Exhibit 4.11
ALTO
INGREDIENTS, INC.
2016
STOCK INCENTIVE PLAN
(Adopted
March 25, 2016, and ratified by Stockholders June 16, 2016;
Amended
March 29, 2018, and ratified by Stockholders June 14, 2018;
Amended
August 6, 2019, and ratified by Stockholders November 7, 2019;
Amended
September 2, 2020, and ratified by Stockholders November 18, 2020;
Amended
March 30, 2022, and ratified by Stockholders June 23, 2022)
ARTICLE
ONE
GENERAL PROVISIONS
I. Purpose
of the Plan.
This
2016 Stock Incentive Plan is intended to promote the interests of Alto Ingredients, Inc. by providing eligible persons in the Corporation’s
service with the opportunity to acquire a proprietary or economic interest, or otherwise increase their proprietary or economic interest,
in the Corporation as an incentive for them to remain in such service and render superior performance during such service. Capitalized
terms not otherwise defined herein shall have the meanings assigned to such terms in the attached Appendix.
II. Structure
of the Plan.
A. The
Plan is divided into two equity-based incentive programs:
| ● | the
Discretionary Grant Program, under which eligible persons may, at the discretion of the Plan
Administrator, be granted options to purchase shares of common stock or stock appreciation
rights tied to the value of such common stock; and |
| ● | the
Stock Issuance Program, under which eligible persons may be issued shares of common stock
pursuant to restricted stock or restricted stock unit awards or other stock-based awards,
made by and at the discretion of the Plan Administrator, that vest upon the completion of
a designated service period and/or the attainment of pre-established performance milestones,
or under which shares of common stock may be issued through direct purchase or as a bonus
for services rendered to the Corporation (or any Parent or Subsidiary). |
B. The
provisions of Articles One and Four shall apply to all equity programs under the Plan and shall govern the interests of all persons
under the Plan.
III. Administration
of the Plan.
A. The
Compensation Committee shall have sole and exclusive authority to administer the Discretionary Grant and Stock Issuance Programs, provided,
however, that the Board may retain, reassume or exercise from time to time the power to administer those programs with respect to all
persons. However, any discretionary Awards to members of the Compensation Committee must be authorized and approved by a disinterested
majority of the Board.
B. The
Plan Administrator shall, within the scope of its administrative functions under the Plan, have full power and authority (subject to
the provisions of the Plan) to establish such rules and regulations as it may deem appropriate for proper administration of the Discretionary
Grant and Stock Issuance Programs and to make such determinations under, and issue such interpretations of, the provisions of those programs
and any outstanding Awards thereunder as it may deem necessary or advisable. Decisions of the Plan Administrator within the scope of
its administrative functions under the Plan shall be final and binding on all parties who have an interest in the Discretionary Grant
and Stock Issuance Programs under its jurisdiction or any Award thereunder.
C. Service
on the Compensation Committee shall constitute service as a Board member, and members of each such committee shall accordingly be entitled
to full indemnification and reimbursement as Board members for their service on such committee. No member of the Compensation Committee
shall be liable for any act or omission made in good faith with respect to the Plan or any Award under the Plan.
IV. Eligibility.
A. The
persons eligible to participate in the Discretionary Grant and Stock Issuance Programs are as follows:
(i) Employees;
(ii) non-employee
members of the Board or the board of directors of any Parent or Subsidiary; and
(iii) Consultants.
B. The
Plan Administrator shall, within the scope of its administrative jurisdiction under the Plan, have full authority to determine (i) with
respect to Awards made under the Discretionary Grant Program, which eligible persons are to receive such Awards, the time or times when
those Awards are to be made, the number of shares to be covered by each such Award, the status of any awarded option as either an Incentive
Option or a Non-Statutory Option, the exercise price per share in effect for each Award (subject to the limitations set forth in Article Two),
the time or times when each Award is to vest and become exercisable, subject to a minimum initial vesting period of one (1) year, and
the maximum term for which the Award is to remain outstanding, and (ii) with respect to Awards under the Stock Issuance Program, which
eligible persons are to receive such Awards, the time or times when the Awards are to be made, the number of shares subject to each such
Award, the vesting schedule (if any) applicable to the shares subject to such Award, subject to a minimum initial vesting period of one
(1) year, and the cash consideration (if any) payable for such shares.
C. The
Plan Administrator shall have the absolute discretion to grant options or stock appreciation rights in accordance with the Discretionary
Grant Program and to effect stock issuances or other stock-based awards in accordance with the Stock Issuance Program.
V. Stock
Subject to the Plan.
A. The
stock issuable under the Plan shall be shares of authorized but unissued or reacquired common stock, including shares repurchased by
the Corporation on the open market. Subject to any additional shares authorized by the vote of the Board and approved by the stockholders,
the number of shares of common stock reserved for issuance over the term of the Plan shall not exceed 7,400,000 shares. Any or all of
the shares of common stock reserved for issuance under the Plan shall be authorized for issuance pursuant to Incentive Options or other
Awards.
B. No
one person participating in the Plan may be granted Awards of common stock having a Fair Market Value on the applicable grant date(s)
of more than One Million Dollars ($1,000,000) in the aggregate per calendar year.
C. Shares
of common stock subject to outstanding Awards under the Plan shall in no event become eligible for reissuance under the Plan, whether
as a result of expiration or termination of an Award, cancellation or repurchase of unvested shares, tender of shares in connection with
a net/cashless exercise program, withholding of shares to cover withholding taxes, or otherwise.
D. If
any change is made to the common stock by reason of any stock split, stock dividend, recapitalization, combination of shares, exchange
of shares or other change affecting the outstanding common stock as a class without the Corporation’s receipt of consideration,
appropriate adjustments shall be made by the Plan Administrator to (i) the maximum number and/or class of securities issuable under the
Plan, (ii) the maximum number and/or class of securities for which any one person may be granted Awards under the Plan per calendar year,
(iii) the number and/or class of securities and the exercise or base price per share (or any other cash consideration payable per share)
in effect under each outstanding Award under the Discretionary Grant Program, and (iv) the number and/or class of securities subject
to each outstanding Award under the Stock Issuance Program and the cash consideration (if any) payable per share thereunder. To the extent
such adjustments are to be made to outstanding Awards, those adjustments shall be effected in a manner that shall preclude the enlargement
or dilution of rights and benefits under those Awards. The adjustments determined by the Plan Administrator shall be final, binding and
conclusive.
VI. Clawback
Policy.
