SECURITY OWNERSHIP OF CERTAIN BENEFICIAL
OWNERS AND MANAGEMENT
The following table
sets forth certain information regarding our shares of Common Stock beneficially owned as of October 30, 2013 for (i) each stockholder
known to be the beneficial owner of 5% or more of the Company’s outstanding shares of Common Stock, (ii) each named executive
officer and director, and (iii) all executive officers and directors as a group. A person is considered to beneficially own any
shares: (i) over which such person, directly or indirectly, exercises sole or shared voting or investment power, or (ii) of which
such person has the right to acquire beneficial ownership at any time within 60 days. Unless otherwise indicated, the address of
each stockholder is c/o Reven Housing REIT, Inc., 7911 Herschel Avenue, Suite 201, La Jolla, California 92037.
For purposes of this
table, a person or group of persons is deemed to have “beneficial ownership” of any shares of Common Stock that such
person has the right to acquire within 60 days of this Information Statement. For purposes of computing the percentage of outstanding
shares of our Common Stock held by each person or group of persons named above, any shares that such person or persons has the
right to acquire within 60 days of this Information Statement
is deemed to be outstanding, but is not deemed to be outstanding
for the purpose of computing the percentage ownership of any other person. The inclusion herein of any shares listed as beneficially
owned does not constitute an admission of beneficial ownership. The beneficial ownership of each person was calculated based on
79,360,880 shares of our Common Stock outstanding as of October 30, 2013.
Name and Address of Beneficial Owner
|
Number of Shares Beneficially
Owned
|
Percentage Beneficially
Owned
|
5% Owners
|
|
|
King Apex Group Holdings II Limited (1)
|
32,500,000
|
41.0%
|
King Apex Group Holdings III Limited (1)
|
34,000,000
|
42.8%
|
Executive Officers and Directors
:
|
|
|
Chad M. Carpenter(2)
|
11,568,060
|
14.0%
|
Thad Meyer
|
-0-
|
-0-
|
Jon Haahr (3)
|
-0-
|
-0-
|
Xiaofan Bai(4)
|
66,500,000
|
83.8%
|
Xiaohang Bai
|
-0-
|
-0-
|
Siyu Lan
|
-0-
|
-0-
|
Guojuan Cheng
|
-0-
|
-0-
|
All executive officers and directors as a group (7 persons)
|
78,078,060
|
94.5%
|
* Less than one percent
|
(1)
|
Address is OMC Chambers, Wickhams Cay 1,
Road Town, Tortola, British Virgin Islands. .
|
|
(2)
|
Includes 3,260,880 shares underlying common stock purchase warrants exercisable as of October 7, 2013.
|
|
(3)
|
Mr. Haahr’s address is c/o Silver Portal Capital, LLC, 12265 El Camino Real, Suite 230, San Diego, California 92130.
|
|
(4)
|
Includes 32,500,000 shares held of record by King Apex Group Holdings II Limited and 34,000,000 shares held of record by King Apex Group Holdings III Limited, shares of which Mr. Bai disclaims beneficial ownership. Mr. Bai is the Chief Executive Officer of the two funds and has dispositive and voting control with respect to the shares held thereby.
|
INTERESTS OF CERTAIN PERSONS IN OR
OPPOSITION TO MATTERS TO BE ACTED UPON
The Indemnification
Agreement, as described more fully in Action Three below, together with the limitation on the directors' liability provided in
the Company’s Bylaws, as amended, and its Articles of Incorporation, as amended, reduce significantly the number of instances
in which directors or officers might be held personally liable to the Company for monetary damages for breach of their fiduciary
duties. Therefore, it should be noted that the current officers and directors of the Company have a direct personal interest in
the approval of the Indemnification Agreement.
Section 7-108-501(2)
of the CRS provides that a transaction between a corporation and one or more of its directors or a corporation and another entity
in which one or more of its directors has a financial interest or is an officer or director shall not be void or voidable provided
that: (i) the material facts of that transaction are disclosed or known to the Board and the Board authorizes the transaction by
a majority of the disinterested directors of the board; (ii) the material facts of that transaction are disclosed or known to the
stockholders and the stockholders authorize the transaction by a vote of the stockholders; or (iii) the transaction is fair to
the corporation as of the time it is authorized, approved or ratified by the Board, a committee or the stockholders. Each director
or executive officer of the Company that has or will enter into an Indemnification Agreement, and as such, each director or executive
officer of the Company has or will have a financial interest therein.
Except with respect
to the Indemnification Agreement as described in the foregoing, no officer or director of the Company has any substantial interest
in the Actions, other than his or her role as an officer or director of the Company.
ACTION ONE – AMENDMENT OF THE
ARTICLES OF INCORPORATION TO INCREASE THE AUTHORIZED NUMBER OF COMMON STOCK
On October 30, 2013,
the Board adopted resolutions authorizing an amendment of the Company’s Articles of Incorporation to increase the authorized
number of shares from 100,000,000 to 600,000,000 (the “Authorized Capital Increase”).
On October 30, 2013,
pursuant to Section 7-107-104 of the CRS, we received written consents approving the Authorized Capital Increase from the Majority
Stockholders.
Reasons for the Authorized Capital Increase
As of the close of
business on October 30, 2013, there were 79,360,880 shares of Common Stock issued and outstanding. In addition, as of the close
of business on October 30, 2013, there were 5,271,760 shares of Common Stock issuable upon exercise of outstanding warrants. Additional
closings of the Company’s recent private placement transaction pursuant to that certain Stock Purchase Agreement dated as
of September 27, 2013 (the “2013 Private Placement”), contemplate the issuance of an aggregate of additional 58,500,000
shares of Common Stock if the 2013 Private Placement is fully subscribed. Furthermore, with the adoption and approval of the amendments
to the 2012 Incentive Compensation Plan discussed in Action Two of this Information Statement, a total of 33,000,000 shares of
Common Stock have been reserved for issuance under the 2012 Incentive Compensation Plan. The Company’s Articles of Incorporation
currently authorizes the issuance of up to 100,000,000 shares of Common Stock, par value $0.001 per share.
Therefore, the additional
shares of authorized shares of Common Stock will be used to:
|
·
|
issue up to 5,271,760shares of Common Stock upon exercise of the above described outstanding warrants;
|
|
·
|
issue up to 58,500,000 shares of Common Stock in connection with additional closings of the 2013
Private Placement;
|
|
·
|
issue up to 33,000,000 shares of Common Stock under the 2012 Incentive Compensation Plan; and
|
|
·
|
allow the Company the ability and flexibility to issue additional shares of Common Stock for any
proper corporate purposes, including but not limited to, public or private financings, stock splits, stock dividends, potential
strategic transactions, including mergers, acquisitions, strategic partnerships, joint ventures and other business combinations,
as well as for other general corporate transactions
|
Other than as described
above, the Company has no current plan, commitment, arrangement, understanding or agreement regarding the issuance of the additional
shares of Common Stock resulting from the proposed increase in the number of authorized shares of Common Stock. The additional
shares of Common Stock will be available for issuance from time to time as determined by the Board.
Effect of the Authorized Capital Increase
If we issue additional
shares of Common Stock (or securities convertible into, or exercisable or exchangeable for, shares of Common Stock) as described
above, this could have the effect of diluting existing stockholders’ ownership. Further, depending upon the price at which
shares might be issued, this may have the effect of depressing the price of shares of our Common Stock or diluting the book value
of Common Stock per share or earnings per share. Additional issuances could also reduce the per share amounts available upon our
liquidation, if that should occur. While the issuance of shares in certain instances may have the effect of forestalling a hostile
takeover, the Board does not intend nor does it view the increase in authorized shares as an antitakeover measure, nor are we aware
of any proposed or contemplated transaction of this type.
The additional authorized
shares of Common Stock when issued will have the identical powers, preferences, and rights as the shares now issued and outstanding,
including the right to cast one vote per share and to receive dividends, if any.
Effective Date of the Authorized Capital Increase
The Authorized Capital
Increase will become effective upon the filing of a Certificate of Amendment to our Articles of Incorporation with the Secretary
of State of the State of Colorado or at such later time as indicated in such amendment. We intend to file the Certificate of Amendment
to our Articles of Incorporation in the form attached hereto as Exhibit A with the Secretary of State of the State of Colorado
promptly after the 20-day period following the date on which this Information Statement is first mailed to our stockholders.
ACTION TWO – AMENDMENTS TO THE
COMPANY’S 2012 INCENTIVE COMPENSATION PLAN
On October 30, 2013,
the Board adopted resolutions authorizing amendments to the Company’s 2012 Incentive Compensation Plan to increase the number
of shares of common stock reserved under the plan and to increase certain per-person award limitations (the “Plan Amendments”).
On October 30, 2013,
pursuant to Section 7-107-104 of the CRS, we received written consents approving the Plan Amendments from the Majority Stockholders.
Reasons for the Plan Amendments
The Plan Amendments
provide for (i) an increase of the total number of shares reserved under the Plan to 33,000,000 from 5,002,500; and (ii) increase
the per-person award limitations in Section 5 of the Plan to 10,000,000 shares from 2,500,000 shares with respect to options, stock
appreciation rights, restricted stock, and/or other stock-based awards.
As of the date of this
information statement, the Company has issued and outstanding a total of 79,360,880 shares of Common Stock. The Company’s
current outstanding capitalization is significantly larger than the Company’s outstanding capitalization at the time the
Company’s 2012 Incentive Compensation Plan was first adopted by the Company and approved by the Company’s stockholders.
When the 2012 Incentive Compensation Plan was approved by the Company’s stockholders on August 29, 2012, the Company had
issued and outstanding a total of 8,350,000 shares of Common Stock. This increase is largely due to the first two closings of the
Company’s 2013 Private Placement in September 2013. It is anticipated that up to an additional 58,500,000 shares of Common
Stock will be issued in additional closings of the Company’s 2013 Private Placement.
The Board determined
that the 2012 Incentive Compensation Plan requires additional available shares for issuance to provide flexibility with respect
to stock-based compensation that the Board believes is necessary to establish appropriate long-term incentives to achieve our objectives.
Our Board believes that it is advisable to increase the share limit to 33,000,000 in order to attract and compensate employees,
officers, directors and other eligible participants upon whose judgment, initiative and effort we depend. In addition, our Board
believes that it is advisable to also increase the per-person award limitations in Section 5 of the Plan to 10,000,000 shares from
2,500,000 shares with respect to options, stock appreciation rights, restricted stock, and/or other stock-based awards, for the
same purpose of attracting, retaining and compensating employees, officers, directors and other eligible participants upon whose
judgment, initiative and effort we depend. The issuance of stock options and share grants to these eligible participants is designed
to align the interests of such participants with those of our stockholders.
As amended, the 2012
Incentive Compensation Plan will continue to provide for appropriate adjustments in the number of shares in the event of a stock
dividend, recapitalization, merger or similar transaction.
Effective Date of the Plan Amendments
The Plan Amendments
will become effective upon the 20th calendar day following the mailing of this Information Statement to our stockholders. The Amended
and Restated 2012 Incentive Compensation Plan, as approved by the Board and the Majority Stockholders to incorporate the Plan Amendments,
is attached to this Information Statement as Exhibit B.
ACTION THREE – APPROVAL OF THE
INDEMNIFICATION AGREEMENT
On October 30, 2013,
the Board adopted resolutions approving a form of indemnification agreement to be entered into by the Company with its current
and future directors and executive officers (the “Indemnification Agreement”).
On October 30, 2013,
pursuant to Section 7-107-104 of the CRS, we received written consents approving the Indemnification Agreement from the Majority
Stockholders.
The terms of the Indemnification
Agreement provide, among other things, that the Company will indemnify the directors and officers to the full extent authorized
or permitted by the provisions of the CRS, as such may be amended from time to time. Each director and officer of the Company will
enter into an Indemnification Agreement with the Company. The Board believes that the Indemnification Agreement will serve the
best interests of the Company and its stockholders by strengthening the Company's ability to attract and retain knowledgeable and
experienced persons to serve as directors and officers.
Reasons for the
Indemnification Agreement
The purpose of the
Indemnification Agreement is to induce and retain highly competent persons to serve the Company as directors and officers or to
continue to serve as a director and/or officer of the Company. This Agreement is a supplement to and in furtherance of the Company’s
Bylaws, as amended, and its Articles of Incorporation, as amended, and any resolutions adopted pursuant thereto by the Company’s
Board or stockholders, and shall not be deemed a substitute therefor, nor to diminish or abrogate any rights of parties.
Effect of the Indemnification
Agreement
The Indemnification
Agreement provides that the Company will indemnify the respective officer or director party thereto to the fullest extent permitted
by the CRS if such officer or director becomes a party to or is threatened with any action, suit or proceeding arising out of such
officer’s or director’s service as an officer or director, as applicable, of the Company. The Indemnification Agreement
also provides that the Company will advance, if requested by an indemnified person, any and all expenses incurred in connection
with any such proceeding, subject to reimbursement by the indemnified person should a final judicial determination be made that
indemnification is not available under applicable law. The Indemnification Agreement further provides that if the Company maintains
directors’ and officers’ liability coverage, each indemnified person shall be included in such a manner as to provide
the indemnified person the same rights and benefits as are accorded to the most favorably insured of the Company’s directors,
if the indemnified person is a director; or of the Company’s officers, if the indemnified person is not a director of the
Company but is an officer.
A copy of the Indemnification
Agreement is filed herewith as Exhibits C and is incorporated by reference herein. The above description of the terms of the Indemnification
Agreement is qualified in its entirety by reference to such exhibit.
WHERE YOU CAN FIND MORE INFORMATION
The Company files annual
reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, proxy statements and other information with
the SEC. You may obtain such SEC filings from the SEC’s website at http://www.sec.gov. You can also read and copy these materials
at the SEC’s public reference room at 100 F Street, N.E., Washington, D.C. 20549. You can obtain information about the operation
of the SEC’s public reference room by calling the SEC at 1-800-SEC-0330.
DELIVERY OF DOCUMENTS TO SECURITY HOLDERS
SHARING AN ADDRESS
If hard copies of the
materials are requested, we will send only one Information Statement and other corporate mailings to stockholders who share a single
address unless we received contrary instructions from any stockholder at that address. This practice, known as “householding,”
is designed to reduce our printing and postage costs. However, the Company will deliver promptly upon written or oral request a
separate copy of the Information Statement to a stockholder at a shared address to which a single copy of the Information Statement
was delivered. You may make such a written or oral request by (a) sending a written notification stating (i) your name, (ii) your
shared address and (iii) the address to which the Company should direct the additional copy of the Information Statement, to the
Company at Reven Housing REIT, Inc., P.O. Box 1459, La Jolla, CA 92038-1459, attention: Chief Executive Officer.
If multiple stockholders
sharing an address have received one copy of this Information Statement or any other corporate mailing and would prefer the Company
to mail each stockholder a separate copy of future mailings, you may send notification to or call the Company’s principal
executive offices. Additionally, if current stockholders with a shared address received multiple copies of this Information Statement
or other corporate mailings and would prefer the Company to mail one copy of future mailings to stockholders at the shared address,
notification of such request may also be made by mail or telephone to the Company’s principal executive offices.
|
By Order of the Board of Directors,
/s/ Chad M. Carpenter
Chairman and Chief Executive Officer
|
Exhibit A
Certificate of Amendment
Exhibit B
Amended and Restated 2012 Incentive Compensation
Plan
reven
housing reit, inc.
