Forward Industries, Inc.
2011 Long Term Incentive Plan

ARTICLE 1

Establishment, Purpose, and Duration

1.1                 Purpose.Establishment.  Forward Industries, Inc., New York corporation (hereinafter referred to as the “Company”), establishes an incentive compensation plan to be known as the 2011 Long Term Incentive Plan (hereinafter referred to as the “2011 Plan”), as set forth in this document.

The 2011 Plan permits the grant of Nonqualified Stock Options, Incentive Stock Options, Stock Appreciation Rights, Restricted Stock, Restricted Stock Units, Performance Shares and Performance Units.

The Plan shall become effective upon shareholder approval (the “Effective Date”) and shall remain in effect as provided in Section 1.3 hereof.

1.2                 Purpose of the 2011 Plan.  The purpose of the Forward Industries, Inc. 2007 Equity Incentive2011 Plan (the “Plan”) is to promote and further the growth and profitability of the Company by offering incentives to selected key personnel and directors who have the capacity for contributing in substantial measure toward the growth and profitabilityinterests of the Company and its shareholders by strengthening the Company’s ability to attract, motivate, and retain Employees, Directors, consultants and other independent contractors, upon whose judgment, initiative, and efforts the financial success and growth of the business of the Company largely depend, and to provide an additional incentive for such key individuals by making discretionary grantsthrough stock ownership and other rights that promote and recognize the financial success and growth of Stock Options and/or Restricted Stock.  The Plan has been adoptedthe Company and approved bycreate value for shareholders.

1.3                 Duration of the Board of Directors and shall become effective2011 Plan.  Unless sooner terminated as provided herein, the 2011 Plan shall terminate ten years from the Effective Date.  After the 2011 Plan is terminated, no Awards may be granted but Awards previously granted shall remain outstanding in Section 16 hereof.

accordance with their applicable terms and conditions and the 2011 Plan’s terms and conditions.

ARTICLE 2

Definitions

     2. Definitions. For purposes ofWhenever used in the 2011 Plan, the following terms shall have the indicated meanings unless otherwise expressly provided or unless the context otherwise requires:

     (a) “Affiliate” shall mean an affiliate withinset forth below, and when the meaning is intended, the initial letter of the word shall be capitalized.

2.1                 “Affiliate” shall have the meaning ascribed to such term in Rule 12b-2 promulgated under the General Rules and Regulations of the Exchange Act.

2.2                 “Annual Award Limit” or “Annual Award Limits” have the meaning set forth in Section 4.3.

2.3                 “Award” means, individually or collectively, a grant under this Plan of Nonqualified Stock Options, Incentive Stock Options, Stock Appreciation Rights, Restricted Stock, Restricted Stock Units, Performance Shares or Performance Units, in each case subject to the terms of this Plan. 

2.4                 “Beneficial Owner” or “Beneficial Ownership” shall have the meaning ascribed to such term in Rule 13d-3 promulgated under the General Rules and Regulations under the Exchange Act, and shall include a Subsidiary.

     (b) “Award” means an awardAct.

2.5                 “Board” or “Board of Options or Restricted Stock pursuant to the provisions of the Plan.

     (c) “Board”Directors” means the Board of Directors of the Company.

     (d) “Cause” shall mean, unless otherwise determined by the Committee: (1)

2.6                 “Change in the case where there is no employment or consulting agreement between the Grantee and the Company or any Subsidiary at the time of grant or where such an agreement exists but does not define “cause” (or words of like import), the Grantee’s (i) dishonesty or fraud, (ii) insubordination, willful misconduct, or refusal to perform services, (iii) unsatisfactory performance of services or material breach of any written agreement between the Grantee and the Company or any Subsidiary, (iv) disclosure to anyone outside the Company or its Affiliates, or useControl” means a Change in other than the Company’s or its Affiliates’ business, without authorization from the Company, of any confidential information or material relating to the business of the Company or its Affiliates, acquired by the Grantee either during or after employment or other service with the Company or its Affiliates, or (v) attempt directly or indirectly to induce any employee of the Company or its Affiliates to be employed or perform services elsewhere or attempt directly or indirectly to solicit the trade or business of any current or prospective customer, supplier or partner of the Company or its Affiliates, or (2)Control as defined in the case where there is an employment or consulting agreement between the Grantee and the Company or any Subsidiary at the time of grant which defines “cause” (or words of like import), the meaning ascribed to such term under such agreement.

     (e) “Certificate” means either a physical paper stock certificate or electronic book entry or other electronic form of account entry evidencing the ownership of Shares issued upon exercise of an Option or grant of Restricted Stock as a result of an Award.  Such Certificates may bear a restrictive legend, as set forth herein.

    (f) “Code”Article 14.

2.7                 “Code” means the Internal Revenue Code of 1986, as amended from time to time, and any regulations promulgated thereunder.time.

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 (g) “Committee”

2.8                 “Committee” means a committeethe Compensation Committee of the Board, or any other committee designated by the Board to administer this Plan.  The members of Directors, whichthe Committee shall be appointed from time to time by and shall serve at the discretion of the Board.  The Committee shall consist of two or more persons, each of whom, unless otherwise determined by the Board ofdirectors who are Nonemployee Directors and “Outside Directors” (as such term is (1) an “outside director” within the meaning ofdefined in Section 162(m) of the Code, (2) a “non-employee director” within the meaning of Rule 16b-3 under the Exchange Act, and (3) an “independent director” as defined in The Nasdaq Stock Market Rule 4200.   Unless otherwise determined by the Board of Directors from time to time, the Committee shall mean the Compensation Committee of the Board of Directors or such other committee of the Board as may be appointed by the Board to administer the Plan in accordance with Section 3 hereof, provided in each case that its membership satisfies the foregoing qualifications.

     (h) “Company”Code).

2.9                 “Company” means Forward Industries, Inc., a New York corporation.corporation, and any successor thereto as provided in Article 17 herein.

2.10              “Covered Employee” means a Participant who is a “covered employee,” as defined in Section 162(m) of the Code and the regulations promulgated under Section 162(m) of the Code, or any successor statute.

2.11              “Director” means a member of the Board of Directors of the Company and/or any of its Affiliates and/or Subsidiaries.

2.12              “Effective Date” has the meaning set forth in Section 1.1.

2.13              “Employee” means any employee of the Company, its Affiliates and/or Subsidiaries.

2.14              “Exchange Act” means the Securities Exchange Act of 1934, as amended from time to time, or any successor act thereto.

2.15              “Evidence of Award” means an agreement, certificate, resolution or other type or form of writing or other evidence approved by the Committee which sets forth the terms and conditions of an Award.  An Evidence of Award may be in any electronic medium, may be limited to a notation on the books and records of the Company and, with the approval of the Committee, need not be signed by a representative of the Company or a Participant.

2.16              “Fair Market Value” or “FMV” means the last sales price reported for the Shares on the applicable date as reported on the principal national securities exchange in the United States on which it is then traded or The NASDAQ Stock Market (if the Shares are so listed), or, if not so listed, the mean between the closing bid and asked prices of publicly traded Shares in the over-the-counter market, or, if such bid and asked prices shall not be available, as reported by any nationally recognized quotation service selected by the Company, or as determined by the Committee in a manner consistent with the provisions of the Code. If, however, the required accounting standards used to account for equity Awards granted to Participants are substantially modified subsequent to the Effective Date of the 2011 Plan such that fair value accounting for such Awards becomes required, the Committee shall have the ability to determine an Award’s FMV based on the relevant facts and circumstances.

2.17              “Full Value Award” means an Award other than in the form of an Option or SAR, and which is settled by the issuance of Shares.

2.18              “Freestanding SAR” means an SAR that is granted independently of any Options, as described in Article 7.

2.19              “Grant Price” means the price established at the time of grant of a SAR pursuant to Article 7, used to determine whether there is any payment due upon exercise of the SAR.

2.20              “Incentive Stock Option” means an Option that is intended to qualify as an “incentive stock option” under Section 422 of the Code or any successor provision.

2.21              “Insider” shall mean an individual who is, on the relevant date, an officer, Director, or more than ten percent (10%) Beneficial Owner of any class of the Company’s equity securities that is registered pursuant to Section 12 of the Exchange Act, as determined by the Board in accordance with Section 16 of the Exchange Act.

2.22              “Nonemployee Director” has the same meaning set forth in Rule 16b-3 promulgated under the Exchange Act, or any successor definition adopted by the United States Securities and Exchange Commission.

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 (i) “Corporate Change in Control”

2.23              “Nonqualified Stock Option” means an Option that is not intended to meet the requirements of Section 422 of the Code, or that otherwise does not meet such requirements.

2.24              “Operating Cash Flow” means cash flow from operating activities.

2.25              “Option” means the firstright to occurpurchase Shares granted to a Participant in accordance with Article 6.  Options granted under this Plan may be Nonqualified Stock Options, Incentive Stock Option or a combination thereof.

2.26              “Option Price” means the price at which a Share may be purchased by a Participant pursuant to an Option.

2.27              “Participant” means any eligible person as set forth in Article 5 to whom an Award is granted.

2.28              “Performance-Based Compensation” means compensation under an Award that satisfies the requirements of Section 162(m) of the following events:  

        (i) any Person Code for deductibility of remuneration paid to Covered Employees.

2.29              “Performance Measures” means measures as described in Article 10 on which the performance goals are based and which are approved by the Company’s shareholders pursuant to this Plan in order to qualify Awards as Performance-Based Compensation.

2.30              “Performance Period” means the period of time during which the performance goals must be met in order to determine the degree of payout and/or group  (asvesting with respect to an Award.

2.31              “Performance Share” means an Award granted to a Participant, as described in Article 9.