The
Plan Administrator shall, notwithstanding anything to the contrary contained in any Award document or in any employment or other agreement,
have full power and authority, and is required, to terminate any vested or unvested Award or require repayment to the Corporation of
the proceeds received by a participant arising from any Award, to apply the Corporation’s Policy for Recoupment of Incentive Compensation
dated March 29, 2018, as such policy may be amended by the Corporation from time to time, or any successor “clawback” or
similar policy adopted by the Corporation, including any such policy or policy changes mandated by or implemented pursuant to the Dodd-Frank
Wall Street Reform and Consumer Protection Act or the applicable listing requirements or rules and regulations of The NASDAQ Capital
Market, if applicable, and any other stock exchange or other market on which common stock is then quoted or listed for trading.
ARTICLE
TWO
DISCRETIONARY GRANT PROGRAM
I. Option
Terms.
Each
option shall be evidenced by one or more documents in the form approved by the Plan Administrator; provided, however, that each such
document shall comply with the terms specified below. Each document evidencing an Incentive Option shall, in addition, be subject to
the provisions of the Plan applicable to such options.
A. Exercise
Price.
1. The
exercise price per share shall be fixed by the Plan Administrator but shall not be less than 85% of the Fair Market Value per share of
common stock on the option grant date.
2. The
exercise price shall become immediately due upon exercise of the option and shall be payable in one or more of the following forms that
the Plan Administrator may deem appropriate in each individual instance:
(i) cash
or check made payable to the Corporation;
(ii) shares
of common stock valued at Fair Market Value on the Exercise Date and held for the period (if any) necessary to avoid any additional charges
to the Corporation’s earnings for financial reporting purposes; or
(iii) to
the extent the option is exercised for vested shares, through a special sale and remittance procedure pursuant to which the Optionee
shall concurrently provide irrevocable instructions to (a) a brokerage firm to effect the immediate sale of the purchased shares and
remit to the Corporation, out of the sale proceeds available on the settlement date, sufficient funds to cover the aggregate exercise
price payable for the purchased shares plus all applicable federal, state and local income and employment taxes required to be withheld
by the Corporation by reason of such exercise and (b) the Corporation to deliver the certificates for the purchased shares directly to
such brokerage firm to complete the sale.
Except
to the extent such sale and remittance procedure is utilized, payment of the exercise price for the purchased shares must be made on
the Exercise Date.
B. Exercise
and Term of Options. Each option shall be exercisable at such time or times, during such period and for such number of shares
as shall be determined by the Plan Administrator and set forth in the documents evidencing the option. However, no option shall have
a term in excess of ten years measured from the option grant date.
C. Effect
of Termination of Service.
1. The
following provisions shall govern the exercise of any options held by the Optionee at the time of cessation of Service or death:
(i) Any
option outstanding at the time of the Optionee’s cessation of Service for any reason shall remain exercisable for such period of
time thereafter as shall be determined by the Plan Administrator and set forth in the documents evidencing the option or as otherwise
specifically authorized by the Plan Administrator in its sole discretion pursuant to an express written agreement with Optionee, but
no such option shall be exercisable after the expiration of the option term.
(ii) Any
option held by the Optionee at the time of death and exercisable in whole or in part at that time may be subsequently exercised by the
personal representative of the Optionee’s estate or by the person or persons to whom the option is transferred pursuant to the
Optionee’s will or the laws of inheritance or by the Optionee’s designated beneficiary or beneficiaries of that option.
(iii) During
the applicable post-Service exercise period, the option may not be exercised in the aggregate for more than the number of vested shares
for which that option is at the time exercisable. No additional shares shall vest under the option following the Optionee’s cessation
of Service, except to the extent (if any) specifically authorized by the Plan Administrator in its sole discretion pursuant to an express
written agreement with Optionee. Upon the expiration of the applicable exercise period or (if earlier) upon the expiration of the option
term, the option shall terminate and cease to be outstanding for any shares for which the option has not been exercised.
2. The
Plan Administrator shall have complete discretion, exercisable either at the time an option is granted or at any time while the option
remains outstanding, to:
(i) extend
the period of time for which the option is to remain exercisable following the Optionee’s cessation of Service from the limited
exercise period otherwise in effect for that option to such greater period of time as the Plan Administrator shall deem appropriate,
but in no event beyond the expiration of the option term, and/or
(ii) permit
the option to be exercised, during the applicable post-Service exercise period, not only with respect to the number of vested shares
of common stock for which such option is exercisable at the time of the Optionee’s cessation of Service but also with respect to
one or more additional installments in which the Optionee would have vested had the Optionee continued in Service.
D. Stockholder
Rights. The holder of an option shall have no stockholder rights with respect to the shares subject to the option until such
person shall have exercised the option, paid the exercise price and become a holder of record of the purchased shares.
E. Repurchase
Rights. The Plan Administrator shall have the discretion to grant options that are exercisable for unvested shares of common
stock. Should the Optionee cease Service while holding such unvested shares, the Corporation shall have the right to repurchase, at the
exercise price paid per share, any or all of those unvested shares. The terms upon which such repurchase right shall be exercisable (including
the period and procedure for exercise and the appropriate vesting schedule for the purchased shares) shall be established by the Plan
Administrator and set forth in the document evidencing such repurchase right.
F. Transferability
of Options. The transferability of options granted under the Plan shall be governed by the following provisions:
(i) Incentive
Options. During the lifetime of the Optionee, Incentive Options shall be exercisable only by the Optionee and shall not be assignable
or transferable other than by will or the laws of inheritance following the Optionee’s death.
(ii) Non-Statutory
Options. Non-Statutory Options shall be subject to the same limitation on transfer as Incentive Options, except that the Plan
Administrator may structure one or more Non-Statutory Options so that the option may be assigned in whole or in part during the Optionee’s
lifetime to one or more Family Members of the Optionee or to a trust established exclusively for the Optionee and/or one or more such
Family Members, to the extent such assignment is in connection with the Optionee’s estate plan or pursuant to a domestic relations
order. The assigned portion may only be exercised by the person or persons who acquire a proprietary interest in the option pursuant
to the assignment. The terms applicable to the assigned portion shall be the same as those in effect for the option immediately prior
to such assignment and shall be set forth in such documents issued to the assignee as the Plan Administrator may deem appropriate.
(iii) Beneficiary
Designations. Notwithstanding the foregoing, the Optionee may designate one or more persons as the beneficiary or beneficiaries
of his or her outstanding options under this Article Two (whether Incentive Options or Non-Statutory Options), and those
options shall, in accordance with such designation, automatically be transferred to such beneficiary or beneficiaries upon the Optionee’s
death while holding those options. Such beneficiary or beneficiaries shall take the transferred options subject to all the terms and
conditions of the applicable agreement evidencing each such transferred option, including (without limitation) the limited time period
during which the option may be exercised following the Optionee’s death.
II. Incentive
Options.
The
terms specified below, together with any additions, deletions or changes thereto imposed from time to time pursuant to the provisions
of the Code governing Incentive Options, shall be applicable to all Incentive Options. Except as modified by the provisions of this Section II,
all the provisions of Articles One, Two and Four shall be applicable to Incentive Options. Options that are specifically designated
as Non-Statutory Options when issued under the Plan shall not be subject to the terms of this Section II.