AMENDED
AND RESTATED
2012
INCENTIVE COMPENSATION PLAN
REVEN HOUSING REIT, INC.
2012
INCENTIVE COMPENSATION PLAN
1.
|
|
Purpose
|
|
1
|
|
|
|
|
|
2.
|
|
Definitions
|
|
1
|
|
|
|
|
|
3.
|
|
Administration.
|
|
6
|
|
|
|
|
|
4.
|
|
Shares
Subject to Plan.
|
|
7
|
|
|
|
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|
5.
|
|
Eligibility;
Per-Person Award Limitations
|
|
8
|
|
|
|
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6.
|
|
Specific
Terms of Awards.
|
|
9
|
|
|
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7.
|
|
Certain
Provisions Applicable to Awards.
|
|
14
|
|
|
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8.
|
|
Code
Section 162(m) Provisions.
|
|
17
|
|
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9.
|
|
Change
in Control.
|
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18
|
|
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10.
|
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General
Provisions.
|
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1
0
|
REVEN HOUSING REIT, INC.
amended
and restated 2012 INCENTIVE COMPENSATION PLAN
Purpose
. The
purpose of this REVEN HOUSING REIT, INC. AMENDED AND RESTATED 2012 INCENTIVE COMPENSATION PLAN (the “
Plan
”)
is to assist REVEN HOUSING REIT, INC., a Colorado corporation (the “
Company
”) and its Related Entities
(as hereinafter defined) in attracting, motivating, retaining and rewarding high-quality executives and other employees, officers,
directors, consultants and other persons who provide services to the Company or its Related Entities by enabling such persons to
acquire or increase a proprietary interest in the Company in order to strengthen the mutuality of interests between such persons
and the Company's shareholders, and providing such persons with performance incentives to expend their maximum efforts in the creation
of shareholder value.
Definitions
.
For purposes of the Plan, the following terms shall be defined as set forth below, in addition to such terms defined in Section
1 hereof and elsewhere herein.
(a) “
Award
”
means any Option, Stock Appreciation Right, Restricted Stock Award, Restricted Stock Unit Award, Share granted as a bonus or in
lieu of another Award, Dividend Equivalent, Other Stock-Based Award or Performance Award, together with any other right or interest,
granted to a Participant under the Plan.
(b) “
Award
Agreement
” means any written agreement, contract or other instrument or document evidencing any Award granted by
the Committee hereunder.
(c) “
Beneficiary
”
means the person, persons, trust or trusts that have been designated by a Participant in his or her most recent written beneficiary
designation filed with the Committee to receive the benefits specified under the Plan upon such Participant's death or to which
Awards or other rights are transferred if and to the extent permitted under Section 10(b) hereof. If, upon a Participant's death,
there is no designated Beneficiary or surviving designated Beneficiary, then the term Beneficiary means the person, persons, trust
or trusts entitled by will or the laws of descent and distribution to receive such benefits.
(d) “
Beneficial
Owner
”
and “Beneficial Ownership”
shall have the meaning ascribed to such term in Rule
13d-3 under the Exchange Act and any successor to such Rule.
(e) “
Board
”
means the Company's Board of Directors.
(f) “
Cause
”
shall, with respect to any Participant, have the meaning specified in the Award Agreement. In the absence of any definition in
the Award Agreement, “Cause” shall have the equivalent meaning or the same meaning as “cause” or “for
cause” set forth in any employment, consulting, or other agreement for the performance of services between the Participant
and the Company or a Related Entity or, in the absence of any such agreement or any such definition in such agreement, such term
shall mean (i) the failure by the Participant to perform, in a reasonable manner, his or her duties as assigned by the Company
or a Related Entity, (ii) any violation or breach by the Participant of his or her employment, consulting or other similar agreement
with the Company or a Related Entity, if any, (iii) any violation or breach by the Participant of any non-competition, non-solicitation,
non-disclosure and/or other similar agreement with the Company or a Related Entity, (iv) any act by the Participant of dishonesty
or bad faith with respect to the Company or a Related Entity, (v) use of alcohol, drugs or other similar substances in a manner
that adversely affects the Participant’s work performance, or (vi) the commission by the Participant of any act, misdemeanor,
or crime reflecting unfavorably upon the Participant or the Company or any Related Entity. The good faith determination by the
Committee of whether the Participant’s Continuous Service was terminated by the Company for “Cause” shall be
final and binding for all purposes hereunder.
(g) “
Change
in Control
” means a Change in Control as defined in Section 9(b) of the Plan.
(h) “
Code
”
means the Internal Revenue Code of 1986, as amended from time to time, including regulations thereunder and successor provisions
and regulations thereto.
(i) “
Committee
”
means a committee designated by the Board to administer the Plan; provided, however, such Committee shall consist of at least two
directors, each of whom shall be (i) a “non-employee director” within the meaning of Rule 16b-3 (or any successor
rule) under the Exchange Act, unless administration of the Plan by “non-employee directors” is not then required in
order for exemptions under Rule 16b-3 to apply to transactions under the Plan, (ii) an “outside director” within the
meaning of Section 162(m) of the Code, and (iii) “Independent”, the failure of the Committee to be so comprised shall
not invalidate any Award that otherwise satisfies the terms of the Plan.
(j) “
Consultant
”
means any Person (other than an Employee or a Director, solely with respect to rendering services in such Person’s capacity
as a director) who is engaged by the Company or any Related Entity to render consulting or advisory services to the Company or
such Related Entity.
(k) “
Continuous
Service
” means the uninterrupted provision of services to the Company or any Related Entity in any capacity of Employee,
Director, Consultant or other service provider. Continuous Service shall not be considered to be interrupted in the case of (i)
any approved leave of absence, (ii) transfers among the Company, any Related Entities, or any successor entities, in any capacity
of Employee, Director, Consultant or other service provider, or (iii) any change in status as long as the individual remains in
the service of the Company or a Related Entity in any capacity of Employee, Director, Consultant or other service provider (except
as otherwise provided in the Award Agreement). An approved leave of absence shall include sick leave, military leave, or any other
authorized personal leave.
(l) “
Covered
Employee”
means the Person who, as of the end of the taxable year, either is the principal executive officer of the
Company or is serving as the acting principal executive officer of the Company, and each other Person whose compensation is required
to be disclosed in the Company’s filings with the Securities and Exchange Commission by reason of that person being among
the three highest compensated officers of the Company as of the end of a taxable year, or such other person as shall be considered
a “covered employee” for purposes of Section 162(m) of the Code.
(m) “
Director
”
means a member of the Board or the board of directors of any Related Entity.
(n) “
Disability
”
means a permanent and total disability (within the meaning of Section 22(e) of the Code), as determined by a medical doctor satisfactory
to the Committee.
(o) “
Dividend
Equivalent
” means a right, granted to a Participant under Section 6(g) hereof, to receive cash, Shares, other Awards
or other property equal in value to dividends paid with respect to a specified number of Shares, or other periodic payments.
(p) “
Effective
Date
” means the effective date of the Plan, which shall be August 29, 2012.
(q) “
Eligible
Person
” means each officer, Director, Employee, Consultant and other person who provides services to the Company
or any Related Entity. The foregoing notwithstanding, only Employees of the Company, or any parent corporation or subsidiary corporation
of the Company (as those terms are defined in Sections 424(e) and (f) of the Code, respectively), shall be Eligible Persons for
purposes of receiving any Incentive Stock Options. An Employee on leave of absence may, in the discretion of the Committee, be
considered as still in the employ of the Company or a Related Entity for purposes of eligibility for participation in the Plan.
(r) “
Employee
”
means any person, including an officer or Director, who is an employee of the Company or any Related Entity. The payment of a director’s
fee by the Company or a Related Entity shall not be sufficient to constitute “employment” by the Company.
(s) “
Exchange
Act
” means the Securities Exchange Act of 1934, as amended from time to time, including rules thereunder and successor
provisions and rules thereto.
(t) “
Fair
Market Value
” means the fair market value of Shares, Awards or other property as determined by the Committee, or
under procedures established by the Committee. Unless otherwise determined by the Committee, the Fair Market Value of a Share as
of any given date during the period which the Company is a Publicly Held Corporation shall be the closing sale price per Share
reported on a consolidated basis for stock listed on the principal stock exchange or market on which Shares are traded on the date
as of which such value is being determined (or as of such later measurement date as determined by the Committee on the date the
Award is authorized by the Committee), or, if there is no sale on that date, then on the last previous day on which a sale was
reported.
(u) “
Good
Reason
” shall, with respect to any Participant, have the meaning specified in the Award Agreement. In the absence
of any definition in the Award Agreement, “Good Reason” shall have the equivalent meaning or the same meaning as “good
reason” or “for good reason” set forth in any employment, consulting or other agreement for the performance of
services between the Participant and the Company or a Related Entity or, in the absence of any such agreement or any such definition
in such agreement, such term shall mean (i) the assignment to the Participant of any duties inconsistent in any material respect
with the Participant's duties or responsibilities as assigned by the Company or a Related Entity, or any other action by the Company
or a Related Entity which results in a material diminution in such duties or responsibilities, excluding for this purpose an isolated,
insubstantial and inadvertent action not taken in bad faith and which is remedied by the Company or a Related Entity promptly after
receipt of notice thereof given by the Participant; (ii) any material failure by the Company or a Related Entity to comply with
its obligations to the Participant as agreed upon, other than an isolated, insubstantial and inadvertent failure not occurring
in bad faith and][a failure which is remedied by the Company or a Related Entity promptly after receipt of notice thereof given
by the Participant; or (iii) the Company's or Related Entity’s requiring the Participant to be based at any office or location
outside of fifty (50) miles from the location of employment or service as of the date of Award, except for travel reasonably required
in the performance of the Participant’s responsibilities.
(v) “
Incentive
Stock Option
” means any Option intended to be designated as an incentive stock option within the meaning of Section
422 of the Code or any successor provision thereto.
(w) “
Independent
”,
when referring to either the Board or members of the Committee, shall have the same meaning as used in the rules of the Listing
Market.
(x) “
Incumbent
Board
” means the Incumbent Board as defined in Section 9(b)(ii) hereof.
(y)
“Listing
Market”
means the national securities exchange on which any securities of the Company are listed for trading, and
if not listed for trading, by the rules of the Nasdaq Market.
(z) “
Option
”
means a right granted to a Participant under Section 6(b) hereof, to purchase Shares or other Awards at a specified price during
specified time periods.
(aa) “
Optionee
”
means a person to whom an Option is granted under this Plan or any person who succeeds to the rights of such person under this
Plan.
(bb) “
Other
Stock-Based Awards
” means Awards granted to a Participant under Section 6(i) hereof.
(cc) “
Participant
”
means a person who has been granted an Award under the Plan which remains outstanding, including a person who is no longer an Eligible
Person.
(dd) “
Performance
Award
” means any Award of Performance Shares or Performance Units granted pursuant to Section 6(h) hereof.
(ee) “
Performance
Period
” means that period established by the Committee at the time any Performance Award is granted or at any time
thereafter during which any performance goals specified by the Committee with respect to such Award are to be measured.
(ff) “
Performance
Share
” means any grant pursuant to Section 6(h) hereof of a unit valued by reference to a designated number of Shares,
which value may be paid to the Participant by delivery of such property as the Committee shall determine, including cash, Shares,
other property, or any combination thereof, upon achievement of such performance goals during the Performance Period as the Committee
shall establish at the time of such grant or thereafter.
(gg) “
Performance
Unit
” means any grant pursuant to Section 6(h) hereof of a unit valued by reference to a designated amount of property
(including cash) other than Shares, which value may be paid to the Participant by delivery of such property as the Committee shall
determine, including cash, Shares, other property, or any combination thereof, upon achievement of such performance goals during
the Performance Period as the Committee shall establish at the time of such grant or thereafter.
(hh) “
Person
”
shall have the meaning ascribed to such term in Section 3(a)(9) of the Exchange Act and used in Sections 13(d) and 14(d) thereof,
and shall include a “group” as defined in Section 13(d) thereof.
(ii) “
Publicly
Held Corporation
” shall mean a publicly held corporation as that term is used under Section 162(m)(2) of the Code.
(jj) “
Related
Entity
” means any Subsidiary, and any business, corporation, partnership, limited liability company or other entity
designated by the Board, in which the Company or a Subsidiary holds a substantial ownership interest, directly or indirectly.
(kk) “
Restricted
Stock
” means any Share issued with the restriction that the holder may not sell, transfer, pledge or assign such
Share and with such risks of forfeiture and other restrictions as the Committee, in its sole discretion, may impose (including
any restriction on the right to vote such Share and the right to receive any dividends), which restrictions may lapse separately
or in combination at such time or times, in installments or otherwise, as the Committee may deem appropriate.
(ll) “
Restricted
Stock Award
” means an Award granted to a Participant under Section 6(d) hereof.
(mm) “
Restricted
Stock Unit
” means a right to receive Shares, including Restricted Stock, cash measured based upon the value of Shares
or a combination thereof, at the end of a specified deferral period.
(nn) “
Restricted
Stock Unit Award
” means an Award of Restricted Stock Unit granted to a Participant under Section 6(e) hereof.
(oo)
“Restriction
Period”
means the period of time specified by the Committee that Restricted Stock Awards shall be subject to such
restrictions on transferability, risk of forfeiture and other restrictions, if any, as the Committee may impose.
(pp) “
Rule
16b-3
” means Rule 16b-3, as from time to time in effect and applicable to the Plan and Participants, promulgated
by the Securities and Exchange Commission under Section 16 of the Exchange Act.
(qq) “
Shareholder
Approval Date
” means the date on which this Plan is approved by shareholders of the Company eligible to vote in the
election of directors, by a vote sufficient to meet the requirements Sections 162(m) and 422 of the Code, Rule 16b-3 under the
Exchange Act applicable requirements under the rules of the Listing Market.
(rr) “
Shares
”
means the shares of common stock of the Company, par value $.001 per share, and such other securities as may be substituted (or
resubstituted) for Shares pursuant to Section 10(c) hereof.
(ss) “
Stock
Appreciation Right
” means a right granted to a Participant under Section 6(c) hereof.
(tt) “
Subsidiary
”
means any corporation or other entity in which the Company has a direct or indirect ownership interest of 50% or more of the total
combined voting power of the then outstanding securities or interests of such corporation or other entity entitled to vote generally
in the election of directors or in which the Company has the right to receive 50% or more of the distribution of profits or 50%
or more of the assets on liquidation or dissolution.
(uu) “
Substitute
Awards
” means Awards granted or Shares issued by the Company in assumption of, or in substitution or exchange for,
Awards previously granted, or the right or obligation to make future Awards, by a company (i) acquired by the Company or any Related
Entity, (ii) which becomes a Related Entity after the date hereof, or (iii) with which the Company or any Related Entity combines.
3.
Administration
.
Authority of
the Committee
. The Plan shall be administered by the Committee;
provided, however, that except as otherwise
expressly provided in this Plan, the Board may exercise any power or authority granted to the Committee under this Plan and in
that case, references herein shall be deemed to include references to the Board. The Committee shall have full and final authority,
subject to and consistent with the provisions of the Plan, to select Eligible Persons to become Participants, grant Awards, determine
the type, number and other terms and conditions of, and all other matters relating to, Awards, prescribe Award Agreements (which
need not be identical for each Participant) and rules and regulations for the administration of the Plan, construe and interpret
the Plan and Award Agreements and correct defects, supply omissions or reconcile inconsistencies therein, and to make all other
decisions and determinations as the Committee may deem necessary or advisable for the administration of the Plan. In exercising
any discretion granted to the Committee under the Plan or pursuant to any Award, the Committee shall not be required to follow
past practices, act in a manner consistent with past practices, or treat any Eligible Person or Participant in a manner consistent
with the treatment of any other Eligible Persons or Participants.
Manner of Exercise
of Committee Authority.
During the period that the
Company is a Publicly Held Corporation, the Committee,
and not the Board, shall exercise sole and exclusive discretion (i) on any matter relating to a Participant then subject to Section
16 of the Exchange Act with respect to the Company to the extent necessary in order that transactions by such Participant shall
be exempt under Rule 16b-3 under the Exchange Act, (ii) with respect to any Award that is intended to qualify as “performance-based
compensation” under Section 162(m), to the extent necessary in order for such Award to so qualify; and (iii) with respect
to any Award to an Independent Director. Any action of the Committee shall be final, conclusive and binding on all persons, including
the Company, its Related Entities, Eligible Persons, Participants, Beneficiaries, transferees under Section 10(b) hereof or other
persons claiming rights from or through a Participant, and shareholders. The express grant of any specific power to the Committee,
and the taking of any action by the Committee, shall not be construed as limiting any power or authority of the Committee. The
Committee may delegate to officers or managers of the Company or any Related Entity, or committees thereof, the authority, subject
to such terms and limitations as the Committee shall determine, to perform such functions, including administrative functions
as the Committee may determine to the extent that such delegation will not result in the loss of an exemption under Rule 16b-3(d)(1)
for Awards granted to Participants subject to Section 16 of the Exchange Act in respect of the Company and will not cause Awards
intended to qualify as “performance-based compensation” under Code Section 162(m) to fail to so qualify. The Committee
may appoint agents to assist it in administering the Plan. Any such delegations shall be set forth in a written instrument that
specifies the persons authorized to act thereunder and the terms and limitations of such authority, which writing shall be delivered
to the Company’s Chief Financial Officer, Principal Accounting Officer and General Counsel before any authority may be exercised.
Limitation of
Liability
. The Committee and the Board, and each member thereof,
shall be entitled to, in good faith, rely
or act upon any report or other information furnished to him or her by any officer or Employee, the Company's independent auditors,
Consultants or any other agents assisting in the administration of the Plan. Members of the Committee and the Board, and any officer
or Employee acting at the direction or on behalf of the Committee or the Board, shall not be personally liable for any action or
determination taken or made in good faith with respect to the Plan, and shall, to the extent permitted by law, be fully indemnified
and protected by the Company with respect to any such action or determination.
4.
Shares
Subject to Plan
.
Limitation on
Overall Number of Shares Available for Delivery Under Plan
.
Subject to adjustment as provided in Section
10(c) hereof, the total number of Shares reserved and available for delivery under the Plan shall be
33,000,000
.
Any Shares delivered under the Plan may consist, in whole or in part, of authorized and unissued shares or treasury shares.
Application of
Limitation to Grants of Awards.
. No Award may be granted if the
number of Shares to be delivered in connection
with such an Award exceeds the number of Shares remaining available for delivery under the Plan, minus the number of Shares deliverable
in settlement of or relating to then outstanding Awards. The Committee may adopt reasonable counting procedures to ensure appropriate
counting, avoid double counting (as, for example, in the case of tandem or substitute awards) and make adjustments if the number
of Shares actually delivered differs from the number of Shares previously counted in connection with an Award.
(c)
Availability
of Shares Not Delivered under Awards and Adjustments to
Limits.
(i) If any Awards
are forfeited, expire or otherwise terminate without issuance of such Shares, or any Award is settled for cash or otherwise does
not result in the issuance of all or a portion of the Shares subject to such Award, the Shares to which those Awards were subject,
shall, to the extent of such forfeiture, expiration, termination, cash settlement or non-issuance, again be available for delivery
with respect to Awards under the Plan, subject to Section 4(c)(iv) below.
(ii) In the event
that any Option or other Award granted hereunder is exercised through the tendering of Shares (either actually or by attestation)
or by the withholding of Shares by the Company, or withholding tax liabilities arising from such Option or other Award are satisfied
by the tendering of Shares (either actually or by attestation) or by the withholding of Shares by the Company, then only the number
of Shares issued net of the Shares tendered or withheld shall be counted for purposes of determining the maximum number of Shares
available for grant under the Plan.
(iii) Substitute Awards
shall not reduce the Shares authorized for delivery under the Plan or authorized for delivery to a Participant in any period. Additionally,
in the event that a company acquired by the Company or any Related Entity or with which the Company or any Related Entity combines
has shares available under a pre-existing plan approved by its shareholders, the shares available for delivery pursuant to the
terms of such pre-existing plan (as adjusted, to the extent appropriate, using the exchange ratio or other adjustment or valuation
ratio or formula used in such acquisition or combination to determine the consideration payable to the holders of common stock
of the entities party to such acquisition or combination) may be used for Awards under the Plan and shall not reduce the Shares
authorized for delivery under the Plan if and to the extent that the use of such Shares would not require approval of the Company’s
shareholders under the rules of the Listing Market.
(iv) Any Share that
again becomes available for delivery pursuant to this Section 4(c) shall be added back as one (1) Share.
(v) Notwithstanding
anything in this Section 4(c) to the contrary but subject to adjustment as provided in Section 10(c) hereof, the maximum aggregate
number of Shares that may be delivered under the Plan as a result of the exercise of the Incentive Stock Options shall be
33,000,000
Shares.
Eligibility;
Per-Person Award Limitations
. Awards may be granted under the Plan only
to Eligible Persons. Subject to adjustment
as provided in Section 10(c), in any fiscal year of the Company during any part of which the Plan is in effect, no Participant
may be granted (i) Options or Stock Appreciation Rights with respect to more than
10,000,000
Shares or (ii) Restricted
Stock, Restricted Stock Units, Performance Shares and/or Other Stock-Based Awards with respect to more than
10,000,000
Shares. In addition, the maximum dollar value payable to any one Participant with respect to Performance Units is (x) $2,500,000
with respect to any 12 month Performance Period and (y) with respect to any Performance Period that is more than 12 months, $5,000,000.
6.
Specific
Terms of Awards
.
General
.
Awards may be granted on the terms and conditions set forth in this
Section 6. In addition, the Committee may impose
on any Award or the exercise thereof, at the date of grant or thereafter (subject to Section 10(e)), such additional terms and
conditions, not inconsistent with the provisions of the Plan, as the Committee shall determine, including terms requiring forfeiture
of Awards in the event of termination of the Participant’s Continuous Service and terms permitting a Participant to make
elections relating to his or her Award. Except as otherwise expressly provided herein, the Committee shall retain full power and
discretion to accelerate, waive or modify, at any time, any term or condition of an Award that is not mandatory under the Plan.
Except in cases in which the Committee is authorized to require other forms of consideration under the Plan, or to the extent other
forms of consideration must be paid to satisfy the requirements of Maryland law, no consideration other than services may be required
for the grant (as opposed to the exercise) of any Award.
Options
.
The Committee is authorized to grant Options to any Eligible Person on
the following terms and conditions:
(i)
Exercise
Price
. Other than in connection with Substitute Awards, the exercise price per Share purchasable under an Option shall
be determined by the Committee, provided that such exercise price shall not be less than 100% of the Fair Market Value of a Share
on the date of grant of the Option and shall not, in any event, be less than the par value of a Share on the date of grant of the
Option. If an Employee owns or is deemed to own (by reason of the attribution rules applicable under Section 424(d) of the Code)
more than 10% of the combined voting power of all classes of stock of the Company (or any parent corporation or subsidiary corporation
of the Company, as those terms are defined in Sections 424(e) and (f) of the Code, respectively) and an Incentive Stock Option
is granted to such Employee, the exercise price of such Incentive Stock Option (to the extent required by the Code at the time
of grant) shall be no less than 110% of the Fair Market Value of a Share on the date such Incentive Stock Option is granted.
(ii)
Time and
Method of Exercise
. The Committee shall determine the time or times at which or the circumstances under which an Option
may be exercised in whole or in part (including based on achievement of performance goals and/or future service requirements),
the time or times at which Options shall cease to be or become exercisable following termination of Continuous Service or upon
other conditions, the methods by which the exercise price may be paid or deemed to be paid (including in the discretion of the
Committee a cashless exercise procedure), the form of such payment, including, without limitation, cash, Shares (including without
limitation the withholding of Shares otherwise deliverable pursuant to the Award), other Awards or awards granted under other plans
of the Company or a Related Entity, or other property (including notes or other contractual obligations of Participants to make
payment on a deferred basis provided that such deferred payments are not in violation of Section 13(k) of the Exchange Act, or
any rule or regulation adopted thereunder or any other applicable law), and the methods by or forms in which Shares will be delivered
or deemed to be delivered to Participants.
(iii)
Incentive
Stock Options
. The terms of any Incentive Stock Option granted under the Plan shall comply in all respects with the provisions
of Section 422 of the Code. Anything in the Plan to the contrary notwithstanding, no term of the Plan relating to Incentive Stock
Options (including any Stock Appreciation Right issued in tandem therewith) shall be interpreted, amended or altered, nor shall
any discretion or authority granted under the Plan be exercised, so as to disqualify either the Plan or any Incentive Stock Option
under Section 422 of the Code, unless the Participant has first requested, or consents to, the change that will result in such
disqualification. Thus, if and to the extent required to comply with Section 422 of the Code, Options granted as Incentive Stock
Options shall be subject to the following special terms and conditions:
(A) the Option shall
not be exercisable for more than ten years after the date such Incentive Stock Option is granted; provided, however, that if a
Participant owns or is deemed to own (by reason of the attribution rules of Section 424(d) of the Code) more than 10% of the combined
voting power of all classes of stock of the Company (or any parent corporation or subsidiary corporation of the Company, as those
terms are defined in Sections 424(e) and (f) of the Code, respectively) and the Incentive Stock Option is granted to such Participant,
the term of the Incentive Stock Option shall be (to the extent required by the Code at the time of the grant) for no more than
five years from the date of grant; and
(B) The aggregate Fair
Market Value (determined as of the date the Incentive Stock Option is granted) of the Shares with respect to which Incentive Stock
Options granted under the Plan and all other option plans of the Company (and any parent corporation or subsidiary corporation
of the Company, as those terms are defined in Sections 424(e) and (f) of the Code, respectively) that become exercisable for the
first time by the Participant during any calendar year shall not (to the extent required by the Code at the time of the grant)
exceed $100,000.
Stock Appreciation
Rights
. The Committee may grant Stock Appreciation Rights
to any Eligible Person in conjunction with all
or part of any Option granted under the Plan or at any subsequent time during the term of such Option (a “Tandem Stock Appreciation
Right”), or without regard to any Option (a “Freestanding Stock Appreciation Right”), in each case upon such
terms and conditions as the Committee may establish in its sole discretion, not inconsistent with the provisions of the Plan, including
the following:
(i)
Right to
Payment
. A Stock Appreciation Right shall confer on the Participant to whom it is granted a right to receive, upon exercise
thereof, the excess of (A) the Fair Market Value of one Share on the date of exercise over (B) the grant price of the Stock Appreciation
Right as determined by the Committee. The grant price of a Stock Appreciation Right shall not be less than 100% of the Fair Market
Value of a Share on the date of grant, in the case of a Freestanding Stock Appreciation Right, or less than the associated Option
exercise price, in the case of a Tandem Stock Appreciation Right.
(ii)
Other
Terms
. The Committee shall determine at the date of grant or thereafter, the time or times at which and the circumstances
under which a Stock Appreciation Right may be exercised in whole or in part (including based on achievement of performance goals
and/or future service requirements), the time or times at which Stock Appreciation Rights shall cease to be or become exercisable
following termination of Continuous Service or upon other conditions, the method of exercise, method of settlement, form of consideration
payable in settlement, method by or forms in which Shares will be delivered or deemed to be delivered to Participants, whether
or not a Stock Appreciation Right shall be in tandem or in combination with any other Award, and any other terms and conditions
of any Stock Appreciation Right.
(iii)
Tandem
Stock Appreciation Rights
. Any Tandem Stock Appreciation Right may be granted at the same time as the related Option is
granted or, for Options that are not Incentive Stock Options, at any time thereafter before exercise or expiration of such Option.
Any Tandem Stock Appreciation Right related to an Option may be exercised only when the related Option would be exercisable and
the Fair Market Value of the Shares subject to the related Option exceeds the exercise price at which Shares can be acquired pursuant
to the Option. In addition, if a Tandem Stock Appreciation Right exists with respect to less than the full number of Shares covered
by a related Option, then an exercise or termination of such Option shall not reduce the number of Shares to which the Tandem Stock
Appreciation Right applies until the number of Shares then exercisable under such Option equals the number of Shares to which the
Tandem Stock Appreciation Right applies. Any Option related to a Tandem Stock Appreciation Right shall no longer be exercisable
to the extent the Tandem Stock Appreciation Right has been exercised, and any Tandem Stock Appreciation Right shall no longer be
exercisable to the extent the related Option has been exercised.
Restricted Stock
Awards
. The Committee is authorized to grant Restricted Stock
Awards to any Eligible Person on the following
terms and conditions:
(i)
Grant and
Restrictions
. Restricted Stock Awards shall be subject to such restrictions on transferability, risk of forfeiture and
other restrictions, if any, as the Committee may impose, or as otherwise provided in this Plan during the Restricted Period. The
terms of any Restricted Stock Award granted under the Plan shall be set forth in a written Award Agreement which shall contain
provisions determined by the Committee and not inconsistent with the Plan. The restrictions may lapse separately or in combination
at such times, under such circumstances (including based on achievement of performance goals and/or future service requirements),
in such installments or otherwise, as the Committee may determine at the date of grant or thereafter. Except to the extent restricted
under the terms of the Plan and any Award Agreement relating to a Restricted Stock Award, a Participant granted Restricted Stock
shall have all of the rights of a shareholder, including the right to vote the Restricted Stock and the right to receive dividends
thereon (subject to any mandatory reinvestment or other requirement imposed by the Committee). During the period that the Restriction
Stock Award is subject to a risk of forfeiture, subject to Section 10(b) below and except as otherwise provided in the Award Agreement,
the Restricted Stock may not be sold, transferred, pledged, hypothecated, margined or otherwise encumbered by the Participant.
(ii)
Forfeiture
.
Except as otherwise determined by the Committee, upon termination of a Participant's Continuous Service during the applicable
Restriction Period, the Participant's Restricted Stock that is at that time subject to a risk of forfeiture that has not lapsed
or otherwise been satisfied shall be forfeited and reacquired by the Company; provided that the Committee may provide, by rule
or regulation or in any Award Agreement, or may determine in any individual case, that forfeiture conditions relating to Restricted
Stock Awards shall be waived in whole or in part in the event of terminations resulting from specified causes, and the Committee
may in other cases waive in whole or in part the forfeiture of Restricted Stock.
(iii)
Certificates
for Stock
. Restricted Stock granted under the Plan may be evidenced in such manner as the Committee shall determine. If
certificates representing Restricted Stock are registered in the name of the Participant, the Committee may require that such certificates
bear an appropriate legend referring to the terms, conditions and restrictions applicable to such Restricted Stock, that the Company
retain physical possession of the certificates, and that the Participant deliver a stock power to the Company, endorsed in blank,
relating to the Restricted Stock.
(iv)
Dividends
and Splits
. As a condition to the grant of a Restricted Stock Award, the Committee may require or permit a Participant
to elect that any cash dividends paid on a Share of Restricted Stock be automatically reinvested in additional Shares of Restricted
Stock or applied to the purchase of additional Awards under the Plan. Unless otherwise determined by the Committee, Shares distributed
in connection with a stock split or stock dividend, and other property distributed as a dividend, shall be subject to restrictions
and a risk of forfeiture to the same extent as the Restricted Stock with respect to which such Shares or other property have been
distributed.
Restricted Stock
Unit Award
. The Committee is authorized to grant Restricted
Stock Unit Awards to any Eligible Person on the
following terms and conditions:
(i)
Award and
Restrictions
. Satisfaction of a Restricted Stock Unit Award shall occur upon expiration of the deferral period specified
for such Restricted Stock Unit Award by the Committee (or, if permitted by the Committee, as elected by the Participant). In addition,
a Restricted Stock Unit Award shall be subject to such restrictions (which may include a risk of forfeiture) as the Committee may
impose, if any, which restrictions may lapse at the expiration of the deferral period or at earlier specified times (including
based on achievement of performance goals and/or future service requirements), separately or in combination, in installments or
otherwise, as the Committee may determine. A Restricted Stock Unit Award may be satisfied by delivery of Shares, cash equal to
the Fair Market Value of the specified number of Shares covered by the Restricted Stock Unit, or a combination thereof, as determined
by the Committee at the date of grant or thereafter. Prior to satisfaction of a Restricted Stock Unit Award, a Restricted Stock
Unit Award carries no voting or dividend or other rights associated with Share ownership.
(ii)
Forfeiture
.
Except as otherwise determined by the Committee, upon termination of a Participant's Continuous Service during the applicable
deferral period or portion thereof to which forfeiture conditions apply (as provided in the Award Agreement evidencing the Restricted
Stock Unit Award), the Participant's Restricted Stock Unit Award that is at that time subject to a risk of forfeiture that has
not lapsed or otherwise been satisfied shall be forfeited; provided that the Committee may provide, by rule or regulation or in
any Award Agreement, or may determine in any individual case, that forfeiture conditions relating to a Restricted Stock Unit Award
shall be waived in whole or in part in the event of terminations resulting from specified causes, and the Committee may in other
cases waive in whole or in part the forfeiture of any Restricted Stock Unit Award.
(iii)
Dividend
Equivalents
. Unless otherwise determined by the Committee at the date of grant, any Dividend Equivalents that are granted
with respect to any Restricted Stock Unit Award shall be either (A) paid with respect to such Restricted Stock Unit Award at the
dividend payment date in cash or in Shares of unrestricted stock having a Fair Market Value equal to the amount of such dividends,
or (B) deferred with respect to such Restricted Stock Unit Award and the amount or value thereof automatically deemed reinvested
in additional Restricted Stock Units, other Awards or other investment vehicles, as the Committee shall determine or permit the
Participant to elect. The applicable Award Agreement shall specify whether any Dividend Equivalents shall be paid at the dividend
payment date, deferred or deferred at the election of the Participant. If the Participant may elect to defer the Dividend Equivalents,
such election shall be made within 30 days after the grant date of the Restricted Stock Unit Award, but in no event later than
12 months before the first date on which any portion of such Restricted Stock Unit Award vests (or at such other times prescribed
by the Committee as shall not result in a violation of Section 409A of the Code).
Bonus Stock and
Awards in Lieu of Obligations
. The Committee is authorized
to grant Shares to any Eligible Persons as a bonus,
or to grant Shares or other Awards in lieu of obligations to pay cash or deliver other property under the Plan or under other plans
or compensatory arrangements, provided that, in the case of Eligible Persons subject to Section 16 of the Exchange Act, the amount
of such grants remains within the discretion of the Committee to the extent necessary to ensure that acquisitions of Shares or
other Awards are exempt from liability under Section 16(b) of the Exchange Act. Shares or Awards granted hereunder shall be subject
to such other terms as shall be determined by the Committee.
Dividend Equivalents
.
The Committee is authorized to grant Dividend
Equivalents to any Eligible Person entitling the Eligible Person to
receive cash, Shares, other Awards, or other property equal in value to the dividends paid with respect to a specified number of
Shares, or other periodic payments. Dividend Equivalents may be awarded on a free-standing basis or in connection with another
Award. The Committee may provide that Dividend Equivalents shall be paid or distributed when accrued or shall be deemed to have
been reinvested in additional Shares, Awards, or other investment vehicles, and subject to such restrictions on transferability
and risks of forfeiture, as the Committee may specify. Any such determination by the Committee shall be made at the grant date
of the applicable Award.
Performance
Awards
. The Committee is authorized to grant Performance
Awards to any Eligible Person payable in cash,
Shares, or other Awards, on terms and conditions established by the Committee, subject to the provisions of Section 8 if and to
the extent that the Committee shall, in its sole discretion, determine that an Award shall be subject to those provisions. The
performance criteria to be achieved during any Performance Period and the length of the Performance Period shall be determined
by the Committee upon the grant of each Performance Award; provided, however, that a Performance Period shall not be shorter than
twelve (12) months nor longer than five (5) years. Except as provided in Section 9 or as may be provided in an Award Agreement,
Performance Awards will be distributed only after the end of the relevant Performance Period. The performance goals to be achieved
for each Performance Period shall be conclusively determined by the Committee and may be based upon the criteria set forth in
Section 8(b), or in the case of an Award that the Committee determines shall not be subject to Section 8 hereof, any other criteria
that the Committee, in its sole discretion, shall determine should be used for that purpose. The amount of the Award to be distributed
shall be conclusively determined by the Committee. Performance Awards may be paid in a lump sum or in installments following the
close of the Performance Period or, in accordance with procedures established by the Committee, on a deferred basis in a manner
that does not violate the requirements of Section 409A of the Code.
Other Stock-Based
Awards
. The Committee is authorized, subject to limitations
under applicable law, to grant to any Eligible
Person such other Awards that may be denominated or payable in, valued in whole or in part by reference to, or otherwise based
on, or related to, Shares, as deemed by the Committee to be consistent with the purposes of the Plan. Other Stock-Based Awards
may be granted to Participants either alone or in addition to other Awards granted under the Plan, and such Other Stock-Based Awards
shall also be available as a form of payment in the settlement of other Awards granted under the Plan. The Committee shall determine
the terms and conditions of such Awards. Shares delivered pursuant to an Award in the nature of a purchase right granted under
this Section 6(i) shall be purchased for such consideration, (including without limitation loans from the Company or a Related
Entity provided that such loans are not in violation of Section 13(k) of the Exchange Act, or any rule or regulation adopted thereunder
or any other applicable law) paid for at such times, by such methods, and in such forms, including, without limitation, cash, Shares,
other Awards or other property, as the Committee shall determine.
7.
Certain
Provisions Applicable to Awards
.
Stand-Alone,
Additional, Tandem, and Substitute Awards
. Awards granted
under the Plan may, in the discretion of the Committee,
be granted either alone or in addition to, in tandem with, or in substitution or exchange for, any other Award or any award granted
under another plan of the Company, any Related Entity, or any business entity to be acquired by the Company or a Related Entity,
or any other right of a Participant to receive payment from the Company or any Related Entity. Such additional, tandem, and substitute
or exchange Awards may be granted at any time. If an Award is granted in substitution or exchange for another Award or award,
the Committee shall require the surrender of such other Award or award in consideration for the grant of the new Award. In addition,
Awards may be granted in lieu of cash compensation, including in lieu of cash amounts payable under other plans of the Company
or any Related Entity, in which the value of Shares subject to the Award is equivalent in value to the cash compensation (for
example, Restricted Stock or Restricted Stock Units), or in which the exercise price, grant price or purchase price of the Award
in the nature of a right that may be exercised is equal to the Fair Market Value of the underlying Shares minus the value of the
cash compensation surrendered (for example, Options or Stock Appreciation Right granted with an exercise price or grant price
“discounted” by the amount of the cash compensation surrendered), provided that any such determination to grant an
Award in lieu of cash compensation must be made in a manner intended to comply with Section 409A of the Code.
Term of Awards
.
The term of each Award shall be for such period as may be
determined by the Committee; provided that in no event
shall the term of any Option or Stock Appreciation Right exceed a period of ten years (or in the case of an Incentive Stock Option
such shorter term as may be required under Section 422 of the Code).
Form and Timing
of Payment Under Awards; Deferrals
. Subject to the terms of
the Plan and any applicable Award Agreement,
payments to be made by the Company or a Related Entity upon the exercise of an Option or other Award or settlement of an Award
may be made in such forms as the Committee shall determine, including, without limitation, cash, Shares, other Awards or other
property, and may be made in a single payment or transfer, in installments, or on a deferred basis, provided that any determination
to pay in installments or on a deferred basis shall be made by the Committee at the date of grant. Any installment or deferral
provided for in the preceding sentence shall, however, be subject to the Company’s compliance with applicable law and all
applicable rules of the Listing Market, and in a manner intended to be exempt from or otherwise satisfy the requirements of Section
409A of the Code. Subject to Section 7(e) hereof, the settlement of any Award may be accelerated, and cash paid in lieu of Shares
in connection with such settlement, in the sole discretion of the Committee or upon occurrence of one or more specified events
(in addition to a Change in Control). Any such settlement shall be at a value determined by the Committee in its sole discretion,
which, without limitation, may in the case of an Option or Stock Appreciation Right be limited to the amount if any by which the
Fair Market Value of a Share on the settlement date exceeds the exercise or grant price. Installment or deferred payments may be
required by the Committee (subject to Section 7(e) of the Plan, including the consent provisions thereof in the case of any deferral
of an outstanding Award not provided for in the original Award Agreement) or permitted at the election of the Participant on terms
and conditions established by the Committee, all in a manner that is intended to be exempt from or otherwise satisfy the requirements
of Section 409A of the Code. The Committee may, without limitation, make provision for the payment or crediting of a reasonable
interest rate on installment or deferred payments or the grant or crediting of Dividend Equivalents or other amounts in respect
of installment or deferred payments denominated in Shares.
Exemptions from
Section 16(b) Liability.
It is the intent of the Company that the
grant of any Awards to or other transaction
by a Participant who is subject to Section 16 of the Exchange Act shall be exempt from Section 16 pursuant to an applicable exemption
(except for transactions acknowledged in writing to be non-exempt by such Participant). Accordingly, if any provision of this Plan
or any Award Agreement does not comply with the requirements of Rule 16b-3 then applicable to any such transaction, such provision
shall be construed or deemed amended to the extent necessary to conform to the applicable requirements of Rule 16b-3 so that such
Participant shall avoid liability under Section 16(b).
Code Section 409A
.
(i) The Award Agreement
for any Award that the Committee reasonably determines to constitute a Section 409A Plan, as defined in Section 7(e)(ii) hereof,
and the provisions of the Plan applicable to that Award, shall be construed in a manner consistent with the applicable requirements
of Section 409A of the Code, and the Committee, in its sole discretion and without the consent of any Participant, may amend any
Award Agreement (and the provisions of the Plan applicable thereto) if and to the extent that the Committee determines that such
amendment is necessary or appropriate to comply with the requirements of Section 409A of the Code.
(ii) If any Award
constitutes a “nonqualified deferred compensation plan” under Section 409A of the Code (a “
Section 409A
Plan
”), then the Award shall be subject to the following additional requirements, if and to the extent required to
comply with Section 409A of the Code:
(A) Payments under
the Section 409A Plan may be made only upon (u) the Participant’s “separation from service”, (v) the date the
Participant becomes “disabled”, (w) the Participant’s death, (x) a “specified time (or pursuant to a fixed
schedule)” specified in the Award Agreement at the date of the deferral of such compensation, (y) a “change in the
ownership or effective control of the corporation, or in the ownership of a substantial portion of the assets” of the Company,
or (z) the occurrence of an “unforeseeble emergency”;
(B) The time or schedule
for any payment of the deferred compensation may not be accelerated, except to the extent provided in applicable Treasury Regulations
or other applicable guidance issued by the Internal Revenue Service;
(C) Any elections with
respect to the deferral of such compensation or the time and form of distribution of such deferred compensation shall comply with
the requirements of Section 409A(a)(4) of the Code; and
(D) In the case of
any Participant who is “specified employee”, a distribution on account of a “separation from service” may
not be made before the date which is six months after the date of the Participant’s “separation from service”
(or, if earlier, the date of the Participant’s death).
For purposes of the foregoing, the terms
in quotations shall have the same meanings as those terms have for purposes of Section 409A of the Code, and the limitations set
forth herein shall be applied in such manner (and only to the extent) as shall be necessary to comply with any requirements of
Section 409A of the Code that are applicable to the Award.
(iii) Notwithstanding
the foregoing, or any provision of this Plan or any Award Agreement, the Company does not make any representation to any Participant
or Beneficiary that any Awards made pursuant to this Plan are exempt from, or satisfy, the requirements of, Section 409A, and the
Company shall have no liability or other obligation to indemnify or hold harmless the Participant or any Beneficiary for any tax,
additional tax, interest or penalties that the Participant or any Beneficiary may incur in the event that any provision of this
Plan, or any Award Agreement, or any amendment or modification thereof, or any other action taken with respect thereto, is deemed
to violate any of the requirements of Section 409A.
8.
Code
Section 162(m) Provisions
.
Covered Employees.
During the time the Company is a Publicly Held
Corporation, then the provisions of this Section 8 shall be
applicable to any Performance Award granted to an Eligible Person who is, or is likely to be, as of the end of the tax year in
which the Company would claim a tax deduction in connection with such Award, a Covered Employee.
Performance Criteria
.