2.32              “Performance Unit” means an Award granted to a Participant, as described in Article 9.

2.33              “Period of Restriction” means the period when Restricted Stock or Restricted Stock Units are subject to a “substantial risk of forfeiture” within the meaning of Section 83 of the Code (based on the passage of time, the achievement of performance goals, or upon the occurrence of other events as determined by the Committee, in its discretion), as provided in Article 8.

2.34              “Person” shall have the meaning ascribed to such terms are definedterm in Section 3(a)(9) of the Exchange Act and regulations thereunder) is or becomes the beneficial owner (asused in Sections 13(d) and 14(d) thereof, including a “group” as defined in Section 13(d) thereof.

2.35              “Plan” means the Exchange ActForward Industries, Inc. 2011 Long Term Incentive Plan.

2.36              “Plan Year” means the Company’s fiscal year that begins October 1 and ends September 30, or regulations thereunder)such other period if the Company shall change its fiscal year.

2.37              “Restricted Stock” means Shares granted or sold to a Participant pursuant to Article 8 as to which the Period of Restriction has not lapsed.

2.38              “Restricted Stock Unit” means a unit granted or sold to a Participant pursuant to Article 8 as to which the Period of Restriction has not lapsed.

2.39              “Section 409A Rules” means the provisions of Section 409A of the Code and Treasury Regulations and other Internal Revenue Service guidance promulgated thereunder.

2.40              “Share” means a share of common stock of the Company, $.01 par value per share.

2.41              “Stock Appreciation Right” or “SAR” means an Award, designated as a SAR and granted pursuant to the terms of Article 7 herein.

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2.42              “Subsidiary” means a corporation, company or other entity (i) more than 50 percent (50%) of whose outstanding shares or securities (representing the right to vote for the election of directors or other managing authority) are, or (ii) which does not have outstanding shares or securities (as may be the case in a partnership, joint venture or unincorporated association), but more than 50 percent (50%) of whose ownership interest representing the right generally to make decisions for such other entity is, now or hereafter, owned or controlled, directly or indirectly, by the Company, except that for purposes of securitiesdetermining whether any person may be a Participant for purposes of any grant of Incentive Stock Options, “Subsidiary” means any corporation in which at the time the Company owns or controls, directly or indirectly, more than 50 percent (50%) of the Company (not including in the securities beneficially ownedtotal combined voting power represented by all classes of stock issued by such Personcorporation.

2.43              “Ten Percent Shareholder” means a person who owns, or group any securities acquired directly fromwho is deemed to own under Section 424(d) of the Company or its Affiliates)  representing 50% orCode, stock possessing more than ten percent(10%) of the total combined voting power of the Company’s then outstanding securities, excludingCompany or any PersonSubsidiary.

ARTICLE 3

Administration

3.1                 General.  The Committee shall be responsible for administering the 2011 Plan, subject to this Article 3 and the other provisions of the 2011 Plan.  The act or group who becomesdetermination of a majority of the Committee shall be the act or determination of the Committee and any decision reduced to writing and signed by all of the members of the Committee shall be fully effective as if it had been made by a majority at a meeting duly held.  The Committee may employ attorneys, consultants, accountants, agents, and other persons, any of whom may be an Employee, and the Committee, the Company, and its officers and Directors shall be entitled to rely upon the advice, opinions, or valuations of any such a beneficial ownerpersons.  All actions taken and all interpretations and determinations made by the Committee shall be final and binding upon the Participants, the Company, and all other interested persons.

3.2                 Authority of the Committee.  The Committee shall have full and exclusive discretionary power to interpret the terms and the intent of the 2011 Plan and any Evidence of Award or other agreement or document ancillary to or in connection with the 2011 Plan, to determine eligibility for Awards and to adopt such rules, regulations, forms, instruments, and guidelines for administering the 2011 Plan as the Committee may deem necessary or proper.  Such authority shall include, but not be limited to, selecting Award recipients, establishing all Award terms and conditions, including the terms and conditions set forth in an Evidence of Award, and, subject to Article 15, adopting modifications and amendments to the 2011 Plan or any Evidence of Award, including without limitation, any that are necessary to comply with the laws of the countries and other jurisdictions in which the Company, its Affiliates, and/or its Subsidiaries operate.  In the event that for any reason the Committee is unable to act or if the Committee at the time of any grant, Award or other acquisition under the 2011 Plan does not consist of two or more Nonemployee Directors, or if there shall be no such Committee, then the 2011 Plan shall be administered by the Board, and references herein to the Committee (except in the proviso to this sentence) shall be deemed to be references to the Board.

ARTICLE 4

Shares Subject to the 2011 Plan and Maximum Awards

4.1                 Number of Shares Available for Awards.

(a)                 Subject to adjustment as provided in Section 4.4 herein, the maximum number of Shares available for issuance to Participants under the 2011 Plan (the “Share Authorization”) shall be eight hundred fifty thousand (850,000) Shares, all of which may be Incentive Stock Options;

(b)                 Of the Shares reserved for issuance under Section 4.1(a) of the 2011 Plan, no more than four hundred thousand (400,000) of the reserved Shares may be issued pursuant to Full Value Awards.

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(c)                 Subject to the limit set forth in Section 4.1(a) on the number of Shares that may be issued in the aggregate under the 2011 Plan, the maximum number of Shares that may be issued to any one Participant in a Plan Year is three hundred thousand (300,000).

4.2                 Share Usage.  Shares covered by an Award shall only be counted as used to the extent they are actually issued.  Any Shares related to Awards which terminate by expiration, forfeiture, cancellation, or otherwise without the issuance of such Shares, are settled in cash in lieu of Shares, or are exchanged with the Committee’s permission, prior to the issuance of Shares, for Awards not involving Shares, shall be available again for grant under the 2011 Plan.  Moreover, if the Option Price of any Option granted under the 2011 Plan or the tax withholding requirements with respect to any Award granted under the 2011 Plan are satisfied by tendering Shares to the Company (by either actual delivery or by attestation), or if an SAR is exercised, only the number of Shares issued, net of the Shares tendered, if any, will be deemed delivered for purposes of determining the maximum number of Shares available for delivery under the 2011 Plan and any Shares so tendered shall again be available for issuance under the 2011 Plan. The maximum number of Shares available for issuance under the 2011 Plan shall not be reduced to reflect any dividends or dividend equivalents that are reinvested into additional Shares or credited as additional Restricted Stock, Restricted Stock Units, Performance Shares, or Stock-Based Awards.  The Shares available for issuance under the 2011 Plan may be authorized and unissued Shares, treasury Shares or a combination thereof.

4.3                 Annual Award Limits.  Subject to the terms of Section 4.1 hereof and unless and until the Committee determines that an Award to a Covered Employee shall not be designed to qualify as Performance-Based Compensation, the following limits (each an “Annual Award Limit,” and, collectively, “Annual Award Limits”) shall apply to grants of such Awards under the 2011 Plan:

(a)                 Options:  The maximum aggregate number of Shares subject to Options granted in any one Plan Year to any one Participant shall be three hundred thousand (300,000).

(b)                 Incentive Stock Options:  The maximum aggregate number of Shares subject to Incentive Stock Options granted under the 2011 Plan to any one Participant shall be three hundred thousand (300,000).

(c)                 SARs:  The maximum number of Shares subject to Stock Appreciation Rights granted in any one Plan Year to any one Participant shall be three hundred thousand (300,000).

(d)                 Restricted Stock or Restricted Stock Units:  The maximum aggregate grant with respect to Awards of Restricted Stock or Restricted Stock Units in any one Plan Year to any one Participant shall be three hundred thousand (300,000).

(e)                 Performance Units or Performance Shares:  The maximum aggregate Award of Performance Units or Performance Shares that any one Participant may receive in any one Plan Year shall be three hundred thousand (300,000) Shares, or equal to the value of three hundred thousand (300,000) Shares determined as of the date of vesting or payout, as applicable.

4.4                 Adjustments in Authorized Shares.  In the event of any corporate event or transaction which is(including, but not limited to, a change in the shares of the Company or the capitalization of the Company) such as a merger, consolidation, reorganization, recapitalization, separation, stock dividend, stock split, reverse stock split, split up, spin-off, or consolidation;other distribution of stock or property of the Company, combination of Shares, exchange of Shares, dividend in kind, or other like change in capital structure or distribution (other than normal cash dividends) to shareholders of the Company, or any similar corporate event or transaction, the Committee, in its sole discretion, in order to prevent dilution or enlargement of Participants’ rights under the 2011 Plan, shall substitute or adjust, as applicable, the number and kind of Shares that may be issued under the 2011 Plan or under particular forms of Awards, the number and kind of Shares subject to outstanding Awards, the Option Price or Grant Price applicable to outstanding Awards, the Annual Award Limits, and other value determinations applicable to outstanding Awards.

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        (ii) the election to the Board, without the recommendation or approval of a majority of the incumbent Board (as of the date on which the Plan becomes effective), of directors constituting a majority of the number of directors of the Company then in office,Except as otherwise provided however, that directors whose election or appointment following such effective date is recommended or approved by a majority of the members of the incumbent Board shall be deemed to be members of the incumbent Board for purposes hereof, provided further that directors whose initial assumption of office is in connection with an actual or threatened election contest relating to the election of directors of the Company will not be considered as members of the incumbent Board for purposes of this paragraph (ii); or

        (iii) the occurrence of any other event that the incumbent Board of Directors in its sole reasonable discretion determines should be considered a Corporate Change in Control.

     (j) “Covered Employee” means an employee within the meaning set forth in Section 162(m) of the Code.