A. Eligibility.
Incentive Options may only be granted to Employees.
B. Exercise
Price. The exercise price per share shall not be less than 100% of the Fair Market Value per share of common stock on the option
grant date.
C. Dollar
Limitation. The aggregate Fair Market Value of the shares of common stock (determined as of the respective date or dates of grant)
for which one or more options granted to any Employee under the Plan (or any other option plan of the Corporation or any Parent or Subsidiary)
may for the first time become exercisable as Incentive Options during any one calendar year shall not exceed the sum of One Hundred Thousand
Dollars ($100,000). To the extent the Employee holds two or more such options which become exercisable for the first time in the same
calendar year, then for purposes of the foregoing limitation on the exercisability of those options as Incentive Options, such options
shall be deemed to become first exercisable in that calendar year on the basis of the chronological order in which they were granted,
except to the extent otherwise provided under applicable law or regulation.
D. 10%
Stockholder. If any Employee to whom an Incentive Option is granted is a 10% Stockholder, then the exercise price per share shall
not be less than 110% of the Fair Market Value per share of common stock on the option grant date, and the option term shall not exceed
five years measured from the option grant date.
III. Stock
Appreciation Rights.
A. Authority.
The Plan Administrator shall have full power and authority, exercisable in its sole discretion, to grant stock appreciation rights in
accordance with this Section III to selected Optionees or other individuals eligible to receive option grants under the Discretionary
Grant Program.
B. Types.
Three types of stock appreciation rights shall be authorized for issuance under this Section III: (i) tandem stock appreciation
rights (“Tandem Rights”), (ii) standalone stock appreciation rights (“Standalone Rights”) and (iii)
limited stock appreciation rights (“Limited Rights”).
C. Tandem
Rights. The following terms and conditions shall govern the grant and exercise of Tandem Rights.
1. One
or more Optionees may be granted a Tandem Right, exercisable upon such terms and conditions as the Plan Administrator may establish,
to elect between the exercise of the underlying stock option for shares of common stock or the surrender of that option in exchange for
a distribution from the Corporation in an amount equal to the excess of (i) the Fair Market Value (on the option surrender date) of the
number of shares in which the Optionee is at the time vested under the surrendered option (or surrendered portion thereof) over (ii)
the aggregate exercise price payable for such vested shares.
2. No
such option surrender shall be effective unless it is approved by the Plan Administrator, either at the time of the actual option surrender
or at any earlier time. If the surrender is so approved, then the distribution to which the Optionee shall accordingly become entitled
under this Section III may be made in shares of common stock valued at Fair Market Value on the option surrender date, in
cash, or partly in shares and partly in cash, as the Plan Administrator shall in its sole discretion deem appropriate.
3. If
the surrender of an option is not approved by the Plan Administrator, then the Optionee shall retain whatever rights the Optionee had
under the surrendered option (or surrendered portion thereof) on the option surrender date and may exercise such rights at any time prior
to the later of (i) five business days after the receipt of the rejection notice or (ii) the last day on which the option is otherwise
exercisable in accordance with the terms of the instrument evidencing such option, but in no event may such rights be exercised more
than ten years after the date of the option grant.
D. Standalone
Rights. The following terms and conditions shall govern the grant and exercise of Standalone Rights under this Article Two:
1. One
or more individuals eligible to participate in the Discretionary Grant Program may be granted a Standalone Right not tied to any underlying
option under this Discretionary Grant Program. The Standalone Right shall relate to a specified number of shares of common stock and
shall be exercisable upon such terms and conditions as the Plan Administrator may establish. In no event, however, may the Standalone
Right have a maximum term in excess of ten years measured from the grant date. Upon exercise of the Standalone Right, the holder shall
be entitled to receive a distribution from the Corporation in an amount equal to the excess of (i) the aggregate Fair Market Value (on
the exercise date) of the shares of common stock underlying the exercised right over (ii) the aggregate base price in effect for those
shares.
2. The
number of shares of common stock underlying each Standalone Right and the base price in effect for those shares shall be determined by
the Plan Administrator in its sole discretion at the time the Standalone Right is granted. In no event, however, may the base price per
share be less than the Fair Market Value per underlying share of common stock on the grant date.
3. Standalone
Rights shall be subject to the same transferability restrictions applicable to Non-Statutory Options and may not be transferred during
the holder’s lifetime, except to one or more Family Members of the holder or to a trust established exclusively for the holder
and/or such Family Members, to the extent such assignment is in connection with the holder’s estate plan or pursuant to a domestic
relations order covering the Standalone Right as marital property. In addition, one or more beneficiaries may be designated for an outstanding
Standalone Right in accordance with substantially the same terms and provisions as set forth in Section I.F of this Article Two.
4. The
distribution with respect to an exercised Standalone Right may be made in shares of common stock valued at Fair Market Value on the exercise
date, in cash, or partly in shares and partly in cash, as the Plan Administrator shall in its sole discretion deem appropriate.
5. The
holder of a Standalone Right shall have no stockholder rights with respect to the shares subject to the Standalone Right unless and until
such person shall have exercised the Standalone Right and become a holder of record of shares of common stock issued upon the exercise
of such Standalone Right.
E. Limited
Rights. The following terms and conditions shall govern the grant and exercise of Limited Rights under this Article Two:
1. One
or more Section 16 Insiders may, in the Plan Administrator’s sole discretion, be granted Limited Rights with respect to their
outstanding options under this Article Two.
2. Upon
the occurrence of a Hostile Take-Over, the Section 16 Insider shall have the unconditional right (exercisable for a 30-day period
following such Hostile Take-Over) to surrender each option with such a Limited Right to the Corporation. The Section 16 Insider
shall in return be entitled to a cash distribution from the Corporation in an amount equal to the excess of (i) the Take-Over Price of
the number of shares in which the Optionee is at the time vested under the surrendered option (or surrendered portion thereof) over (ii)
the aggregate exercise price payable for those vested shares. Such cash distribution shall be made within five days following the option
surrender date.
3. The
Plan Administrator shall pre-approve, at the time such Limited Right is granted, the subsequent exercise of that right in accordance
with the terms of the grant and the provisions of this Section III. No additional approval of the Plan Administrator or the
Board shall be required at the time of the actual option surrender and cash distribution. Any unsurrendered portion of the option shall
continue to remain outstanding and become exercisable in accordance with the terms of the instrument evidencing such grant.
F. Post-Service
Exercise. The provisions governing the exercise of Tandem, Standalone and Limited Stock Appreciation Rights following the cessation
of the recipient’s Service or the recipient’s death shall be substantially the same as those set forth in Section I.C
of this Article Two for the options granted under the Discretionary Grant Program.
IV. Change
in Control/ Hostile Take-Over.
A. No
Award outstanding under the Discretionary Grant Program at the time of a Change in Control shall vest and become exercisable on an accelerated
basis if and to the extent that: (i) such Award is, in connection with the Change in Control, assumed by the successor corporation (or
parent thereof) or otherwise continued in full force and effect pursuant to the terms of the Change in Control transaction, (ii) such
Award is replaced with a cash retention program of the successor corporation that preserves the spread existing at the time of the Change
in Control on the shares of common stock as to which the Award is not otherwise at that time vested and exercisable and provides for
subsequent payout of that spread in accordance with the same exercise/vesting schedule applicable to those shares, or (iii) the acceleration
of such Award is subject to other limitations imposed by the Plan Administrator. However, if none of the foregoing conditions are satisfied,
each Award outstanding under the Discretionary Grant Program at the time of the Change in Control but not otherwise vested and exercisable
as to all the shares at the time subject to that Award shall automatically accelerate so that each such Award shall, immediately prior
to the effective date of the Change in Control, vest and become exercisable as to all the shares of common stock at the time subject
to that Award and may be exercised as to any or all of those shares as fully vested shares of common stock.
B. All
outstanding repurchase rights under the Discretionary Grant Program shall also terminate automatically, and the shares of common stock
subject to those terminated rights shall immediately vest in full, in the event of any Change in Control, except to the extent: (i) those
repurchase rights are assigned to the successor corporation (or parent thereof) or otherwise continue in full force and effect pursuant
to the terms of the Change in Control transaction or (ii) such accelerated vesting is precluded by other limitations imposed by the Plan
Administrator.
C. Immediately
following the consummation of the Change in Control, all outstanding Awards under the Discretionary Grant Program shall terminate and
cease to be outstanding, except to the extent assumed by the successor corporation (or parent thereof) or otherwise expressly continued
in full force and effect pursuant to the terms of the Change in Control transaction.
D. Each
option that is assumed in connection with a Change in Control or otherwise continued in effect shall be appropriately adjusted, immediately
after such Change in Control, to apply to the number and class of securities that would have been issuable to the Optionee in consummation
of such Change in Control had the option been exercised immediately prior to such Change in Control. In the event outstanding Standalone
Rights are to be assumed in connection with a Change in Control transaction or otherwise continued in effect, the shares of common stock
underlying each such Standalone Right shall be adjusted immediately after such Change in Control to apply to the number and class of
securities into which those shares of common stock would have been converted in consummation of such Change in Control had those shares
actually been outstanding at that time. Appropriate adjustments to reflect such Change in Control shall also be made to (i) the exercise
price payable per share under each outstanding option, provided the aggregate exercise price payable for such securities shall remain
the same, (ii) the base price per share in effect under each outstanding Standalone Right, provided the aggregate base price shall remain
the same, (iii) the maximum number and/or class of securities available for issuance over the remaining term of the Plan, and (iv) the
maximum number and/or class of securities for which any one person may be granted Awards under the Plan per calendar year. To the extent
the actual holders of the Corporation’s outstanding common stock receive cash consideration for their common stock in consummation
of the Change in Control, the successor corporation may, in connection with the assumption or continuation of the outstanding Awards
under the Discretionary Grant Program, substitute, for the securities underlying those assumed Awards, one or more shares of its own
common stock with a fair market value equivalent to the cash consideration paid per share of common stock in such Change in Control transaction.
E. The
Plan Administrator shall have full power and authority to structure one or more outstanding Awards under the Discretionary Grant Program
so that those Awards shall immediately vest and become exercisable as to all of the shares at the time subject to those Awards in the
event the Optionee’s Service is subsequently terminated by reason of an Involuntary Termination within a designated period (not
to exceed 18 months) following the effective date of any Change in Control or a Hostile Take-Over in which those Awards do not otherwise
vest on an accelerated basis. Any Awards so accelerated shall remain exercisable as to fully vested shares until the expiration or sooner
termination of their term.
F. The
portion of any Incentive Option accelerated in connection with a Change in Control shall remain exercisable as an Incentive Option only
to the extent the applicable One Hundred Thousand Dollar ($100,000) limitation is not exceeded. To the extent such dollar limitation
is exceeded, the accelerated portion of such option shall be exercisable as a Non-Statutory Option under the federal tax laws.
G. Awards
outstanding under the Discretionary Grant Program shall in no way affect the right of the Corporation to adjust, reclassify, reorganize
or otherwise change its capital or business structure or to merge, consolidate, dissolve, liquidate or sell or transfer all or any part
of its business or assets.
ARTICLE
THREE
STOCK ISSUANCE PROGRAM
I. Stock
Issuance Terms.
A. Issuances.
Shares of common stock may be issued under the Stock Issuance Program through direct and immediate issuances without any intervening
option grants. Each such stock issuance shall be evidenced by a Stock Issuance Agreement that complies with the terms specified below.
Shares of common stock may also be issued under the Stock Issuance Program pursuant to restricted stock awards or restricted stock units,
awarded by and at the discretion of the Plan Administrator, that entitle the recipients to receive the shares underlying those awards
or units upon the attainment of designated performance goals and/or the satisfaction of specified Service requirements or upon the expiration
of a designated time period following the vesting, subject to a minimum initial vesting period of one (1) year, of those awards or units.
B. Issue
Price.
1. The
price per share at which shares of common stock may be issued under the Stock Issuance Program shall be fixed by the Plan Administrator,
but shall not be less than 100% of the Fair Market Value per share of common stock on the issuance date.
2. Shares
of common stock may be issued under the Stock Issuance Program for any of the following items of consideration that the Plan Administrator
may deem appropriate in each individual instance:
(i) cash
or check made payable to the Corporation;
(ii) past
services rendered to the Corporation (or any Parent or Subsidiary); or
(iii) any
other valid form of consideration permissible under the Delaware Corporations Code at the time such shares are issued.
C. Vesting
Provisions.
1. Shares
of common stock issued under the Stock Issuance Program may, in the discretion of the Plan Administrator, vest in one or more installments
over the Participant’s period of Service, subject to a minimum initial vesting period of one (1) year, and/or upon attainment of
specified performance objectives. The elements of the vesting schedule applicable to any unvested shares of common stock issued under
the Stock Issuance Program shall be determined by the Plan Administrator and incorporated into the Stock Issuance Agreement. Shares of
common stock may also be issued under the Stock Issuance Program pursuant to restricted stock awards or restricted stock units that entitle
the recipients to receive the shares underlying those awards and/or units upon the attainment of designated performance goals or the
satisfaction of specified Service requirements or upon the expiration of a designated time period, subject to a minimum initial vesting
period of one (1) year, following the vesting of those awards or units, including (without limitation) a deferred distribution date following
the termination of the Participant’s Service.
2. The
Plan Administrator shall also have the discretionary authority, consistent with Code Section 162(m), to structure one or more Awards
under the Stock Issuance Program so that the shares of common stock subject to those Awards shall vest (or vest and become issuable)
upon the achievement of certain pre-established corporate performance goals based on one or more of the following criteria: (i) return
on total stockholders’ equity; (ii) net income per share of common stock; (iii) net income or operating income; (iv) earnings before
interest, taxes, depreciation, amortization and stock-compensation costs, or operating income before depreciation and amortization; (v)
sales or revenue targets; (vi) return on assets, capital or investment; (vii) cash flow; (viii) market share; (ix) cost reduction goals;
(x) budget comparisons; (xi) implementation or completion of projects or processes strategic or critical to the Corporation’s business
operations; (xii) measures of customer satisfaction; (xiii) any combination of, or a specified increase in, any of the foregoing; and
(xiv) the formation of joint ventures, research and development collaborations, marketing or customer service collaborations, or the
completion of other corporate transactions intended to enhance the Corporation’s revenue or profitability or expand its customer
base; provided, however, that for purposes of items (ii), (iii) and (vii) above, the Plan Administrator may, at the time the Awards are
made, specify certain adjustments to such items as reported in accordance with generally accepted accounting principles in the U.S. (“GAAP”),
which will exclude from the calculation of those performance goals one or more of the following: certain charges related to acquisitions,
stock-based compensation, employer payroll tax expense on certain stock option exercises, settlement costs, restructuring costs, gains
or losses on strategic investments, non-operating gains or losses, certain other non-cash charges, valuation allowance on deferred tax
assets, and the related income tax effects, purchases of property and equipment, and any extraordinary non-recurring items as described
in Accounting Principles Board Opinion No. 30 or its successor, provided that such adjustments are in conformity with those reported
by the Corporation on a non-GAAP basis. In addition, such performance goals may be based upon the attainment of specified levels of the
Corporation’s performance under one or more of the measures described above relative to the performance of other entities and may
also be based on the performance of any of the Corporation’s business groups or divisions thereof or any Parent or Subsidiary.
Performance goals may include a minimum threshold level of performance below which no award will be earned, levels of performance at
which specified portions of an award will be earned, and a maximum level of performance at which an award will be fully earned. The Plan
Administrator may provide that, if the actual level of attainment for any performance objective is between two specified levels, the
amount of the award attributable to that performance objective shall be interpolated on a straight-line basis.
3. Any
new, substituted or additional securities or other property (including money paid other than as a regular cash dividend) that the Participant
may have the right to receive with respect to the Participant’s unvested shares of common stock by reason of any stock dividend,
stock split, recapitalization, combination of shares, exchange of shares or other change affecting the outstanding common stock as a
class without the Corporation’s receipt of consideration shall be issued subject to (i) the same vesting requirements applicable
to the Participant’s unvested shares of common stock and (ii) such escrow arrangements as the Plan Administrator shall deem appropriate.
4. The
Participant shall have full stockholder rights with respect to any shares of common stock issued to the Participant under the Stock Issuance
Program, whether or not the Participant’s interest in those shares is vested; provided, however, that the Corporation shall withhold
and retain any dividends on unvested shares until such time as the shares vest, if at all, and shall thereafter promptly pay to the Participant
any such dividends withheld and retained or, if the shares do not vest, return any such dividends to the corporate treasury. Accordingly,
the Participant shall have the right to vote all such shares but shall not receive any cash dividends paid on any unvested shares unless
and until the shares vest. The Participant shall not have any stockholder rights with respect to the shares of common stock subject to
a restricted stock unit award until that award vests and the shares of common stock are actually issued thereunder. However, dividend-equivalent
units may be paid or credited, either in cash or in actual or phantom shares of common stock, on outstanding restricted stock unit or
restricted stock awards, subject to such terms and conditions as the Plan Administrator may deem appropriate and subject to the withholding
and retention of dividends with respect to any unvested awards on the same terms as set forth above.
5. Should
the Participant cease to remain in Service while holding one or more unvested shares of common stock issued under the Stock Issuance
Program or should the performance objectives not be attained with respect to one or more such unvested shares of common stock, then except
as set forth in Section I.C.6 of this Article Three, those shares shall be immediately surrendered to the Corporation for
cancellation, and the Participant shall have no further stockholder rights with respect to those shares. To the extent the surrendered
shares were previously issued to the Participant for consideration paid in cash, cash equivalent or otherwise, the Corporation shall
repay to the Participant the same amount and form of consideration as the Participant paid for the surrendered shares.
6. In
the event of the Participant’s retirement, the Plan Administrator may in its discretion waive the surrender and cancellation of
one or more unvested shares of common stock that would otherwise occur upon the cessation of the Participant’s Service. Any such
waiver shall result in the immediate vesting of the Participant’s interest in the shares of common stock as to which the waiver
applies. Such waiver may be effected at any time, whether before or after the Participant’s cessation of Service as a result of
the Participant’s retirement. No vesting requirements tied to the attainment of performance objectives may be waived with respect
to shares that were intended at the time of issuance to qualify as performance-based compensation under Code Section 162(m), except
in the event of the Participant’s Involuntary Termination or as otherwise provided in Section II.E of this Article Three.
7. Outstanding
restricted stock awards or restricted stock units under the Stock Issuance Program shall automatically terminate, and no shares of common
stock shall actually be issued in satisfaction of those awards or units, if the performance goals or Service requirements established
for such awards or units are not attained or satisfied.
II. Change
in Control/ Hostile Take-Over.
A. All
of the Corporation’s outstanding repurchase rights under the Stock Issuance Program shall terminate automatically, and all the
shares of common stock subject to those terminated rights shall immediately vest in full, in the event of any Change in Control, except
to the extent (i) those repurchase rights are to be assigned to the successor corporation (or parent thereof) or otherwise continued
in full force and effect pursuant to the express terms of the Change in Control transaction or (ii) such accelerated vesting is precluded
by other limitations imposed in the Stock Issuance Agreement.
B. Each
outstanding Award under the Stock Issuance Program that is assumed in connection with a Change in Control or otherwise continued in effect
shall be adjusted immediately after the consummation of that Change in Control to apply to the number and class of securities into which
the shares of common stock subject to the Award immediately prior to the Change in Control would have been converted in consummation
of such Change in Control had those shares actually been outstanding at that time, and appropriate adjustments shall also be made to
the cash consideration (if any) payable per share thereunder, provided the aggregate amount of such consideration shall remain the same.
If any such Award is not so assumed or otherwise continued in effect or replaced with a cash retention program which preserves the Fair
Market Value of the shares underlying the Award at the time of the Change in Control and provides for the subsequent payout of that value
in accordance with the vesting schedule in effect for the Award at the time of such Change in Control, such Award shall vest, and the
shares of common stock subject to that Award shall be issued as fully-vested shares, immediately prior to the consummation of the Change
in Control.