If a Performance Award is subject to this Section 8, then
the payment or distribution thereof or the lapsing of restrictions
thereon and the distribution of cash, Shares or other property pursuant thereto, as applicable, shall be contingent upon achievement
of one or more objective performance goals. Performance goals shall be objective and shall otherwise meet the requirements of Section
162(m) of the Code and regulations thereunder including the requirement that the level or levels of performance targeted by the
Committee result in the achievement of performance goals being “substantially uncertain.” One or more of the following
business criteria for the Company, on a consolidated basis, and/or for Related Entities, or for business or geographical units
of the Company and/or a Related Entity (except with respect to the total shareholder return and earnings per share criteria), shall
be used by the Committee in establishing performance goals for such Awards: (1) earnings per share;
(2) revenues or margins; (3) cash flow;
(4) operating margin; (5) return on net assets, investment, capital, or equity; (6) economic value added; (7) direct contribution;
(8) net income; pretax earnings; earnings before interest and taxes; earnings before interest, taxes, depreciation and amortization;
earnings after interest expense and before extraordinary or special items; operating income or income from operations; income before
interest income or expense, unusual items and income taxes, local, state or federal and excluding budgeted and actual bonuses which
might be paid under any ongoing bonus plans of the Company; (9) working capital; (10) management of fixed costs or variable costs;
(11) identification or consummation of investment opportunities or completion of specified projects in accordance with corporate
business plans, including strategic mergers, acquisitions or divestitures; (12) total shareholder return; (13) debt reduction;
(14) market share; (15) entry into new markets, either geographically or by business unit; (16) customer retention and satisfaction;
(17) strategic plan development and implementation, including turnaround plans; and/or (18) the Fair Market Value of a Share. Any
of the above goals may be determined on an absolute or relative basis or as compared to the performance of a published or special
index deemed applicable by the Committee including, but not limited to, the Standard & Poor’s 500 Stock Index or a group
of companies that are comparable to the Company. In determining the achievement of the performance goals, unless otherwise specified
by the Committee at the time the performance goals are set, the Committee shall exclude the impact of any (i) restructurings, discontinued
operations, extraordinary items (as defined pursuant to generally accepted accounting principles), and other unusual or non-recurring
charges, (ii) event either not directly related to the operations of the Company or not within the reasonable control of the Company’s
management, (iii) change in accounting standards required by generally accepted accounting principles; or (iv) such other exclusions
or adjustments as the Committee specifies at the time the Award is granted.
Performance
Period; Timing For Establishing Performance Goals
.
Achievement of performance goals in respect of Performance
Awards shall be measured over a Performance Period no shorter than twelve (12) months and no longer than five (5) years, as specified
by the Committee. Performance goals shall be established not later than 90 days after the beginning of any Performance Period
applicable to such Performance Awards, or at such other date as may be required or permitted for “performance-based compensation”
under Section 162(m) of the Code.
Adjustments
.
The Committee may, in its discretion, reduce the amount of a
settlement otherwise to be made in connection with Awards
subject to this Section 8, but may not exercise discretion to increase any such amount payable to a Covered Employee in respect
of an Award subject to this Section 8. The Committee shall specify the circumstances in which such Awards shall be paid or forfeited
in the event of termination of Continuous Service by the Participant prior to the end of a Performance Period or settlement of
Awards.
Committee Certification
.
No Participant shall receive any payment under the
Plan that is subject to this Section 8 unless the Committee has
certified, by resolution or other appropriate action in writing, that the performance criteria and any other material terms previously
established by the Committee or set forth in the Plan, have been satisfied to the extent necessary to qualify as "performance
based compensation" under Section 162(m) of the Code.
9.
Change
in Control
.
Effect of “Change
in Control.”
If and only to the extent provided in any
employment or other agreement between the Participant
and the Company or any Related Entity, or in any Award Agreement, or to the extent otherwise determined by the Committee in its
sole discretion and without any requirement that each Participant be treated consistently, upon the occurrence of a “Change
in Control,” as defined in Section 9(b):
(i) Any Option or
Stock Appreciation Right that was not previously vested and exercisable as of the time of the Change in Control, shall become immediately
vested and exercisable, subject to applicable restrictions set forth in Section 10(a) hereof.
(ii) Any restrictions,
deferral of settlement, and forfeiture conditions applicable to a Restricted Stock Award, Restricted Stock Unit Award or an Other
Stock-Based Award subject only to future service requirements granted under the Plan shall lapse and such Awards shall be deemed
fully vested as of the time of the Change in Control, except to the extent of any waiver by the Participant and subject to applicable
restrictions set forth in Section 10(a) hereof.
(iii) With respect
to any outstanding Award subject to achievement of performance goals and conditions under the Plan, the Committee may, in its discretion,
deem such performance goals and conditions as having been met as of the date of the Change in Control.
Definition of
“Change in Control”
. Unless otherwise specified in any
employment agreement between the Participant
and the Company or any Related Entity, or in an Award Agreement, a “Change in Control” shall mean the occurrence of
any of the following:
(i) The acquisition
by any Person of Beneficial Ownership (within the meaning of Rule 13d-3 promulgated under the Exchange Act) of more than forty
percent (40%) of either (A) the value of then outstanding equity securities of the Company (the “
Outstanding
Company Stock
”) or (B) the combined voting power of the then outstanding voting securities of
the
Company entitled to vote generally in the election of directors (the “
Outstanding Company
Voting Securities
”)
(the foregoing Beneficial Ownership hereinafter being referred to as a
"
Controlling Interest
");
provided, however, that for purposes of this Section 9(b), the following acquisitions shall not constitute or result in a Change
in Control: (v) any acquisition directly from the Company; (w) any acquisition by the Company; (x) any acquisition by any Person
that as of the Effective Date owns Beneficial Ownership of a Controlling Interest; (y) any acquisition by any employee benefit
plan (or related trust) sponsored or maintained by the Company or any Related Entity; or (z) any acquisition by any entity pursuant
to a transaction which complies with clauses (A), (B) and (C) of subsection (iii) below; or
(ii) During any period
of two (2) consecutive years (not including any period prior to the Effective Date) individuals who constitute the Board on the
Effective Date (the “
Incumbent Board
”) cease for any reason to constitute at least a majority of the
Board; provided, however, that any individual becoming a director subsequent to the Effective Date whose election, or nomination
for election by the Company’s shareholders, was approved by a vote of at least a majority of the directors then comprising
the Incumbent Board shall be considered as though such individual were a member of the Incumbent Board, but excluding, for this
purpose, any such individual whose initial assumption of office occurs as a result of an actual or threatened election contest
with respect to the election or removal of directors or other actual or threatened solicitation of proxies or consents by or on
behalf of a Person other than the Board; or
(iii) Consummation
of (A) a reorganization, merger, statutory share exchange or consolidation or similar transaction involving (x) the Company or
(y) any of its Subsidiaries, but in the case of this clause (y) only if equity securities of the Company are issued or issuable
in connection with the transaction (each of the events referred to in this clause
(A) being hereinafter referred to as
a “
Business Reorganization
”), or (B) a sale or other disposition of all or substantially all of the
assets of the Company, or the acquisition of assets or equity of another entity by the Company or any of its Subsidiaries
(each an “
Asset Sale
”), in each case, unless, following such Business Reorganization or Asset Sale,
all or substantially all of the individuals and entities who were the Beneficial Owners, respectively, of the Outstanding
Company Stock and Outstanding Company Voting Securities immediately prior to such Business Reorganization or Asset Sale
beneficially own, directly or indirectly, more than fifty percent (50%) of the value of the then outstanding equity
securities and the combined voting power of the then outstanding voting securities entitled to vote generally in the election
of members of the board of directors (or comparable governing body of an entity that does not have such a board), as the case
may be, of the entity resulting from such Business Reorganization or Asset Sale (including, without limitation, an entity
which as a result of such transaction owns the Company or all or substantially all of the Company’s assets either
directly or through one or more subsidiaries) (the “
Continuing Entity
”) in substantially the same
proportions as their ownership, immediately prior to such Business Reorganization or Asset Sale, of the Outstanding Company
Stock and Outstanding Company Voting Securities, as the case may be (excluding any outstanding equity or voting securities of
the Continuing Entity that such Beneficial Owners hold immediately following the consummation of the Business Reorganization
or Asset Sale as a result of their ownership, prior to such consummation, of equity or voting securities of any company or
other entity involved in or forming part of such Business Reorganization or Asset Sale other than the Company); or
(iv) Approval by the
shareholders of the Company of a complete liquidation or dissolution of the Company.
Notwithstanding the foregoing, a Change
of Control shall not be deemed to have occurred for purposes of this Plan as the result of the issuance by the Company of any equity
securities or securities convertible into equity securities for cash or property so long as such securities are issued by the Company
other than in connection with a transaction that would result in a Change of Control pursuant to Section 9(b) of this Plan.
10.
General
Provisions
.
Compliance With
Legal and Other Requirements
. The Company may, to the
extent deemed necessary or advisable by the Committee,
postpone the issuance or delivery of Shares or payment of other benefits under any Award until completion of such registration
or qualification of such Shares or other required action under any federal or state law, rule or regulation, listing or other required
action with respect to the Listing Market, or compliance with any other obligation of the Company, as the Committee, may consider
appropriate, and may require any Participant to make such representations, furnish such information and comply with or be subject
to such other conditions as it may consider appropriate in connection with the issuance or delivery of Shares or payment of other
benefits in compliance with applicable laws, rules, and regulations, listing requirements, or other obligations.
Limits on Transferability;
Beneficiaries
. No Award or other right or interest
granted under the Plan shall be pledged, hypothecated
or otherwise encumbered or subject to any lien, obligation or liability of such Participant to any party, or assigned or transferred
by such Participant otherwise than by will or the laws of descent and distribution or to a Beneficiary upon the death of a Participant,
and such Awards or rights that may be exercisable shall be exercised during the lifetime of the Participant only by the Participant
or his or her guardian or legal representative, except that Awards and other rights (other than Incentive Stock Options and Stock
Appreciation Rights in tandem therewith) may be transferred to one or more Beneficiaries or other transferees during the lifetime
of the Participant, and may be exercised by such transferees in accordance with the terms of such Award, but only if and to the
extent such transfers are permitted by the Committee pursuant to the express terms of an Award Agreement (subject to any terms
and conditions which the Committee may impose thereon). A Beneficiary, transferee, or other person claiming any rights under the
Plan from or through any Participant shall be subject to all terms and conditions of the Plan and any Award Agreement applicable
to such Participant, except as otherwise determined by the Committee, and to any additional terms and conditions deemed necessary
or appropriate by the Committee.
(c)
Adjustments.
(i)
Adjustments
to Awards
. In the event that any extraordinary dividend or other distribution (whether in the form of cash, Shares, or
other property), recapitalization, forward or reverse split, reorganization, merger, consolidation, spin-off, combination, repurchase,
share exchange, liquidation, dissolution or other similar corporate transaction or event affects the Shares and/or such other securities
of the Company or any other issuer, then the Committee shall, in such manner as it may deem equitable, substitute, exchange or
adjust any or all of (A) the number and kind of Shares which may be delivered in connection with Awards granted thereafter, (B)
the number and kind of Shares by which annual per-person Award limitations are measured under Section 4 hereof, (C) the number
and kind of Shares subject to or deliverable in respect of outstanding Awards, (D) the exercise price, grant price or purchase
price relating to any Award and/or make provision for payment of cash or other property in respect of any outstanding Award, and
(E) any other aspect of any Award that the Committee determines to be appropriate.
(ii)
Adjustments
in Case of Certain Transactions
. In the event of any merger, consolidation or other reorganization in which the Company
does not survive, or in the event of any Change in Control, any outstanding Awards may be dealt with in accordance with any of
the following approaches, without the requirement of obtaining any consent or agreement of a Participant as such, as determined
by the agreement effectuating the transaction or, if and to the extent not so determined, as determined by the Committee: (a)
the continuation of the outstanding Awards by the Company, if the Company is a surviving entity, (b) the assumption or substitution
for, as those terms are defined below, the outstanding Awards by the surviving entity or its parent or subsidiary, (c) full exercisability
or vesting and accelerated expiration of the outstanding Awards, or (d) settlement of the value of the outstanding Awards in cash
or cash equivalents or other property followed by cancellation of such Awards (which value, in the case of Options or Stock Appreciation
Rights, shall be measured by the amount, if any, by which the Fair Market Value of a Share exceeds the exercise or grant price
of the Option or Stock Appreciation Right as of the effective date of the transaction). For the purposes of this Agreement, an
Option, Stock Appreciation Right, Restricted Stock Award, Restricted Stock Unit Award or Other Stock-Based Award shall be considered
assumed or substituted for if following the Change in Control the Award confers the right to purchase or receive, for each Share
subject to the Option, Stock Appreciation Right, Restricted Stock Award, Restricted Stock Unit Award or Other Stock-Based Award
immediately prior to the Change in Control, on substantially the same vesting and other terms and conditions as were applicable
to the Award immediately prior to the Change in Control, the consideration (whether stock, cash or other securities or property)
received in the transaction constituting a Change in Control by holders of Shares for each Share held on the effective date of
such transaction (and if holders were offered a choice of consideration, the type of consideration chosen by the holders of a
majority of the outstanding shares); provided, however, that if such consideration received in the transaction constituting a
Change in Control is not solely common stock of the successor company or its parent or subsidiary, the Committee may, with the
consent of the successor company or its parent or subsidiary, provide that the consideration to be received upon the exercise
or vesting of an Option, Stock Appreciation Right, Restricted Stock Award, Restricted Stock Unit Award or Other Stock-Based Award,
for each Share subject thereto, will be solely common stock of the successor company or its parent or subsidiary substantially
equal in fair market value to the per share consideration received by holders of Shares in the transaction constituting a Change
in Control. The determination of such substantial equality of value of consideration shall be made by the Committee in its sole
discretion and its determination shall be conclusive and binding. The Committee shall give written notice of any proposed transaction
referred to in this Section 10(c)(ii) at a reasonable period of time prior to the closing date for such transaction (which notice
may be given either before or after the approval of such transaction), in order that Participants may have a reasonable period
of time prior to the closing date of such transaction within which to exercise any Awards that are then exercisable (including
any Awards that may become exercisable upon the closing date of such transaction). A Participant may condition his exercise of
any Awards upon the consummation of the transaction.
(iii)
Other
Adjustments
. The Committee (and the Board if and only to the extent such authority is not required to be exercised by the
Committee to comply with Section 162(m) of the Code) is authorized to make adjustments in the terms and conditions of, and the
criteria included in, Awards (including Performance Awards, or performance goals and conditions relating thereto) in recognition
of unusual or nonrecurring events (including, without limitation, acquisitions and dispositions of businesses and assets) affecting
the Company, any Related Entity or any business unit, or the financial statements of the Company or any Related Entity, or in response
to changes in applicable laws, regulations, accounting principles, tax rates and regulations or business conditions or in view
of the Committee's assessment of the business strategy of the Company, any Related Entity or business unit thereof, performance
of comparable organizations, economic and business conditions, personal performance of a Participant, and any other circumstances
deemed relevant; provided that no such adjustment shall be authorized or made if and to the extent that such authority or the making
of such adjustment would cause Options, Stock Appreciation Rights, Performance Awards granted pursuant to Section 8(b) hereof to
Participants designated by the Committee as Covered Employees and intended to qualify as “performance-based compensation”
under Code Section 162(m) and the regulations thereunder to otherwise fail to qualify as “performance-based compensation”
under Code Section 162(m) and regulations thereunder. Adjustments permitted hereby may include, without limitation, increasing
the exercise price of Options and Stock Appreciation Rights, increasing performance goals, or other adjustments that may be adverse
to the Participant. Notwithstanding the foregoing, no adjustments may be made with respect to any Performance Awards subject to
Section 8 if and to the extent that such adjustment would cause the Award to fail to qualify as “performance-based compensation”
under Section 162(m) of the Code.
Taxes
.
The Company and any Related Entity are authorized to withhold from any
Award granted, any payment relating to an
Award under the Plan, including from a distribution of Shares, or any payroll or other payment to a Participant, amounts of withholding
and other taxes due or potentially payable in connection with any transaction involving an Award, and to take such other action
as the Committee may deem advisable to enable the Company or any Related Entity and Participants to satisfy obligations for the
payment of withholding taxes and other tax obligations relating to any Award. This authority shall include authority to withhold
or receive Shares or other property and to make cash payments in respect thereof in satisfaction of a Participant's tax obligations,
either on a mandatory or elective basis in the discretion of the Committee.
Changes to the
Plan and Awards
. The Board may amend, alter, suspend,
discontinue or terminate the Plan, or the Committee's
authority to grant Awards under the Plan, without the consent of shareholders or Participants, except that any amendment or alteration
to the Plan shall be subject to the approval of the Company's shareholders not later than the annual meeting next following such
Board action if such shareholder approval is required by any federal or state law or regulation (including, without limitation,
Rule 16b-3 or Code Section 162(m)) or the rules of the Listing Market, and the Board may otherwise, in its discretion, determine
to submit other such changes to the Plan to shareholders for approval; provided that, except as otherwise permitted by the Plan
or Award Agreement, without the consent of an affected Participant, no such Board action may materially and adversely affect the
rights of such Participant under the terms of any previously granted and outstanding Award. The Committee may waive any conditions
or rights under, or amend, alter, suspend, discontinue or terminate any Award theretofore granted and any Award Agreement relating
thereto, except as otherwise provided in the Plan; provided that, except as otherwise permitted by the Plan or Award Agreement,
without the consent of an affected Participant, no such Committee or the Board action may materially and adversely affect the rights
of such Participant under terms of such Award. Notwithstanding anything to the contrary, the Committee shall be authorized to amend
any outstanding Option and/or Stock Appreciation Right to reduce the exercise price or grant price without the prior approval of
the shareholders of the Company. In addition, the Committee shall be authorized to cancel outstanding Options and/or Stock Appreciation
Rights replaced with Awards having a lower exercise price without the prior approval of the shareholders of the Company.
Limitation on
Rights Conferred Under Plan
. Neither the Plan nor any action
taken hereunder or under any Award shall be
construed as (i) giving any Eligible Person or Participant the right to continue as an Eligible Person or Participant or in the
employ or service of the Company or a Related Entity; (ii) interfering in any way with the right of the Company or a Related Entity
to terminate any Eligible Person's or Participant's Continuous Service at any time, (iii) giving an Eligible Person or Participant
any claim to be granted any Award under the Plan or to be treated uniformly with other Participants and Employees, or (iv) conferring
on a Participant any of the rights of a shareholder of the Company or any Related Entity including, without limitation, any right
to receive dividends or distributions, any right to vote or act by written consent, any right to attend meetings of shareholders
or any right to receive any information concerning the Company’s or any Related Entity’s business, financial condition,
results of operation or prospects, unless and until such time as the Participant is duly issued Shares on the stock books of the
Company or any Related Entity in accordance with the terms of an Award. None of the Company, its officers or its directors shall
have any fiduciary obligation to the Participant with respect to any Awards unless and until the Participant is duly issued Shares
pursuant to the Award on the stock books of the Company in accordance with the terms of an Award. Neither the Company, nor any
Related Entity, nor any of the their respective officers, directors, representatives or agents is granting any rights under the
Plan to the Participant whatsoever, oral or written, express or implied, other than those rights expressly set forth in this Plan
or the Award Agreement.
Unfunded Status
of Awards; Creation of Trusts
. The Plan is intended to
constitute an “unfunded” plan for incentive
and deferred compensation. With respect to any
payments not yet made to a Participant
or obligation to deliver Shares pursuant to an Award, nothing contained in the Plan or any Award Agreement shall give any such
Participant any rights that are greater than those of a general creditor of the Company or Related Entity that issues the Award;
provided that the Committee may authorize the creation of trusts and deposit therein cash, Shares, other Awards or other property,
or make other arrangements to meet the obligations of the Company or Related Entity under the Plan. Such trusts or other arrangements
shall be consistent with the “unfunded” status of the Plan unless the Committee otherwise determines with the consent
of each affected Participant. The trustee of such trusts may be authorized to dispose of trust assets and reinvest the proceeds
in alternative investments, subject to such terms and conditions as the Committee may specify and in accordance with applicable
law.
Nonexclusivity
of the Plan
. Neither the adoption of the Plan by the Board nor its
submission to the shareholders of the
Company for approval shall be construed as creating any limitations on the power of the Board or a committee thereof to adopt such
other incentive arrangements as it may deem desirable including incentive arrangements and awards which do not qualify under Section
162(m) of the Code.
Payments in the
Event of Forfeitures; Fractional Shares
. Unless otherwise
determined by the Committee, in the event of a
forfeiture of an Award with respect to which a Participant paid cash or other consideration, the Participant shall be repaid the
amount of such cash or other consideration. No fractional Shares shall be issued or delivered pursuant to the Plan or any Award.
The Committee shall determine whether cash, other Awards or other property shall be issued or paid in lieu of such fractional shares
or whether such fractional shares or any rights thereto shall be forfeited or otherwise eliminated.
Governing Law
.
Except as otherwise provided in any Award Agreement, the
validity, construction and effect of the Plan, any rules
and regulations under the Plan, and any Award Agreement shall be determined in accordance with the laws of the State of Maryland
without giving effect to principles of conflict of laws, and applicable federal law.
Non-U.S. Laws
.
The Committee shall have the authority to adopt such
modifications, procedures, and subplans as may be necessary
or desirable to comply with provisions of the laws of foreign countries in which the Company or its Related Entities may operate
to assure the viability of the benefits from Awards granted to Participants performing services in such countries and to meet the
objectives of the Plan.
Plan Effective
Date and Shareholder Approval; Termination of Plan
. The Plan
shall become effective on the Effective Date,
subject to subsequent approval, within 12 months of its adoption by the Board, by shareholders of the Company eligible to vote
in the election of directors, by a vote sufficient to meet the requirements of Code Sections 162(m) (if applicable) and 422, Rule
16b-3 under the Exchange Act (if applicable), applicable requirements under the rules of any stock exchange or automated quotation
system on which the Shares may be listed or quoted, and other laws, regulations, and obligations of the Company applicable to
the Plan. Awards may be granted subject to shareholder approval, but may not be exercised or otherwise settled in the event the
shareholder approval is not obtained. The Plan shall terminate at the earliest of (a) such time as no Shares remain available
for issuance under the Plan, (b) termination of this Plan by the Board, or (c) the tenth anniversary of the Effective Date. Awards
outstanding upon expiration of the Plan shall remain in effect until they have been exercised or terminated, or have expired.
Exhibit C
Form of Indemnification Agreement
INDEMNIFICATION AGREEMENT
INDEMNIFICATION AGREEMENT
(this “Agreement”), made and executed as of _______________, 2013, by and between Reven Housing REIT, Inc., a Colorado
corporation (the “Company”), and _______________, an individual (the “Indemnitee”).
WITNESSETH
:
WHEREAS, the Company
is aware that, to induce and to retain highly competent persons to serve the Company as directors or officers or in other capacities,
the Company must provide such persons with adequate protection through insurance and indemnification against inordinate risks of
claims and actions against them arising out of their service to and activities on behalf of the Company;
WHEREAS, the Company
recognizes the substantial increase in corporate litigation in general, subjecting directors and officers to expensive litigation
risks at the same time as the availability and coverage of liability insurance has been severely limited;
WHEREAS, the Bylaws
of the Company, as amended (the “Bylaws”), contain indemnification provisions which allow the Company to provide the
members of the Board of Directors and officers of the Company indemnification protection to the fullest extent permitted by applicable
law; and
WHEREAS, it is reasonable,
prudent and necessary for the Company to obligate itself contractually to indemnify such persons to the fullest extent permitted
by applicable law and to provide an express process and procedure for seeking indemnification so that they will continue to serve
the Company free from undue concern.
AGREEMENT
:
NOW, THEREFORE, in
consideration of the premises and the mutual promises and covenants contained herein, and for other good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, the Company and the Indemnitee do hereby agree as follows:
1. DEFINITIONS.
For purposes of this Agreement, the following terms shall have the meanings set forth below:
(a) “Disinterested
Director” shall mean a director of the Company who is not or was not a party to the Proceeding in respect of which indemnification
is being sought.
(b) “Expenses”
shall include all reasonable attorneys’ fees, accountants’ fees, retainers, court costs, transcript costs, fees of
experts, witness fees, travel expenses, duplicating costs, printing and binding costs, telephone charges, postage, delivery service
fees, and all other disbursements or expenses incurred in connection with prosecuting, defending, preparing to prosecute or defend,
investigating or being or preparing to be a witness in any Proceeding or establishing the Indemnitee’s right of entitlement
to indemnification for any of the foregoing.
(c) “Independent
Counsel” shall mean a law firm of at least 100 attorneys or a member of a law firm of at least 100 attorneys that is experienced
in matters of corporate law and that neither is presently nor in the past five years has been retained to represent (i) the Company
or the Indemnitee or any affiliate thereof in any matter material to either such party or (ii) any other party to the Proceeding
giving rise to a claim for indemnification hereunder. Notwithstanding the foregoing, the term “Independent Counsel”
shall not include any person who, under the applicable standards of professional conduct then prevailing, would have a conflict
of interest in representing either the Company or the Indemnitee in an action to determine the Indemnitee’s right to indemnification
under this Agreement.
(d) “Proceeding”
shall mean any threatened, pending or completed action, suit, arbitration, investigation, inquiry, alternate dispute resolution
mechanism, administrative or legislative hearing, or any other proceeding (including, without limitation, any securities laws action,
suit, arbitration, investigation, inquiry, alternative dispute resolution mechanism, hearing or procedure) whether civil, criminal,
administrative, arbitrative or investigative and whether or not based upon events occurring, or actions taken, before the date
hereof, and any appeal in or related to any such action, suit, arbitration, investigation, inquiry, alternate dispute resolution
mechanism, hearing or proceeding and any inquiry or investigation (including discovery), whether conducted by or in the right of
the Company or any other person, that the Indemnitee in good faith believes could lead to any such action, suit, arbitration, investigation,
inquiry, alternative dispute resolution mechanism, hearing or other proceeding or appeal thereof.
2. SERVICE
BY THE INDEMNITEE. The Indemnitee agrees to serve or to continue to serve as a director or officer of the Company and will discharge
his/her duties and responsibilities to the best of his/her ability so long as the Indemnitee is duly elected or appointed in accordance
with the provisions of the Company’s Articles of Incorporation, as amended (the “Articles”), the Bylaws, and
the Colorado Revised Statutes, as amended (the “CRS”), or until his/her earlier death, retirement, resignation or removal,
or also in the case of a director, until his/her successor shall have been duly elected and qualified. The Indemnitee may at any
time and for any reason resign from such position (subject to any other obligation, whether contractual or imposed by operation
of law), in which event this Agreement shall continue in full force and effect after such resignation. Additionally, this Agreement
shall remain in full force and effect after the death, retirement or removal of the Indemnitee, or also in the case of a director,
until his/her successor shall have been duly elected and qualified. Notwithstanding the forgoing, this Agreement may be terminated
in accordance with Section 22 hereof. Nothing in this Agreement shall confer upon the Indemnitee the right to continue in the employ
of the Company or as a director of the Company, or affect the right of the Company to terminate, in the Company’s sole discretion
(with or without cause) and at any time, the Indemnitee’s employment or position as a director, in each case, subject to
any contractual rights of the Indemnitee existing otherwise than under this Agreement.
3. INDEMNIFICATION.
The Company shall indemnify the Indemnitee and advance Expenses to the Indemnitee as provided in this Agreement to the fullest
extent permitted by the Articles, the Bylaws in effect as of the date hereof and the CRS or other applicable law in effect on the
date hereof and to any greater extent that the Bylaws, the CRS, or applicable law may in the future from time to time permit. Without
diminishing the scope of the indemnification provided by this Section 3, the rights of indemnification of the Indemnitee provided
hereunder shall include, but shall not be limited to, those rights hereinafter set forth, except that no indemnification shall
be paid hereunder to the Indemnitee:
(a) unless
it is determined that the Indemnitee (i) acted in good faith; (ii) reasonably believed (y) in the case of conduct in the person's
official capacity, that the Indemnitee's conduct was in the Company’s best interests; and (z) in any other case, that the
Indemnitee's conduct was not opposed to the Company's best interests; and (iii) in the case of a criminal proceeding, did not have
a reasonable cause to believe the person's conduct was unlawful;
(b) in
any circumstance where such indemnification is expressly prohibited by applicable law in effect as of the date of this Agreement
or subsequently determined to be expressly prohibited by applicable law;
(c) with
respect to liability for which payment is actually made to the Indemnitee under an insurance policy or under an indemnity clause,
Bylaws provision or other agreement (other than this Agreement), except in respect of any liability in excess of payment under
such insurance, clause, Bylaws provision or other agreement; or
(d) if
a final decision by a court having jurisdiction in the matter shall determine that such indemnification is not lawful.
4. ACTIONS
OR PROCEEDINGS OTHER THAN AN ACTION BY OR IN THE RIGHT OF THE COMPANY. The Indemnitee shall be entitled to the indemnification
rights provided in this Agreement if the Indemnitee was or is a party or is threatened to be made a party to any Proceeding, other
than a Proceeding by or in the right of the Company, by reason of the fact that the Indemnitee is or was a director, officer, employee,
agent or fiduciary of the Company or any of the Company’s direct or indirect wholly-owned subsidiaries, or is or was serving
at the request of the Company or any of the Company’s direct or indirect wholly-owned subsidiaries as a director, officer,
employee, agent or fiduciary of any other entity, including, but not limited to, another corporation, partnership, limited liability
company, employee benefit plan, joint venture, trust or other enterprise, or by reason of any act or omission by him/her in such
capacity. Pursuant to this Section 4, the Indemnitee shall be indemnified against all judgments, penalties (including, but not
limited to, excise and similar taxes) and fines against the Indemnitee, and all Expenses, liabilities and amounts paid in settlement
which were actually and reasonably incurred by, or in the case of retainers, to be incurred by, the Indemnitee or on the Indemnitee’s
behalf in connection with such Proceeding (including, but not limited to, the investigation, defense or appeal thereof); provided,
however, in the absence of the Company’s material breach of this Agreement, the Company shall not be obligated to indemnify
Indemnitee for any settlement entered into by Indemnitee without the prior written consent of the Company, which shall not be unreasonably
withheld.
5. ACTIONS
BY OR IN THE RIGHT OF THE COMPANY. The Indemnitee shall be entitled to the indemnification rights provided in this Agreement if
the Indemnitee was or is a party or is threatened to be made a party to any Proceeding brought by or in the right of the Company
to procure a judgment in its favor by reason of the fact that the Indemnitee is or was a director, officer, employee, agent or
fiduciary of the Company or any of the Company’s direct or indirect wholly-owned subsidiaries, or is or was serving at the
request of the Company or any of the Company’s direct or indirect wholly-owned subsidiaries as a director, officer, employee,
agent or fiduciary of another entity, including, but not limited to, another corporation, partnership, limited liability company,
employee benefit plan, joint venture, trust or other enterprise, or by reason of any act or omission by him/her in any such capacity.