     (k) “Director” means an individual serving onCode, the Board as a resultCommittee, in its sole discretion, may also make appropriate adjustments in the terms of any Awards under the 2011 Plan to reflect or related to such changes or distributions and to modify any other terms of outstanding Awards, including modifications of performance goals and changes in the length of Performance Periods.  The determination of the electionCommittee as to the foregoing adjustments, if any, shall be conclusive and binding on Participants under the 2011 Plan.

Subject to the provisions of Article 15, without affecting the number of Shares reserved or available hereunder, the Committee may authorize the issuance or assumption of benefits under this Plan in connection with any merger, consolidation, acquisition of property or stock, or reorganization upon such terms and conditions as it may deem appropriate, subject to compliance with the rules under Section 422 of the Code and the Section 409A Rules, where applicable.

ARTICLE 5

Eligibility and Participation

5.1                 Eligibility.  Individuals eligible to participate in this Plan include all Employees, Directors, consultants and other independent contractors.

5.2                 Actual Participation.  Subject to the provisions of the 2011 Plan, the Committee may, from time to time, select from all eligible individuals, those to whom Awards shall be granted and shall determine, in its sole discretion, the nature of, any and all terms permissible by shareholderslaw, and the amount of each Award.  In making this determination, the Committee may consider any factors it deems relevant, including without limitation, the office or appointmentposition held by incumbent directors.

     (l) “Employee” means any individual employed bya Participant or the Participant’s relationship to the Company, the Participant’s degree of responsibility for and contribution to the growth and success of the Company or any Subsidiary.

     (m) “Exchange Act” meansSubsidiary or Affiliate, the United States Securities Exchange ActParticipant’s length of 1934.

     (n) “Fair Market Value” as of any dateservice, promotions and potential.

5.3                 Ten Percent Shareholder.  A Ten Percent Shareholder shall mean, unless otherwise required by the Code or other applicable law, the closing sale price per Share as published by the principal national securities exchange on which the Shares are traded on such date or, if there is no sale of Shares on such date, the average of the bid and asked prices on such exchange at the close of trading on such date, or if the Shares are not listed on a national securities exchange on such date, the closing price or, if none, the average of the bid and asked prices in the over-the-counter market at the close of trading on such date, or if the Shares are not traded on a national securities exchange or the over-the-counter market, the value of one Share on such date as determined in good-faith by the Committee.

     (o) “Grantee” means an Employee, Director, or Officer to whom an Award has beenbe granted hereunder.

     (p) “Incentive Stock Option” shall mean an Option that is intended to be an “incentive stock option” within the meaning of Section 422 of the Code.

     (q) “Non-Qualified Stock Option” shall mean an Option that is not an Incentive Stock Option.

     (r) “Option” shall mean an Incentive Stock Option or a Non-Qualified Stockunless the exercise price of such option is at least one hundred ten percent(110%) of the Fair Market Value of the Shares on the date of grant and the Option granted pursuantis not exercisable after the expiration of five(5) years from the date of grant.

ARTICLE 6

Options

6.1                 Grant of Options.  Subject to the Plan.

     (s) “Option Agreement” meansterms and provisions of the agreement pursuant2011 Plan, Options may be granted to which an Incentive Stock Option or Non-Qualified Stock Option is grantedParticipants in accordance with Section 7, a form of which, subjectsuch number, and upon such terms, and at any time and from time to completion by appropriate insertions, modifications, restrictions, and limitations,time as shall be determined by the Committee, in its sole discretion, provideddiscretion.

6.2                 Evidence of Award.  Each Option grant shall be evidenced by an Evidence of Award that shall specify the Option Price, the maximum duration of the Option, the number of Shares to which the Option pertains, the conditions upon which an Option shall become vested and exercisable, and such insertions, modifications, restrictions, and limitationsother provisions as the Committee shall determine which are not inconsistent with the terms of the 2011 Plan.

6.3                 Option Price.  The Option Price for each grant of an Option under this Plan is attached hereto as Exhibit A.

     (t) “Performance Goals” means, and shall be based on, one or more of the following business criteria: revenue growth; net income; earnings per share; earnings before any one or more of the following items: interest, taxes, depreciation or amortization; operating or pre-tax income; cash flow; return on equity; return on invested capital; return on assets; cost reductions or savings; funds from operations; appreciation in the market value of Shares; product market share or any other quantitative or qualitative measure deemed appropriate by the  Committee.  Where applicable, Performance Goals may be expressed in terms of attaining a specified level of the particular criteria or the attainment of a percentage increase or decrease in the particular criteria, as determined by the Committee. The Performance Goals may be subject to a threshold level of performance below which no vesting will occur, levels of performance at which specified vesting will occur, and a maximum level of performance above which full vesting will occur. Each of the Performance Goals shall be determined, where applicable, in accordance with generally accepted accounting principles and shall be subject to certification by the Committee; provided that the Committee shall have the authority to make equitable adjustments to the Performance Goals in recognition of unusual or non-recurring events affecting the Company or any Subsidiary or the financial statements of the Company or any Subsidiary, in response to changes in applicable laws or regulations, or to account for items of gain, loss, or expense determined to be extraordinary or unusual in nature or infrequent in occurrence or related to the disposal of a segment of a business or related to a change in accounting principles.

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     (u) “Permanent Disability” means disability of the Grantee that prevents him or her from performing the customary duties of his or her employment or other service for the Company or its Affiliates by reason of physical or mental incapacity that is expected to be of indefinite duration or result in death, or as defined in an applicable agreement entered into by the Grantee and the Company or its Affiliate, or as determined by the Committee in accordance with uniform and non discriminatory standards adopted by the Committee, in the absence of which the provisions of Section 22(e)(3) of the Code shall apply.

     (v) “Restricted Stock” means the Shares awarded upon the terms and conditions and subject to the restrictions set forth in Section 6 and in the Grantee’s Restricted Stock Agreement.

     (w) “Restricted Stock Agreement” means the agreement pursuant to which Restricted Stock is issued in accordance with Section 6, a form of which, subject to completion by appropriate insertions, modifications, restrictions, and limitations, as determined by the Committee in its sole discretion, provided that such insertions, modifications, restrictions, and limitations are not inconsistent with the terms of the Plan, is attached hereto as Exhibit B.

     (x) “Shares” means shares of Common Stock, par value $.01 per share, of the Company.

     (y) “Subsidiary” means any corporation or business trust the majority of the outstanding voting stock of which is owned, directly or indirectly, by the Company.

     (z) “Termination of Employment” means the time when the employee-employer relationship between the Employee and the Company or a Subsidiary is terminated for any reason, including, but not limited to, a termination by resignation (including retirement), discharge, death, Permanent Disability or the disaffiliation of a Subsidiary, but excluding any such termination where there is a immediate reemployment (other than part time employment or consulting) by either the Company or a Subsidiary.

     (aa) “Transfer Restrictions” means the restrictions on transfer on Restricted Stock set forth in Section 6 hereof.

     3. Administration of the Plan.  (a) Committee. The Plan shall be administered by the Committee.  The Committee shall have the authority in its sole and absolute discretion, subject to and not inconsistent with the express provisions of the Plan, to administer the Plan and to exercise all the powers and authorities either specifically granted to it under the Plan or necessary or advisable in the administration of the Plan, including, without limitation, the authority to grant Awards; to determine the persons to whom and the time or times at which Awards shall be granted; to determine the number of Awards to be granted, the number of Shares to which an Award may relate and the terms, conditions, restrictions, limitations (including without limitation the exercise and vesting conditions relating thereto, as applicable), and (as applicable) Performance Goals relating to any Award, whether or not specifically set forth in the Plan; to determine whether, to what extent, and under what circumstances an Award may be cancelled, forfeited, exchanged, or surrendered; to make adjustments in any applicable Performance Goals in recognition of unusual or nonrecurring events affecting the Company or the financial statements of the Company, or in response to changes in applicable laws, regulations, or accounting principles; to construe and interpret the Plan and any Award; to prescribe, amend, and rescind rules and regulations relating to the Plan; to determine and interpret the terms and provisions of Option Agreements, Restricted Stock Agreements, and any other instrument under the Plan; and to make any and all determinations and interpretations and take such other actions as may be deemed necessary or advisable in order to carry out the provisions, intent, and purposes of the Plan.

     (b) Committee Action. (i) The Committee may, in its sole and absolute discretion, without amendment to the Plan, except in the case of Termination of Employment or other relationship for cause, waive or amend the operation of Plan provisions respecting vesting or exercise after Termination of Employment or service to the Company or a Subsidiary and, except as otherwise provided herein, adjust any of the terms of any Award. The Committee may also accelerate the vesting date or waive or adjust any other condition or restriction imposed hereunder with respect to the vesting of an Award, provided that the Committee determines that such acceleration, waiver or other adjustment is in the best interests of the Company and necessary or desirable in light of extraordinary circumstances. Except as set forth herein, no amendment or modification of an outstanding Award may adversely affect the terms of a Grantee’s Award without the Grantee’s written consent.  Notwithstanding anything in the Plan to the contrary, no Award outstanding under the Plan may, directly or indirectly, be re-priced, re-granted through cancellation or exchange, or otherwise amended or modified to reduce the price applicable thereto (other than with respect to adjustments made in connection with a transaction or change contemplated by Section 10 hereof) without the approval of the Company’s shareholders.  (ii) A majority of the members of the Committee shall constitute a quorum. The Committee may act by the vote of a majority of its members present at a meeting at which there is a quorum or by unanimous written consent. The determinations of the Committee, including with regard to questions of construction, interpretation and administration, shall be final, binding and conclusive on all persons.

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     (c) Members Protected. (i) No member of the Committee shall be personally liable for any action, determination, or interpretation taken or made with respect to the Plan, unless such action, determination, or interpretation constitutes willful misconduct, fraud, gross negligence or demonstrates bad faith, and all members of the Committee shall be fully protected by the Company with respect to any such action, determination or interpretation except as aforesaid.  (ii) The Company shall indemnify and hold harmless each member of the Committee and the Board and any employee of the Company who provides assistance with the administration of the Plan from and against any loss, cost, liability (including any sum paid in settlement of a claim with the approval of the Board), damage and expense (including the advancement of reasonable legal and other expenses incident thereto) arising out of or incurred in connection with the Plan, unless and except to the extent attributable to such person’s willful misconduct, fraud, gross negligence, or bad faith.

     4. Plan Limitations; Shares Subject to the Plan. (a) Share Limit. The maximum number of Shares that may be issued or transferred under the Plan shall be 400,000 Shares in the aggregate, consisting of Shares underlying Options and Restricted Stock, subject to adjustment pursuant to the provisions of Section 10.  Such shares may be authorized but unissued Shares or authorized and issued Shares held in the Company’s treasury.  Any (i) Options and (ii) Restricted Stock that have been awarded under the Plan but are subsequently forfeited, surrendered, cancelled, remain unexercised at Option expiration or termination, or otherwise revert to the Plan pursuant to the provisions hereof or of an Award may again be issued as Awards under the Plan.

(b) Grantee Limit. The total number of shares (i) underlying Options or (ii) of Restricted Stock subject to one or more Awards awarded to any one Grantee in any tax year of the Company shall not exceed 200,000 Shares subject to adjustment as provided in Section 10.

     5. Eligibility for Participation. The Committee shall from time to time in its absolute discretion select Grantees from among those persons who, in the opinion of the Committee are in a position to contribute materially to the growth and success of the Company.  Notwithstanding the foregoing, Incentive Stock Options may only be granted to persons who are employed by the Company or a Subsidiary at the time of grant.

     6. Restricted Stock Awards. (a) Grant of Award. The Committee may, from time to time, grant Restricted Stock Awards to eligible Employees, Directors, and Officers.   Each Award shall be evidenced by a Restricted Stock Agreement between the Company and the Grantee, which Agreement shall contain terms prescribed by the Plan and such other terms and conditions, limitations, and restrictions as the Committee may deem necessary or advisable. The purchase price, if any, of Restricted Stock awarded under the Plan shall be set forth in the Restricted Stock Agreement and shall not be less than the amount required for the issuance of fully paid, non-assessable Shares under the Certificate of Incorporation of the Company. 

(b) Vesting. At the time of the Award of shares of Restricted Stock, the Committee shall establish a vesting date or vesting dates with respect to such Award. The Committee may divide Awards into classes and assign a different vesting date for each class. Provided that all conditions to the vesting of a share of Restricted Stock imposed pursuant to Section 6(c) are satisfied, upon the occurrence of the vesting date with respect to a share of Restricted Stock, such Share shall vest and the Transfer Restrictions shall lapse.

(c) Restrictions. Restricted Stock shall be subject to the following restrictions:

     (i) no Restricted Stock may be sold, assigned, transferred, pledged, hypothecated, or otherwise disposed of during such time as such Restricted Stock is subject to the restrictions provided in this Section 6;

     (ii) The restrictions with respect to the Restricted Stock shall be specified in and shall lapse in accordance with, the provisions hereof and as established by the Committee and set forth in each Grantee’s Restricted Stock Agreement.

     (iii) Each Certificate issued with respect to Restricted Stock shall be registered in the name of the Grantee and deposited, together with a stock power duly executed in blank by the Grantee, with the Company or, if the Committee so specifies, with a third party custodian or trustee, and shall bear the following, or a similar, legend:

“The transferability of this certificate and the shares of Common Stock represented hereby are subject to the terms, conditions and restrictions (including forfeiture) contained in the Forward Industries, Inc. 2007 Equity Incentive Plan  and the Restricted Stock Agreement entered into between the registered owner and Forward Industries, Inc. A copy of such Plan and Agreement are on file in the offices of Forward Industries Inc., 1801 Green Rd., Suite E., Pompano Beach, Fl., 33064.”

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    (iv) Awards of Restricted Stock granted to Covered Employees (or employees who, in the Committee’s determination, may become Covered Employees) that are performance based shall vest only after the attainment of Performance Goals has been certified by the Committee.

     (d) Certificates. Upon the vesting of Shares of Restricted Stock and at the expiration of the restrictions provided herein and in the Restricted Stock Agreement, the Company will cause a new Certificate to be delivered to the Grantee (or in the case of the Grantee’s death (where the Committee has determined that unvested Shares under an Award shall not be subject to forfeiture) to his or her legal representative, beneficiary or heir), free of any legend provided herein for such number of Shares as to which such restrictions shall have lapsed; provided, however, that the Company shall not be required to issue fractional Shares.

     (e) Rights of Grantee. During the applicable period of restriction as to any Restricted Stock, a Grantee shall be the record owner thereof and shall be entitled to vote such Shares and receive all dividends and other distributions paid with respect to such Shares; provided that if any such dividend or distribution is paid in Shares, the Shares so received shall be subject to the same restrictions as the Restricted Stock with respect to which such dividend or distribution was paid.  The Committee in its discretion may require that any dividends paid on Restricted Stock be held in escrow until all restrictions or conditions to the vesting of such Shares have lapsed, and the Committee may provide in the agreement such other restrictions terms or conditions with respect to the treatment and holding of any shares, cash or other property that may be received as consideration or in exchange for Restricted Stock.

7. Stock Options.

     (a) GrantEvidence of Award.  The Committee may, from time to time, grant Option Awards to eligible Employees, Directors, and Officers.   Each Award shall be evidenced by an Option Agreement between the Company and the Grantee, which Agreement shall contain terms prescribed by the Plan and such other terms and conditions, limitations, and restrictions as the Committee may deem necessary or advisable. 

    (b) Type of Options. Subject to the provisions hereof, the Committee may grant Incentive Stock Options and Non-Qualified Stock Options to eligible personnel upon such terms and conditions as the Committee deems appropriate.  

     (c) Option Term. Unless sooner terminated, all Options shall expire not more than ten (10) years after the date the Option is granted (or, in the case of an Incentive Stock Option granted to a Ten Percent Stockholder, not more than five (5) years).

     (d) Exercise Price. The exercise price per Share covered by an Option may not be less than one hundred percent (100%)100% of the Fair Market Value per Shareof the Shares on the date of grant.

6.4                 Duration of Options.  Except as otherwise provided in Section 422 of the Option is granted (or, in case of an Incentive StockCode, each Option granted to a Ten Percent Stockholder, one hundred ten percent (110%) of the Fair Market Value per Share on the date the Option is granted).  The “date the Option is granted”Participant shall refer to the date on whichexpire at such time as the Committee definitively authorizesshall determine at the time of grant and specify in the Evidence of Award; provided, however, that no Option shall be exercisable later than the Option (or upon thetenth anniversary date on which all conditions, if any, imposed by the Committee in conditioning the grant, have been satisfied).of its grant.

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 (e)

6.5                 Exercise of Options.  Options granted under this Article 6 shall be exercisable at such times and be subject to such restrictions and conditions as the Committee shall in each instance approve and specify in the Evidence of Award, which terms and restrictions need not be the same for each grant or for each Participant.  The Committee may establish suchprovide in the Evidence of Award for the acceleration of the vesting and other conditions and restrictions on the exerciseexercisability of an Option and/outstanding Options, in whole or upon the issuance of Shares in connection with the exercise of an Optionpart, as it deems appropriate. All or part of the exercisable portion of an Option may be exercised at any time during the Option term, except that, without the consent ofdetermined by the Committee no partial exercisein its sole discretion, in the event of an option may be for less than one hundred (100) shares.  Alla Change in Control.

6.6                 Payment.  Options granted under this Article 6 shall be exercisable during a Grantee’s lifetime only by the Grantee.

     (f) Payment of Exercise Price. An Option may be exercised by transmittingthe delivery of a notice of exercise to the Company: (i)Company or an agent designated by the Company in a written notice specifyingform specified or accepted by the Committee, or by complying with any alternative procedures which may be authorized by the Committee, setting forth the number of Shares with respect to which the Option is to be purchased, and (ii)exercised, accompanied by full payment for the Shares.

A condition of the issuance of the Shares as to which an Option shall be exercised shall be the payment of the Option Price.  The Option Price of any Option shall be payable to the Company in full either: (a) in cash or its equivalent; (b) by tendering (either by actual delivery or attestation) previously acquired Shares having an aggregate Fair Market Value at the time of exercise price, together withequal to the amount, ifOption Price; (c) by a combination of (a) and (b); or (d) any deemed necessaryother method approved or accepted by the Committee in its sole discretion, including, without limitation, if the Committee so determines, (i) a cashless (broker-assisted) exercise, or (ii) a reduction in the number of Shares that would otherwise be issued by such number of Shares having in the aggregate a Fair Market Value at the time of exercise equal to enablethe portion of the Option Price being so paid.

Subject to any governing rules or regulations, as soon as practicable after receipt of written notification of exercise and full payment (including satisfaction of any applicable tax withholding), the Company shall deliver to satisfy its federal, state, foreignthe Participant evidence of book entry Shares, or other tax withholding obligations with respect to such exercise.upon the Participant’s request, Share certificates in an appropriate amount based upon the number of Shares purchased under the Option(s).

Unless otherwise determined by the Committee, all payments under all of the methods indicated above shall be paid in United States dollars.

6.7                 Restrictions on Share Transferability.  The Committee may establishimpose such rules and procedures as it deems appropriate for the exercise of Options. The exercise price ofrestrictions on any Shares acquired pursuant to the exercise of an Option granted under this Article 6 as it may deem advisable and specify in the Evidence of Award, including, without limitation, minimum holding period requirements, restrictions under applicable federal securities laws, under the requirements of any stock exchange or market upon which such Shares are then listed and/or traded, or under any blue sky or state securities laws applicable to such Shares.

6.8                 Termination of Employment.  Each Participant’s Evidence of Award shall set forth the extent to which the Participant shall have the right to exercise the Option following termination of the Participant’s employment or provision of services to the Company, its Affiliates, its Subsidiaries, as the case may be.  Such provisions shall be determined in the sole discretion of the Committee, shall be included in the Evidence of Award entered into with each Participant, need not be uniform among all Options issued pursuant to this Article 6, and may reflect distinctions based on the reasons for termination.

6.9                 Transferability of Options.  Except as otherwise provided in a Participant’s Evidence of Award or otherwise at any time by the Committee, no Option granted under this Article 6 may be paidsold, transferred, pledged, assigned, or otherwise alienated or hypothecated, other than by will or by the laws of descent and distribution or as otherwise required by law; provided that the Board or Committee may permit further transferability, on a general or a specific basis, and may impose conditions and limitations on any permitted transferability. Further, except as otherwise provided in a Participant’s Evidence of Award or otherwise at any time by the Committee, or unless the Board or Committee decides to permit further transferability, all Options granted to a Participant under this Article 6 shall be exercisable during his or her lifetime only by such Participant, and following his or her lifetime, by such Participant’s estate for a period to be determined by the Committee, subject to applicable Code limits.  With respect to those Options, if any, that are permitted to be transferred to another person, references in the 2011 Plan to exercise or payment of the Option Price by the Participant shall be deemed to include, as determined by the Committee, the Participant’s permitted transferee.

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ARTICLE 7

Stock Appreciation Rights

7.1                 Grant of SARs.  Subject to the terms and conditions of the 2011 Plan, SARs, including Freestanding SARs, may be granted to Participants at any time and from time to time as shall be determined by the Committee.

Subject to the terms and conditions of the 2011 Plan, the Committee shall have complete discretion in determining the number of SARs granted to each Participant and, consistent with the provisions of the 2011 Plan, in determining the terms and conditions pertaining to such SARs.

The Grant Price for each grant of a Freestanding SAR shall be determined by the Committee and shall be specified in the Evidence of Award.  The Grant Price may include (but not be limited to) a Grant Price based on one hundred percent (100%) of the FMV of the Shares on the date of grant, a Grant Price that is set at a premium to the FMV of the Shares on the date of grant, or is indexed to the FMV of the Shares on the date of grant, with the index determined by the Committee, in its discretion to the extent consistent with the Section 409A Rules.

7.2                 SAR Agreement.  Each SAR Award shall be evidenced by an Evidence of Award that shall specify the Grant Price, the term of the SAR, and such other provisions as the Committee shall determine.

7.3                 Term of SAR.  The term of an SAR granted under the 2011 Plan shall be determined by the Committee, in its sole discretion, and except as determined otherwise by the Committee and specified in the SAR Evidence of Award, no SAR shall be exercisable later than the tenth anniversary date of its grant.

7.4                 Exercise of Freestanding SARs.  Freestanding SARs may be exercised upon whatever terms and conditions the Committee, in its sole discretion, imposes and specifies in the Evidence of Award.  The Committee may provide in the Evidence of Award for the earlier exercise of Freestanding SARS in the event of a Change in Control.

7.5                 Payment of SAR Amount.  Upon the exercise of an SAR, a Participant shall be entitled to receive payment from the Company in an amount determined by multiplying:

(a)                 The excess of the Fair Market Value of a Share on the date of exercise over the Grant Price; by

(b)                 The number of Shares with respect to which the SAR is exercised.

At the discretion of the Committee, the payment upon SAR exercise may be in cash, certifiedShares, or bank check and/any combination thereof, or suchin any other form of payment as may bemanner approved by the Committee in its sole discretion.  The Committee’s determination regarding the form of SAR payout shall be set forth in the Evidence of Award pertaining to the grant of the SAR.

7.6                 Termination of Employment.  Each Evidence of Award shall set forth the extent to which the Participant shall have the right to exercise the SAR following termination of the Participant’s employment with or provision of services to the Company, its Affiliates, and/or its Subsidiaries, as the case may be.  Such provisions shall be determined in the sole discretion of the Committee, shall be included in the Evidence of Award entered into with Participants, need not be uniform among all SARs issued pursuant to the 2011 Plan, and may reflect distinctions based on the reasons for termination.

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7.7                 Nontransferability of SARs.  Except as otherwise provided in a Participant’s Evidence of Award or otherwise at any time by the Committee, no SAR granted under the 2011 Plan may be sold, transferred, pledged, assigned, or otherwise alienated or hypothecated, other than by will or by the laws of descent and distribution or as otherwise required by law.  Further, except as otherwise provided in a Participant’s Evidence of Award or otherwise at any time by the Committee, all SARs granted to a Participant under the 2011 Plan shall be exercisable during his or her lifetime only by such Participant.  With respect to those SARs, if any, that are permitted to be transferred to another person, references in the 2011 Plan to exercise of the SAR by applicable lawthe Participant or payment of any amount to the Participant shall be deemed to include, as determined by the Committee, the Participant’s permitted transferee.

7.8                 Other Restrictions.  The Committee shall impose such other conditions and/or restrictions on any Shares received upon exercise of a SAR granted pursuant to the 2011 Plan as it may deem advisable or desirable.  These restrictions may include, but shall not be limited to, a requirement that the Participant hold the Shares received upon exercise of a SAR for a specified period of time.

ARTICLE 8

Restricted Stock and Restricted Stock Units

8.1                 Grant of Restricted Stock or Restricted Stock Units.  Subject to the terms and provisions of the 2011 Plan, the Committee, at any time and from time to time, may grant Shares of Restricted Stock and/or Restricted Stock Units to Participants in such amounts as the Committee shall determine.  Restricted Stock Units shall represent the right of a Participant to receive payment upon the lapse of the Period of Restriction.

8.2                 Restricted Stock or Restricted Stock Unit Agreement.  Each Restricted Stock and/or Restricted Stock Unit grant shall be evidenced by an Evidence of Award that shall specify the Period(s) of Restriction, the number of Shares of Restricted Stock or the number of Restricted Stock Units granted, and such other provisions as the Committee shall determine.

8.3                 Transferability.  Except as provided in this Plan or an Evidence of Award, the Shares of Restricted Stock and/or Restricted Stock Units granted herein may not be sold, transferred, pledged, assigned, or otherwise alienated or hypothecated until the end of the applicable Period of Restriction established by the Committee and specified in the Evidence of Award (and in the case of Restricted Stock Units until the date of delivery or other payment), or upon earlier satisfaction of any other conditions, as specified by the Committee, in its sole discretion, and set forth in the Evidence of Award or otherwise at any time by the Committee. All rights with respect to the Restricted Stock and/or Restricted Stock Units granted to a Participant under the 2011 Plan shall be available during his or her lifetime only to such Participant, except as otherwise provided in an Evidence of Award or at any time by the Committee.

8.4                 Other Restrictions.  The Committee shall impose such other conditions and/or restrictions on any Shares of Restricted Stock or Restricted Stock Units granted pursuant to the 2011 Plan as it may deem advisable including, without limitation, unrestricted, fully paida requirement that Participants pay a stipulated purchase price for each Share of Restricted Stock or each Restricted Stock Unit, restrictions based upon the achievement of specific performance goals, time-based restrictions on vesting following the attainment of the performance goals, time-based restrictions, and/or restrictions under applicable laws or under the requirements of any stock exchange or market upon which such Shares thatare listed or traded, or holding requirements or sale restrictions placed on the Shares by the Company upon vesting of such Restricted Stock or Restricted Stock Units. The receipt of dividends on account of shares of Restricted Stock or Restricted Stock Units shall be determined by the Committee.

Except with respect to a maximum of 50% of the Shares authorized in Section 4.1(a), or as otherwise provided in Section 8.7 hereto, any Awards of Restricted Stock or Restricted Stock Units which vest on the basis of the Participant’s continued employment with or provision of service to the Company shall not provide for vesting which is any more rapid than annual pro rata vesting over a three (3) year period and any Awards of Restricted Stock or Restricted Stock Units which vest upon the attainment of performance goals shall provide for a performance period of at least three months. The Committee may provide in the Evidence of Award for immediate vesting of Restricted Stock or Restricted Stock Units, in whole or in part, in the event of a Change in Control.

To the extent deemed appropriate by the Committee, the Company may retain the certificates representing Shares of Restricted Stock in the Company’s possession until such time as all conditions and/or restrictions applicable to such Shares have been owned by the holder for at least six (6) months (free and clear of any liens and encumbrances).satisfied or lapse.

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     (g)Except as otherwise provided in this Article 8, Shares of Restricted Stock covered by each Restricted Stock Award shall become freely transferable by the Participant after all conditions and restrictions applicable to such Shares have been satisfied or lapse (including satisfaction of any applicable tax withholding obligations), and Restricted Stock Units shall be paid in cash, Shares, or a combination of cash and Shares as the Committee, in its sole discretion shall determine.

8.5                 Certificate Legend.  In addition to any legends placed on certificates pursuant to Section 8.4, each certificate representing Shares of Restricted Stock granted pursuant to the 2011 Plan may bear a legend as determined by the Committee in its sole discretion.

8.6                 Voting Rights.  Unless otherwise determined by the Committee and set forth in a Participant’s Evidence of Award, to the extent permitted or required by law, as determined by the Committee, Participants holding Shares of Restricted Stock granted hereunder may be granted the right to exercise full voting rights with respect to those Shares during the Period of Restriction.  A Participant shall have no voting rights with respect to any Restricted Stock Units granted hereunder.

8.7                 Termination of Options.Employment  (i) Termination due.  To the extent consistent with the Section 409A Rules, each Evidence of Award shall set forth the extent to Death which the Participant shall have the right to retain Restricted Stock and/or Disability. If a Grantee’s employment or other service terminates due to his or her death or Permanent Disability (or if the Grantee’s employment or other service is terminated by reason of his or her Permanent Disability and the Grantee dies within one year of suchRestricted Stock Units following termination of the Participant’s employment with or other service), then: (i) that portionprovision of services to the Company, its Affiliates, and/or its Subsidiaries, as the case may be.  Such provisions shall be determined in the sole discretion of the Committee, shall be included in the Evidence of Award entered into with each Participant, need not be uniform among all Shares of Restricted Stock or Restricted Stock Units issued pursuant to the 2011 Plan, and may reflect distinctions based on the reasons for termination.

ARTICLE 9

Performance Units/Performance Shares

9.1                 Grant of Performance Units/Performance Shares.  Subject to the terms and provisions of the 2011 Plan, the Committee, at any time and from time to time, may grant Performance Units and/or Performance Shares to Participants in such amounts and upon such terms as the Committee shall determine.

9.2                 Value of Performance Units/Performance Shares.  Each Performance Unit shall have an Optioninitial value that is not exercisableestablished by the Committee at the time of grant.  Each Performance Share shall have an initial value equal to the Fair Market Value of a Share on the date of terminationgrant.  The Committee shall immediately terminate, and (ii) that portion of an Option that is exercisableset performance goals in its discretion as described in Section 10.4 which, depending on the dateextent to which they are met, will determine the value and/or number of termination shall remain exercisable,Performance Units/Performance Shares that will be paid out to the extent exercisable on the date of termination, by the Grantee (or the Grantee’s designated beneficiary or representative) during the one year period following the date of termination (or, during the one year after the later death of a disabled Grantee) or, if sooner, until the expiration of the stated term thereof, and, to the extent not exercised during such period, shall thereupon terminate.

                (ii) Termination for Cause or at a Time when Cause Exists. Unless the Committee shall otherwise decide as being in the best interests of the Company in respect of the portion of an Option that is exercisable, if a Grantee’s employment or other service is terminated by the Company or a Subsidiary for Cause or if, at the time of his or her termination, grounds for a termination for Cause exist, then any Option held by the Grantee (whether or not then exercisable) shall immediately terminate and cease to be exercisable.

                (iii) Other Termination. If a Grantee’s employment or other service terminates for any reason or no reason other than as specified in paragraph 7(g)(i) or 7(g)(ii), then, except as provided for in an employment agreement: (i) that portion of an Option held by the Grantee that is not exercisable on the date of termination shall immediately terminate, and (ii) that portion of an Option that is exercisable on the date of termination shall remain exercisable, to the extent exercisable on the date of termination, by the Grantee during the ninety (90) day period following the date of termination or, if sooner, until the expiration of the stated term thereof, and, to the extent not exercised during such period, shall thereupon terminate.

    8.Participant.

9.3                 Additional Terms Relating to Options and Restricted Stock Awards.

     (a) Conditions. At the time of an Award, the Committee may impose such restrictions or conditions to the exercisability of Options or vesting of Restricted Stock as it, in its absolute discretion, deems appropriate, including requiring the achievementEarning of Performance Goals.  If the conditions or restrictions pertaining to such exercisability or vesting in respect of an Award are not satisfied in accordance with their terms, the Award shall be forfeited and theUnits/Performance Shares underlying the Options or Restricted Stock, as the case may be, shall revert to the Plan as authorized but unawarded Shares. To the extent not inconsistent with the provisions of the Plan, the Option Agreement and Restricted Stock Agreement, as the case may be, shall govern the rights and obligations of the Grantee (and any person claiming through the Grantee) with respect to the Option and Restricted Stock.  To the extent that an Award made to a Covered Employee is performance based and is intended to satisfy the criteria set forth in Code Section 162(m), it shall be based on and subject to achievement of the Performance Goals as set forth in the Option Agreement or Restricted Stock Agreement relating to such Award.  To the extent that an Award of Options becomes exercisable or an Award of Restricted Stock is to vest based upon the continued employment of the Participant, such Award shall vest pursuant to a schedule as the Committee may determine in its sole discretion.

     (b) Rights Upon Issuance. No person shall have any rights as a shareholder with respect to any Shares covered by or relating to any Award until the date of issuance of a Certificate with respect to such Shares (whether by book entry or in physical, certificated form).  Except as otherwise expressly provided in Section 10, no adjustment to any Award shall be made for dividends or other rights for which the record date occurs prior to the date of such Certificate.

     (c) Termination of Relationship. Subject to the terms of this Plan, after the applicable Performance Period has ended, the holder of Section 7(g)Performance Units/Performance Shares shall be entitled to receive payout on the value and number of Performance Units/Performance Shares earned by the Participant over the Performance Period, to be determined as a function of the extent to which the corresponding performance goals have been achieved.

9.4                 Form and Timing of Payment of Performance Units/Performance Shares.  Payment of earned Performance Units/Performance Shares shall be as determined by the Committee and as evidenced in the caseEvidence of Options, unlessAward.  Subject to the terms of the 2011 Plan, the Committee, otherwise determines in its sole discretion, upon may pay earned Performance Units/Performance Shares in the form of cash or in Shares (or in a combination thereof) equal to the value of the earned Performance Units/Performance Shares at the close of the applicable Performance Period, or as soon as practicable after the end of the Performance Period.  Any Shares may be granted subject to any restrictions deemed appropriate by the Committee.  The determination of the Committee with respect to the form of payout of such Awards shall be set forth in the Evidence of Award pertaining to the grant of the Award.

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9.5                 Termination of Employment.  To the extent consistent with the Section 409A Rules and Section 162(m) of the Code, each Evidence of Award shall set forth the extent to which the Participant shall have the right to retain Performance Units and/or Performance Shares following termination of the Participant’s employment with or provision of services to the Company, its Affiliates, and/or its Subsidiaries, as the case may be.  Such provisions shall be determined in the sole discretion of the Committee, shall be included in the Evidence of Award entered into with each Participant, need not be uniform among all Awards of Performance Units or Performance Shares issued pursuant to the 2011 Plan, and may reflect distinctions based on the reasons for termination.

9.6                 Nontransferability.  Except as otherwise provided in a Participant’s Evidence of Award or otherwise at any time by the Committee, Performance Units/Performance Shares may not be sold, transferred, pledged, assigned, or otherwise alienated or hypothecated, other relationship betweenthan by will or by the Granteelaws of descent and distribution or as otherwise required by law.  Further, except as otherwise provided in a Participant’s Evidence of Award or otherwise at any time by the Committee, a Participant’s rights under the 2011 Plan shall be exercisable during his or her lifetime only by such Participant.

ARTICLE 10

Performance Measures

10.1              Performance Measures.  Unless and until the Committee proposes for shareholder vote and the Companyshareholders approve a change in the general Performance Measures set forth in this Article 10, the performance goals upon which the payment or any Subsidiaryvesting of an Award to a Covered Employee that is intended to qualify as Performance-Based Compensation shall be limited to one or more of the following Performance Measures:

(a)                 Net earnings or net income (before or after taxes and interest/investments);

(b)                 Earnings per share;

(c)                 Earnings per share growth;

(d)                 Net sales growth;

(e)                 Net earnings or net income growth (before or after taxes and interest/investment);

(f)                  Net operating profit;

(g)                 Return measures (including return on assets, capital, equity, or sales);

(h)                 Cash flow (including Operating Cash Flow , free cash flow, and cash flow return on capital);

(i)                  Earnings before or after taxes, interest, depreciation, and/or amortization;

(j)                  Gross or operating margins or growth thereof;

(k)                 Productivity ratios;

(l)                  Share price (including growth measures and total shareholder return);

(m)                Expense targets;

(n)                 Operating efficiency;

(o)                 Customer satisfaction;

(p)                 Revenue or Revenue growth;

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(q)                Operating profit growth;

(r)                 Working capital targets;

(s)                 Economic value added;

(t)                  Real estate management objectives;

(u)                 Sale or disposition of assets; and

(v)                 Acquisition of key assets.

Any Performance Measure(s) may be used to measure the performance of the Company, (orSubsidiary, and/or Affiliate as a whole or any business unit of the successor ofCompany, Subsidiary, and/or Affiliate or any such company) for any reason, all Shares relating to an Award (or part thereof) which on the date of termination is not exercisable, or which has not vested, orcombination thereof, as to which the restrictions thereon shall not have lapsed shall be immediately forfeited to the Plan as authorized but unawarded Shares and the corresponding Award (or part thereof) shall immediately terminate on such date; provided, however, the Committee may not so determinedeem appropriate, or any of the above Performance Measures as compared to the performance of a group of comparable companies, or published or special index that the Committee, in its sole discretion, deems appropriate, or the Company may select Performance Measure (l) above as compared to various stock market indices. The Committee also has the authority to provide for accelerated vesting of any Award based on the achievement of performance goals pursuant to the Performance Measures specified in this Article 10.

10.2              Evaluation of Performance.  The Committee may provide in any such Award that any evaluation of performance may include or exclude any of the following events that occurs during a Performance Period: (a) asset write-downs, (b) litigation or claim judgments or settlements, (c) the effect of changes in tax laws, accounting principles, or other laws or provisions affecting reported results, (d) any reorganization and restructuring programs, (e) extraordinary nonrecurring items as described in Accounting Principles Board Opinion No. 30 and/or in management’s discussion and analysis of financial condition and results of operations appearing in the case whereCompany’s annual report to shareholders for the Employmentapplicable year, (f) acquisitions or other relationshipdivestitures and (g) foreign exchange gains and losses. To the extent such inclusions or exclusions affect Awards to Covered Employees, they shall be prescribed in a form that meets the requirements of Section 162(m) of the Code for deductibility.

10.3              Adjustment of Performance-Based Compensation.  The terms of Awards that are designed to qualify as Performance-Based Compensation, and that are held by Covered Employees, may not be modified, except to the extent that after such modification the Award would continue to constitute Performance-Based Compensation.  The Committee shall retain the discretion to reduce the amount of any payment under an Award that is terminated for cause.

    (d)designed to qualify as Performance-Based Compensation that would otherwise be payable to a Covered Employee, either on a formula or discretionary basis or any combination, as the Committee determines.

10.4              Change of Control.Committee Discretion.  In the event that applicable tax and/or securities laws change to permit Committee discretion to alter the governing Performance Measures without obtaining shareholder approval of a Corporate Change of Control,such changes, the Committee shall have sole discretion to make such changes without obtaining shareholder approval.  In addition, in the event that the Committee determines that it is advisable to grant Awards that shall not qualify as Performance-Based Compensation, the Committee may in its discretion, and subject to compliance withmake such grants without satisfying the other terms and conditionsrequirements of Section 162(m) of the Plan,  make appropriate or equitable adjustments to the PlanCode and awards, including (1) the number of shares of Common Stock that can be granted; (2) the number and kind of shares ormay base vesting on Performance Measures other securities subject to any then outstanding  awards and (3) an acceleration of the vesting or exercise of awards under the Plan.   

    (e) Cancellation of Awards. Unless an Option Agreement or Restricted Stock Agreement specifies otherwise, the Committee will cancel, rescind, suspend, withhold or otherwise limit or restrict any unexpired Option or unvested Restricted Stock at any time if the Grantee is notthan those set forth in compliance with all material applicable provisions of the Award and the Plan. Upon exercise of an Option and as a condition to issuance of Certificates pursuant to Section 6(d), the Grantee shall certify in a manner acceptable to the Company that he or she is in compliance with the terms and conditions of the Plan and Restricted Stock Agreement or Option Agreement, as applicable.  10.1.

ARTICLE 11

Beneficiary Designation

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    9.Each Participant under the 2011 Plan may, from time to time, name any beneficiary or beneficiaries (who may be named contingently or successively) to whom any benefit under the 2011 Plan is to be paid in case of his or her death before he or she receives any or all of such benefit.  Each such designation shall revoke all prior designations by the same Participant, shall be in a form prescribed by the Committee, and will be effective only when filed by the Participant in writing with the Company during the Participant’s lifetime.  In the absence of any such designation, benefits remaining unpaid at the Participant’s death shall be paid to the Participant’s estate. Following a Participant’s death, such Participant’s estate may exercise Options or other Awards, if applicable, granted hereunder for a period to be determined by the Committee, subject to applicable Code limits.

ARTICLE 12

Deferrals

To the extent permitted by the Section 409A Rules, the Committee may permit or require a Participant to defer such Participant’s receipt of the payment of cash or the delivery of Shares that would otherwise be due to such Participant by virtue of the exercise of an Option or SAR, the lapse or waiver of restrictions with respect to Restricted Stock or Restricted Stock Units, or the satisfaction of any requirements or performance goals with respect to Performance Shares or Performance Unit.  If any such deferral election is required or permitted, the Committee shall, in its sole discretion, establish rules and procedures for such payment deferrals, consistent with the Section 409A Rules.

ARTICLE 13

Rights of Participants

13.1              Employment.  Nothing in the 2011 Plan or an Evidence of Award shall interfere with or limit in any way the right of the Company, its Affiliates, and/or its Subsidiaries, to terminate any Participant’s employment or service on the Board at any time or for any reason not prohibited by law, nor confer upon any Participant any right to continue his or her employment or service for any specified period of time.

Neither an Award nor any benefits arising under this Plan shall constitute an employment contract with the Company, its Affiliates, and/or its Subsidiaries and, accordingly, subject to Articles 3 and 15, this Plan and the benefits hereunder may be terminated at any time in the sole and exclusive discretion of the Committee without giving rise to any liability on the part of the Company, its Affiliates, and/or its Subsidiaries.

13.2              Participation.  No individual shall have the right to be selected to receive an Award under this Plan, or, having been so selected, to be selected to receive a future Award.

13.3              Rights as a Shareholder.  Except as otherwise provided herein, a Participant shall have none of the rights of a shareholder with respect to Shares covered by any Award until the Participant becomes the record holder of such Shares.

ARTICLE 14

Change in Control

14.1              Change in Control.  For purposes of this Plan, a “Change in Control” shall mean the occurrence during the term of any of the following events:

(a)                 All or substantially all (meaning having a total gross fair market value at least equal to 50.1% of the total gross fair market value of all of the Company’s assets immediately before such acquisition or acquisitions) of the assets of the Company are acquired by a Person (during a twelve month period ending on the date of the most recent acquisition by such Person); or

(b)                 The Company is merged, consolidated, or reorganized into or with another corporation or entity during a twelve-month period with the result that upon the conclusion of the transaction less than 50.1% of the outstanding securities entitled to vote generally in the election of directors or other capital interests of the surviving, resulting or acquiring corporation are beneficially owned (as that term is defined in Rule 13-d 3 under the Exchange Act) by the shareholders of the Company immediately prior to the completion of the transaction.

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ARTICLE 15

Amendment, Modification, Suspension, and Termination

15.1              Amendment, ofModification, Suspension, and Termination.  Subject to Section 15.3 and 15.4, the Plan. The BoardCommittee may, at any time and from time to time, alter, amend, modify, accelerate, suspend, or amendterminate the 2011 Plan or any Evidence of Award in any respect;whole or in part; provided, however, that, without the prior approval of the Company’s shareholders, Options issued under the 2011 Plan will not be repriced, replaced, or regranted through cancellation, and no amendment of the 2011 Plan shall be made without shareholder approval if shareholder approval is required by law, regulation, or stock exchange rule.

15.2              Adjustment of Awards Upon the Occurrence of Certain Unusual or Nonrecurring Events.  The Committee may make adjustments, consistent with Section 162(m) of the Code and the Section 409A Rules, in the terms and conditions of, and the criteria included in, Awards in recognition of unusual or nonrecurring events (including, without limitation, the events described in Section 4.4 hereof) affecting the Company or the financial statements of the Company or of changes in applicable laws, regulations, or accounting principles, whenever the Board may not increase the maximum number of Shares that may be awarded under the Plan (other than increases due to adjustments in accordance with Section 10), materially modify the requirements as to eligibility for participation in the Plan, or otherwise materially increase the benefits accruing to participants under the Plan; and provided, further, that shareholder approval shall be required for any such amendment if and to the extent the Board of DirectorsCommittee determines that such approval isadjustments are appropriate in order to prevent unintended dilution or necessary for purposes of satisfying Section 162(m), Section 409A, or Section 422enlargement of the Codebenefits or Rule 16b-3potential benefits intended to be made available under the Exchange Act or other applicable law or the requirements of any securities exchange upon which the securities2011 Plan. The determination of the Company trade. Nothing herein shall restrict the Committee’s ability to exercise its discretionary authority pursuant to Section 3, which discretion may be exercised without amendmentCommittee as to the foregoing adjustments, if any, shall be conclusive and binding on Participants under the 2011 Plan.  Any modification or amendment

15.3              Awards Previously Granted.  Notwithstanding any other provision of the 2011 Plan to the contrary, no termination, amendment, suspension, or modification of the 2011 Plan or an Evidence of Award shall not,adversely affect in any material way any Award previously granted under the 2011 Plan, without the written consent of any Grantee, adversely affect the Grantee’s rightsParticipant holding such Award except as required under an outstanding Award granted prior to such modification or amendment.

     10.the tax laws.

15.4              DilutionCompliance with the Section 409A Rules.  It is the intention of the Board that the 2011 Plan comply strictly with the Section 409A Rules and Other Adjustments. In the event of any change in the number of outstanding Shares by reason of any stock dividend or split, recapitalization, merger, consolidation, spin-off, reorganization, combination or exchange of shares, or other similar corporate change affecting all shareholders on a pro rata basis, the Committee shall makeexercise its discretion in granting Awards hereunder (and the terms of such adjustments, ifgrants), accordingly.  The Plan and any as it deems necessary, appropriate, and equitable in the aggregate number or kindgrant of Options or Restricted Stock or other stock or securities whichan Award hereunder may be awarded pursuantamended from time to time as may be necessary or appropriate to comply with the Plan, and in the terms and restrictions of each outstanding Award affected thereby. Such adjustments shall be conclusive and binding upon all parties concerned, absent manifest error.

     11.Section 409A Rules.

ARTICLE 16

Withholding

16.1              Tax Matters.Withholding (a) Withholding..  The Company shall have the power and the right to deduct from each Grantee’s salary or wages,withhold, or at the option of the Grantee, the Grantee shall payrequire a Participant to remit to the Company, the minimum statutory amount of any taxto satisfy federal, state, and local taxes, domestic or foreign, required by any governmental authoritylaw or regulation to be withheld resulting on accountwith respect to any taxable event arising as a result of an Award,this Plan.