C. The
Plan Administrator shall have full power and authority to structure one or more outstanding Awards under the Stock Issuance Program so
that the shares of common stock subject to those Awards shall immediately vest (or vest and become issuable) as to all of the shares
at the time subject to those Awards in the event the Participant’s Service is subsequently terminated by reason of an Involuntary
Termination within a designated period (not to exceed 18 months) following the effective date of any Change in Control or a Hostile Take-Over
in which those Awards do not otherwise vest on an accelerated basis.
D. The
Plan Administrator’s authority under Paragraph C of this Section II shall also extend to any Award intended to qualify
as performance-based compensation under Code Section 162(m), even though the automatic vesting of those Awards pursuant to Paragraph
C of this Section II may result in their loss of performance-based status under Code Section 162(m).
E. Awards
outstanding under the Stock Issuance Program shall in no way affect the right of the Corporation to adjust, reclassify, reorganize or
otherwise change its capital or business structure or to merge, consolidate, dissolve, liquidate or sell or transfer all or any part
of its business or assets.
ARTICLE
FOUR
MISCELLANEOUS
I. Tax
Withholding.
A. The
Corporation’s obligation to deliver shares of common stock upon the issuance, exercise or vesting of Awards under the Plan shall
be subject to the satisfaction of all applicable federal, state and local income and employment tax withholding requirements.
B. Subject
to applicable laws, rules and regulations and policies of the Corporation, the Plan Administrator may, in its discretion, provide any
or all Optionees or Participants to whom Awards are made under the Plan with the right to utilize any or all of the following methods
to satisfy all or part of the Withholding Taxes to which those holders may become subject in connection with the issuance, exercise or
vesting of those Awards.
(i) Stock
Withholding: The election to have the Corporation withhold, from the shares of common stock otherwise issuable upon the issuance,
exercise or vesting of those Awards a portion of those shares with an aggregate Fair Market Value equal to the percentage of the Withholding
Taxes (not to exceed 100%) designated by the Optionee or Participant and make a cash payment equal to such Fair Market Value directly
to the appropriate taxing authorities on such individual’s behalf.
(ii) Stock
Delivery: The election to deliver to the Corporation, at the time the Award is issued, exercised or vests, one or more shares
of common stock previously acquired by such the Optionee or Participant (other than in connection with the issuance, exercise or vesting
triggering the Withholding Taxes) with an aggregate Fair Market Value equal to the percentage of the Withholding Taxes (not to exceed
100%) designated by such holder. The shares of common stock so delivered shall not be added to the shares of common stock authorized
for issuance under the Plan.
(iii) Sale
and Remittance: The election to deliver to the Corporation, to the extent the Award is issued or exercised for vested shares,
through a special sale and remittance procedure pursuant to which the Optionee or Participant shall concurrently provide irrevocable
instructions to a brokerage firm to effect the immediate sale of the purchased or issued shares and remit to the Corporation, out of
the sale proceeds available on the settlement date, sufficient funds to cover the Withholding Taxes required to be withheld by the Corporation
by reason of such issuance, exercise or vesting.
II. Share
Escrow/Legends.
Unvested
shares issued under the Plan may, in the Plan Administrator’s discretion, be held in escrow by the Corporation until the Participant’s
interest in such shares vests or may be issued directly to the Participant with restrictive legends on the certificates evidencing those
unvested shares.
III. Effective
Date and Term of the Plan.
A. The
Plan was initially adopted by the Board on March 25, 2016 and ratified and approved by the Corporation’s stockholders on June 16,
2016. The Plan was amended by the Board on March 29, 2018, which was ratified and approved by the Corporation’s stockholders on
June 14, 2018, to increase the number of shares authorized for issuance under the Plan from 1,150,000 shares to 3,650,000 shares and
to implement other updates. The Plan was further amended by the Board on August 6, 2019, which was ratified and approved by the Corporation’s
stockholders on November 7, 2019, to increase the number of shares authorized for issuance under the Plan from 3,650,000 shares to 5,650,000
shares and to implement other updates. The Plan was further amended by the Board on September 2, 2020, which was ratified and approved
by the Corporation’s stockholders on November 18, 2020, to increase the number of shares authorized for issuance under the Plan
from 5,650,000 shares to 7,400,000 shares. The Plan was further amended by the Board on March 30, 2022, which was ratified and approved
by the Corporation’s stockholders on June 23, 2022, to increase the number of shares authorized for issuance under the Plan from
7,400,000 shares to 8,900,000 shares.
B. The
Plan shall become effective on the Plan Effective Date. Awards may be granted under the Discretionary Grant Program and the Stock Issuance
Program at any time on or after the Plan Effective Date.
C. The
Plan shall terminate upon the earliest to occur of (i) March 25, 2026, (ii) the date on which all shares available for issuance under
the Plan shall have been issued as fully-vested shares, (iii) the termination of all outstanding Awards in connection with a Change in
Control, or (iv) such other date as the Board in its sole discretion terminates the Plan. If the Plan terminates on March 25, 2026 or
on such other date as the Board terminates the Plan, then all Awards outstanding at that time shall continue to have force and effect
in accordance with the provisions of the documents evidencing such Awards.
IV. Amendment,
Suspension or Termination of the Plan.
The
Board may suspend or terminate the Plan at any time, without notice, and in its sole discretion. The Board shall have complete and exclusive
power and authority to amend or modify the Plan in any or all respects. However, no such amendment or modification shall materially impair
the rights and obligations with respect to Awards at the time outstanding under the Plan unless the Optionee or the Participant consents
to such amendment or modification. In addition, stockholder approval will be required for any amendment to the Plan that (i) materially
increases the number of shares of common stock available for issuance under the Plan, (ii) materially expands the class of individuals
eligible to receive option grants or other awards under the Plan, (iii) materially increases the benefits accruing to the Optionees and
Participants under the Plan or materially reduces the price at which shares of common stock may be issued or purchased under the Plan,
(iv) materially extends the term of the Plan, (v) expands the types of awards available for issuance under the Plan, or (vi) is required
under applicable laws, rules or regulations to be approved by stockholders.
V. Use
of Proceeds.
Any
cash proceeds received by the Corporation from the sale of shares of common stock under the Plan shall be used for general corporate
purposes.
VI. Regulatory
Approvals.
A. The
implementation of the Plan, the grant of any Award and the issuance of shares of common stock in connection with the issuance, exercise
or vesting of any Award made under the Plan shall be subject to the Corporation’s procurement of all approvals and permits required
by regulatory authorities having jurisdiction over the Plan, the Awards made under the Plan and the shares of common stock issuable pursuant
to those Awards.
B. No
shares of common stock or other assets shall be issued or delivered under the Plan unless and until there shall have been compliance
with all applicable requirements of federal and state securities laws, including the filing and effectiveness of the Form S-8 registration
statement for the shares of common stock issuable under the Plan, and all applicable listing requirements of The NASDAQ Capital Market,
if applicable, and any other stock exchange or other market on which common stock is then quoted or listed for trading.
VII. No
Employment/Service Rights.
Nothing
in the Plan shall confer upon the Optionee or the Participant any right to continue in Service for any period of specific duration or
interfere with or otherwise restrict in any way the rights of the Corporation (or any Parent or Subsidiary employing or retaining such
person) or of the Optionee or the Participant, which rights are hereby expressly reserved by each, to terminate such person’s Service
at any time for any reason, with or without cause.
VIII. Non-Exclusivity
of the Plan.
Nothing
contained in the Plan is intended to amend, modify, or rescind any previously approved compensation plans, programs or options entered
into by the Corporation. This Plan shall be construed to be in addition to and independent of any and all other arrangements. Neither
the adoption of the Plan by the Board nor the submission of the Plan to the stockholders of the Corporation for approval shall be construed
as creating any limitations on the power or authority of the Board to adopt, with or without stockholder approval, such additional or
other compensation arrangements as the Board may from time to time deem desirable.
IX. Governing
Law.
All
questions and obligations under the Plan and agreements issued pursuant to the Plan shall be construed and enforced in accordance with
the laws of the State of Delaware.
X. Information
to Optionees and Participants.
Optionees
and Participants under the Plan who do not otherwise have access to financial statements of the Corporation will receive the Corporation’s
financial statements at least annually.
APPENDIX
The
following definitions shall be in effect under the Plan:
A. “Award”
means any of the following stock or stock-based awards authorized for issuance or grant under the Plan: stock option, stock appreciation
right, direct stock issuance, restricted stock or restricted stock unit award or other stock-based award.
B. “Board”
means the Corporation’s board of directors.
C. “Change
in Control” shall be deemed to have occurred if, in a single transaction or series of related transactions:
(i)
any person (as such term is used in Section 13(d) and 14(d) of the 1934 Act, or persons acting as a group, other than a trustee or fiduciary
holding securities under an employment benefit program, is or becomes a “beneficial owner” (as defined in Rule 13-3 under
the 1934 Act), directly or indirectly of securities of the Corporation representing 51% or more of the combined voting power of the Corporation,
or
(ii)
there is a merger, consolidation, or other business combination transaction of the Corporation with or into another corporation, entity
or person, other than a transaction in which the holders of at least a majority of the shares of voting capital stock of the Corporation
outstanding immediately prior to such transaction continue to hold (either by such shares remaining outstanding or by their being converted
into shares of voting capital stock of the surviving entity) a majority of the total voting power represented by the shares of voting
capital stock of the Corporation (or surviving entity) outstanding immediately after such transaction, or
(iii)
all or substantially all of the Corporation’s assets are sold.
D. “Code”
means the Internal Revenue Code of 1986, as amended.
E. “common
stock” means the Corporation’s common stock, $0.001 par value per share.
F. “Compensation
Committee” means a committee of the Board comprised solely of two or more Eligible Directors who are appointed by the Board
to administer the Discretionary Grant and Stock Issuance Programs, who are “outside directors” within the meaning of Section
162(m) of the Code and who are “non-employee directors” within the meaning of Rule 16b-3(b)(3)(i).
G. “Consultant”
means a consultant or other independent advisor who is under written contract with the Corporation (or any Parent or Subsidiary) to provide
consulting or advisory services to the Corporation (or any Parent or Subsidiary) and whose securities issued pursuant to the Plan could
be registered on Form S-8.
H. “Corporation”
means Alto Ingredients, Inc., a Delaware corporation, and any corporate successor to all or substantially all of the assets or voting
stock of Alto Ingredients, Inc. that shall by appropriate action adopt the Plan.
I. “Discretionary
Grant Program” means the discretionary grant program in effect under Article Two of the Plan pursuant to which
stock options and stock appreciation rights may be granted to one or more eligible individuals.
J. “Eligible
Director” means a Board member who is not, at the time of such determination, an employee of the Corporation (or any Parent
or Subsidiary).
K. “Employee”
means an individual who is in the employ of the Corporation (or any Parent or Subsidiary), subject to the control and direction of the
employer entity as to both the work to be performed and the manner and method of performance.
L. “Exercise
Date” means the date on which the Corporation shall have received written notice of the option exercise.
M. “Fair
Market Value” per share of common stock on any relevant date shall be determined in accordance with the following provisions:
(i) If
the common stock is at the time traded on The NASDAQ Capital Market, then the Fair Market Value shall be the closing selling price per
share of common stock at the close of regular hours trading (i.e., before after- hours trading begins) on The NASDAQ Capital Market on
the date in question, as such price is reported by the National Association of Securities Dealers. If there is no closing selling price
for the common stock on the date in question, then the Fair Market Value shall be the closing selling price on the last preceding date
for which such quotation exists.
(ii) If
the common stock is not traded on The NASDAQ Capital Market but is at the time listed or quoted on any other market or exchange, then
the Fair Market Value shall be the closing selling price per share of common stock at the close of regular hours trading (i.e., before
after-hours trading begins) on the date in question on the market or exchange determined by the Plan Administrator to be the primary
market for the common stock, as such price is officially quoted in the composite tape of transactions on such exchange. If there is no
closing selling price for the common stock on the date in question, then the Fair Market Value shall be the closing selling price on
the last preceding date for which such quotation exists.
(iii) In
the absence of an established market for the common stock, the Fair Market Value shall be determined in good faith by the Plan Administrator.
In
addition, with respect to any Incentive Option, the Fair Market Value shall be determined in a manner consistent with any regulations
issued by the Secretary of the Treasury for the purpose of determining fair market value of securities subject to an Incentive Option
plan under the Code.
N. “Family
Member” means, with respect to a particular Optionee or Participant, any child, stepchild, grandchild, parent, stepparent,
grandparent, spouse, former spouse, sibling, niece, nephew, mother-in-law, father-in-law, son-in-law, daughter-in-law, brother-in-law
or sister-in-law, including adoptive relationships.
O. “Hostile
Take-Over” means either of the following events effecting a change in control or ownership of the Corporation:
(i)
the acquisition, directly or indirectly, by any person or related group of persons (other than the Corporation or a person that directly
or indirectly controls, is controlled by, or is under common control with, the Corporation) of beneficial ownership (within the meaning
of Rule 13d-3 of the 1934 Act) of securities possessing more than 50% of the total combined voting power of the Corporation’s outstanding
securities pursuant to a tender or exchange offer made directly to the Corporation’s stockholders that the Board does not recommend
such stockholders to accept, or
(ii)
a change in the composition of the Board over a period of 36 consecutive months or less such that a majority of the Board members ceases,
by reason of one or more contested elections for Board membership, to be composed of individuals who either (A) have been Board members
continuously since the beginning of such period or (B) have been elected or nominated for election as Board members during such period
by at least a majority of the Board members described in clause (A) who were still in office at the time the Board approved such election
or nomination.
P.
“Incentive Option” means an option that satisfies the requirements of Code Section 422.
Q. “Involuntary
Termination” means the termination of the Service of any individual that occurs by reason of:
(i) if
such individual is providing services to the Corporation pursuant to a written contract that defines “cause” or “misconduct”
or similar reasons such individual could be dismissed or discharged by the Corporation, then such individual’s involuntary dismissal
or discharge by the Corporation other than for any of such reasons and other than for Misconduct shall be an Involuntary Termination;
(ii) if
such individual is not providing services to the Corporation pursuant to a written contract that defines “cause” or “misconduct”
or similar reasons such individual could be dismissed or discharged by the Corporation, then such individual’s involuntary dismissal
or discharge by the Corporation for reasons other than Misconduct shall be an Involuntary Termination;
(iii) if
such individual is providing services to the Corporation pursuant to a written contract that defines “good reason” or similar
reasons such individual could voluntarily resign, then such individual’s voluntary resignation for any of such reasons shall be
an Involuntary Termination; or
(iv) if
such individual is providing services to the Corporation pursuant to a written contract that does not define “good reason”
or similar reasons such individual could voluntarily resign, then such individual’s voluntary resignation following (A) a change
in his or her position with the Corporation that materially reduces his or her duties and responsibilities or the level of management
to which he or she reports, (B) a reduction in his or her level of compensation (including base salary, fringe benefits and target bonus
under any corporate-performance based bonus or incentive programs) by more than 15% or (C) a relocation of such individual’s place
of employment by more than 50 miles, provided and only if such change, reduction or relocation is effected by the Corporation without
the individual’s consent, shall be an Involuntary Termination.
R. “Misconduct”
means the commission of: any act of fraud, embezzlement or dishonesty by the Optionee or Participant; any unauthorized use or disclosure
by such person of confidential information or trade secrets of the Corporation (or any Parent or Subsidiary); any illegal or improper
conduct or intentional misconduct, gross negligence or recklessness by such person that has adversely affected or, in the determination
of the Plan Administrator, is likely to adversely affect, the business, reputation, goodwill or affairs of the Corporation (or any Parent
or Subsidiary) in a material manner; any conduct that provides a basis for the Corporation to terminate for “cause,” “misconduct”
or similar reasons the written contract pursuant to which the Optionee or Participant is providing Services to the Corporation; resignation
by the Optionee or Participant on fewer than 30 days’ prior written notice and in violation of an agreement to remain in Service
of the Corporation, in anticipation of a termination for “cause,” “misconduct” or similar reasons under the agreement,
or in lieu of a formal discharge for “cause,” “misconduct” or similar reasons. The foregoing definition shall
not in any way preclude or restrict the right of the Corporation (or any Parent or Subsidiary) to discharge or dismiss any Optionee,
Participant or other person in the Service of the Corporation (or any Parent or Subsidiary) for any other acts or omissions, but such
other acts or omissions shall not be deemed, for purposes of the Plan, to constitute grounds for termination for Misconduct.
S. “1934
Act” means the Securities Exchange Act of 1934, as amended.
T. “Non-Statutory
Option” means an option not intended to satisfy the requirements of Code Section 422.
U. “Optionee”
means any person to whom an option is granted under the Discretionary Grant Program.
V. “Parent”
means any corporation (other than the Corporation) in an unbroken chain of corporations ending with the Corporation, provided each corporation
in the unbroken chain (other than the Corporation) owns, at the time of the determination, stock possessing 50% or more of the total
combined voting power of all classes of stock in one of the other corporations in such chain.
W. “Participant”
means any person who is issued shares of common stock or restricted stock units or other stock-based awards under the Stock Issuance
Program.
X. “Permanent
Disability” or “Permanently Disabled” means the inability of the Optionee or the Participant to engage in
any substantial gainful activity by reason of any medically determinable physical or mental impairment expected to result in death or
to be of continuous duration of twelve months or more.
Y. “Plan”
means the Corporation’s 2016 Stock Incentive Plan, as set forth in this document.
Z. “Plan
Administrator” means the particular entity, whether the Compensation Committee or the Board, which is authorized to administer
the Discretionary Grant and Stock Issuance Programs with respect to one or more classes of eligible persons, to the extent such entity
is carrying out its administrative functions under those programs with respect to the persons then subject to its jurisdiction.
AA. “Plan
Effective Date” means the date that stockholder approval of the Plan is obtained in accordance with Section III.A. of
Article Four.
BB. “Section 16
Insider” means an officer or director of the Corporation subject to the short-swing profit liability provisions of Section 16
of the 1934 Act.
CC. “Service”
means the performance of services for the Corporation (or any Parent or Subsidiary) by a person in the capacity of an Employee, an Eligible
Director or a Consultant, except to the extent otherwise specifically provided in the documents evidencing the Award made to such person.
For purposes of the Plan, an Optionee or Participant shall be deemed to cease Service immediately upon the occurrence of the either of
the following events: (i) the Optionee or Participant no longer performs services in any of the foregoing capacities for the Corporation
or any Parent or Subsidiary or (ii) the entity for which the Optionee or Participant is performing such services ceases to remain a Parent
or Subsidiary of the Corporation, even though the Optionee or Participant may subsequently continue to perform services for that entity.
DD. “Stock
Issuance Agreement” means the agreement entered into by the Corporation and the Participant at the time of issuance of shares
of common stock under the Stock Issuance Program.
EE. “Stock
Issuance Program” means the stock issuance program in effect under Article Three of the Plan.
FF. “Subsidiary”
means any corporation (other than the Corporation) in an unbroken chain of corporations beginning with the Corporation, provided each
corporation (other than the last corporation) in the unbroken chain owns, at the time of the determination, stock possessing 50% or more
of the total combined voting power of all classes of stock in one of the other corporations in such chain.
GG. “Take-Over
Price” means the greater of (i) the Fair Market Value per share of common stock on the date the option is surrendered to the
Corporation in connection with a Hostile Take-Over or, if applicable, (ii) the highest reported price per share of common stock paid
by the tender offeror in effecting such Hostile Take-Over through the acquisition of such common stock. However, if the surrendered option
is an Incentive Option, the Take-Over Price shall not exceed the clause (i) price per share.
HH. “10%
Stockholder” means the owner of stock (as determined under Code Section 424(d)) possessing more than 10% of the total
combined voting power of all classes of stock of the Corporation (or any Parent or Subsidiary).
II. “Withholding
Taxes” means the federal, state and local income and employment taxes to which the Optionee or Participant may become subject
in connection with the issuance, exercise or vesting of the Award made to him or her under the Plan.