Pursuant to this Section 5, the Indemnitee shall be indemnified against all Expenses actually and reasonably incurred by, or in
the case of retainers, to be incurred by, him/her in connection with such Proceeding (including, but not limited to the investigation,
defense or appeal thereof); provided, however, that no indemnification shall be made in respect of any claim, issue or matter as
to which the Indemnitee shall have been adjudged to be liable to the Company in a final adjudication by a court of competent
jurisdiction from which there is no further right of appeal or in a final adjudication of an arbitration pursuant to Section 12
hereof, if the Indemnitee elects to seek such arbitration, unless and to the extent that the court in which such Proceeding shall
have been brought or is pending, shall determine that such indemnification may be made.
6. GOOD
FAITH DEFINITION. For purposes of this Agreement, the Indemnitee shall be deemed to have acted in good faith and in a manner the
Indemnitee reasonably believed to be in or not opposed to the best interests of the Company, or, with respect to any criminal Proceeding,
to have had no reasonable cause to believe the Indemnitee’s conduct was unlawful, if such action was based on any of the
following: (a) the records or books of the account of the Company or other enterprise, including financial statements; (b) information
supplied to the Indemnitee by the officers of the Company or any of the Company’s direct or indirect wholly-owned subsidiaries
or any entity at which the Indemnitee is or was serving as a director, officer, employee, agent or fiduciary at the request of
the Company or any of the Company’s direct or indirect wholly-owned subsidiaries (each such entity, a “Subject Enterprise”)
in the course of his/her duties; (c) the advice of legal counsel for the Company or Subject Enterprise; or (d) information or records
given in reports made to the Company or Subject Enterprise by an independent certified public accountant or by an appraiser or
other expert selected with reasonable care by the Company or other enterprise. The provisions of this Section 6 shall not be deemed
to be exclusive or to limit in any way the other circumstances in which the Indemnitee may be deemed to have met the applicable
standard of conduct set forth in this Agreement.
7. INDEMNIFICATION
FOR EXPENSES OF WITNESS. Notwithstanding the other provisions of this Agreement, to the extent that the Indemnitee has served on
behalf of the Company or any of the Company’s direct or indirect wholly-owned subsidiaries, or is or was serving at the request
of the Company or any of the Company’s direct or indirect wholly-owned subsidiaries, as a witness or other similar participant
in any Proceeding, the Indemnitee shall be indemnified against all Expenses actually and reasonably incurred by, or in the case
of retainers, to be incurred by, the Indemnitee in connection therewith to be paid by the Company within seven days of receipt
by the Company of a statement from the Indemnitee requesting such payment and detailing such Expenses.
8. PARTIAL
INDEMNIFICATION. If the Indemnitee is entitled under any provision of this Agreement to indemnification by the Company for some
or a portion of the judgments, penalties and fines and Expenses and amounts paid in settlement actually and reasonably incurred
by, or in the case of retainers to be incurred by, the Indemnitee in connection with the investigation, defense, appeal or settlement
of such Proceeding described in Sections 4 and 5 hereof, but is not entitled to indemnification for the total amount thereof, the
Company shall nevertheless indemnify the Indemnitee for the portion of such judgments, penalties and fines and Expenses and amounts
paid in settlement actually and reasonably incurred by, or in the case of retainers, to be incurred by, the Indemnitee for which
the Indemnitee is entitled to be indemnified. For purposes of this Section 8 and without limitation, the termination of any claim,
issue, or matter in such a Proceeding described herein (a) by dismissal, summary judgment, judgment on the pleading, or final judgment,
with or without prejudice, or (b) by agreement without payment or assumption or admission of liability by the Indemnitee, shall
be deemed to be a successful determination or result as to such claim, issue or matter.
9. PROCEDURE
FOR DETERMINATION OF ENTITLEMENT TO INDEMNIFICATION.
(a) To
obtain indemnification under this Agreement, the Indemnitee shall submit to the Company a written request, including documentation
and information which is reasonably available to the Indemnitee and is reasonably necessary to determine whether the Indemnitee
is entitled to indemnification. The Secretary of the Company shall, promptly upon receipt of a request for indemnification, advise
the Board of Directors that the Indemnitee has requested indemnification. Any Expenses incurred by, or in the case of retainers,
to be incurred by, the Indemnitee in connection with the Indemnitee’s request for indemnification hereunder shall be borne
by the Company.
(b) Upon
written request by the Indemnitee for indemnification pursuant to Sections 4 and 5 hereof, the entitlement of the Indemnitee to
indemnification pursuant to the terms of this Agreement shall be determined by the following person or persons, who shall be empowered
to make such determination: (i) if requested by the Indemnitee, by Independent Counsel selected by the Board of Directors in a
written opinion to the Board of Directors, a copy of which shall be delivered to the Indemnitee; or (ii) if not so requested, (A)
by the Board of Directors of the Company, by a majority vote of a quorum (determined in accordance with the Bylaws) consisting
of Disinterested Directors, or (B) if a quorum consisting of Disinterested Directors is not obtainable or if a majority vote of
a quorum consisting of Disinterested Directors so directs, by Independent Counsel in a written opinion to the Board of Directors,
a copy of which shall be delivered to the Indemnitee. The Independent Counsel shall be selected by the Board of Directors of the
Company. Such determination of entitlement to indemnification shall be made not later than 45 days after receipt by the Company
of a written request for indemnification. If it is so determined that the Indemnitee is entitled to indemnification, payment to
the Indemnitee shall be made within 15 days after such determination.
(c) The
Indemnitee shall be entitled to indemnification hereunder without a separate determination by or on behalf of the Company pursuant
to Section 9(b) hereof with respect to any Proceeding and/or any claim, issue, or matter with respect thereto: (i) which is resolved
by agreement without any payment or assumption or admission of liability by the Indemnitee; or (ii) as to which a final decision
on the merits has been made by the court or other body with jurisdiction over that Proceeding, in which the Indemnitee was not
determined to be liable with respect to such claim, issue, or matter asserted against the Indemnitee in the Proceeding; or (iii)
as to which a court or arbitrator determines upon application that, despite such a determination of liability on the part of the
Indemnitee, but in view of all the circumstances of the Proceeding and of the Indemnitee’s conduct with respect thereto,
the Indemnitee is fairly and reasonably entitled to indemnification for such judgments, penalties, fines, amounts paid in settlement,
and Expenses as such court or arbitrator shall deem proper; provided, however, such decision shall have been rendered in or with
respect to the Proceeding for which the Indemnitee seeks indemnification under this Agreement.
10. PRESUMPTIONS
AND EFFECT OF CERTAIN PROCEEDINGS.
(a) In
making a determination with respect to entitlement to indemnification, the Indemnitee shall be presumed to be entitled to full
indemnification hereunder, and the Company shall have the burden of proof in the making of any determination contrary to such presumption.
Neither the failure of the Board of Directors (or such other person or persons empowered to make the determination of whether the
Indemnitee is entitled to indemnification) to have made a determination prior to the commencement of any action pursuant to this
Agreement that indemnification is proper in the circumstances because the Indemnitee has met the applicable standard of conduct,
nor any determination thereby that the Indemnitee has not met such applicable standard of conduct, shall be a defense or admissible
as evidence in any Proceeding for any purpose or create a presumption that the Indemnitee has acted in bad faith or failed to meet
any other applicable standard of conduct.
(b) If
the Board of Directors or the Independent Counsel, as applicable, shall have failed to make a determination as to entitlement to
indemnification within 45 days after receipt by the Company of such request, the requisite determination of entitlement to indemnification
shall be deemed to have been made and the Indemnitee shall be absolutely entitled to such indemnification, absent actual and material
fraud in the request for indemnification, a prohibition of indemnification under applicable law in effect as of the date of this
Agreement, or a subsequent determination that such indemnification is prohibited by applicable law. The termination of any Proceeding
described in Sections 4 or 5 hereof by judgment, order, settlement or conviction, or upon a plea of nolo contendere or its equivalent,
shall not, of itself: (i) create a presumption that the Indemnitee acted in bad faith or in a manner which he/she reasonably believed
to be opposed to the best interests of the Company, or, with respect to any criminal Proceeding, that the Indemnitee has reasonable
cause to believe that the Indemnitee’s conduct was unlawful; or (ii) otherwise adversely affect the rights of the Indemnitee
to indemnification, except as may be provided herein.
11. ADVANCEMENT
OF EXPENSES. Subject to applicable law, all reasonable Expenses actually incurred by, or in the case of retainers, to be incurred
by, the Indemnitee in connection with any Proceeding shall be paid by the Company in advance of the final disposition of such Proceeding,
if so requested by the Indemnitee, within seven days after the receipt by the Company of a statement or statements from the Indemnitee
requesting such advance or advances. The Indemnitee may submit such statements from time to time. The Indemnitee’s entitlement
to such Expenses shall include those incurred, or in the case of retainers, to be incurred, in connection with any Proceeding by
the Indemnitee seeking an adjudication or award in arbitration pursuant to this Agreement. Such statement or statements shall reasonably
evidence the Expenses incurred by, or in the case of retainers, to be incurred by, the Indemnitee in connection therewith and shall
include or be accompanied by a written affirmation by the Indemnitee of the Indemnitee’s good faith belief that the Indemnitee
has met the standard of conduct necessary for indemnification under this Agreement and an undertaking by or on behalf of the Indemnitee
to repay such amount if it is ultimately determined that the Indemnitee is not entitled to be indemnified against such Expenses
by the Company pursuant to this Agreement or otherwise. The form of Written Affirmation is attached as
Exhibit A
hereto.
Each written undertaking to pay amounts advanced must be an unlimited general obligation but need not be secured, and shall be
accepted without reference to financial ability to make repayment.
12. REMEDIES
OF THE INDEMNITEE IN CASES OF DETERMINATION NOT TO INDEMNIFY OR FAILURE TO ADVANCE EXPENSES. In the event that a determination
is made that the Indemnitee is not entitled to indemnification hereunder or if the payment has not been timely made following a
determination of entitlement to indemnification pursuant to Sections 9 and 10 hereof, or if Expenses are not advanced pursuant
to Section 11 hereof, the Indemnitee shall be entitled to seek a final adjudication in an appropriate court of the State of California
or any other court of competent jurisdiction of the Indemnitee’s entitlement to such indemnification or advance. Alternatively,
the Indemnitee may, at the Indemnitee’s option, seek an award in arbitration to be conducted by a single arbitrator chosen
by the Indemnitee and approved by the Company, which approval shall not be unreasonably withheld or delayed. If the Indemnitee
and the Company do not agree upon an arbitrator within 30 days following notice to the Company by the Indemnitee that it seeks
an award in arbitration, the arbitrator will be chosen pursuant to the rules of the American Arbitration Association (the “AAA”).
The arbitration will be conducted pursuant to the rules of the AAA, and an award shall be made within 60 days following the filing
of the demand for arbitration. The arbitration shall be held in San Diego, California. The Company shall not oppose the Indemnitee’s
right to seek any such adjudication or award in arbitration or any other claim. Such judicial proceeding or arbitration shall be
made de novo, and the Indemnitee shall not be prejudiced by reason of a determination (if so made) that the Indemnitee is not entitled
to indemnification. If a determination is made or deemed to have been made pursuant to the terms of Section 9 or Section 10 hereof
that the Indemnitee is entitled to indemnification, the Company shall be bound by such determination and shall be precluded from
asserting that such determination has not been made or that the procedure by which such determination was made is not valid, binding
and enforceable. The Company further agrees to stipulate in any such court or before any such arbitrator that the Company is bound
by all the provisions of this Agreement and is precluded from making any assertions to the contrary. If the court or arbitrator
shall determine that the Indemnitee is entitled to any indemnification hereunder, the Company shall pay all reasonable Expenses
actually incurred by, or in the case of retainers to be incurred by, the Indemnitee in connection with such adjudication or award
in arbitration (including, but not limited to, any appellate Proceedings).
13. NOTIFICATION
AND DEFENSE OF CLAIM. Promptly after receipt by the Indemnitee of notice of the commencement of any Proceeding, the Indemnitee
will, if a claim in respect thereof is to be made against the Company under this Agreement, notify the Company in writing of the
commencement thereof. The omission or delay by the Indemnitee to so notify the Company will not relieve the Company from any liability
that it may have to the Indemnitee under this Agreement or otherwise, except to the extent that the Company may suffer material
prejudice by reason of such failure or delay. Notwithstanding any other provision of this Agreement, with respect to any such Proceeding
as to which the Indemnitee gives notice to the Company of the commencement thereof:
(a) The
Company will be entitled to participate therein at its own expense.
(b) Except
as otherwise provided in this Section 13(b), to the extent that it may wish, the Company, jointly with any other indemnifying party
similarly notified, shall be entitled to assume the defense thereof with counsel reasonably satisfactory to the Indemnitee, which
shall not be unreasonably withheld. After prior written notice from the Company to the Indemnitee of its election to so assume
the defense thereof, the Company shall not be liable to the Indemnitee under this Agreement for any legal or other Expenses subsequently
incurred by the Indemnitee in connection with the defense thereof other than reasonable costs of investigation or as otherwise
provided below. The Indemnitee shall have the right to employ the Indemnitee’s own counsel in such Proceeding, but the fees
and Expenses of such counsel incurred after such notice from the Company of its assumption of the defense thereof shall be at the
expense of the Indemnitee unless (i) the employment of counsel by the Indemnitee has been authorized by the Company; (ii) the Indemnitee
shall have reasonably concluded that there may be a conflict of interest between the Company and the Indemnitee in the conduct
of the defense of such Proceeding, and such determination by the Indemnitee shall be supported by an opinion of counsel, which
opinion shall be reasonably acceptable to the Company; or (iii) the Company shall not in fact have employed counsel to assume the
defense of the Proceeding, in each of which cases the fees and Expenses of counsel shall be at the expense of the Company. The
Company shall not be entitled to assume the defense of any Proceeding brought by or on behalf of the Company or as to which the
Indemnitee shall have reached the conclusion provided for in clause (ii) above.
(c) The
Company shall not be liable to indemnify the Indemnitee under this Agreement for any amounts paid in settlement of any Proceeding
without its prior written consent, which consent shall not be unreasonably withheld. The Company shall not be required to obtain
the consent of the Indemnitee to settle any Proceeding which the Company has undertaken to defend if the Company assumes full and
sole responsibility for such settlement and such settlement grants the Indemnitee a complete and unqualified release in respect
of any potential liability. The Company shall have no obligation to indemnify the Indemnitee under this Agreement with regard to
any judicial award issued in a Proceeding, or any related Expenses of the Indemnitee, if the Company was not given a reasonable
and timely opportunity, at its expense, to participate in the defense of such Proceeding, except to the extent the Company was
not materially prejudiced thereby.
(d) If,
at the time of the receipt of a notice of a claim pursuant to this Section 13, the Company has director and officer liability insurance
in effect, the Company shall give prompt notice of the commencement of the Proceeding for which indemnification is sought to the
insurers in accordance with the procedures set forth in the respective policies.
The Company shall thereafter
take all necessary or desirable action to cause such insurers to pay, on behalf of the Indemnitee, all amounts payable as a result
of such Proceeding in accordance with the terms of the policies.
14. OTHER
RIGHTS TO INDEMNIFICATION. The indemnification and advancement of Expenses provided by this Agreement are cumulative, and not exclusive,
and are in addition to any other rights to which the Indemnitee may now or in the future be entitled under any provision of the
Bylaws or Certificate of the Company, or other governing documents of any direct or indirect wholly-owned subsidiary of the Company,
any vote of the stockholders of the Company or Disinterested Directors, any provision of law or otherwise. Except as required by
applicable law, the Company shall not adopt any amendment to its Bylaws or Certificate the effect of which would be to deny, diminish
or encumber the Indemnitee’s right to indemnification under this Agreement.
15. NO IMPUTATION.
The knowledge or actions, or failure to act, of any director, officer, agent or employee of the Company or the Company itself shall
not be imputed to the Indemnitee for purposes of determining the right to indemnification under this Agreement.
16. DIRECTOR
AND OFFICER LIABILITY INSURANCE. The Company shall, from time to time, make the good faith determination whether it is practicable
for the Company to obtain and maintain a policy or policies of insurance with reputable insurance companies providing the officers
and directors of the Company and any direct or indirect wholly-owned subsidiary of the Company with coverage for losses from wrongful
acts or to ensure the Company’s performance of its indemnification obligations under this Agreement. Among other considerations,
the Company will weigh the costs of obtaining such insurance coverage against the protection afforded by such coverage. Notwithstanding
the foregoing, the Company shall have no obligation to obtain or maintain such insurance if the Company determines in good faith
that such insurance is not necessary or is not reasonably available, if the premium costs for such insurance are disproportionate
to the amount of coverage provided, if the coverage provided by such insurance is limited by exclusions so as to provide an insufficient
benefit or if the Indemnitee is covered by similar insurance maintained by a direct or indirect wholly-owned subsidiary of the
Company. However, the Company’s decision whether or not to adopt and maintain such insurance shall not affect in any way
its obligations to indemnify the Indemnitee under this Agreement or otherwise. In all policies of director and officer liability
insurance, the Indemnitee shall be named as an insured in such a manner as to provide the Indemnitee the same rights and benefits
as are accorded to the most favorably insured of the Company’s directors, if the Indemnitee is a director; or of the Company’s
officers, if the Indemnitee is not a director of the Company but is an officer. The Company agrees that the provisions of this
Agreement shall remain in effect regardless of whether liability or other insurance coverage is at any time obtained or retained
by the Company; except that any payments made to, or on behalf of, the Indemnitee under an insurance policy shall reduce the obligations
of the Company hereunder with respect to the amount of such payment in accordance with Section 3(c) hereof.
17. INTENT.
This Agreement is intended to be broader than any statutory indemnification rights applicable in the State of Colorado and shall
be in addition to and supplemental to any other rights the Indemnitee may have under the Articles, the Bylaws, applicable law or
otherwise. To the extent that a change in applicable law (whether by statute or judicial decision) permits greater indemnification
by agreement than would be afforded currently under the Articles, the Bylaws, applicable law or this Agreement, it is the intent
of the parties that the Indemnitee enjoy by this Agreement the greater benefits so afforded by such change. To the extent there
is any conflict between this Agreement and the Bylaws with respect to any right or obligation of any party hereto, the terms of
this Agreement shall control; provided, however, the foregoing shall not apply to a reduction of any right of the Indemnitee.
18. ATTORNEY’S
FEES AND OTHER EXPENSES TO ENFORCE AGREEMENT. In the event that the Indemnitee is subject to or intervenes in any Proceeding in
which the validity or enforceability of this Agreement is at issue or seeks an adjudication or award in arbitration to enforce
the Indemnitee’s rights under, or to recover damages for breach of, this Agreement the Indemnitee, if he/she prevails in
whole or in part in such action, shall be entitled to recover from the Company and shall be indemnified by the Company against
any actual expenses for attorneys’ fees and disbursements reasonably incurred by the Indemnitee.
19. SUBROGATION.
In the event of payment under this Agreement, the Company shall be subrogated to the extent of such payment to all of the rights
of recovery of the Indemnitee, who shall execute all documents required and shall do all acts that may be necessary to secure such
rights and to enable the Company effectively to bring suit to enforce such rights.
20. EFFECTIVE
DATE. The provisions of this Agreement shall cover claims or Proceedings whether now pending or hereafter commenced and shall be
retroactive to cover acts or omissions or alleged acts or omissions which heretofore have taken place. The Company shall be liable
under this Agreement, pursuant to Sections 4 and 5 hereof, for all acts of the Indemnitee while serving as a director and/or officer,
notwithstanding the termination of the Indemnitee’s service, if such act was performed or omitted to be performed during
the term of the Indemnitee’s service to the Company.
21. GROSS-UP
FOR TAXES. In the event any payment of indemnity to the Indemnitee under this Agreement shall be deemed to be income for federal,
state or local income, excise or other tax purposes, then the Company shall pay to the Indemnitee, in addition to any amount for
indemnification provided for herein, an amount equal to the amount of taxes for which the Indemnitee shall become liable (with
offset for any deductions which the Indemnitee may have that are related to the indemnification amount but without offset for any
other deductions which the Indemnitee may have that are not related to the indemnification amount), promptly upon receipt from
the Indemnitee of a request for reimbursement of such taxes together with a copy of the Indemnitee’s tax return, which shall
be maintained in strictest confidence by the Company. Any such tax gross-up payment shall be paid to the Indemnitee within 60 days
following receipt by the Company of the Indemnitee’s request and tax return, which shall be received by the Company no later
than the end of the calendar year next following the calendar year in which the Indemnitee remits the related taxes; provided,
however, that in the event the Indemnitee is audited by the Internal Revenue Service, the deadline for receipt by the Company of
the Indemnitee’s request and tax return shall be extended to the end of three calendar years (plus the time length of any
audit extensions requested by the Internal Revenue Service) next following the calendar year in which the Indemnitee remits the
related taxes.
22. DURATION
OF AGREEMENT. This Agreement shall continue until and terminate upon the later of: (a) ten years after the Indemnitee has ceased
to occupy any of the positions or have any relationships described in Sections 4 and 5 of this Agreement; (b) the final termination
of all Proceedings to which the Indemnitee may be subject by reason of the fact that he/she is or was a director, officer, employee,
agent or fiduciary of the Company or any of the Company’s direct or indirect wholly-owned subsidiaries, or is or was serving
at the request of the Company or any of the Company’s direct or indirect wholly-owned subsidiaries as a director, officer,
employee, agent or fiduciary of any other entity, including, but not limited to, another corporation, partnership, limited liability
company, employee benefit plan, joint venture, trust or other enterprise, or by reason of any act or omission by the Indemnitee
in any such capacity; or (c) the expiration of all statutes of limitation applicable to possible Proceedings to which the Indemnitee
may be subject arising out of the Indemnitee’s positions or relationships described in Sections 4 and 5 of this Agreement.
The indemnification provided under this Agreement shall continue as to the Indemnitee even though he/she may have ceased to be
a director or officer of the Company or any of the Company’s direct or indirect wholly-owned subsidiaries. This Agreement
shall be binding upon the Company and its successors and assigns, including, without limitation, any corporation or other entity
which may have acquired all or substantially all of the Company’s assets or business or into which the Company may be consolidated
or merged, and shall inure to the benefit of the Indemnitee and his/her spouse, successors, assigns, heirs, devisees, executors,
administrators or other legal representations. The Company shall require any successor or assignee (whether direct or indirect,
by purchase, merger, consolidation or otherwise) to all or substantially all of the business and/or assets of the Company, by written
agreement in form and substance reasonably satisfactory to the Company, expressly to assume and agree to perform this Agreement
in the same manner and to the same extent that the Company would be required to perform if no such succession or assignment had
taken place.
23. DISCLOSURE
OF PAYMENTS. Except as required by any federal securities laws or other federal or state law, neither party hereto shall disclose
any payments under this Agreement unless prior approval of the other party is obtained.
24. CONTRIBUTION.
To the fullest extent permissible under applicable law, if the indemnification provided for in this Agreement is unavailable to
the Indemnitee for any reason whatsoever, the Company, in lieu of indemnifying the Indemnitee, shall contribute to the amount incurred
by the Indemnitee, whether for judgments, fines, penalties, excise taxes, amounts paid or to be paid in settlement, and/or for
Expenses, in connection with any claim relating a Proceeding under this Agreement, in such proportion as is deemed fair and reasonable
in light of all of the circumstances of such Proceeding in order to reflect (i) the relative benefits received by the Company and
the Indemnitee as a result of the event(s) and/or transaction(s) giving rise to such Proceeding; and/or (ii) the relative fault
of the Company (and its directors, officers, employees, and agents) and the Indemnitee in connection with such event(s) and/or
transaction(s). If such contribution constitutes deferred compensation subject to Section 409A of the Internal Revenue Code of
1986, as amended, and the Treasury Regulations and other guidance thereunder (“Section 409A”), as determined by the
Company, such contribution shall be paid to the Indemnitee (or the Indemnitee’s estate in the event of death) upon the earlier
of (a) the Indemnitee’s “separation from service” (as defined by the Company in accordance with Section 409A);
(b) the Indemnitee’s death; (c) the Indemnitee’s becoming “disabled” (as defined in Section 409A); (d)
the occurrence of an “unforeseeable emergency” (as defined in Section 409A); or (e) a change in the ownership or effective
control of the Company or in the ownership of a substantial portion of the assets of the Company (as defined in Section 409A).
25. IRC
SECTION 409A. This Agreement is intended to comply with Section 409A (as defined in Section 23 of this Agreement) and any ambiguous
provisions will be construed in a manner that is compliant with the application of Section 409A. If (a) the Indemnitee is a “specified
employee” (as such term is defined by the Company in accordance with Section 409A) and (b) any payment payable upon “separation
from service” (as such term is defined by the Company in accordance with Section 409A) under this Agreement is subject to
Section 409A and is required to be delayed under Section 409A because the Indemnitee is a specified employee, that payment shall
be payable on the earlier of (i) the first business day that is six months after the Indemnitee’s “separation from
service”; (ii) the date of the Indemnitee’s death; or (iii) the date that otherwise complies with the requirements
of Section 409A. This Section 25 shall be applied by accumulating all payments that otherwise would have been paid within six months
of the Indemnitee’s separation from service and paying such accumulated amounts on the earliest business day which complies
with the requirements of Section 409A. For purposes of Section 409A, each payment or amount due under this Agreement shall be considered
a separate payment, and the Indemnitee’s entitlement to a series of payments under this Agreement is to be treated as an
entitlement to a series of separate payments.
26. SEVERABILITY.
If any provision or provisions of this Agreement shall be held invalid, illegal or unenforceable for any reason whatsoever, (a)
the validity, legality and enforceability of the remaining provisions of this Agreement (including, but not limited to, all portions
of any Sections of this Agreement containing any such provision held to be invalid, illegal or unenforceable) shall not in any
way be affected or impaired thereby and (b) to the fullest extent possible, the provisions of this Agreement (including, but not
limited to, all portions of any paragraph of this Agreement containing any such provision held to be invalid, illegal or unenforceable,
that are not themselves invalid, illegal or unenforceable) shall be construed so as to give effect to the intent manifested by
the provision held invalid, illegal or unenforceable.
27. COUNTERPARTS.
This Agreement may be executed by one or more counterparts, each of which shall for all purposes be deemed to be an original but
all of which together shall constitute one and the same agreement. Only one such counterpart signed by the party against whom enforceability
is sought shall be required to be produced to evidence the existence of this Agreement.
28. CAPTIONS.
The captions and headings used in this Agreement are inserted for convenience only and shall not be deemed to constitute part of
this Agreement or to affect the construction thereof.
29. ENTIRE
AGREEMENT, MODIFICATION AND WAIVER. This Agreement, along with any employment agreement addressing the subject matter hereof and
the Articles and the Bylaws, interpreted as described in Section 17 hereof, constitutes the entire agreement and understanding
of the parties hereto regarding the subject matter hereof, and no supplement, modification or amendment of this Agreement shall
be binding unless executed in writing by all parties hereto. No waiver of any of the provisions of this Agreement shall be deemed
or shall constitute a waiver of any other provisions hereof (whether or not similar) nor shall such waiver constitute a continuing
waiver. No supplement, modification or amendment to this Agreement shall limit or restrict any right of the Indemnitee under this
Agreement in respect of any act or omission of the Indemnitee prior to the effective date of such supplement, modification or amendment
unless expressly provided therein.
30. NOTICES.
All notices, requests, demands or other communications hereunder shall be in writing and shall be deemed to have been duly given
if (a) delivered by hand with receipt acknowledged by the party to whom said notice or other communication shall have been directed,
(b) mailed by certified or registered mail, return receipt requested with postage prepaid, on the date shown on the return receipt
or (c) delivered by facsimile transmission on the date shown on the facsimile machine report:
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(a)
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If to the Indemnitee to:
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Facsimile:
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(b)
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If to the Company, to:
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Reven
Housing REIT, Inc.
7911 Herschel Avenue,
Suite 201
La Jolla, CA
92037
Attn: Board of Directors
or to such other address as may
be furnished to the Indemnitee by the Company or to the Company by the Indemnitee, as the case may be.
31. GOVERNING
LAW. The parties hereto agree that this Agreement shall be governed by, and construed and enforced in accordance with, the laws
of the State of Colorado, applied without giving effect to any conflicts of law principles.
[
Signature Page Follows
]
IN WITNESS WHEREOF,
the parties hereto have executed this Agreement on the day and year first above written.
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THE COMPANY
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Reven Housing REIT, Inc.,
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a Colorado corporation
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By:
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Chad M. Carpenter, Chief Executive Officer
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INDEMNITEE
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EXHIBIT A
[DATE]
The Board of
Directors of
Reven Housing REIT, Inc.
7911 Herschel Avenue, Suite 201
La Jolla, CA 92037
Ladies and Gentlemen:
Pursuant
to Section 11 (“Advancement of Expenses”) of that certain Indemnification Agreement, dated ________________, 2013,
by and between
Reven Housing REIT, Inc
., a Colorado corporation (the “Company”),
and me (the “Indemnification Agreement”), I request that the Company pay in advance the reasonable expenses incurred
by me in the defense of a Proceeding (as such term is defined in the Indemnification Agreement). I also request that the Company
pay in advance the reasonable Expenses incurred by me in the defense of any other Proceeding, as such terms are defined in the
Indemnification Agreement, arising from substantially the same matters that are in the original Proceeding in which I am named
as a defendant by reason of the fact that I am or was an officer or member of the Board of Directors of the Company or its affiliates.
In relation to the
request made above, I believe, in good faith, that I have met the standard of conduct necessary for indemnification under the Indemnification
Agreement, and I hereby undertake to repay to the Company, immediately and upon demand, any expenses (including attorneys’
fees) paid by it to me or on my behalf in advance of the final disposition of the above-described Proceedings, if it shall ultimately
be determined that I am not entitled to be indemnified by the Company pursuant to the Indemnification Agreement or otherwise.
Sincerely,
Printed Name: