respect to any Award under
the Plan if circumstances occur (including, but not limited to, unusual or nonrecurring events, changes in tax laws or accounting
principles or practices or changed business or economic conditions) that cause any such performance-based goals and targets or
performance-based criteria to be inappropriate in the judgment of the Board; provided, that with respect to any Award that is intended
to qualify for the “performance-based compensation” exception under Section 162(m) of the Code and the regulations
thereunder, any adjustment by the Board shall be consistent with the requirements of Section 162(m) of the Code and the regulations
thereunder.
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20.
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Compliance with Code Section 409A
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Notwithstanding any
other provision in the Plan or an Award Agreement to the contrary, if and to the extent that Code Section 409A is deemed to apply
to the Plan or any Award, it is the general intention of the Company that the Plan and all such Awards shall, to the extent practicable,
comply with, or be exempt from, Code Section 409A, and the Plan and any such Award Agreement shall, to the extent practicable,
be construed in accordance therewith. Deferrals of shares or any other benefit issuable pursuant to an Award otherwise exempt from
Code Section 409A in a manner that would cause Code Section 409A to apply shall not be permitted unless such deferrals are in compliance
with, or exempt from, Code Section 409A. In the event that the Company (or a successor thereto) has any stock which is publicly
traded on an established securities market or otherwise, distributions that are subject to Code Section 409A to any Participant
who is a “specified employee” (as defined under Code Section 409A) upon a separation from service may only be made
following the expiration of the six-month period after the date of separation from service (as defined under Code Section 409A)
(with such distributions to be made during the seventh month following separation of service), or, if earlier than the end of the
six-month period, the date of death of the specified employee, or as otherwise permitted under Code Section 409A. For purposes
of Code Section 409A, each installment payment provided under the Plan or an Award Agreement shall be treated as a separate payment.
Without in any way limiting the effect of any of the foregoing, (i) in the event that Code Section 409A requires that any special
terms, provisions or conditions be included in the Plan or any Award Agreement, then such terms, provisions and conditions shall,
to the extent practicable, be deemed to be made a part of the Plan or Award Agreement, as applicable, and (ii) terms used in the
Plan or an Award Agreement shall be construed in accordance with Code Section 409A if and to the extent required. Further, in the
event that the Plan or any Award shall be deemed not to comply with Code Section 409A, then neither the Company, the Administrator
nor its or their designees or agents shall be liable to any Participant or other person for actions, decisions or determinations
made in good faith.
30
Exhibit
4.9
MEREDIAN
HOLDINGS GROUP, INC.
2016
OMNIBUS STOCK INCENTIVE PLAN
MEREDIAN
HOLDINGS GROUP, INC.
2016
OMNIBUS STOCK INCENTIVE PLAN
In
addition to other terms defined herein or in an Award Agreement, the following terms shall have the meanings given below:
(a) Administrator
means the Board, and, upon its delegation of all or part of its authority to administer the Plan to the Committee, the Committee.
(b) Affiliate
means any Parent or Subsidiary of the Company, and also includes any other business entity which is controlled by, under common
control with or controls the Company; provided, however, that the term “Affiliate” shall be construed in a manner
in accordance with the registration provisions of applicable federal securities laws if and to the extent required.
(c) Applicable
Law means any applicable laws, rules or regulations (or similar guidance), including but not limited to the Georgia Business
Corporate Code, the Securities Act, the Exchange Act, the Code (including, without limitation, Code Section 162(m)) and the listing
or other rules of any applicable stock exchange, in each case if and to the extent applicable to the Company. References to any
applicable laws, rules and regulations, including references to any sections or other provisions of applicable laws, rules and
regulations, shall also refer to any successor provisions thereto unless the Administrator determines otherwise.
(d) Award
means, individually or collectively, a grant under the Plan of an Option (including an Incentive Option or a Nonqualified
Option); a Stock Appreciation Right (including a Related SAR or a Freestanding SAR); a Restricted Award (including a Restricted
Stock Award or a Restricted Unit Award); a Performance Award (including a Performance Share Award or a Performance Unit Award);
a Phantom Stock Award, an Other Stock-Based Award; a Dividend Equivalent Award; a Substitute Award and/or any other award granted
under the Plan.
(e) Award
Agreement means an award agreement (which may be in written or electronic form, in the Administrator’s discretion, and
which includes any amendment or supplement thereto) between the Company and a Participant specifying the terms, conditions and
restrictions of an Award granted to the Participant. An Award Agreement may also state such other terms, conditions and restrictions,
including but not limited to terms, conditions and restrictions applicable to shares of Common Stock or any other benefit underlying
an Award, as may be established by the Administrator.
(f) Base
Price means, with respect to a SAR, the initial price assigned to the SAR.
(g) Board
or Board of Directors means the Board of Directors of the Company.
(h) Cause
means, unless the Administrator determines otherwise, a Participant’s termination of employment or service resulting
from the Participant’s (i) termination for “Cause” as defined under the Participant’s employment, change
in control, consulting or other agreement with the Company or an Affiliate, if any, or (ii) if the Participant has not entered
into any such agreement (or, if any such agreement does not define “Cause”), then the Participant’s termination
shall be for “Cause” if termination results due to the Participant’s (A) dishonesty; (B) refusal or failure
to perform his duties for the Company or an Affiliate; or (C) engaging in fraudulent conduct or conduct that could be materially
damaging to the Company without a reasonable good faith belief that such conduct was in the best interest of the Company. The
determination of “Cause” shall be made by the Administrator and its determination shall be final and conclusive. Without
in any way limiting the effect of the foregoing, for purposes of the Plan and an Award, a Participant’s employment or service
shall be deemed to have terminated for Cause if, after the Participant’s employment or service has terminated, facts and
circumstances are discovered that would have justified, in the opinion of the Administrator, a termination for Cause.
(i) A
Change of Control shall (except as may be otherwise provided in an individual Award Agreement or as may be otherwise required,
if at all, under Code Section 409A) be deemed to have occurred on the earliest of the following dates:
(i) The
date any entity or person shall have become the beneficial owner of, or shall have obtained voting control over, more than fifty
percent (50%) of the total voting power of the Company’s then outstanding voting stock;
(ii) The
date of the consummation of (A) a merger, consolidation or reorganization of the Company (or similar transaction involving the
Company), in which the holders of the Common Stock immediately prior to the transaction do not have voting control over more than
fifty percent (50%) of the voting securities of the surviving corporation immediately after such transaction, or (B) the sale
or disposition of all or substantially all the assets of the Company; or
(iii) The
date there shall have been a change in a majority of the Board of Directors of the Company within a 12-month period unless the
nomination for election by the Company’s shareholders of each new Director was approved by the vote of two-thirds of the
members of the Board (or a committee of the Board, if nominations are approved by a Board committee rather than the Board) then
still in office who were in office at the beginning of the 12-month period.
(For
the purposes herein, the term “person” shall mean any individual, corporation, partnership, group, association or
other person, as such term is defined in Section 13(d)(3) or Section 14(d)(2) of the Exchange Act, other than the Company, a Subsidiary
of the Company or any employee benefit plan(s) sponsored or maintained by the Company or any Subsidiary thereof, and the term
“beneficial owner” shall have the meaning given the term in Rule 13d-3 under the Exchange Act.)
For
the purposes of clarity, a transaction shall not constitute a Change of Control if its principal purpose is to change the state
of the Company’s incorporation, create a holding company that would be owned in substantially the same proportions by the
persons who held the Company’s securities immediately before such transaction or is another transaction of other similar
effect.
Notwithstanding
the preceding provisions of Section 1(i), in the event that any Awards granted under the Plan are deemed to be deferred compensation
subject to (and not exempt from) the provisions of Code Section 409A, then distributions related to such Awards to be made upon
a Change of Control may be permitted, in the Administrator's discretion, upon the occurrence of one or more of the following events
(as they are defined and interpreted under Code Section 409A): (A) a change in the ownership of the Company; (B) a change in effective
control of the Company; or (C) a change in the ownership of a substantial portion of the assets of the Company.
The
Administrator shall have full and final authority, in its discretion (subject to any Code Section 409A considerations), to determine
whether a Change of Control of the Company has occurred, the date of the occurrence of such Change of Control and any incidental
matters relating thereto.
(j) Code
means the Internal Revenue Code of 1986, as amended. Any reference herein to a specific Code section shall be deemed to include
all related regulations or other guidance with respect to such Code section.
(k) Committee
means the Compensation Committee of the Board or other committee of the Board which may be appointed to administer the Plan
in whole or in part.
(l) Common
Stock means the common stock of Meredian Holdings Group, Inc., $0.001 par value, or any successor securities thereto.
(m) Company
means Meredian Holdings Group, Inc., a Georgia corporation, together with any successor thereto.
(n) Covered
Employee shall have the meaning given the term in Code Section 162(m).
(o) Director
means a member of the Board or of the board of directors of an Affiliate.
(p) Disability
shall, except as may be otherwise determined by the Administrator (taking into account any Code Section 409A considerations),
as applied to any Participant, having the meaning given in any Award Agreement, employment agreement, change in control agreement,
consulting agreement or other similar agreement, if any, to which the Participant is a party, or, if there is no such agreement
(or if such agreement does not define “Disability”), “Disability” shall mean the inability of the Participant
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.
The Administrator shall have authority to determine if a Disability has occurred.
(q) Displacement
shall, except as may be otherwise determined by the Administrator (taking into account any Code Section 409A considerations),
as applied to any Participant, be as defined in any Award Agreement, employment agreement, change in control agreement, consulting
agreement or other similar agreement, if any, to which the Participant is a party, or, if there is no such agreement (or if such
agreement does not define “Displacement”), “Displacement” shall mean the termination of the Participant’s
employment or service due to the elimination of the Participant’s job or position without fault on the part of the Participant.
The Administrator shall have authority to determine if a Displacement has occurred.
(r) Dividend
Equivalent Awards shall mean a right granted to a Participant pursuant to Section 13 to receive the equivalent value (in cash
or shares of Common Stock) of dividends paid on Common Stock.
(s) Effective
Date means the effective date of the Plan, as provided in Section 4.
(t) Employee
means any person who is an employee of the Company or any Affiliate (including entities which become Affiliates after the
Effective Date of the Plan). For this purpose, an individual shall be considered to be an Employee only if there exists between
the individual and the Company or an Affiliate the legal and bona fide relationship of employer and employee (taking into account
Code Section 409A considerations if and to the extent applicable); provided, however, that, with respect to Incentive Options,
“Employee” means any person who is considered an employee of the Company or any Parent or Subsidiary for purposes
of Treasury Regulation Section 1.421-1(h) (or any successor provision related thereto).
(u) Exchange
Act means the Securities Exchange Act of 1934, as amended.
(v) Fair
Market Value per share of the Common Stock shall be established in good faith by the Administrator and, unless otherwise determined
by the Administrator, the Fair Market Value shall be determined in accordance with the following provisions: (A) if the shares
of Common Stock are listed for trading on The NASDAQ Stock Market (“Nasdaq”) or another national or regional stock
exchange, the Fair Market Value shall be the closing sales price per share of the shares on Nasdaq or other principal stock exchange
on which such securities are listed on the date an Award is granted or other determination is made (such date of determination
being referred to herein as a “valuation date”), or, if there is no transaction on such date, then on the trading
date nearest preceding the valuation date for which closing price information is available, and, provided further, if the shares
are not listed for trading on Nasdaq or another stock exchange but are regularly quoted on an automated quotation system (including
the OTC Bulletin Board) or by a recognized securities dealer, the Fair Market Value shall be the closing sales price for such
shares as quoted on such system or by such securities dealer on the valuation date, but if selling prices are not reported, the
Fair Market Value of a share of Common Stock shall be the mean between the high bid and low asked prices for the Common Stock
on the valuation date (or, if no such prices were reported on that date, on the last date such prices were reported), as reported
in The Wall Street Journal or such other source as the Administrator deems reliable; or (B) if the shares of Common Stock are
not listed or reported in any of the foregoing, then the Fair Market Value shall be determined by the Administrator based on such
valuation measures or other factors as it deems appropriate. Notwithstanding the foregoing, (i) with respect to the grant of Incentive
Options, the Fair Market Value shall be determined by the Administrator in accordance with the applicable provisions of Section
20.2031-2 of the Federal Estate Tax Regulations, or in any other manner consistent with the Code Section 422; and (ii) Fair Market
Value shall be determined in accordance with Code Section 409A if and to the extent required.
(w) Freestanding
SAR means an SAR that is granted without relation to an Option, as provided in Section 8.
(x) Good
Reason means, unless otherwise provided in an Award Agreement or determined by the Administrator, in the context of a Change
of Control, a Participant’s termination of employment or service resulting from the Participant’s (i) termination
for “Good Reason” as defined under the Participant’s employment, change in control, consulting or other similar
agreement with the Company or an Affiliate, if any, or (ii) if the Participant has not entered into any agreement (or, if any
such agreement does not define “Good Reason”), then, a Participant’s termination shall be for “Good Reason”
if termination results due to any of the following without the Participant’s consent: (A) a material reduction in the Participant’s
base salary as in effect immediately prior to the date of the Change of Control, (B) the assignment to the Participant of duties
or responsibilities materially inconsistent with (other than in the context of a promotion), or a material diminution in, the
Participant’s position, authority, duties or responsibilities as in effect immediately prior to the Change of Control, or
(C) the relocation of the Participant’s principal place of employment by more than 50 miles from the location at which the
Participant was stationed immediately prior to the Change of Control. Notwithstanding the foregoing, with respect to Directors,
unless the Administrator determines otherwise, a Director’s termination from service on the Board shall be for “Good
Reason” if the Participant ceases to serve as a Director, or, if the Company is not the surviving company in the Change
of Control event, a member of the board of directors of the surviving entity, in either case, due to the Participant’s failure
to be nominated to serve as a director of such entity or the Participant’s failure to be elected to serve as a director
of such entity, but not due to the Participant’s decision not to continue service on the Board of Directors of the Company
or the board of directors of the surviving entity, as the case may be. An event or condition that would otherwise constitute “Good
Reason” shall constitute Good Reason only if the Company fails to rescind or cure such event or condition within 30 days
after receipt from the Participant of written notice of the event which constitutes Good Reason, and Good Reason shall cease to
exist for any event or condition described herein on the 60th day following the later of the occurrence or the Participant’s
knowledge thereof, unless the Participant has given the Company written notice thereof prior to such date. In the context other
than a Change of Control, “Good Reason” shall be as defined by the Administrator and set forth in the applicable Award
Agreement. The determination of “Good Reason” shall be made by the Administrator and its determination shall be final
and conclusive.
(y) Incentive
Option means an Option that is designated by the Administrator as an Incentive Option pursuant to Section 7 and intended to
meet the requirements of incentive stock options under Code Section 422.
(z) Independent
Contractor means an independent contractor, consultant or advisor providing services (other than capital-raising services)
to the Company or an Affiliate.
(aa) Nonqualified
Option means an Option granted under Section 7 that is not intended to qualify as an incentive stock option under Code Section
422.
(bb) Option
means a stock option granted under Section 7 that entitles the holder to purchase from the Company a stated number of shares
of Common Stock at the Option Price, and subject to such terms and conditions, as may be set forth in the Plan or an Award Agreement
or established by the Administrator.
(cc) Option
Period means the term of an Option, as provided in Section 7(d).
(dd) Option
Price means the price at which an Option may be exercised, as provided in Section 7(b).
(ee) Other
Stock-Based Award means a right, granted to a Participant under Section 12, that relates to or is valued by referenced to
shares of Common Stock or other Awards relating to shares of Common Stock.
(ff) Parent
shall mean a “parent corporation,” whether now or hereafter existing, as defined in Code Section 424(e).
(gg) Participant
means an individual who is an Employee employed by, or a Director or Independent Contractor providing services to, the Company
or an Affiliate who satisfies the requirements of Section 6 and is selected by the Administrator to receive an Award under the
Plan.
(hh) Performance
Award means a Performance Share Award and/or a Performance Unit Award, as provided in Section 10.
(ii) Performance
Measures mean one or more performance factors which may be established by the Administrator with respect to an Award. Performance
factors may be based on such corporate, business unit or division and/or individual performance factors and criteria as the Administrator
in its discretion may deem appropriate; provided, however, that, if and to the extent required by Applicable Law with respect
to Awards granted to Covered Employees that are intended to qualify as “performance-based compensation” under Code
Section 162(m), such performance factors shall be objective and shall be based upon one or more of the following criteria (as
determined by the Administrator in its discretion): (i) revenues or sales; (ii) gross margins; (iii) earnings per share;
(iv) product production or shipments; (v) consolidated earnings before or after taxes (including earnings before interest,
taxes, depreciation and amortization); (vi) net income; (vii) operating income; (viii) book value per share; (ix) return on shareholders'
equity; (x) return on investment; (xi) return on capital; (xii) capital raising and improvements in capital structure; (xiii)
expense management; (xiv) operating margins; (xv) maintenance or improvement of gross margins or operating margins; (xvi)
stock price or total shareholder return; (xvii) market share; (xviii) profitability; (xix) costs; (xx) cash flow or free
cash flow; (xxi) working capital; (xxii) return on assets; (xxiii) economic wealth created, and/or (xxiv) strategic business criteria,
based on meeting specified goals or objectives related to market penetration, geographic business expansion, cost targets, customer
satisfaction, employee satisfaction, management of employment practices and employee benefits, management of litigation, management
of information technology, goals relating to acquisitions or divestitures of products, product lines, subsidiaries, affiliates
or joint ventures, quality matrices, customer service matrices, execution of pre-approved corporate strategy and/or such other
performance based factors deemed reasonable and appropriate by the Board. In addition, with respect to Participants who are not
Covered Employees, the Administrator may approve performance objectives based on other criteria, which may or may not be objective.
If and to the extent that Code Section 162(m) is applicable to the Company, the Administrator shall, within the time and in the
manner prescribed by Code Section 162(m), define in an objective fashion the manner of calculating the Performance Measures it
selects to use for Covered Employees during any specific performance period. The foregoing criteria may relate to the Company,
one or more of its Affiliates or one or more of its divisions, units, partnerships, joint venturers or minority investments, facilities,
product lines or products or any combination of the foregoing. The targeted level or levels of performance with respect to such
business criteria may be established at such levels and on such terms as the Administrator may determine, in its discretion, including
but not limited to on an absolute basis, in relation to performance in a prior performance period, and/or relative to one or more
peer group companies or indices, or any combination thereof.
(jj) Performance
Share means an Award granted under Section 10, in an amount determined by the Administrator and specified in an Award Agreement,
stated with reference to a specified number of shares of Common Stock, that entitles the holder to receive shares of Common Stock,
a cash payment or a combination of Common Stock and cash (as determined by the Administrator), subject to the terms of the Plan
and the terms and conditions established by the Administrator.
(kk) Performance
Unit means an Award granted under Section 10, in an amount determined by the Administrator and specified in an Award Agreement,
that entitles the holder to receive shares of Common Stock, a cash payment or a combination of Common Stock and cash (as determined
by the Administrator), subject to the terms of the Plan and the terms and conditions established by the Administrator.
(ll) Phantom
Stock Award means an Award granted under Section 11, entitling a Participant to a payment in cash, shares of Common Stock
or a combination of cash and Common Stock (as determined by the Administrator), following the completion of the applicable vesting
period and compliance with the terms of the Plan and other terms and conditions established by the Administrator. The unit value
of a Phantom Stock Award shall be based on the Fair Market Value of a share of Common Stock.
(mm) Plan
means the Meredian Holdings Group, Inc. 2016 Omnibus Stock Incentive Plan, as it may be hereafter amended and/or restated.
(nn) Related
SAR means an SAR granted under Section 8 that is granted in relation to a particular Option and that can be exercised only
upon the surrender to the Company, unexercised, of that portion of the Option to which the SAR relates.
(oo) Restricted
Award means a Restricted Stock Award and/or a Restricted Stock Unit Award, as provided in Section 9.
(pp) Restricted
Stock Award means an Award of shares of Common Stock granted to a Participant under Section 9. Shares of Common Stock subject
to a Restricted Stock Award shall cease to be restricted when, in accordance with the terms of the Plan and the terms and conditions
established by the Administrator, the shares vest and become transferable and free of substantial risks of forfeiture.
(qq) Restricted
Stock Unit means a Restricted Award granted to a Participant pursuant to Section 9 which is settled, if at all, (i) by the
delivery of one share of Common Stock for each Restricted Stock Unit, (ii) in cash in an amount equal to the Fair Market Value
of one share of Common Stock for each Restricted Stock Unit, or (iii) in a combination of cash and shares equal to the Fair Market
Value of one share of Common Stock for each Restricted Stock Unit, as determined by the Administrator. A Restricted Stock Unit
represents the promise of the Company to deliver shares of Common Stock, cash or a combination thereof, as applicable, at the
end of the applicable restriction period if and only to the extent the Award vests and ceases to be subject to forfeiture, subject
to compliance with the terms of the Plan and Award Agreement and any terms and conditions established by the Administrator.
(rr) Retirement
shall, except as may be otherwise determined by the Administrator (taking into account any Code Section 409A considerations),
as applied to any Participant, have the meaning given in an Award Agreement, employment agreement, change in control agreement,
consulting agreement or other similar agreement, if any, to which the Participant is a party, or, if there is no such agreement
(or if such agreement does not define “Retirement”), then “Retirement” shall, unless the Administrator
determines otherwise, mean retirement in accordance with the retirement policies and procedures established by the Company. The
Administrator shall have authority to determine if a Retirement has occurred.
(ss) SAR
means a stock appreciation right granted under Section 8 entitling the Participant to receive, with respect to each share
of Common Stock encompassed by the exercise of such SAR, the excess, if any, of the Fair Market Value on the date of exercise
over the Base Price, subject to the terms of the Plan and Award Agreement and any other terms and conditions established by the
Administrator. References to “SARs” include both Related SARs and Freestanding SARs, unless the context requires otherwise.
(tt) Securities
Act means the Securities Act of 1933, as amended.
(uu) Subsidiary
shall mean a “subsidiary corporation,” whether now or hereafter existing, as defined in Code Section 424(f).
(vv) Substitute
Award means an Award granted by the Company in assumption of, or in substitution or exchange for, an award previously granted,
or the right or obligation to make a future award, by a corporation acquired by the Company or any Subsidiary or with which the
Company or any Subsidiary combines.
(ww) Termination
Date means the date of termination of a Participant’s employment or service for any reason, as determined by the Administrator
(taking into account any Code Section 409A considerations).
The
purposes of the Plan are to encourage and enable selected Employees, Directors and Independent Contractors of the Company and
its Affiliates to acquire or to increase their holdings of Common Stock and other equity-based interests in the Company in order
to promote a closer identification of their interests with those of the Company and its shareholders, and to provide flexibility
to the Company in its ability to motivate, attract and retain the services of Participants upon whose judgment, interest and special
effort the successful conduct of its operation largely depends. These purposes may be carried out through the granting of Awards
to selected Participants, including the granting of Options in the form of Incentive Stock Options and/or Nonqualified Options;
SARs in the form of Freestanding SARs and/or Related SARs; Restricted Awards in the form of Restricted Stock Awards and/or Restricted
Stock Units; Performance Awards in the form of Performance Shares and/or Performance Units; Phantom Stock Awards; Other Stock-Based
Awards; and/or Dividend Equivalent Awards.
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3.
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Administration
of the Plan
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(a) The
Plan shall be administered by the Board or, upon its delegation, by the Committee (or a subcommittee thereof). If and to the extent
the Company is subject to Rule 16b-3 adopted under the Exchange Act, the Committee shall, to the extent required by Rule 16b-3
adopted under the Exchange Act, be comprised solely of two or more “non-employee directors,” as such term is defined
in Rule 16b-3, or as may otherwise be permitted under Rule 16b-3. Further, if and to the extent required by Applicable Law, the
Plan shall be administered by a committee comprised of two or more “outside directors” (as such term is defined in
Code Section 162(m)) or as may otherwise be permitted under Code Section 162(m). In addition, Committee members shall qualify
as “independent directors” under applicable stock exchange rules if and to the extent required.
(b) Subject
to the provisions of the Plan, the Administrator shall have full and final authority in its discretion to take any action with
respect to the Plan including, without limitation, the authority to (i) determine all matters relating to Awards, including selection
of individuals to be granted Awards, the types of Awards, the number of shares of Common Stock, if any, subject to an Award, and
all terms, conditions, restrictions and limitations of an Award; (ii) prescribe the form or forms of Award Agreements evidencing
any Awards granted under the Plan; (iii) establish, amend and rescind rules and regulations for the administration of the Plan;
(iv) correct any defect, supply any omission or reconcile any inconsistency in the Plan or in any Award or Award Agreement; and
(v) construe and interpret the Plan, Awards and Award Agreements made under the Plan, to interpret rules and regulations for administering
the Plan and to make all other determinations deemed necessary or advisable for administering the Plan. In addition, (i) the Administrator
shall have the authority, in its sole discretion, to accelerate the date that any Award which was not otherwise exercisable, vested
or earned shall become exercisable, vested or earned in whole or in part without any obligation to accelerate such date with respect
to any other Award granted to any recipient; and (ii) the Administrator may in its sole discretion modify or extend the terms
and conditions for exercise, vesting or earning of an Award (in each case, taking into account any Code Section 409A considerations).
The Administrator’s authority to grant Awards and authorize payments under the Plan shall not in any way restrict the authority
of the Company to grant compensation to Employees, Directors or Independent Contractors under any other compensation plan, program
or arrangement of the Company or an Affiliate. The Administrator may determine that a Participant’s rights, payments and/or
benefits with respect to an Award (including but not limited to any shares issued or issuable and/or cash paid or payable with
respect to an Award) shall be subject to reduction, cancellation, forfeiture or recoupment upon the occurrence of certain specified
events, in addition to any otherwise applicable vesting or performance conditions of an Award. Such events may include, but shall
not be limited to, termination of employment for Cause, violation of policies of the Company or an Affiliate, breach of non-solicitation,
noncompetition, confidentiality or other restrictive covenants that may apply to the Participant, other conduct by the Participant
that is determined by the Administrator to be detrimental to the business or reputation of the Company or any Affiliate, and/or
other circumstances where such reduction, cancellation, forfeiture or recoupment is required by Applicable Law. In addition, the
Administrator shall have the authority and discretion to establish terms and conditions of Awards (including but not limited to
the establishment of subplans) as the Administrator determines to be necessary or appropriate to conform to the applicable requirements
or practices of jurisdictions outside of the United States. In addition to action by meeting in accordance with Applicable Law,
any action of the Administrator with respect to the Plan may be taken by a written instrument signed by all of the members of
the Board or Committee, as appropriate, and any such action so taken by written consent shall be as fully effective as if it had
been taken by a majority of the members at a meeting duly held and called. All determinations of the Administrator with respect
to the Plan and any Award or Award Agreement will be final and binding on the Company and all persons having or claiming an interest
in any Award granted under the Plan. No member of the Board or Committee, as applicable, shall be liable while acting as Administrator
for any action or determination made in good faith with respect to the Plan, an Award or an Award Agreement. The members of the
Board or Committee, as applicable, shall be entitled to indemnification and reimbursement in the manner and to the fullest extent
provided in the Company’s articles of incorporation and/or bylaws and/or pursuant to Applicable Law.
(c) The
Administrator may adjust or modify Performance Measures or other performance factors or criteria due to extraordinary items, transactions,
events or developments, or in recognition of any other unusual or infrequent events affecting the Company or the financial statements
of the Company, or in response to changes in Applicable Law, accounting principles or business conditions, in each case as determined
by the Administrator (provided that should Code Section 162(m) become applicable, any adjustment or modification involving Covered
Employees for compensation that is intended to qualify as “performance-based compensation” under Code Section 162(m)
shall be subject to any applicable Code Section 162(m) restrictions). By way of example but not limitation, the Administrator
may provide with respect to any Award that any evaluation of performance shall exclude or otherwise objectively adjust for any
specified circumstance or event that occurs during a performance period, including circumstances or events such as the following:
(i) asset write-downs or impairment charges; (ii) significant litigation or claim judgments or settlements; (iii) the effect of
changes in tax laws, accounting standards or principles or other laws or regulatory rules; (iv) any reorganization and restructuring
programs; (v) extraordinary nonrecurring items as described in then-current accounting principles; (vi) extraordinary nonrecurring
items as described in management’s discussion and analysis of financial condition and results of operations appearing in
the Company’s annual report to shareholders; (vii) acquisitions or divestitures; (viii) a change in the Company’s
fiscal year; (ix) any other specific unusual or infrequent events or objectively determinable category thereof; and/or (x) foreign
exchange gains and losses.
(d) Notwithstanding
the other provisions of Section 3, the Board may expressly delegate to one or more officers of the Company or a special committee
consisting of one or more directors who are also officers of the Company the authority, within specified parameters, to grant
Awards to eligible Participants, and to make any or all of the determinations reserved for the Administrator in the Plan and summarized
in Section 3(b) with respect to such Awards (subject to any restrictions imposed by Applicable Law and such terms and conditions
as may be established by the Administrator); provided, however, that, if and to the extent required by Section 16 of the Exchange
Act or Code Section 162(m), the Participant, at the time of said grant or other determination, (i) is not deemed to be an officer
or director of the Company within the meaning of Section 16 of the Exchange Act; and (ii) is not deemed to be a Covered Employee
as defined under Code Section 162(m). To the extent that the Administrator has delegated authority to grant Awards pursuant to
this Section 3(e) to an officer and/or a special committee, references to the “Administrator” shall include references
to such officer(s) and/or special committee, subject, however, to the requirements of the Plan, Rule 16b-3, Code Section 162(m)
and other Applicable Law.
The
Effective Date of the Plan shall be May 5, 2016 (the “Effective Date”). Awards may be granted on or after the Effective
Date, but no Awards may be granted after May 4, 2026. Awards that are outstanding at the end of the Plan term (or such earlier
termination date as may be established by the Board pursuant to Section 16(a)) shall continue in accordance with their terms,
unless otherwise provided in the Plan or an Award Agreement.
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5.
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Shares
of Stock Subject to the Plan; Award Limitations
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(a) Shares
of Stock Subject to the Plan: Subject to adjustments as provided in Section 5(d), the maximum aggregate number of shares of
Common Stock that may be issued pursuant to Awards granted under the Plan shall initially not exceed 110,000 shares, which number
of shares of Common Stock available for issuance under the Plan shall automatically increase on January 1 of each year, beginning
on January 1, 2017 and continuing through January 1, 2026, by a number of shares of Common Stock equal to one-half percent (0.50%)
of the total number of shares of Common Stock outstanding on December 31 of the immediately preceding December. Shares delivered
under the Plan shall be authorized but unissued shares or shares purchased on the open market or by private purchase. The Company
hereby reserves sufficient authorized shares of Common Stock to meet the grant of Awards hereunder.
(b) Award
Limitations: Notwithstanding any provision in the Plan to the contrary, the following limitations shall apply to Awards granted
under the Plan, in each case subject to adjustments pursuant to Section 5(d):
(i) The
maximum aggregate number of shares of Common Stock that may be issued under the Plan pursuant to the grant of Incentive Options
shall not exceed 110,000 shares;
(ii) If
and to the extent required under Code Section 162(m), in any 12-month period, no Participant may be granted Options and SARs that
are not related to an Option for more than 110,000 shares of Common Stock (or the equivalent value thereof based on the Fair Market
Value per share of the Common Stock on the date of grant of an Award);
(iii) If
and to the extent required under Code Section 162(m), in any 12-month period, no Participant may be granted Awards other than
Options or SARs that are settled in shares of Common Stock for more than 110,000 shares of Common Stock (or the equivalent value
thereof based on the Fair Market Value per share of the Common Stock on the date of grant of an Award).
(For
purposes of Section 5(b)(ii) and (iii), an Option and Related SAR shall be treated as a single Award.)
(c) Shares
Not Subject to Limitations: The following will not be applied to the share limitations of Section 5(a) above: (i) dividends,
including dividends paid in shares, or dividend equivalents paid in cash in connection with outstanding Awards; (ii) Awards which
are settled in cash rather than the issuance of shares; (iii) any shares subject to an Award if the Award is forfeited, cancelled,
terminated, expires or lapses for any reason without the issuance of shares underlying the Award or any shares subject to an Award
which shares are forfeited to, or repurchased or reacquired by, the Company; and (iv) any shares surrendered by a Participant
or withheld by the Company to pay the Option Price or purchase price for an Award or shares used to satisfy any tax withholding
requirements in connection with the exercise, vesting or earning of an Award if, in accordance with the terms of the Plan, a Participant
pays such Option Price or purchase price or satisfies such tax withholding requirements by either tendering previously owned shares
or having the Company withhold shares. Further, (i) shares issued under the Plan through the settlement, assumption or substitution
of outstanding awards granted by another entity or obligations to grant future awards as a condition of or in connection with
a merger, acquisition or similar transaction involving the Company acquiring another entity shall not reduce the maximum number
of shares of Common Stock available for delivery under the Plan; and (ii) available shares under a shareholder approved plan of
an acquired company (as appropriately adjusted to reflect the transaction) may be used for Awards under the Plan (subject to applicable
stock exchange listing requirements) and will not reduce the maximum number of shares available under the Plan.
(d) Adjustments;
Right to Issue Additional Securities: If there is any change in the outstanding shares of Common Stock because of a merger,
consolidation or reorganization involving the Company, or if the Board declares a stock dividend, stock split distributable in
shares of Common Stock, other distribution (other than regular or ordinary cash dividends) or reverse stock split, combination
or reclassification of the Common Stock, or if there is a similar change in the capital stock structure of the Company affecting
the Common Stock (excluding conversion of convertible securities by the Company and/or the exercise of warrants by their holders),
then the number of shares of Common Stock reserved for issuance under the Plan shall be correspondingly adjusted, and the Administrator
shall make such adjustments to Awards or to any provisions of this Plan as the Administrator deems equitable to prevent dilution
or enlargement of Awards or as may otherwise be advisable. Nothing in the Plan, an Award or an Award Agreement shall limit the
ability of the Company to issue additional securities (including but not limited to the issuance of other options or other derivative
securities, warrants, additional shares or classes of Common Stock, preferred stock and/or other convertible securities).
(e) Substitute
Awards: Substitute Awards shall not reduce the Common Stock authorized for issuance under the Plan or authorized for grant to
Participants in any calendar year. Additionally, in the event that a corporation acquired by the Company or any Subsidiary, or
with which the Company or any Subsidiary, has shares available under a pre-existing plan approved by stockholders and not adopted
in contemplation of such acquisition or combination, the shares available for grant pursuant to the terms of such pre-existing
plan (as adjusted, to the extent appropriate, using the exchange ratio or other adjustment or valuation ratio or formula used
in such acquisition or combination to determine the consideration payable to the holders of common stock of the entities party
to such acquisition or combination) may be used for Awards under the Plan and shall not reduce the Common Stock authorized for
issuance under the Plan; provided the Awards using such available shares shall not be made after the date awards or grants could
have been made under the terms of the pre-existing plan, absent the acquisition or combination, and shall only be made to individuals
who were not Employees, Directors or Independent Contractors of the Company or its Subsidiaries immediately before such acquisition
or combination.
An
Award may be granted only to an individual who satisfies all of the following eligibility requirements on the date the Award is
granted:
(a) The
individual is either (i) an Employee, (ii) a Director or (iii) an Independent Contractor.
(b) With
respect to the grant of Incentive Options, the individual is otherwise eligible to participate under this Section 6, is an Employee
of the Company or a Parent or Subsidiary and does not own, immediately before the time that the Incentive Option is granted, stock
possessing more than 10% of the total combined voting power of all classes of stock of the Company or a Parent or Subsidiary.
Notwithstanding the foregoing, an Employee who owns more than 10% of the total combined voting power of the Company or a Parent
or Subsidiary may be granted an Incentive Option if the Option Price is at least 110% of the Fair Market Value of the Common Stock,
and the Option Period does not exceed five years. For this purpose, an individual will be deemed to own stock which is attributable
to him under Code Section 424(d).
(c) With
respect to the grant of Substitute Awards or assumption of awards in connection with a merger, consolidation, acquisition, reorganization
or similar business transaction involving the Company or an Affiliate, the recipient is otherwise eligible to receive the Award
and the terms of the award are consistent with the Plan and Applicable Law (including, to the extent necessary, the federal securities
laws registration provisions, Code Section 409A and Code Section 424(a)).
(d) The
individual, being otherwise eligible under this Section 6, is selected by the Administrator as an individual to whom an Award
shall be granted (as defined above, a “Participant”).
(a) Grant
of Options: Subject to the limitations of the Plan, the Administrator may in its discretion grant Options to such eligible
Participants in such numbers, subject to such terms and conditions, and at such times as the Administrator shall determine. Both
Incentive Options and Nonqualified Options may be granted under the Plan, as determined by the Administrator; provided, however,
that Incentive Options may only be granted to Employees of the Company or a Parent or Subsidiary. To the extent that an Option
is designated as an Incentive Option but does not qualify as such under Code Section 422, the Option (or portion thereof) shall
be treated as a Nonqualified Option. An Option may be granted with or without a Related SAR.
(b) Option
Price: The Option Price per share at which an Option may be exercised shall be established by the Administrator and stated
in the Award Agreement evidencing the grant of the Option; provided, that (i) the Option Price of an Option shall be no less than
100% of the Fair Market Value per share of the Common Stock as determined on the date the Option is granted (or 110% of the Fair
Market Value with respect to Incentive Options granted to an Employee who owns stock possessing more than 10% of the total combined
voting power of all classes of stock of the Company or a Parent or Subsidiary, as provided in Section 6(b)); and (ii) in no event
shall the Option Price per share of any Option be less than the par value, if any, per share of the Common Stock. Notwithstanding
the foregoing, the Administrator may in its discretion authorize the grant of substitute or assumed options of an acquired entity
with an Option Price not equal to 100% of the Fair Market Value of the stock on the date of grant, if the terms of such substitution
or assumption otherwise comply, to the extent deemed applicable, with Code Section 409A and/or Code Section 424(a).
(c) Date
of Grant: An Option shall be considered to be granted on the date that the Administrator acts to grant the Option, or on such
later date as may be established by the Administrator in accordance with Applicable Law.
(d) Option
Period and Limitations on the Right to Exercise Options:
(i) The
Option Period shall be determined by the Administrator at the time the Option is granted and shall be stated in the Award Agreement.
The Option Period shall not extend more than 10 years from the date on which the Option is granted (or five years with respect
to Incentive Options granted to an Employee who owns stock possessing more than 10% of the total combined voting power of all
classes of stock of the Company or a Parent or Subsidiary, as provided in Section 6(b)). Any Option or portion thereof not exercised
before expiration of the Option Period shall terminate. The period or periods during which, and the terms and conditions pursuant
to which, an Option may vest and become exercisable shall be determined by the Administrator in its discretion, subject to the
terms of the Plan.
(ii) An
Option may be exercised by giving written notice to the Company in form acceptable to the Administrator at such place and subject
to such conditions as may be established by the Administrator or its designee. Such notice shall specify the number of shares
to be purchased pursuant to an Option and the aggregate purchase price to be paid therefor and shall be accompanied by payment
of such purchase price. Unless an Award Agreement provides otherwise, such payment shall be in the form of cash or cash equivalent;
provided that, except where prohibited by the Administrator or Applicable Law (and subject to such terms and conditions as may
be established by the Administrator), payment may also be made:
(A) By
delivery (by either actual delivery or attestation) of shares of Common Stock owned by the Participant for such time period, if
any, as may be determined by the Administrator;
(B) By
shares of Common Stock withheld upon exercise;
(C) With
respect only to purchases upon exercise of an Option after a Public Market for the Common Stock exists, by delivery of written
notice of exercise to the Company and delivery to a broker of written notice of exercise and irrevocable instructions to promptly
deliver to the Company the amount of sale or loan proceeds to pay the Option Price;
(D) By
such other payment methods as may be approved by the Administrator and which are acceptable under Applicable Law; or
(E) By
any combination of the foregoing methods.
Shares
delivered or withheld in payment on the exercise of an Option shall be valued at their Fair Market Value on the date of exercise,
as determined by the Administrator or its designee. For the purposes of the Plan, a “Public Market” for the Common
Stock shall be deemed to exist (i) upon consummation of a firm commitment underwritten public offering of the Common Stock (or
successor securities thereto) pursuant to an effective registration statement under the Securities Act, or (ii) if the Administrator
otherwise determines that there is an established public market for the Common Stock.
(iii) The
Administrator shall determine the extent, if any, to which a Participant may have the right to exercise an Option following termination
of the Participant’s employment or service with the Company. Such rights, if any, shall be subject to the sole discretion
of the Administrator, shall be stated in the individual Award Agreement, need not be uniform among all Options issued pursuant
to this Section 7, and may reflect distinctions based on the reasons for termination of employment or service. The Administrator
also shall have authority, in its sole discretion (taking into account any Code Section 409A considerations), to accelerate the
date for exercising all or any part of an Option which was not otherwise vested and exercisable, extend the period during which
an Option may be exercised, modify the other terms and conditions of exercise, or any combination of the foregoing.
(e) Notice
of Disposition: If shares of Common Stock acquired upon exercise of an Incentive Option are disposed of within two years following
the date of grant or one year following the transfer of such shares to a Participant upon exercise, the Participant shall, promptly
following such disposition, notify the Company in writing of the date and terms of such disposition and provide such other information
regarding the disposition as the Administrator may reasonably require.
(f) Limitation
on Incentive Options: In no event shall there first become exercisable by an Employee in any one calendar year Incentive Options
granted by the Company or any Parent or Subsidiary with respect to shares having an aggregate Fair Market Value (determined at
the time an Incentive Option is granted) greater than $100,000; provided that, if such limit is exceeded, then the first $100,000
of shares to become exercisable in such calendar year will be Incentive Options and the Options (or portion thereof) for shares
with a value in excess of $100,000 that first became exercisable in that calendar year will be Nonqualified Options. In the event
the Code or the regulations promulgated thereunder are amended after the Effective Date of the Plan to provide for a different
limitation on the Fair Market Value of shares permitted to be subject to Incentive Options, then such different limit shall be
automatically incorporated herein. To the extent that any Incentive Options are first exercisable by a Participant in excess of
the limitation described herein, the excess shall be considered a Nonqualified Option.
(g) Nontransferability
of Options: Incentive Options shall not be transferable (including by sale, assignment, pledge or hypothecation) other than
transfers by will or the laws of intestate succession or, in the Administrator’s discretion, such transfers as may otherwise
be permitted in accordance with Treasury Regulation Section 1.421-1(b)(2) or Treasury Regulation Section 1.421-2(c) or any successor
provisions thereto. Nonqualified Options shall not be transferable (including by sale, assignment, pledge or hypothecation) other
than by will or the laws of intestate succession, except for transfers if and to the extent permitted by the Administrator in
a manner consistent with the registration provisions of the Securities Act. Except as may be permitted by the preceding, an Option
shall be exercisable during the Participant’s lifetime only by him or by his guardian or legal representative. The designation
of a beneficiary in accordance with the Plan does not constitute a transfer.
(h) Modification,
Extension or Renewal. The Board may modify, extend or renew outstanding Options and authorize the grant of new Options in
substitution therefor, provided that, (a) except as expressly provided for in the Plan or an Award Agreement, any such action
may not, without the written consent of a Participant, impair any of such Participant’s rights under any Option previously
granted and (b) except pursuant to the provisions of Section 7(b) of the Plan, Options issued hereunder will not be repriced,
replaced or regranted through cancellation or by lowering the Exercise Price of a previously granted Award without prior approval
of the Company’s stockholders. Any outstanding Incentive Option that is modified, extended, renewed or otherwise altered
will be treated in accordance with Section 424(h) of the Code.
(i) Limitations
on Exercise. The Board may specify a reasonable minimum number of Shares that may be purchased on any exercise of an Option,
provided that such minimum number will not prevent Participant from exercising the Option for the full number of Shares for which
it is then exercisable.
(j) No
Disqualification. Notwithstanding any other provision in this Plan, no term of this Plan relating to Incentive Options will
be interpreted, amended or altered, nor will any discretion or authority granted under this Plan be exercised, so as to disqualify
this Plan under Section 422 of the Code or, without the consent of the Participant affected, to disqualify any Incentive Option
under Section 422 of the Code.
(k) Lapsed
Grants. Notwithstanding anything in the Plan to the contrary, the Company may, in its sole discretion, allow the exercise
of a lapsed grant if the Company determines that: (a) the lapse was the result of the Company’s inability to timely execute
the exercise of an Option award prior to its lapse and (b) the Participant made valid and reasonable efforts to exercise the Award.
In the event the Company makes such a determination, the Company shall allow the exercise to occur as promptly as possible following
its receipt of exercise instructions subsequent to such determination; provided, however, that in no event shall
any such exercise be permitted to occur later than the tenth anniversary of the date of grant of such award.
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8.
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Stock
Appreciation Rights
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(a) Grant
of SARs: Subject to the limitations of the Plan, the Administrator may in its discretion grant SARs to such eligible Participants,
in such numbers, upon such terms and at such times as the Administrator shall determine. SARs may be granted to the holder of
an Option (a “Related Option”) with respect to all or a portion of the shares of Common Stock subject to the
Related Option (a “Related SAR”) or may be granted separately, without relationship to an Option, to an eligible
individual (a “Freestanding SAR”). The Base Price per share of a SAR shall be no less than 100% of the Fair
Market Value per share of the Common Stock on the date the SAR is granted. Notwithstanding the foregoing, the Administrator may
in its discretion authorize the grant of substitute or assumed SARs of an acquired entity with a Base Price per share not equal
to at least 100% of the Fair Market Value of the stock on the date of grant, if the terms of such substitution or assumption otherwise
comply, to the extent deemed applicable, with Code Section 409A and/or Code Section 424(a). A SAR shall be considered to be granted
on the date that the Administrator acts to grant the SAR, or on such other date as may be established by the Administrator in
accordance with Applicable Law.
(b) Related
SARs: A Related SAR may be granted either concurrently with the grant of the Related Option or (if the Related Option is a
Nonqualified Option) at any time thereafter prior to the complete exercise, termination, expiration or cancellation of such Related
Option. The Base Price of a Related SAR shall be equal to the Option Price of the Related Option. Related SARs shall be exercisable
only at the time and to the extent that the Related Option is exercisable (and may be subject to such additional limitations on
exercisability as the Administrator may provide in an Award Agreement), and in no event after the complete termination or full
exercise of the Related Option. Notwithstanding the foregoing, a Related SAR that is related to an Incentive Option may be exercised
only to the extent that the Related Option is exercisable and only when the Fair Market Value exceeds the Option Price of the
Related Option. Upon the exercise of a Related SAR granted in connection with a Related Option, the Option shall be canceled to
the extent of the number of shares as to which the SAR is exercised, and upon the exercise of a Related Option, the Related SAR
shall be canceled to the extent of the number of shares as to which the Related Option is exercised or surrendered.
(c) Freestanding
SARs: An SAR may be granted without relationship to an Option (as defined above, a “Freestanding SAR”)
and, in such case, will be exercisable upon such terms and subject to such conditions as may be determined by the Administrator,
subject to the terms of the Plan.
(d) Exercise
of SARs:
(i) Subject
to the terms of the Plan, SARs shall be vested and exercisable in whole or in part upon such terms and conditions as may be established
by the Administrator. The period during which a SAR may be exercisable shall not exceed 10 years from the date of grant or, in
the case of Related SARs, such shorter Option Period as may apply to the Related Option. Any SAR or portion thereof not
exercised before expiration of the period established by the Administrator shall terminate.
(ii) SARs
may be exercised by giving written notice to the Company in form acceptable to the Administrator at such place and subject to
such terms and conditions as may be established by the Administrator or its designee. Unless the Administrator determines otherwise,
the date of exercise of a SAR shall mean the date on which the Company shall have received proper notice from the Participant
of the exercise of such SAR.
(iii) The
Administrator shall determine the extent, if any, to which a Participant may have the right to exercise a SAR following termination
of the Participant’s employment or service with the Company. Such rights, if any, shall be determined in the sole discretion
of the Administrator, shall be stated in the individual Award Agreement, need not be uniform among all SARs issued pursuant to
this Section 8, and may reflect distinctions based on the reasons for termination of employment or service. The Administrator
also may, in its sole discretion (taking into account any Code Section 409A considerations), accelerate the date for exercising
all or any part of a SAR which was not otherwise exercisable on the Termination Date, extend the period during which a SAR may
be exercised, modify the terms and conditions to exercise, or any combination of the foregoing.
(e) Payment
Upon Exercise: Subject to the limitations of the Plan, upon the exercise of a SAR, a Participant shall be entitled to receive
payment from the Company in an amount determined by multiplying (i) the excess, if any, of the Fair Market Value of a share of
Common Stock on the date of exercise of the SAR over the Base Price of the SAR, by (ii) the number of shares of Common Stock with
respect to which the SAR is being exercised. The consideration payable upon exercise of a SAR shall be paid in cash, shares of
Common Stock (valued at Fair Market Value on the date of exercise of the SAR) or a combination of cash and shares of Common Stock,
as determined by the Administrator.
(f) Nontransferability:
Unless the Administrator determines otherwise, SARs shall not be transferable (including by sale, assignment, pledge or hypothecation)
other than by will or the laws of intestate succession, except for transfers if and to the extent permitted by the Administrator
in a manner consistent with the registration provisions of the Securities Act. Except as may be permitted by the preceding sentence,
SARs may be exercised during the Participant’s lifetime only by him or by his guardian or legal representative. The designation
of a beneficiary in accordance with the Plan does not constitute a transfer.
(a) Grant
of Restricted Awards: Subject to the limitations of the Plan, the Administrator may in its discretion grant Restricted Awards
to such eligible Participants, for such numbers of shares of Common Stock, upon such terms and at such times as the Administrator
shall determine. Such Restricted Awards may be in the form of Restricted Stock Awards and/or Restricted Stock Units that are subject
to certain conditions, which conditions must be met in order for the Restricted Award to vest and be earned (in whole or in part)
and no longer subject to forfeiture. Restricted Stock Awards shall be payable in shares of Common Stock. Restricted Stock Units
shall be payable in cash or shares of Common Stock, or partly in cash and partly in shares of Common Stock, in accordance with
the terms of the Plan and the discretion of the Administrator. The Administrator shall determine the nature, length and starting
date of the period, if any, during which a Restricted Award may be earned (the “Restriction Period”), and shall
determine the conditions which must be met in order for a Restricted Award to be granted or to vest or be earned (in whole or
in part), which conditions may include, but are not limited to, payment of a stipulated purchase price, attainment of performance
objectives, continued service or employment for a certain period of time, a combination of attainment of performance objectives
and continued service, Retirement, Displacement, Disability, death, or any combination of such conditions. In the case of Restricted
Awards based upon performance criteria, or a combination of performance criteria and continued service, the Administrator shall
determine the Performance Measures applicable to such Restricted Awards (subject to Section 1(ii)).
(b) Vesting
of Restricted Awards: Subject to the terms of the Plan (and taking into account any Code Section 409A considerations), the
Administrator shall have sole authority to determine whether and to what degree Restricted Awards have vested and been earned
and are payable and to establish and interpret the terms and conditions of Restricted Awards. The Administrator, in its sole discretion,
may (subject to any Code Section 409A considerations) accelerate the date that any Restricted Award granted to a Participant shall
be deemed to be vested or earned in whole or in part, without any obligation to accelerate such date with respect to other Restricted
Awards granted to any Participant.
(c) Termination
of Employment or Service; Forfeiture: Unless the Administrator determines otherwise, if the employment or service of a Participant
shall be terminated for any reason (whether by the Company or the Participant and whether voluntary or involuntary) and all or
any part of a Restricted Award has not vested or been earned pursuant to the terms of the Plan and related Award Agreement, such
Award, to the extent not then vested or earned, shall be forfeited immediately upon such termination and the Participant shall
have no further rights with respect thereto.
(d) Share
Certificates; Escrow: Unless the Administrator determines otherwise, a certificate or certificates representing the shares
of Common Stock subject to a Restricted Stock Award shall be issued in the name of the Participant (or, in the case of uncertificated
shares, other written evidence of ownership in accordance with Applicable Law shall be provided) after the Award has been granted.
Notwithstanding the foregoing, the Administrator may require that (i) a Participant deliver the certificate(s) (or other instruments)
for such shares to the Administrator or its designee to be held in escrow until the Restricted Stock Award vests and is no longer
subject to a substantial risk of forfeiture (in which case the shares will be promptly released to the Participant) or is forfeited
(in which case the shares shall be returned to the Company); and/or (ii) a Participant deliver to the Company a stock power, endorsed
in blank (or similar instrument), relating to the shares subject to the Restricted Stock Award which are subject to forfeiture.
Unless the Administrator determines otherwise, a certificate or certificate representing shares of Common Stock issuable pursuant
to a Restricted Stock Unit shall be issued in the name of the Participant (or, in the case of uncertificated shares, other written
evidence of ownership in accordance with Applicable Law shall be provided) promptly after the Award (or portion thereof) has vested
and is distributable.
(e) Nontransferability:
Unless the Administrator determines otherwise, Restricted Awards that have not vested shall not be transferable (including by
sale, assignment, pledge or hypothecation) other than transfers by will or the laws of intestate succession, and the recipient
of a Restricted Award shall not sell, transfer, assign, pledge or otherwise encumber shares subject to the Award until the Restriction
Period has expired and until all conditions to vesting have been met. The designation of a beneficiary in accordance with the
Plan does not constitute a transfer.
(a) Grant
of Performance Awards: Subject to the terms of the Plan, the Administrator may in its discretion grant Performance Awards
to such eligible Participants upon such terms and conditions and at such times as the Administrator shall determine. Performance
Awards may be in the form of Performance Shares and/or Performance Units. An Award of a Performance Share is a grant of a right
to receive shares of Common Stock, the cash value thereof, or a combination thereof (in the Administrator’s discretion),
which is contingent upon the achievement of performance or other objectives during a specified period and which has a value on
the date of grant equal to the Fair Market Value of a share of Common Stock. An Award of a Performance Unit is a grant of a right
to receive shares of Common Stock or a designated dollar value amount of Common Stock which is contingent upon the achievement
of performance or other objectives during a specified period, and which has an initial value determined in a dollar amount established
by the Administrator at the time of grant. Subject to Section 5(b), the Administrator shall have discretion to determine the number
of Performance Units and/or Performance Shares granted to any Participant. The Administrator shall determine the nature, length
and starting date of the period during which a Performance Award may be earned (the “Performance Period”),
and shall determine the conditions which must be met in order for a Performance Award to be granted or to vest or be earned (in
whole or in part), which conditions may include but are not limited to payment of a stipulated purchase price, attainment of performance
objectives, continued service or employment for a certain period of time, or a combination of any such conditions. Subject to
Section 1(ii), the Administrator shall determine the Performance Measures to be used in valuing Performance Awards.
(b) Earning
of Performance Awards: Subject to the terms of the Plan (and taking into account any Code Section 409A considerations), the
Administrator shall have sole authority to determine whether and to what degree Performance Awards have been earned and are payable
and to interpret the terms and conditions of Performance Awards and the provisions of Section 10. The Administrator, in its sole
discretion, may (subject to any Code Section 409A considerations) accelerate the date that any Performance Award granted to a
Participant shall be deemed to be earned in whole or in part, without any obligation to accelerate such date with respect to other
Awards granted to any Participant.
(c) Form
of Payment: Payment of the amount to which a Participant shall be entitled upon earning a Performance Award shall be made
in cash, shares of Common Stock, or a combination of cash and shares of Common Stock, as determined by the Administrator in its
sole discretion. Payment may be made in a lump sum or upon such terms as may be established by the Administrator (taking into
account any Code Section 409A considerations).
(d) Termination
of Employment or Service; Forfeiture: Unless the Administrator determines otherwise (taking into account any Code Section
409A considerations), if the employment or service of a Participant shall terminate for any reason (whether by the Company or
the Participant and whether voluntary or involuntary) and the Participant has not earned all or part of a Performance Award pursuant
to the terms of the Plan and related Award Agreement, such Award, to the extent not then earned, shall be forfeited immediately
upon such termination and the Participant shall have no further rights with respect thereto.
(e) Nontransferability:
Unless the Administrator determines otherwise, Performance Awards which have not been earned shall not be transferable (including
by sale, assignment, pledge or hypothecation) other than transfers by will or the laws of intestate succession, and the recipient
of a Performance Award shall not sell, transfer, assign, pledge or otherwise encumber any shares or any other benefit subject
to the Award until the Performance Period has expired and the conditions to earning the Award have been met. The designation of
a beneficiary in accordance with the Plan does not constitute a transfer.
(a) Grant
of Phantom Stock Awards: Subject to the terms of the Plan, the Administrator may in its discretion grant Phantom Stock Awards
to such eligible Participants, in such numbers, upon such terms and at such times as the Administrator shall determine. A Phantom
Stock Award is an Award to a Participant of a number of hypothetical share units with respect to shares of Common Stock, with
a value based on the Fair Market Value of a share of Common Stock.
(b) Vesting
of Phantom Stock Awards: Subject to the terms of the Plan (and taking into account any Code Section 409A considerations),
the Administrator shall have sole authority to determine whether and to what degree Phantom Stock Awards have vested and are payable
and to interpret the terms and conditions of Phantom Stock Awards. The Administrator, in its sole discretion, may (subject to
any Code Section 409A considerations) accelerate the date that any Phantom Stock Award granted to a Participant shall be deemed
to be earned in whole or in part, without any obligation to accelerate such date with respect to other Awards granted to any Participant.
(c) Termination
of Employment or Service; Forfeiture: Unless the Administrator determines otherwise (taking into account any Code Section
409A considerations), if the employment or service of a Participant shall be terminated for any reason (whether by the Company
or the Participant and whether voluntary or involuntary) and all or any part of a Phantom Stock Award has not vested and become
payable pursuant to the terms of the Plan and related Award Agreement, such Award, to the extent not then vested or earned, shall
be forfeited immediately upon such termination and the Participant shall have no further rights with respect thereto.
(d) Payment
of Phantom Stock Awards: Upon vesting of all or a part of a Phantom Stock Award and satisfaction of such other terms and conditions
as may be established by the Administrator, the Participant shall be entitled to a payment of an amount equal to the Fair Market
Value of one share of Common Stock with respect to each such Phantom Stock unit which has vested and is payable. Payment may be
made, in the discretion of the Administrator, in cash or in shares of Common Stock valued at their Fair Market Value on the applicable
vesting date or dates (or other date or dates determined by the Administrator), or in a combination thereof. Payment may be made
in a lump sum or upon such terms as may be established by the Administrator (taking into account any Code Section 409A considerations).
(e) Nontransferability:
Unless the Administrator determines otherwise, (i) Phantom Stock Awards shall not be transferable (including by sale, assignment,
pledge or hypothecation) other than transfers by will or the laws of intestate succession and (ii) shares of Common Stock (if
any) subject to a Phantom Stock Award may not be sold, transferred, assigned, pledged or otherwise encumbered until the Phantom
Stock Award has vested and all other conditions established by the Administrator have been met. The designation of a beneficiary
in accordance with the Plan does not constitute a transfer.
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12.
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Other
Stock-Based Awards
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The
Administrator shall have the authority to grant Other Stock-Based Awards to one or more eligible Participants. Such Other Stock-Based
Awards may be valued in whole or in part by reference to, or otherwise based on or related to, shares of Common Stock or Awards
for shares of Common Stock, including but not limited to Other Stock-Based Awards granted in lieu of bonus, salary or other compensation,
Other Stock-Based Awards granted with vesting or performance conditions, and/or Other Stock-Based Awards granted without being
subject to vesting or performance conditions. Subject to the provisions of the Plan, the Administrator shall determine the number
of shares of Common Stock to be awarded to a Participant under (or otherwise related to) such Other Stock-Based Awards; whether
such Other Stock-Based Awards shall be settled in cash, shares of Common Stock or a combination of cash and shares of Common Stock;
and the other terms and conditions of such Awards. Unless the Administrator determines otherwise, (i) Other Stock-Based Awards
shall not be transferable (including by sale, assignment, pledge or hypothecation) other than transfers by will or the laws of
intestate succession, and (ii) shares of Common Stock (if any) subject to an Other Stock-Based Award may not be sold, transferred,
assigned, pledged or otherwise encumbered until the Other Stock-Based Award has vested and all other conditions established by
the Administrator have been met. The designation of a beneficiary in accordance with the Plan does not constitute a transfer.
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13.
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Dividends
and Dividend Equivalents
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The
Administrator may, in its sole discretion, provide that Awards other than Options and SARs earn dividends or dividend equivalents.
Such dividends or dividend equivalents may be paid currently or may be credited to a Participant’s account. Any crediting
of dividends or dividend equivalents may be subject to such additional restrictions and conditions as the Administrator may establish,
including reinvestment in additional shares of Common Stock or share equivalents. Notwithstanding the other provisions herein,
any dividends or dividend equivalent rights related to an Award shall be structured in a manner so as to avoid causing the Award
and related dividends or dividend equivalents to be subject to Code Section 409A or shall otherwise be structured so that the
Award and dividends or dividend equivalents are in compliance with Code Section 409A.
The
Administrator shall (taking into account any Code Section 409A considerations) have sole discretion to determine at any time the
effect, if any, on an Award, including but not limited to the vesting, earning and/or exercisability of an Award (in whole or
in part), in the event of a Change of Control. Without limiting the effect of the foregoing, the Administrator’s discretion
shall include, but shall in no way be limited to, the discretion to determine with respect to all or any portion of an Award that
(a) the Award shall vest, be earned and/or become exercisable upon a Change of Control, (b) vesting, earning and/or
exercisability of the Award shall accelerate upon a Change of Control, (c) exercise of the Award must occur, if at all, within
time period(s) specified by the Administrator, after which time period(s) the Award shall, unless the Administrator determines
otherwise, terminate, (d) the Award shall be assumed or substituted for another award, (e) the Award shall be cancelled
without the payment of consideration, (f) the Award shall be cancelled in exchange for a cash payment or other consideration
in an amount determined by the Administrator, (g) the Award shall be subject to such treatment (including but not limited
to cancellation, cashout, assumption or substitution) as is provided under the terms of the agreement or other instrument establishing
terms of the Change of Control transaction (e.g., a merger agreement); and/or (h) other actions (or no action) shall be taken
with respect to the Award. The Administrator also has discretion to determine that acceleration or any other effect of a Change
of Control on an Award shall be subject to both the occurrence of a Change of Control event and termination of employment or service
of the Participant upon such terms and conditions as may be established by the Administrator. Any such determinations of the Administrator
may be, but shall not be required to be, stated in an individual Award Agreement.
The
Company shall withhold all required local, state, federal, foreign and other taxes and any other amount required to be withheld
by any governmental authority or law from any amount payable in cash with respect to an Award. Prior to the delivery or transfer
of any certificate for shares or any other benefit conferred under the Plan, the Company shall require any Participant or other
person to pay to the Company in cash the amount of any tax or other amount required by any governmental authority to be withheld
and paid over by the Company to such authority for the account of such recipient. Notwithstanding the foregoing, the Administrator
may in its discretion establish procedures to permit a recipient to satisfy such obligation in whole or in part, and any local,
state, federal, foreign or other income tax obligations relating to such an Award, by electing (the “election”)
to have the Company withhold shares of Common Stock from the shares to which the recipient is otherwise entitled. The number of
shares to be withheld shall have a Fair Market Value as of the date that the amount of tax to be withheld is determined as nearly
equal as possible to (but not exceeding) the amount of such obligations being satisfied. Each election must be made in writing
to the Administrator in accordance with election procedures established by the Administrator.
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16.
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Amendment
and Termination of the Plan and Awards
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(a) Amendment
and Termination of Plan: The Plan may be amended, altered, suspended and/or terminated at any time by the Board; provided,
that approval of an amendment to the Plan by the shareholders of the Company shall be required to the extent, if any, that shareholder
approval of such amendment is required by Applicable Law.
(b) Amendment
and Termination of Awards: The Administrator may amend, alter, suspend and/or terminate any Award granted under the Plan,
prospectively or retroactively, but (except as otherwise provided in Section 16(c) or Section 16(d)) such amendment, alteration,
suspension or termination of an Award shall not, without the written consent of the recipient of an outstanding Award, materially
adversely affect the rights of the recipient with respect to the Award.
(c) Unilateral
Authority of Administrator to Modify Plan and Awards: Notwithstanding Section 16(a) and Section 16(b) herein, the following
provisions shall apply:
(i) The
Administrator shall have unilateral authority to amend the Plan and any Award (without Participant consent) to the extent necessary
to comply with Applicable Law or changes to Applicable Law (including but in no way limited to Code Section 409A, Code Section
422 and federal securities laws).
(ii) The
Administrator shall have unilateral authority to make adjustments to the terms and conditions of Awards in recognition of unusual
or nonrecurring events affecting the Company or any Affiliate, or the financial statements of the Company or any Affiliate, or
of changes in Applicable Law, or accounting principles, if the Administrator determines that such adjustments are appropriate
in order to prevent dilution or enlargement of the benefits or potential benefits intended to be made available under the Plan
or necessary or appropriate to comply with applicable accounting principles or Applicable Law.
(d) Cash
Settlement: Notwithstanding any provision of the Plan, an Award or an Award Agreement to the contrary, the Administrator shall
have unilateral discretion to cause any Award (or portion thereof) granted under the Plan to be canceled in consideration of an
alternative award or cash payment of an equivalent cash value, as determined by the Administrator in its sole discretion, made
to the holder of such canceled Award. Without in any way limiting the authority of the Administrator described in the preceding
sentence, in the case of Options and SARs, the Administrator may determine that (i) the difference between the Fair Market Value
per share of the Common Stock at the time of cancellation (or as of such other date determined by the Administrator) and the Option
Price or Base Price, as the case may be, shall constitute an equivalent cash value, and (ii) if the calculation described in Section
16(d)(i) herein does not result in a positive number, the Option or SAR, as the case may be, may be canceled for no consideration.
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17.
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Restrictions
on Awards and Shares; Compliance with Applicable Law
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(a) General:
As a condition to the issuance and delivery of Common Stock hereunder, or the grant of any benefit pursuant to the Plan, the Company
may require a Participant or other person at any time and from time to time to become a party to an Award Agreement, other agreement(s)
restricting the transfer, purchase, repurchase and/or voting of shares of Common Stock of the Company, and any employment agreements,
consulting agreements, noncompetition agreements, confidentiality agreements, nonsolicitation agreements, nondisparagement agreements
or other agreements imposing such restrictions as may be required by the Company. In addition, without in any way limiting the
effect of the foregoing, each Participant or other holder of shares issued under the Plan shall be permitted to transfer such
shares only if such transfer is in accordance with the Plan, the Award Agreement, any other applicable agreements and Applicable
Law. The acquisition of shares of Common Stock under the Plan by a Participant or any other holder of shares shall be subject
to, and conditioned upon, the agreement of the Participant or other holder of such shares to the restrictions described in the
Plan, the Award Agreement and any other applicable agreements and Applicable Law.
(b) Compliance
with Applicable Law, Rules and Regulations: The Company may impose such restrictions on Awards, shares of Common Stock and
any other benefits underlying Awards hereunder as it may deem advisable, including without limitation restrictions under the federal
securities laws, the requirements of any stock exchange or similar organization and any blue sky, state or foreign securities
or other laws applicable to such securities. Notwithstanding any other Plan provision to the contrary, the Company shall not be
obligated to issue, deliver or transfer shares of Common Stock under the Plan, make any other distribution of benefits under the
Plan, or take any other action, unless such delivery, distribution or action is in compliance with Applicable Law (including but
not limited to the requirements of the Securities Act). The Company will be under no obligation to register shares of Common Stock
or other securities with the Securities and Exchange Commission or to effect compliance with the exemption, registration, qualification
or listing requirements of any state securities laws, stock exchange or similar organization, and the Company will have no liability
for any inability or failure to do so. The Company may cause a restrictive legend or legends to be placed on any certificate issued
pursuant to an Award hereunder in such form as may be prescribed from time to time by Applicable Law or as may be advised by legal
counsel.
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18.
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No
Right or Obligation of Continued Employment or Service or to Awards; Compliance with
the Plan
|
Neither
the Plan, an Award, an Award Agreement nor any other action related to the Plan shall confer upon a Participant any right to continue
in the employ or service of the Company or an Affiliate as an Employee, Director or Independent Contractor, or to interfere in
any way with the right of the Company or an Affiliate to terminate the Participant’s employment or service at any time.
Except as otherwise provided in the Plan, an Award Agreement or as may be determined by the Administrator, all rights of a Participant
with respect to an Award shall terminate upon the termination of the Participant’s employment or service. In addition, no
person shall have any right to be granted an Award, and the Company shall have no obligation to treat Participants or Awards uniformly.
By participating in the Plan, each Participant shall be deemed to have accepted all of the conditions of the Plan and the terms
and conditions of any rules and regulations adopted by the Administrator and shall be fully bound thereby. Any Award granted hereunder
is not intended to be compensation of a continuing or recurring nature, or part of a Participant’s normal or expected compensation,
and in no way represents any portion of a Participant’s salary, compensation or other remuneration for purposes of pension
benefits, severance, redundancy, resignation or any other purpose.
(a) Shareholder
Rights: Except as otherwise determined by the Administrator (and subject to the provisions of Section 9(d) regarding Restricted
Awards), a Participant and his legal representative, legatees or distributees shall not be deemed to be the holder of any shares
of Common Stock subject to an Award and shall not have any rights of a shareholder unless and until certificates for such shares
have been issued and delivered to him or them under the Plan. A certificate or certificates for shares of Common Stock acquired
upon exercise of an Option or SAR shall be issued in the name of the Participant or his beneficiary and distributed to the Participant
or his beneficiary (or, in the case of uncertificated shares, other written notice of ownership in accordance with Applicable
Law shall be provided) as soon as practicable following receipt of notice of exercise and, with respect to Options, payment of
the Option Price (except as may otherwise be determined by the Company in the event of payment of the Option Price pursuant to
Section 7(d)(ii)(C)). Except as otherwise provided in Section 9(d) regarding Restricted Stock Awards or otherwise determined by
the Administrator, a certificate for any shares of Common Stock issuable pursuant to a Restricted Award, Performance Award, Phantom
Stock Award or Other Stock-Based Award shall be issued in the name of the Participant or his beneficiary and distributed to the
Participant or his beneficiary (or, in the case of uncertificated shares, other written notice of ownership in accordance with
Applicable Law shall be provided) after the Award (or portion thereof) has vested and been earned.
(b)
Section 16(b) Compliance: If and to the extent that any Participants in the Plan are subject to Section 16(b) of the Exchange
Act, it is the general intention of the Company that transactions under the Plan shall comply with Rule 16b-3 under the Exchange
Act and that the Plan shall be construed in favor of such Plan transactions meeting the requirements of Rule 16b-3 or any successor
rules thereto. Notwithstanding anything in the Plan to the contrary, the Administrator, in its sole and absolute discretion, may
bifurcate the Plan so as to restrict, limit or condition the use of any provision of the Plan to Participants who are officers
or directors subject to Section 16 of the Exchange Act without so restricting, limiting or conditioning the Plan with respect
to other Participants.
(c) Code
Section 162(m) Performance-Based Compensation. If and to the extent to which Code Section 162(m) is applicable, the Company
intends that compensation paid under the Plan to Covered Employees will, to the extent practicable, constitute “qualified
performance-based compensation” within the meaning of Code Section 162(m), unless otherwise determined by the Administrator.
Accordingly, Awards granted to Covered Employees which are intended to qualify for the performance-based exception under Code
Section 162(m) shall be deemed to include any such additional terms, conditions, limitations and provisions as are necessary to
comply with the performance-based compensation exemption of Code Section 162(m), unless the Administrator, in its discretion,
determines otherwise.
(d) Unfunded
Plan; No Effect on Other Plans:
(i) The
Plan shall be unfunded, and the Company shall not be required to create a trust or segregate any assets that may at any time be
represented by Awards under the Plan. The Plan shall not establish any fiduciary relationship between the Company and any Participant
or other person. Neither a Participant nor any other person shall, by reason of the Plan, acquire any right in or title to any
assets, funds or property of the Company or any Affiliate, including, without limitation, any specific funds, assets or other
property which the Company or any Affiliate, in their discretion, may set aside in anticipation of a liability under the Plan.
A Participant shall have only a contractual right to shares of Common Stock or other amounts, if any, payable under the Plan,
unsecured by any assets of the Company or any Affiliate. Nothing contained in the Plan shall constitute a guarantee that the assets
of such entities shall be sufficient to pay any benefits to any person.
(ii) The
amount of any compensation deemed to be received by a Participant pursuant to an Award shall not constitute compensation with
respect to which any other employee benefits of such Participant are determined, including, without limitation, benefits under
any bonus, pension, profit sharing, life insurance or salary continuation plan, except as otherwise specifically provided by the
terms of such plan or as may be determined by the Administrator.
(iii) The
adoption of the Plan shall not affect any other stock incentive or other compensation plans in effect for the Company or any Affiliate,
nor shall the Plan preclude the Company from establishing any other forms of stock incentive or other compensation for employees
or service providers of the Company or any Affiliate.
(e) Governing
Law: The Plan shall be governed by and construed in accordance with the laws of the State of Georgia, without regard to the
conflict of laws provisions of any state, and in accordance with applicable federal laws of the United States.
(f) Beneficiary
Designation: The Administrator may, in its discretion, permit a Participant to designate in writing a person or persons as
beneficiary, which beneficiary shall be entitled to receive settlement of Awards (if any) to which the Participant is otherwise
entitled in the event of death. In the absence of such designation by a Participant, and in the event of the Participant’s
death, the estate of the Participant shall be treated as beneficiary for purposes of the Plan, unless the Administrator determines
otherwise. The Administrator shall have discretion to approve and interpret the form or forms of such beneficiary designation.
A beneficiary, legal guardian, legal representative or other person claiming any rights pursuant to the Plan is subject to all
terms and conditions of the Plan and any Award Agreement applicable to the Participant, except to the extent that the Plan and/or
Award Agreement provide otherwise, and to any additional restrictions deemed necessary or appropriate by the Administrator.
(g) Gender
and Number: Except where otherwise indicated by the context, words in any gender shall include any other gender, words in
the singular shall include the plural and words in the plural shall include the singular.
(h) Severability:
If any provision of the Plan or an Award Agreement shall be held illegal or invalid for any reason, such illegality or invalidity
shall not affect the remaining parts of the Plan or the Award Agreement, and the Plan or the Award Agreement shall be construed
and enforced as if the illegal or invalid provision had not been included.
(i) Rules
of Construction: Headings are given to the sections of the Plan solely as a convenience to facilitate reference. The reference
to any statute, regulation or other provision of law shall (unless the Administrator determines otherwise) be construed to refer
to any amendment to or successor of such provision of law.
(j) Successors
and Assigns: The Plan shall be binding upon the Company, its successors and assigns, and Participants, their executors, administrators
and permitted transferees and beneficiaries.
(k) Award
Agreement: The grant of any Award under the Plan shall be evidenced by an Award Agreement between the Company and the Participant.
Such Award Agreement may state terms, conditions and restrictions applicable to the Award and any may state such other terms,
conditions and restrictions, including but not limited to terms, conditions and restrictions applicable to shares of Common Stock
(or other benefits) subject to an Award, as may be established by the Administrator.
(l) Right
of Offset: Notwithstanding any other provision of the Plan or an Award Agreement, the Company may at any time (subject to
any Code Section 409A considerations) reduce the amount of any payment or benefit otherwise payable to or on behalf of a Participant
by the amount of any obligation of the Participant to or on behalf of the Company or an Affiliate that is or becomes due and payable.
(m) Uncertified
Shares: Notwithstanding anything in the Plan to the contrary, to the extent the Plan provides for the issuance of stock certificates
to reflect the issuance of shares of Common Stock, the issuance may, in the Company’s discretion, be effected on a non-certificated
basis, to the extent not prohibited by the Company’s articles of incorporation or bylaws or by Applicable Law (including
but not limited to applicable state corporate law and the applicable rules of any stock exchange on which the Common Stock may
be traded).
(n) Income
and Other Taxes: Participants are solely responsible and liable for the satisfaction of all taxes and penalties that may arise
in connection with Awards (including but not limited to any taxes arising under Code Section 409A), and the Company shall not
have any obligation to indemnify or otherwise hold any Participant harmless from any or all of such taxes. The Company shall have
no responsibility to take or refrain from taking any actions in order to achieve a certain tax result for a Participant or any
other person.
(o) Effect
of Certain Changes in Status: Notwithstanding the other terms of the Plan or an Award Agreement, the Administrator has sole
discretion to determine (taking into account any Code Section 409A considerations), at the time of grant of an Award or at any
time thereafter, the effect, if any, on Awards (including but not limited to modifying the vesting, exercisability and/or earning
of Awards) granted to a Participant if the Participant’s status as an Employee, Director or Independent Contractor changes,
including but not limited to a change from full-time to part-time, or vice versa, or if other similar changes in the nature or
scope of the Participant’s employment or service occur.
(p) Shareholder
Approval: The Plan is subject to approval by the shareholders of the Company, which approval must occur, if at all, within
12 months of the Effective Date of the Plan. Awards granted prior to such shareholder approval shall be conditioned upon and shall
be effective only upon approval of the Plan by such shareholders on or before such date.
(q) Deferrals:
Subject to the provisions of this Section 19(q) and Section 20, the Administrator may permit or require a Participant to defer
such Participant’s receipt of the payment of cash or the delivery of shares of Common Stock that would otherwise be payable
with respect to an Award. Any such deferral shall be subject to such terms and conditions as may be established by the Administrator
and to any applicable Code Section 409A requirements.
(r) Fractional
Shares: Except as otherwise provided in an Award Agreement or determined by the Administrator, (i) the total number of shares
issuable pursuant to the exercise, vesting or earning of an Award shall be rounded down to the nearest whole share, and (ii) no
fractional shares shall be issued. The Administrator may, in its discretion, determine that a fractional share shall be settled
in cash.
(s) Compliance
with Recoupment, Ownership and Other Policies or Agreements: Notwithstanding anything in the Plan to the contrary, the Administrator
may, at any time, consistent with, but without limiting, the authority granted in Section 3(b) herein, in its discretion provide
that an Award or benefits related to an Award shall be forfeited and/or recouped if the Participant, during employment or service
or following termination of employment or service for any reason, engages in certain specified conduct, including but not limited
to violation of policies of the Company or an Affiliate, breach of non-solicitation, noncompetition, confidentiality or other
restrictive covenants, or other conduct by the Participant that is determined by the Administrator to be detrimental to the business
or reputation of the Company or any Affiliate. In addition, without limiting the effect of the foregoing, as a condition to the
grant of an Award or receipt or retention of shares of Common Stock, cash or any other benefit under the Plan, the Administrator
may, at any time, require that a Participant agree to abide by any equity retention policy, stock ownership guidelines, compensation
recovery policy and/or other policies adopted by the Company or an Affiliate, each as in effect from time to time and to the extent
applicable to the Participant. Further, each Participant shall be subject to such compensation recovery, recoupment, forfeiture
or other similar provisions as may apply under Applicable Law.
(t) Nonexclusivity
of the Plan. Neither the adoption of this Plan by the Board, the submission of this Plan to the stockholders of the Company
for approval, nor any provision of this Plan will be construed as creating any limitations on the power of the Board to adopt
such incentive arrangements as it may deem desirable, including, without limitation, the granting of stock options and bonuses
otherwise than under this Plan, and such arrangements may be either generally applicable or applicable only in specific cases.
(u) Employees
Based Outside of the United States. Notwithstanding any provision of the Plan to the contrary, in order to foster and promote
achievement of the purposes of the Plan or to comply with provisions of laws in other countries in which the Company and its Subsidiaries
operate or have employees, the Board, in its sole discretion, shall have the power and authority to (i) determine which employees
employed outside the United States are eligible to participate in the Plan, (ii) modify the terms and conditions of Awards granted
to employees who are employed outside the United States, and (iii) establish subplans (through the addition of schedules to the
Plan or otherwise), modify option exercise procedures and other terms and procedures to the extent such actions may be necessary
or advisable.
(v) Adjustment
of Performance Goals and Targets. Notwithstanding any provision of the Plan to the contrary, the Board shall have the authority
to adjust any performance-based goals and targets or other performance-based criteria established with respect to any Award under
the Plan if circumstances occur (including, but not limited to, unusual or nonrecurring events, changes in tax laws or accounting
principles or practices or changed business or economic conditions) that cause any such performance-based goals and targets or
performance-based criteria to be inappropriate in the judgment of the Board; provided, that with respect to any Award that is
intended to qualify for the “performance-based compensation” exception under Section 162(m) of the Code and the regulations
thereunder, any adjustment by the Board shall be consistent with the requirements of Section 162(m) of the Code and the regulations
thereunder.
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20.
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Compliance
with Code Section 409A
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Notwithstanding
any other provision in the Plan or an Award Agreement to the contrary, if and to the extent that Code Section 409A is deemed to
apply to the Plan or any Award, it is the general intention of the Company that the Plan and all such Awards shall, to the extent
practicable, comply with, or be exempt from, Code Section 409A, and the Plan and any such Award Agreement shall, to the extent
practicable, be construed in accordance therewith. Deferrals of shares or any other benefit issuable pursuant to an Award otherwise
exempt from Code Section 409A in a manner that would cause Code Section 409A to apply shall not be permitted unless such deferrals
are in compliance with, or exempt from, Code Section 409A. In the event that the Company (or a successor thereto) has any stock
which is publicly traded on an established securities market or otherwise, distributions that are subject to Code Section 409A
to any Participant who is a “specified employee” (as defined under Code Section 409A) upon a separation from service
may only be made following the expiration of the six-month period after the date of separation from service (as defined under
Code Section 409A) (with such distributions to be made during the seventh month following separation of service), or, if earlier
than the end of the six-month period, the date of death of the specified employee, or as otherwise permitted under Code Section
409A. For purposes of Code Section 409A, each installment payment provided under the Plan or an Award Agreement shall be treated
as a separate payment. Without in any way limiting the effect of any of the foregoing, (i) in the event that Code Section 409A
requires that any special terms, provisions or conditions be included in the Plan or any Award Agreement, then such terms, provisions
and conditions shall, to the extent practicable, be deemed to be made a part of the Plan or Award Agreement, as applicable, and
(ii) terms used in the Plan or an Award Agreement shall be construed in accordance with Code Section 409A if and to the extent
required. Further, in the event that the Plan or any Award shall be deemed not to comply with Code Section 409A, then neither
the Company, the Administrator nor its or their designees or agents shall be liable to any Participant or other person for actions,
decisions or determinations made in good faith.
30
Exhibit 5.1
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KANE KESSLER, P.C.
600 THIRD AVENUE
NEW YORK, NEW YORK 10016-1901
TEL 212.541.6222
FAX 212.245.3009
WWW.KANEKESSLER.COM
WRITER’S DIRECT NUMBER
WRITER’S EMAIL
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March 10, 2021
Danimer Scientific, Inc.
140 Industrial Boulevard
Bainbridge, GA 39817
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Re:
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Registration Statement on Form S-8
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Ladies and Gentlemen:
We are acting as counsel for Danimer Scientific,
Inc., a Delaware corporation (the “Company”), in connection with the Registration Statement on Form S-8 (the “Registration
Statement”) relating to the registration under the Securities Act of 1933, as amended (the “Act”), of 21,631,477
shares (the “Shares”) of the Company’s Class A common stock, par value $0.0001 per share (“Common Stock”).
The Shares include 8,572,457 Shares issuable under the Company’s 2020 Stock Incentive Plan (the “2020 Plan”),
2,571,737 Shares issuable under the Company’s Employee Stock Purchase Plan (the “ESPP”) and 10,487,283 Shares
underlying awards granted under the Meredian Holdings Group, Inc. 2016 Omnibus Stock Incentive Plan and the Meredian Holdings Group,
Inc. 2016 Director and Executive Officer Plan, as assumed by the Company (collectively, the “Legacy Plans” and, together
with the 2020 Plan and the ESPP, the “Plans”).
In our capacity as special counsel to the
Company in connection with the matters referred to above, we have examined copies of the following: (i) the Fourth Amended and
Restated Certificate of Incorporation of the Company as amended to date and currently in effect (the “Amended and Restated
Certificate”); (ii) the Amended and Restated Bylaws of the Company currently in effect (the “Bylaws”); (iii)
the Plans; and (iv) the Registration Statement, in the form it is to be filed with the Securities and Exchange Commission (the
“Commission”) on the date hereof. We have also examined such other documents, papers, authorities, and statutes, and
have made such inquiries of Company officers and representatives, as we have deemed necessary to form the basis of the opinions
hereinafter set forth.
We have reviewed and are familiar with such
corporate proceedings and satisfied ourselves as to such other matters, as we have considered relevant or necessary as a basis
for the opinions expressed in this letter. In such review, we have assumed the accuracy and completeness of all agreements, documents,
records, certificates and other materials submitted to us, the conformity with the originals of all such materials submitted to
us as copies (whether or not certified and including facsimiles), the authenticity of the originals of such materials and all materials
submitted to us as originals, the genuineness of all signatures and the legal capacity of all natural persons. As to certain facts
material to this opinion, we have relied upon oral or written statements and representations of officers and other representatives
of the Company. We have also relied on certificates of public officials, and such other documents and information as we have deemed
necessary or appropriate to enable us to render the opinions expressed below. We have not undertaken any independent investigation
to determine the accuracy of any such facts.
Danimer Scientific, Inc.
March 10, 2021
Page
2
On the basis of the foregoing and the assumptions
set forth below, and subject to the qualifications and limitations set forth herein, we are of the opinion that the Shares have
been duly authorized and, when issued and sold in accordance with the Plans, will be validly issued, fully paid and nonassessable.
The opinions set forth in this letter are
limited to the General Corporation Law of the State of Delaware and the law of the State of New York, in each case as in effect
on the date hereof.
We hereby consent to the filing of this
opinion letter as Exhibit 5.1 to the Registration Statement and to the use of our name under the caption “Legal Matters”
in the Registration Statement and in the Prospectus forming a part thereof and any supplement thereto. In giving this consent,
we do not thereby admit that we are within the category of persons whose consent is required under Section 7 of the Act or
the rules and regulations of the Commission promulgated thereunder.
We are qualified to practice law in the
State of New York and do not purport to be experts on any law other than the laws of the State of New York, the General Corporation
Law of the State of Delaware, and the Federal law of the United States. We are not admitted or qualified to practice in the State
of Delaware; however, we are generally familiar with the General Corporation Law of the State of Delaware as currently in effect
and have made such inquiries as we deem necessary to render the opinions contemplated herein. We express no opinion regarding the
Securities Act, or any other federal or state securities laws or regulations.
This opinion letter is being furnished in
accordance with the requirements of Item 601(b)(5) of Regulation S-K under the Act. This opinion letter is limited to the specific
legal matters expressly set forth herein and is limited to present statutes, regulations, and administrative and judicial interpretations.
We assume no obligation to revise or supplement this opinion in the event of future changes in such laws or regulations.
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Very truly yours,
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KANE KESSLER, P.C.
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By:
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/s/ Jeffrey Tullman, President
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Exhibit 23.1
CONSENT OF INDEPENDENT REGISTERED PUBLIC
ACCOUNTING FIRM
We hereby consent to the incorporation
by reference in this Registration Statement on Form S-8 of our report dated February 28, 2020, relating to the financial statements
of Live Oak Acquisition Corp., which is referred to in that Prospectus. We also consent to the reference to our Firm under the
caption “Experts” in the Prospectus.
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/s/ WithumSmith+Brown, PC
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New York, New York
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March 9, 2021
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Exhibit 23.2
CONSENT OF INDEPENDENT REGISTERED PUBLIC
ACCOUNTING FIRM
We hereby consent to the incorporation
by reference in this Registration Statement on Form S-8 and related Reoffer Prospectus of Danimer Scientific, Inc. of our report
dated October 15, 2020, relating to the consolidated financial statements of Meredian Holdings Group, Inc. d/b/a Danimer Scientific,
incorporated by reference in the Form 8-K (Registration Statement No. 001-39280) of Danimer Scientific, Inc. from Form S-4/A (Registration
Statement No. 333-249691) of Live Oak Acquisition Corp. n/k/a Danimer Scientific, Inc. We also consent to the reference to us under
the heading “Experts” in such Registration Statement.
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/s/ Thomas Howell Ferguson P.A.
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Tallahassee, Florida
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March 9, 2021
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