16.2              Share Withholding.  With respect to withholding required upon the exercise of an Option,Options or SARs, upon the lapse of restrictions on Restricted Stock. TheStock and Restricted Stock Units, or upon the achievement of performance goals related to Performance Shares, or any other taxable event arising as a result of an Award granted hereunder, Participants may elect, subject to the approval of the Committee, may, in its sole discretion, permit a Granteeto satisfy the right to satisfy,withholding requirement, in whole or in part, any tax withholding requirement so resulting by electing to requirehaving the Company to purchase that number of unrestrictedwithhold Shares designated by the Grantee at thehaving a Fair Market Value for Shares on the date of exercise or lapse of restrictions, or if not traded on such daythe tax is to be determined equal to the minimum statutory total tax that could be imposed on the next preceding day on which trading occurred. The Companytransaction. All such elections shall not be required to deliver a Certificate for any Shares upon exercise of an Option or lapse of restrictions until all such taxes shall have been paidirrevocable, made in writing, and signed by the Grantee or the person entitled thereto. The Company shall have the right, but not the obligation, to sell or withhold such number of Shares distributable to the person entitled to such distribution as will provide assets for payment of any tax so required to be paid by the Company for such person unless, prior to such sale or withholding, such person shall have paid to the Company the amount of such tax. Any balance of the proceeds of such a sale remaining after the payment of such taxes shall be paid over to such person. In making any such sale, the Company shall be deemed to be acting on behalfParticipant, and for the account of such person.

     (b) Section83(B) Election. Each Grantee shall deliver to the Company a signed copy of any instrument, letter, or other document the Grantee may execute and file with the Internal Revenue Service evidencing the Grantee’s election under Section 83(b)(2) of Code to treat the receipt of any Restricted Stock as includable in the Grantee’s gross income in the year of receipt. The Grantee shall deliver a copy of any such instrument of election to the Company not later than the date on which any such election is required to be made in accordance with the appropriate provisions of the Code or applicable Regulations thereunder.

     12. Applicable Laws and Regulations. (a) Issuance. The Company’s obligation to issue any Shares or deliver any Certificate pursuant to an Award shall be subject to such compliance asany restrictions or limitations that the Committee, in its sole discretion, deems necessary or advisable with respect to any and all of the followintg: the listing of such Shares upon the Nasdaq SmallCap Market, or such other market or securities exchange on which the Shares may then be listed; the registration or qualification of such Shares under any federal or state law; the rulings or regulations of any governmental regulatory body; or the obtaining of any approval or consent from any federal state or other governmental agency.appropriate.

ARTICLE 17

Successors

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     (b) Listing and Other Conditions. The issuance and transfer of any Shares hereunder shall be effective only at such time as counsel to the Company shall have determined that the issuance and delivery of such shares are in compliance with all applicable laws, regulations of governmental authority and the requirements of the NASDAQ SmallCap Market or such other market or securities exchange on which the Shares may be listed. The Committee may, in its sole discretion, defer the effectiveness of any issuance or transfer of Shares hereunder in order to allow their issuance to be made pursuant to registration or an exemption from registration or other methods for compliance available under federal or state securities laws.  The Committee shall inform the Grantee (or a permitted transferee of such person) in writing of its decision to defer the effectiveness of an issuance or transfer.  If at any time counsel to the Company shall be of the opinion that any sale or delivery of Shares is or may in the circumstances be unlawful or result in the imposition of excise taxes on the Company under the statutes, rules or regulations of any applicable jurisdiction, the Company shall have no obligation to make such sale or delivery, or to make any application or to effect or to maintain any qualification or registration under the Securities Act or otherwise with respect to Shares, and the right to  perfect any Award shall be suspended until, in the opinion of said counsel, such sale or delivery shall be lawful or shall not result in the imposition of excise taxes on the Company.

     13. Employment or Other Rights. Nothing in the Plan or in any Option Agreement or Restricted Stock Agreement shall confer upon any Grantee the right to continue in the employAll obligations of the Company under the 2011 Plan with respect to Awards granted hereunder shall be binding on any successor to the Company, whether the existence of such successor is the result of a direct or indirect purchase, merger, consolidation, or otherwise, of all or substantially all of the business and/or assets of the Company.

ARTICLE 18

General Provisions

18.1              Forfeiture Events.

(a)                 The Committee may specify in an Evidence of Award that the Participant’s rights, payments, and benefits with respect to an Award shall be subject to reduction, cancellation, forfeiture, or recoupment upon the occurrence of certain specified events, in addition to any otherwise applicable vesting or performance conditions of an Award.  Such events may include, but shall not be limited to, termination of employment for cause, termination of the Participant’s provision of services to the Company, Affiliate, and/or Subsidiary, violation of material Company, Affiliate, and/or Subsidiary policies, breach of noncompetition, confidentiality, or other restrictive covenants that may apply to the Participant, or other conduct by the Participant that is detrimental to the business or reputation of the Company, its Affiliates, and/or its Subsidiaries or shall interfere with or restrict in any waySubsidiaries.

(b)                 If the rightsCompany is required to prepare an accounting restatement due to the material noncompliance of the Grantee’s employerCompany, as a result of misconduct, with any financial reporting requirement under the securities laws, if the Participant knowingly or grossly negligently engaged in the misconduct, or knowingly or grossly negligently failed to dischargeprevent the Grantee atmisconduct, or if the Participant is one of the persons subject to automatic forfeiture under Section 304 of the Sarbanes-Oxley Act of 2002, the Participant shall reimburse the Company the amount of any timepayment in settlement of an Award earned or accrued during the twelve-month period following the first public issuance or filing with the United States Securities and Exchange Commission (whichever just occurred) of the financial document embodying such financial reporting requirement.

(c)                 Any current or former executive officer who received any incentive-based Awards within a 36-month period prior to the date the Company is required to prepare an accounting restatement due to the material noncompliance of the Company with any financial reporting requirement under the securities laws shall return such Award to the Company upon demand by the Company. The amount to be recovered shall be the amount of incentive-based Awards, including equity awards, in excess of what would have been paid without the restated results. The operation of this subsection (c) shall be in accordance with the provisions of Section 954 of the Dodd-Frank Wall Street Reform and Consumer Protection Act and any applicable guidance.

18.2              Legend.  The certificates for Shares may include any legend, which the Committee deems appropriate in its sole discretion to reflect any restrictions on transfer of such Shares.

18.3              Gender and Number.  Except where otherwise indicated by the context, any masculine term used herein also shall include the feminine, the plural shall include the singular, and the singular shall include the plural.

18.4              Severability.  In the event any provision of the 2011 Plan shall be held illegal or invalid for any reason, whatsoever,the illegality or invalidity shall not affect the remaining parts of the 2011 Plan, and the 2011 Plan shall be construed and enforced as if the illegal or invalid provision had not been included.  To the extent that any provision of this Plan would prevent any Option that was intended to qualify as an Incentive Stock Option from qualifying as such, that provision shall be null and void with or without cause,respect to such Option.  Such provision, however, shall remain in effect for other Options and there shall be no further effect on any provision of this Plan.

18.5              Requirements of Law.  The granting of Awards and the issuance of Shares under the 2011 Plan shall be subject to all applicable laws, rules, and regulations, and to such rights, ifapprovals by any governmental agencies or national securities exchanges as may be required.

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18.6              Delivery of Title.  The Company shall have no obligation to issue or deliver evidence of title for Shares issued under the Grantee may have under an effective employment2011 Plan prior to:

(a)                 Obtaining any approvals from governmental agencies that the Company determines are necessary or advisable; and

(b)                 Completion of any registration or other agreement withqualification of the Shares under any applicable national or foreign law or ruling of any governmental body that the Company determines to be necessary or Subsidiary.  No personadvisable.

18.7              Inability to Obtain Authority.  The inability of the Company to obtain authority from any regulatory body having jurisdiction, which authority is deemed by the Company’s counsel to be necessary to the lawful issuance and sale of any Shares hereunder, shall relieve the Company of any liability in respect of the failure to issue or sell such Shares as to which such requisite authority shall not have any claim or right to receive an Award hereunder. The Committee’s granting of an Award at any time shall neither require the Committee to grant any other Award to any other person at any time or preclude the Committee from making subsequent grants to such Grantee or any other person.

     14.been obtained.

18.8              TransferabilityInvestment Representations.  The Committee may direct thatrequire any Option Agreement or Certificate evidencingperson receiving Shares issued pursuant to an Award under this Plan to represent and warrant in writing that the person is acquiring the securities for his own account for investment and not with a view to, or for sale in connection with, the distribution of any part thereof.

18.9              Employees Based Outside of the United States.  Notwithstanding any provision of the 2011 Plan shall bear a legend setting forth such restrictions on transferability as may apply to such Shares, including without limitation the legend contemplated by Section 6(c). Awards granted under the Plan shall not be transferable by a Grantee other than (i) upon Grantee’s death by will or bycontrary, in order to comply with the laws of descent and distribution (subject toin other countries in which the Committee’s action to permit vesting, exercise, and transfer in such cases), Company, its Affiliates, and/or (ii) pursuant to a qualified domestic relations order, as defined by the Codeits Subsidiaries operate or Title 1 of the Employee Retirement Income Security Acthave Employees or the rules thereunder, or (iii) as otherwise determined byDirectors, the Committee, in its sole discretion, in accordance withshall have the power and in furtherance of the purposes of the Plan; provided, however, that no transfer of an Incentive Stock Option may be made pursuant to clause (ii) or (iii) of this sentence. The designation of a beneficiary of an Award by a Grantee shall not be deemed a transfer prohibited by this Section 14.  Neither an Award nor the Shares underlying an Award may be assigned, pledged, or hypothecated in any way (whether by operation of law or otherwise)authority to: