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ARBOR HEALTH TECHNOLOGIES INC.

2024 EQUITY INCENTIVE PLAN

Adopted by the Board of Directors: January 15, 2024

Effective Date: Immediately prior to the date of effectiveness of the Registration Statement on Form S-1 (File No. 333-276841) filed by the Company with the Securities and Exchange Commission in connection with the Company's initial public offering of shares of Common Stock on the New York Stock Exchange (the "Effective Date")

Registration Statement declared effective: February 8, 2024 IPO closing date: February 13, 2024

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ARTICLE 1: PURPOSE

The purpose of the Arbor Health Technologies Inc. 2024 Equity Incentive Plan (the "Plan") is to advance the interests of Arbor Health Technologies Inc., a Delaware corporation (the "Company"), and its stockholders by providing a means to attract, retain, and motivate employees, consultants, and members of the Board of Directors of the Company and its Affiliates who are expected to make important contributions to the Company's growth, success, and long-term value creation. The Plan is designed to enable the Company to offer equity-based and cash-based incentive compensation opportunities that are competitive within the healthcare services and software-as-a-service ("SaaS") industry, thereby strengthening the Company's ability to recruit and retain the high-caliber talent essential to the execution of the Company's strategic objectives.

Through the grant of Awards under this Plan, the Company seeks to align the interests of Participants with those of the Company's stockholders by encouraging and facilitating ownership of shares of Common Stock, thus providing Participants with a direct and meaningful stake in the Company's long-term performance and the appreciation in value of the Company's Common Stock.

The Plan succeeds the Company's 2014 Stock Incentive Plan (the "Prior Plan") with respect to the grant of new Awards following the Effective Date. No new Awards shall be granted under the Prior Plan on or after the Effective Date. Notwithstanding the foregoing, all Awards outstanding under the Prior Plan as of the Effective Date shall continue to be governed by the terms and conditions of the Prior Plan and the applicable award agreements thereunder, and nothing in this Plan shall be deemed to amend, modify, or otherwise affect any such outstanding awards.

ARTICLE 2: DEFINITIONS

As used in this Plan, the following terms shall have the meanings set forth below. Capitalized terms used but not defined herein shall have the meanings ascribed to them elsewhere in the Plan.

2.1 "Administrator" means the Board of Directors of the Company, or a Committee designated by the Board to administer the Plan. Unless the Board determines otherwise, the Administrator shall be the Compensation Committee of the Board. As of the date of adoption of this Plan, the Compensation Committee consists of Dr. Samuel Obadina (Chair), Diana Coltrane, and Carolyn Whittemore. To the extent that the Board or a Committee has delegated authority to one or more officers of the Company in accordance with Section 5.1, the term "Administrator" shall also refer to such officer(s) with respect to the scope of such delegated authority.

2.2 "Affiliate" means any entity that, directly or indirectly, controls, is controlled by, or is under common control with, the Company. For purposes of this definition, "control" (including the terms "controlled by" and "under common control with") means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of an entity, whether through the ownership of voting securities, by contract, or otherwise.

2.3 "Applicable Law" means the requirements and limitations imposed by, and the applicable provisions of, federal and state securities laws (including the Securities Act of 1933, as amended, and the Securities Exchange Act of 1934, as amended), the Internal Revenue Code of 1986, as amended, the rules and regulations promulgated by the Securities and Exchange Commission, the listing rules and corporate governance standards of the New York Stock Exchange (including the NYSE Listed Company Manual), the laws of the State of Delaware, and any other applicable law, regulation, rule, or governmental or regulatory requirement, whether domestic or foreign, that may be in effect from time to time.

2.4 "Award" means any Option, Stock Appreciation Right, Restricted Stock Award, Restricted Stock Unit, Performance Award, or Other Stock-Based Award granted under this Plan.

2.5 "Award Agreement" means the written or electronic agreement, notice, or other instrument or document evidencing the terms and conditions of an Award granted under this Plan, as may be amended from time to time. Each Award Agreement shall be subject to the applicable terms and conditions of the Plan, and any provisions in an Award Agreement that are inconsistent with the Plan shall be governed by the Plan.

2.6 "Board" means the Board of Directors of Arbor Health Technologies Inc.

2.7 "Cause" means, unless otherwise defined in the applicable Award Agreement or in a written employment, consulting, or severance agreement between the Participant and the Company or an Affiliate, any of the following: (a) the Participant's willful misconduct or gross negligence in the performance of the Participant's duties to the Company or an Affiliate; (b) the Participant's conviction of, or plea of guilty or nolo contendere to, a felony or any crime involving moral turpitude, fraud, dishonesty, or embezzlement; (c) the Participant's material breach of any written agreement between the Participant and the Company or an Affiliate, including any non-competition, non-solicitation, confidentiality, or inventions assignment agreement; (d) the Participant's material violation of the Company's written policies or codes of conduct, including the Company's Code of Business Conduct and Ethics; (e) the Participant's willful and continued failure to perform the Participant's assigned duties after written notice from the Company and a reasonable opportunity to cure (to the extent such failure is curable); or (f) the Participant's material act of fraud, dishonesty, or misappropriation against the Company or any Affiliate.

2.8 "Change in Control" means the occurrence of any one or more of the following events:

(a) Acquisition of Voting Stock. The acquisition by any individual, entity, or group (within the meaning of Section 13(d)(3) or Section 14(d)(2) of the Exchange Act) (a "Person") of beneficial ownership (within the meaning of Rule 13d-3 under the Exchange Act) of more than fifty percent (50%) of the combined voting power of the then-outstanding voting securities of the Company entitled to vote generally in the election of directors (the "Outstanding Company Voting Securities"); provided, however, that for purposes of this subsection (a), the following acquisitions shall not constitute a Change in Control: (i) any acquisition directly from the Company; (ii) any acquisition by the Company or any Subsidiary; (iii) any acquisition by any employee benefit plan (or related trust) sponsored or maintained by the Company or any Subsidiary; or (iv) any acquisition by any Person pursuant to a transaction that complies with subsection (c)(i), (c)(ii), and (c)(iii) below;

(b) Change in Board Composition. Individuals who, as of the Effective Date, constitute the Board (the "Incumbent Board") cease for any reason to constitute at least a majority of the Board; provided, however, that any individual who becomes a member of the Board subsequent to the Effective Date whose election, or nomination for election by the Company's stockholders, was approved by a vote of at least a majority of the directors then comprising the Incumbent Board shall be considered as though such individual were a member of the Incumbent Board, but excluding, for this purpose, any such individual whose initial assumption of office occurs as a result of an actual or threatened election contest with respect to the election or removal of directors or other actual or threatened solicitation of proxies or consents by or on behalf of a Person other than the Board;

(c) Merger or Consolidation. Consummation of a reorganization, merger, consolidation, statutory share exchange, or similar form of corporate transaction involving the Company (a "Business Combination"), unless, immediately following such Business Combination, (i) all or substantially all of the individuals and entities who were the beneficial owners of the Outstanding Company Voting Securities immediately prior to such Business Combination beneficially own, directly or indirectly, more than fifty percent (50%) of the combined voting power of the then-outstanding voting securities entitled to vote generally in the election of directors of the entity resulting from such Business Combination (including an entity that, as a result of such transaction, owns the Company or all or substantially all of the Company's assets, either directly or through one or more subsidiaries), (ii) no Person (excluding any entity resulting from such Business Combination or any employee benefit plan or related trust of the Company or such entity resulting from such Business Combination) beneficially owns, directly or indirectly, more than fifty percent (50%) of the combined voting power of the then-outstanding voting securities entitled to vote generally in the election of directors of the entity resulting from such Business Combination, and (iii) at least a majority of the members of the board of directors of the entity resulting from such Business Combination were members of the Incumbent Board at the time of the execution of the initial agreement or the action of the Board providing for such Business Combination; or

(d) Liquidation or Sale of Assets. Consummation of a complete liquidation or dissolution of the Company, or the sale or other disposition of all or substantially all of the assets of the Company, other than to an entity with respect to which, following such sale or other disposition, the conditions described in subsection (c)(i), (c)(ii), and (c)(iii) above are satisfied.

Notwithstanding the foregoing, in no event shall the Company's initial public offering of shares of Common Stock on the New York Stock Exchange, or any transactions undertaken in connection therewith (including any reorganization, recapitalization, or change in the Company's capital structure), constitute a "Change in Control" for purposes of this Plan. Additionally, to the extent necessary to comply with Section 409A of the Code with respect to the payment of "nonqualified deferred compensation," a Change in Control shall be deemed to have occurred under the Plan only if such event also constitutes a "change in control event" within the meaning of Treasury Regulation Section 1.409A-3(i)(5).

2.9 "Code" means the Internal Revenue Code of 1986, as amended from time to time, and the Treasury Regulations and other guidance promulgated thereunder. Any reference to a specific section of the Code shall include any successor provision thereof.

2.10 "Committee" means the Compensation Committee of the Board, or such other committee of two or more members of the Board as may be designated by the Board to administer all or any portion of the Plan. Each member of the Committee shall qualify as (a) a "non-employee director" within the meaning of Rule 16b-3 promulgated under the Exchange Act, and (b) an "independent director" as defined under the rules and listing standards of the New York Stock Exchange (including Section 303A.02 and Section 303A.05 of the NYSE Listed Company Manual). If any member of the Committee does not satisfy the foregoing requirements, the Board shall appoint a replacement member who does satisfy such requirements.

2.11 "Common Stock" means the common stock of the Company, par value $0.001 per share, and such other securities as may be substituted for Common Stock pursuant to Article 3 hereof.

2.12 "Company" means Arbor Health Technologies Inc., a Delaware corporation, and any successor thereto.

2.13 "Consultant" means any natural person, including an advisor, who is engaged by the Company or an Affiliate to render bona fide services to the Company or such Affiliate, other than services rendered in connection with the offer or sale of securities in a capital-raising transaction, and who does not render such services as an Employee or Director. A Consultant must be a natural person who provides bona fide services to the Company or an Affiliate within the meaning of Form S-8 under the Securities Act.

2.14 "Continuous Service" means that the Participant's service with the Company or an Affiliate, whether as an Employee, Director, or Consultant, is not interrupted or terminated. A change in the capacity in which the Participant renders service to the Company or an Affiliate (for example, a change from Employee to Consultant status, or a change from Director to Employee status) shall not constitute a termination of Continuous Service, provided that such change does not result in an interruption in the Participant's service. A change in the entity for which the Participant renders service shall not constitute a termination of Continuous Service if the new entity is the Company or an Affiliate. The Administrator, in its sole discretion, shall determine whether a Participant's Continuous Service has terminated and the effective date of such termination, which determination shall be final and binding. Notwithstanding the foregoing, with respect to any Award that constitutes "nonqualified deferred compensation" within the meaning of Section 409A, a termination of Continuous Service shall not be deemed to have occurred for purposes of any provision of the Plan or any Award Agreement relating to the payment or settlement of such Award unless such termination is also a "separation from service" within the meaning of Section 409A.

2.15 "Covered Employee" means any individual who is, or who is reasonably expected to become, a "covered employee" within the meaning of Section 162(m) of the Code and the regulations promulgated thereunder. The Company acknowledges that, following the amendments to Section 162(m) enacted by the Tax Cuts and Jobs Act of 2017 (Public Law 115-97), the performance-based compensation exception under former Section 162(m)(4)(C) is generally no longer available for taxable years beginning after December 31, 2017, except with respect to certain grandfathered arrangements. Notwithstanding the foregoing, the term "Covered Employee" is used in this Plan for informational and administrative purposes.

2.16 "Disability" means, with respect to a Participant, such Participant's disability as defined in the applicable Award Agreement. In the absence of such a definition, "Disability" shall mean: (a) for purposes of determining the tax treatment of Incentive Stock Options, a disability within the meaning of Section 22(e)(3) of the Code (i.e., the inability to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment that can be expected to result in death or that has lasted or can be expected to last for a continuous period of not less than twelve (12) months); and (b) for all other purposes under the Plan, a disability within the meaning of Section 409A(a)(2)(C) of the Code and Treasury Regulation Section 1.409A-3(i)(4).

2.17 "Director" means a member of the Board of Directors of the Company.

2.18 "Effective Date" has the meaning set forth in Article 16 of this Plan.

2.19 "Employee" means any person treated as an employee of the Company or an Affiliate (including officers and Directors who are also employees) for purposes of federal income tax withholding. As of December 31, 2023, the Company and its Affiliates employed approximately 3,400 individuals, all of whom are eligible to participate in this Plan.

2.20 "Exchange Act" means the Securities Exchange Act of 1934, as amended from time to time, and the rules and regulations promulgated thereunder. Any reference to a specific section of the Exchange Act shall include any successor provision thereof.

2.21 "Fair Market Value" means, as of any date of determination:

(a) If the Common Stock is listed on the New York Stock Exchange (or any other established national securities exchange), the closing price of a share of Common Stock as reported on the New York Stock Exchange (or such other exchange) on such date of determination (or, if no shares of Common Stock were traded on such date, on the last preceding trading day on which shares of Common Stock were traded), as reported in The Wall Street Journal or such other source as the Administrator deems reliable. The Company's Common Stock is listed on the New York Stock Exchange under the ticker symbol "ARHT."

(b) If the Common Stock is not listed on a national securities exchange but is regularly quoted in a recognized quotation medium, the mean between the highest bid and lowest asked prices on such date (or, if no prices are quoted on such date, the last preceding date on which prices were quoted).

(c) If neither (a) nor (b) applies, including with respect to any date of determination occurring prior to the listing of the Common Stock on the New York Stock Exchange, the Fair Market Value of the Common Stock shall be determined in good faith by the Board, in a manner consistent with Section 409A of the Code and, as applicable, Section 422 of the Code, taking into account all relevant facts and circumstances, including independent appraisals where appropriate.

2.22 "Fiscal Year" means the fiscal year of the Company, which is the calendar year (January 1 through December 31).

2.23 "Incentive Stock Option" or "ISO" means an Option that is intended to qualify as an "incentive stock option" within the meaning of Section 422 of the Code and the Treasury Regulations promulgated thereunder.

2.24 "Non-Qualified Stock Option" or "NQSO" means an Option that is not intended to qualify as an Incentive Stock Option.

2.25 "Option" means an Incentive Stock Option or a Non-Qualified Stock Option granted pursuant to Article 6 of this Plan.

2.26 "Option Period" means the period during which an Option is exercisable, as set forth in the applicable Award Agreement, which period shall not exceed ten (10) years from the date of grant (or five (5) years from the date of grant in the case of an ISO granted to a Ten Percent Stockholder).

2.27 "Other Stock-Based Award" means an Award granted pursuant to Article 11 of this Plan.

2.28 "Participant" means any eligible Employee, Consultant, or Director who has been granted an Award under this Plan that remains outstanding, including any Award that has not been fully exercised, settled, or forfeited.

2.29 "Performance Award" means an Award granted pursuant to Article 10 of this Plan that is subject to the achievement of Performance Goals during a Performance Period.

2.30 "Performance Goals" means the criteria established by the Administrator for the purposes of determining the degree of vesting, earning, or payout of a Performance Award. Performance Goals may include, without limitation, one or more of the following criteria: revenue; Adjusted EBITDA; net income; earnings per share; operating income; operating margin; cash flow from operations; free cash flow; return on equity; return on assets; total stockholder return; customer growth or customer retention metrics; platform adoption metrics; revenue per customer; annual recurring revenue; net revenue retention rate; new bookings; operating expenses as a percentage of revenue; or any other objective financial, operational, or strategic measure selected by the Administrator. Performance Goals may be applied on an absolute basis, relative to a peer group or index, or relative to the Company's own historical performance.

2.31 "Performance Period" means the period over which the attainment of Performance Goals is measured, as established by the Administrator with respect to each Performance Award.

2.32 "Plan" means this Arbor Health Technologies Inc. 2024 Equity Incentive Plan, as may be amended from time to time.

2.33 "Prior Plan" means the Arbor Health Technologies Inc. 2014 Stock Incentive Plan, under which 12,000,000 shares of Common Stock were authorized for issuance, of which 11,200,000 shares have been granted as options (8,400,000 of which had vested as of the Effective Date), at a weighted average exercise price of $3.25 per share.

2.34 "Restricted Stock Award" means an Award of shares of Common Stock granted pursuant to Article 8 of this Plan that is subject to restrictions on transfer, vesting conditions, and/or forfeiture conditions, as set forth in the applicable Award Agreement.

2.35 "Restricted Stock Unit" or "RSU" means an Award granted pursuant to Article 9 of this Plan representing the right to receive one share of Common Stock (or the cash equivalent thereof) upon the satisfaction of applicable vesting conditions, as set forth in the applicable Award Agreement.

2.36 "SAR" or "Stock Appreciation Right" means an Award granted pursuant to Article 7 of this Plan that provides the Participant with the right to receive, upon exercise, an amount equal to the appreciation in value of a specified number of shares of Common Stock.

2.37 "Section 409A" means Section 409A of the Internal Revenue Code of 1986, as amended, and the Treasury Regulations and other official guidance promulgated thereunder. Any reference to Section 409A shall include any successor provision and any regulations or other formal guidance issued with respect thereto.

2.38 "Securities Act" means the Securities Act of 1933, as amended from time to time, and the rules and regulations promulgated thereunder. Any reference to a specific section of the Securities Act shall include any successor provision thereof.

2.39 "Subsidiary" means any corporation (or other entity that is treated as a corporation for tax purposes) in which the Company owns, directly or indirectly, stock possessing fifty percent (50%) or more of the total combined voting power of all classes of stock of such corporation, or any other entity (including partnerships and limited liability companies) in which the Company owns, directly or indirectly, fifty percent (50%) or more of the combined voting power or value of all classes of equity interests. For purposes of determining eligibility for Incentive Stock Options, the term "Subsidiary" shall have the meaning set forth in Section 424(f) of the Code.

2.40 "Ten Percent Stockholder" means an individual who, at the time of grant, owns (or is deemed to own pursuant to Section 424(d) of the Code) stock possessing more than ten percent (10%) of the total combined voting power of all classes of stock of the Company or any Subsidiary.

ARTICLE 3: SHARES SUBJECT TO THE PLAN

Section 3.1 — Share Reserve

Subject to adjustment as provided in Section 3.4 and the operation of the evergreen provision set forth in Section 3.2, the maximum aggregate number of shares of Common Stock that may be issued pursuant to Awards granted under this Plan shall be ten million three hundred thousand (10,300,000) shares, which represents approximately ten percent (10%) of the Company's post-IPO outstanding shares of Common Stock (103,000,000 shares). All shares of Common Stock reserved for issuance under this Plan are authorized from the Company's 400,000,000 shares of authorized Common Stock, par value $0.001 per share, as set forth in the Company's Amended and Restated Certificate of Incorporation filed with the Secretary of State of the State of Delaware on February 13, 2024.

The maximum aggregate number of shares of Common Stock that may be issued pursuant to the exercise of Incentive Stock Options under this Plan shall be ten million three hundred thousand (10,300,000) shares, subject to adjustment as provided in Section 3.4.

The maximum aggregate number of shares of Common Stock with respect to which Options or Stock Appreciation Rights may be granted to any single Participant during any single Fiscal Year shall not exceed two million (2,000,000) shares, subject to adjustment as provided in Section 3.4.

The maximum aggregate number of shares of Common Stock with respect to which Restricted Stock Awards, Restricted Stock Units, and other full-value Awards may be granted to any single Participant during any single Fiscal Year shall not exceed one million (1,000,000) shares, subject to adjustment as provided in Section 3.4.

The maximum aggregate amount that may be paid to any single Participant during any single Fiscal Year with respect to cash-denominated Performance Awards shall not exceed five million dollars ($5,000,000).

Shares of Common Stock issued under the Plan may be authorized but unissued shares, treasury shares, or shares purchased on the open market.

Section 3.2 — Annual Evergreen Provision

On the first day of each Fiscal Year beginning with the Fiscal Year commencing January 1, 2025, and continuing through and including the Fiscal Year commencing January 1, 2034, the number of shares of Common Stock reserved and available for issuance under this Plan shall automatically increase by an amount equal to the lesser of:

(a) three percent (3%) of the total number of shares of Common Stock outstanding on the last day of the immediately preceding Fiscal Year (determined on a fully-issued basis, without giving effect to the conversion, exercise, or settlement of any outstanding Awards, options, warrants, or convertible securities); and

(b) such lesser number of shares of Common Stock as may be determined by the Board prior to the applicable January 1.

The Board may act prior to the first day of any Fiscal Year to provide that there shall be no increase in the share reserve for such Fiscal Year, or to specify a lesser number of shares by which the share reserve shall increase. In no event shall the evergreen provision result in shares being added to the Plan if doing so would cause the total number of shares available for issuance under the Plan (including all shares previously issued pursuant to Awards, plus all shares then subject to outstanding Awards, plus all shares then available for future grants) to exceed a number determined by the Board to be appropriate in light of the Company's fully diluted capitalization and prevailing best practices for equity compensation plans in the healthcare technology industry.

Section 3.3 — Share Counting and Recycling

The following rules shall apply for purposes of determining the number of shares of Common Stock available for issuance under the Plan:

(a) Returned Shares. If any Award granted under this Plan expires, is forfeited, is cancelled, or terminates for any reason without the issuance of shares of Common Stock (or, in the case of Restricted Stock Awards, if shares are forfeited back to the Company), the shares of Common Stock subject to such Award (or the forfeited portion thereof) shall again become available for issuance under this Plan.

(b) Tax Withholding Shares. Shares of Common Stock that are withheld by the Company or tendered by a Participant (either by actual delivery or attestation) to satisfy tax withholding obligations arising in connection with the exercise, vesting, or settlement of an Award shall NOT be added back to the share reserve and shall not become available again for issuance under this Plan.

(c) Exercise Price Shares. Shares of Common Stock that are tendered by a Participant (either by actual delivery or attestation) or withheld by the Company to pay the exercise price of an Option shall NOT be added back to the share reserve and shall not become available again for issuance under this Plan.

(d) Open Market Repurchases. Shares of Common Stock repurchased by the Company on the open market using proceeds received from the exercise of Options shall NOT be added to the share reserve and shall not become available for issuance under this Plan.

(e) SAR Net Settlement. Upon the exercise of a Stock Appreciation Right that is settled in shares of Common Stock, only the net number of shares of Common Stock actually issued to the Participant upon such exercise shall be counted against the share reserve. The gross number of shares subject to the exercised SAR (less the net shares actually delivered) shall not be added back to the share reserve.

(f) Cash-Settled Awards. Awards that are settled entirely in cash shall not reduce the share reserve.

(g) No Recycling from Prior Plan. Shares of Common Stock subject to awards granted under the Prior Plan that are outstanding as of the Effective Date and that are subsequently forfeited, expire unexercised, or are cancelled after the Effective Date shall NOT be added to the share reserve under this Plan. Such shares shall remain subject to the Prior Plan and shall not become available for issuance under this Plan.

Section 3.4 — Adjustments for Capital Changes

In the event of any stock split, reverse stock split, stock dividend, recapitalization, combination of shares, reclassification of shares, spin-off, reorganization, partial or complete liquidation, or other similar change in the capital structure of the Company (including an extraordinary dividend or distribution in a form other than Common Stock), or in the event of any merger, consolidation, acquisition of property or shares, separation, reorganization (other than a mere reincorporation or the creation of a holding company), or other similar transaction or event that affects the Common Stock, the Administrator shall, in such manner as it deems equitable and appropriate, proportionately adjust the following in order to prevent the dilution or enlargement of benefits intended to be made available under the Plan:

(i) the aggregate number and kind of shares of Common Stock reserved for issuance under the Plan pursuant to Section 3.1 (including the ISO sub-limit);

(ii) the number and kind of shares of Common Stock subject to each outstanding Award;

(iii) the exercise price, base price, or purchase price per share of each outstanding Option and Stock Appreciation Right;

(iv) the per-person annual Award limits set forth in Section 3.1; and

(v) the number of shares subject to the annual evergreen provision set forth in Section 3.2.

All such adjustments shall be made in a manner consistent with Section 409A of the Code and, with respect to Incentive Stock Options, in a manner consistent with Section 424(a) of the Code. The Administrator's determination with respect to any such adjustments shall be final, binding, and conclusive. Except as expressly provided herein, no issuance by the Company of shares of stock of any class, or securities convertible into shares of stock of any class, shall affect, and no adjustment by reason thereof shall be made with respect to, the number or price of shares of Common Stock subject to an Award.

Section 3.5 — Substitute Awards

Awards may be granted under this Plan in assumption of, or in substitution for, outstanding awards previously granted by an entity that is acquired by the Company or an Affiliate, or with which the Company or an Affiliate combines, in each case in a transaction constituting a "change in the ownership or effective control" or a "change in the ownership of a substantial portion of the assets" of such entity within the meaning of Section 409A (or a transaction to which Section 424(a) of the Code applies) ("Substitute Awards"). Substitute Awards shall not reduce the share reserve set forth in Section 3.1 and shall not be subject to the per-person annual Award limits set forth in Section 3.1. The terms and conditions of Substitute Awards may vary from the terms and conditions required by the Plan to the extent the Administrator deems appropriate to conform, in whole or in part, to the provisions of the awards in substitution for which they are granted, subject to compliance with Applicable Law and Section 409A.

ARTICLE 4: ELIGIBILITY

Section 4.1 — General Eligibility

Awards may be granted under this Plan to any Employee, Consultant, or Director of the Company or any of its Affiliates, as determined by the Administrator. The Administrator shall select the Participants to whom Awards shall be granted, shall determine the type and amount of each Award, and shall establish the terms and conditions of each Award, in each case subject to the provisions of this Plan.

Incentive Stock Options may be granted only to Employees of the Company or a Subsidiary (within the meaning of Section 424(f) of the Code). Non-Qualified Stock Options, Stock Appreciation Rights, Restricted Stock Awards, Restricted Stock Units, Performance Awards, and Other Stock-Based Awards may be granted to any eligible Employee, Consultant, or Director.

As of December 31, 2023, the Company and its Affiliates had approximately 3,400 employees, all of whom are eligible to receive Awards under this Plan. In addition, the Company's seven (7) members of the Board of Directors, as well as any Consultants engaged by the Company or its Affiliates, are eligible to receive Awards (other than ISOs, in the case of non-employee Directors and Consultants).

The grant of an Award to an eligible person shall not obligate the Company to grant additional Awards to such person or to any other person, nor shall it imply any right of any person to receive future Awards.

Section 4.2 — Non-Employee Director Compensation Limit

Notwithstanding any other provision of this Plan, the aggregate grant date fair value (computed as of the date of grant in accordance with applicable financial accounting rules) of all Awards granted to any non-employee Director during any single Fiscal Year, taken together with any cash fees, retainers, or other cash compensation paid or payable to such non-employee Director for services as a Director during such Fiscal Year, shall not exceed seven hundred fifty thousand dollars ($750,000); provided, however, that such limit shall be one million dollars ($1,000,000) for the Fiscal Year in which such non-employee Director first commences service on the Board. For the avoidance of doubt, compensation paid to a Director for services rendered in a capacity other than as a Director (for example, as a Consultant or as an employee of the Company) shall not be counted toward the foregoing limits.

ARTICLE 5: ADMINISTRATION

Section 5.1 — Authority of the Administrator

The Plan shall be administered by the Administrator. Subject to the terms of this Plan and Applicable Law, the Administrator shall have full power and authority to:

(a) select and designate the Employees, Consultants, and Directors who shall be granted Awards;

(b) determine the type or types of Awards to be granted to each Participant;

(c) determine the number of shares of Common Stock to be covered by (or with respect to which payments, rights, or other matters are to be calculated in connection with) each Award;

(d) determine the terms and conditions of each Award, including the exercise price, base price, purchase price, vesting schedule, performance conditions, restriction period, settlement terms, payment terms, and any other term or condition, in each case consistent with the provisions of this Plan;

(e) interpret and construe the Plan, any Award Agreement, and any rules and regulations adopted under the Plan, and to make all factual determinations, including the determination of eligibility and entitlement to benefits under the Plan;

(f) establish, amend, suspend, or rescind such rules and regulations and appoint such agents as it deems necessary or appropriate for the proper administration of the Plan;

(g) determine the Fair Market Value of the Common Stock in accordance with Section 2.21;

(h) determine whether, to what extent, and under what circumstances Awards may be settled, cancelled, forfeited, exchanged, or surrendered;

(i) modify, amend, or adjust the terms and conditions of any Award, subject to the provisions of Article 13 and Article 14;

(j) accelerate the vesting, exercisability, or settlement of any Award, including upon a Change in Control, Disability, death, retirement, or other termination of service;

(k) determine whether, to what extent, and under what circumstances cash, shares of Common Stock, other property, or other forms of consideration shall be delivered in satisfaction of any rights under the Plan;

(l) prescribe the form of each Award Agreement and any other form, notice, or document required under the Plan; and

(m) make all other determinations and take all other actions that the Administrator deems necessary or desirable for the administration of the Plan.

All decisions, determinations, and interpretations made by the Administrator shall be final, binding, and conclusive on all persons, including the Company, its Affiliates, Participants, beneficiaries, and any other persons claiming rights under the Plan or any Award.

The Administrator may, to the extent permitted by Applicable Law, delegate to one or more officers of the Company (including the Chief Executive Officer, Dr. Nathaniel Rourke) the authority to grant Awards to Employees who are not officers subject to Section 16 of the Exchange Act, and to determine the terms and conditions of such Awards, subject to such limitations on the aggregate number of shares and per-person maximums as the Administrator may establish. Any such delegation shall be set forth in a written resolution of the Administrator specifying the scope and limitations of the delegated authority. The Administrator may not delegate its authority with respect to Awards granted to persons who are subject to Section 16 of the Exchange Act or to non-employee Directors.

Section 5.2 — Committee Composition

The Committee shall consist of no fewer than two (2) members of the Board. Each member of the Committee shall qualify as: (a) a "non-employee director" within the meaning of Rule 16b-3 promulgated under the Exchange Act; and (b) an "independent director" as defined under the rules and listing standards of the New York Stock Exchange, including Section 303A.05 of the NYSE Listed Company Manual.

As of the date of adoption of this Plan, the Compensation Committee of the Board consists of Dr. Samuel Obadina (Chair), Diana Coltrane, and Carolyn Whittemore. The Board may, at any time and from time to time, change the composition of the Committee, appoint additional members, remove members (with or without cause), and fill vacancies on the Committee, in each case subject to the requirements of this Section 5.2.

The Committee may act by a majority of its members at a meeting, or by unanimous written consent without a meeting, in accordance with the Company's Amended and Restated Bylaws and the charter of the Compensation Committee.

Section 5.3 — Indemnification

Each member of the Administrator (including each member of the Committee and the Board, and each officer to whom authority has been delegated pursuant to Section 5.1) shall be indemnified and held harmless by the Company against and from any and all losses, costs, liabilities, and expenses (including attorneys' fees) that may be imposed upon or reasonably incurred by such person in connection with or resulting from any claim, action, suit, or proceeding to which such person may be a party or in which such person may be involved by reason of any action or failure to act under this Plan, to the fullest extent permitted under applicable law, including the Delaware General Corporation Law, and under the Company's Amended and Restated Certificate of Incorporation and Amended and Restated Bylaws. The foregoing right of indemnification shall not be exclusive of any other rights of indemnification to which such persons may be entitled under the Company's organizational documents, any insurance policy, any agreement, any vote of stockholders or disinterested directors, or otherwise, and shall be in addition to all other rights of indemnification and advancement of expenses to which such persons may be entitled.

ARTICLE 6: STOCK OPTIONS

Section 6.1 — Grant of Options

The Administrator may grant Options to eligible Employees, Consultants, and Directors, subject to the terms and conditions of this Plan. Each Option shall be designated in the applicable Award Agreement as either an Incentive Stock Option or a Non-Qualified Stock Option. If an Option is not expressly designated as an Incentive Stock Option, or if an Option designated as an Incentive Stock Option fails to qualify as such for any reason, such Option shall be treated as a Non-Qualified Stock Option.

Incentive Stock Options may be granted only to Employees of the Company or a Subsidiary (within the meaning of Section 424(f) of the Code). Non-Qualified Stock Options may be granted to any eligible Employee, Consultant, or Director.

Each grant of an Option shall be evidenced by an Award Agreement that shall specify the number of shares of Common Stock subject to the Option, the exercise price, the vesting schedule, the Option Period, whether the Option is an ISO or NQSO, and such other terms and conditions as the Administrator shall determine, in each case consistent with the provisions of this Plan.

Section 6.2 — Exercise Price

The per-share exercise price of each Option granted under this Plan shall be established by the Administrator at the time of grant and shall not be less than one hundred percent (100%) of the Fair Market Value of a share of Common Stock on the date of grant. In the case of an Incentive Stock Option granted to a Ten Percent Stockholder, the per-share exercise price shall not be less than one hundred ten percent (110%) of the Fair Market Value of a share of Common Stock on the date of grant.

Notwithstanding any other provision of this Plan, in no event shall the per-share exercise price of any Option be less than the Fair Market Value of a share of Common Stock on the date of grant, as required for compliance with Section 409A of the Code.

Section 6.3 — Vesting and Exercisability

The vesting schedule applicable to each Option shall be determined by the Administrator and set forth in the applicable Award Agreement. Unless otherwise specified in the Award Agreement, Options shall vest in accordance with the following standard vesting schedule: twenty-five percent (25%) of the shares subject to the Option shall vest and become exercisable on the first anniversary of the date of grant (the "cliff vesting date"), and the remaining seventy-five percent (75%) shall vest and become exercisable in equal monthly installments over the thirty-six (36) months following the cliff vesting date, in each case subject to the Participant's Continuous Service through each applicable vesting date. The Administrator may, in its discretion, establish alternative vesting schedules, including quarterly installments, annual installments, performance-based vesting, or any other schedule deemed appropriate.

The Administrator may, in its discretion and subject to the terms of this Plan, accelerate the vesting and exercisability of any Option at any time and for any reason, including without limitation upon a Change in Control, the Participant's Disability, the Participant's death, or such other circumstances as the Administrator deems appropriate. Any such acceleration shall be set forth in the Award Agreement or in a resolution of the Administrator.

No Option shall be exercisable to the extent that it has not yet vested, except as otherwise expressly provided in the applicable Award Agreement or by action of the Administrator.

Section 6.4 — Option Period (Term)

Each Option shall be exercisable for a period specified in the applicable Award Agreement (the "Option Period"), which shall in no event extend beyond the tenth (10th) anniversary of the date of grant. In the case of an Incentive Stock Option granted to a Ten Percent Stockholder, the Option Period shall not extend beyond the fifth (5th) anniversary of the date of grant.

If the Option Period is not specified in the Award Agreement, the Option Period shall be ten (10) years from the date of grant (or five (5) years for an ISO granted to a Ten Percent Stockholder).

Section 6.5 — Method of Exercise

Options shall be exercised by delivery of written or electronic notice to the Company (or its designated agent), in such form as the Administrator may require, specifying the number of shares of Common Stock with respect to which the Option is being exercised. Such notice shall be accompanied by full payment of the aggregate exercise price and any applicable tax withholding obligations.

The aggregate exercise price may be paid by one or more of the following methods, as permitted by the Administrator and specified in the applicable Award Agreement:

(a) Cash or Check. Payment in United States dollars by cash, personal check, certified check, bank draft, or wire transfer.

(b) Net Exercise / Cashless Exercise. A "cashless exercise" through a broker-assisted program established by the Company, in which the broker delivers to the Company the aggregate exercise price from the proceeds of the sale of shares of Common Stock acquired upon exercise.

(c) Stock Tender. Delivery (either by actual delivery or by attestation) of shares of Common Stock previously owned by the Participant and held for at least six (6) months (or such other period as the Administrator may require to avoid adverse accounting treatment), valued at the Fair Market Value on the date of exercise.

(d) Net Share Settlement. A "net exercise" procedure pursuant to which the Company withholds from the shares otherwise issuable upon exercise that number of shares having an aggregate Fair Market Value (on the date of exercise) equal to the aggregate exercise price and, if applicable, the amount of tax withholding obligations, and delivers to the Participant only the net number of shares.

(e) Combination. Any combination of the foregoing methods.

(f) Other Methods. Any other method approved by the Administrator that is consistent with Applicable Law and the terms of the Plan.

No shares of Common Stock shall be issued upon exercise of an Option until the aggregate exercise price has been paid in full and all applicable withholding taxes have been satisfied.

Section 6.6 — Termination of Service

The following provisions shall apply to the exercise of vested Options following termination of a Participant's Continuous Service, unless otherwise provided in the applicable Award Agreement or in a written employment, consulting, or severance agreement between the Participant and the Company or an Affiliate:

(a) Termination Other Than for Cause, Disability, or Death. If a Participant's Continuous Service terminates for any reason other than Cause, Disability, or death, the Participant may exercise any vested and unexercised Options for a period of three (3) months following the date of such termination (or such longer period as may be specified in the applicable Award Agreement), but in no event beyond the original expiration date of the Option. Any portion of an Option that is not vested as of the date of termination shall be forfeited immediately upon such termination.

(b) Disability. If a Participant's Continuous Service terminates by reason of Disability, the Participant (or the Participant's legal representative) may exercise any vested and unexercised Options for a period of twelve (12) months following the date of such termination (or such longer period as may be specified in the applicable Award Agreement), but in no event beyond the original expiration date of the Option.

(c) Death. If a Participant's Continuous Service terminates by reason of death, or if the Participant dies within the period following termination during which the Option remains exercisable under this Section 6.6, the Participant's estate, personal representative, or beneficiary (as applicable) may exercise any vested and unexercised Options for a period of twelve (12) months following the date of death (or such longer period as may be specified in the applicable Award Agreement), but in no event beyond the original expiration date of the Option.

(d) Termination for Cause. If a Participant's Continuous Service is terminated for Cause, all outstanding Options held by the Participant (whether vested or unvested) shall immediately terminate and be forfeited as of the date of such termination, and the Participant shall have no right to exercise any such Options after the date of termination. Furthermore, if the Administrator determines at any time after a Participant's termination of Continuous Service that grounds for termination for Cause existed at the time of such termination, all outstanding Options held by the Participant shall be deemed to have terminated as of the date of such termination.

In no event shall any Option be exercisable after the expiration of the original Option Period.

Section 6.7 — ISO Limitations

The aggregate Fair Market Value (determined as of the date of grant) of shares of Common Stock with respect to which Incentive Stock Options become exercisable for the first time by any Participant during any calendar year (under this Plan and all other plans of the Company and its Subsidiaries) shall not exceed one hundred thousand dollars ($100,000). To the extent that the aggregate Fair Market Value of shares with respect to which ISOs granted to a Participant become exercisable for the first time during any calendar year exceeds such limit, the Options or portions thereof that exceed such limit (determined in the order in which they were granted) shall be treated as Non-Qualified Stock Options, notwithstanding any designation to the contrary in the applicable Award Agreement.

Incentive Stock Options shall contain such additional terms and conditions as may be required to satisfy the requirements of Section 422 of the Code and the Treasury Regulations promulgated thereunder. The Administrator shall have no liability to any Participant or any other person if an Option designated as an ISO fails to qualify as such for any reason, and any such Option shall be treated as an NQSO.

ARTICLE 7: STOCK APPRECIATION RIGHTS

Section 7.1 — Grant of SARs

The Administrator may grant Stock Appreciation Rights to eligible Employees, Consultants, and Directors, subject to the terms and conditions of this Plan. SARs may be granted independently of, or in tandem with, Options. A SAR granted in tandem with an Option shall be exercisable only to the extent that the related Option is exercisable and shall terminate upon the termination or exercise of the related Option (and vice versa).

Each SAR shall entitle the Participant, upon exercise, to receive an amount (in cash, shares of Common Stock, or a combination thereof, as determined by the Administrator) equal to the excess, if any, of the Fair Market Value of a share of Common Stock on the date of exercise over the per-share exercise price of the SAR, multiplied by the number of shares of Common Stock with respect to which the SAR is exercised.

Each grant of a SAR shall be evidenced by an Award Agreement that shall specify the number of shares subject to the SAR, the exercise price, the vesting schedule, the term, the form of settlement, and such other terms and conditions as the Administrator shall determine, in each case consistent with the provisions of this Plan.

Section 7.2 — SAR Exercise Price

The per-share exercise price of each SAR granted under this Plan shall be established by the Administrator at the time of grant and shall not be less than one hundred percent (100%) of the Fair Market Value of a share of Common Stock on the date of grant. In no event shall the per-share exercise price of any SAR be less than the Fair Market Value of a share of Common Stock on the date of grant, as required for compliance with Section 409A of the Code.

For a SAR granted in tandem with an Option, the exercise price of the SAR shall be equal to the exercise price of the related Option.

Section 7.3 — Vesting, Term, and Exercise

The vesting schedule applicable to each SAR shall be determined by the Administrator and set forth in the applicable Award Agreement. The Administrator may establish time-based vesting, performance-based vesting, or any combination thereof.

No SAR shall be exercisable after the expiration of ten (10) years from the date of grant. SARs may be exercised in whole or in part, subject to the applicable vesting conditions.

Upon exercise of a SAR, settlement shall be made in shares of Common Stock, cash, or a combination thereof, as determined by the Administrator and set forth in the applicable Award Agreement. If settled in shares of Common Stock, the number of shares delivered shall be determined by dividing the aggregate spread amount (the excess of the Fair Market Value over the exercise price, multiplied by the number of shares with respect to which the SAR is exercised) by the Fair Market Value of a share of Common Stock on the date of exercise, rounded down to the nearest whole share.

Section 7.4 — Termination of Service

The provisions of Section 6.6 (Termination of Service) applicable to Options shall apply equally to Stock Appreciation Rights granted under this Article 7, with such modifications as are appropriate to reflect the terms of SARs, unless otherwise provided in the applicable Award Agreement.

ARTICLE 8: RESTRICTED STOCK AWARDS

Section 8.1 — Grant of Restricted Stock

The Administrator may grant Restricted Stock Awards to eligible Employees, Consultants, and Directors, subject to the terms and conditions of this Plan. Each Restricted Stock Award shall consist of shares of Common Stock that are issued to the Participant subject to restrictions on transfer, vesting conditions, and/or forfeiture conditions, as set forth in the applicable Award Agreement.

Each grant of a Restricted Stock Award shall be evidenced by an Award Agreement that shall specify the number of shares of Common Stock subject to the Award, the restriction period (or periods), the conditions upon which the restrictions shall lapse, the purchase price (if any, which may be zero), and such other terms and conditions as the Administrator shall determine, in each case consistent with the provisions of this Plan.

Section 8.2 — Restrictions and Conditions

During the restriction period applicable to a Restricted Stock Award, the shares of Common Stock subject to such Award may not be sold, assigned, transferred, pledged, hypothecated, or otherwise disposed of or encumbered by the Participant, except as otherwise provided in the applicable Award Agreement or as permitted by the Administrator.

The restrictions imposed on shares of Restricted Stock shall lapse in accordance with the vesting schedule or conditions established by the Administrator, which may be based on the Participant's Continuous Service, the achievement of Performance Goals, or a combination of the foregoing, as set forth in the applicable Award Agreement. The Administrator may, in its discretion, impose additional restrictions on shares of Restricted Stock, including restrictions on the right to vote and the right to receive dividends.

The Administrator may, in its discretion and subject to the terms of this Plan, accelerate the lapse of restrictions on all or any portion of a Restricted Stock Award at any time and for any reason, including without limitation upon a Change in Control, the Participant's Disability, the Participant's death, or such other circumstances as the Administrator deems appropriate.

Section 8.3 — Rights as a Stockholder

Subject to the restrictions set forth in this Article 8 and in the applicable Award Agreement, a Participant who has been granted a Restricted Stock Award shall have the rights of a stockholder of the Company with respect to the shares of Common Stock subject to such Award, including the right to vote such shares and the right to receive dividends with respect to such shares; provided, however, that the treatment of dividends on shares of Restricted Stock shall be as specified in the applicable Award Agreement.

The Administrator may provide that any dividends paid on unvested shares of Restricted Stock shall be (a) paid to the Participant currently in cash or in additional shares of Common Stock, (b) accumulated and held in escrow by the Company (or a designated agent), subject to the same vesting conditions as the underlying shares of Restricted Stock, and paid to the Participant only if and when the underlying shares vest, or (c) subject to such other treatment as specified in the applicable Award Agreement. In no event shall dividends on unvested shares of Restricted Stock be paid to the Participant prior to the vesting of such shares unless the applicable Award Agreement expressly provides otherwise.

Section 8.4 — Certificates and Legends

Shares of Common Stock subject to a Restricted Stock Award may be evidenced in such manner as the Administrator shall determine, including by book-entry registration in the name of the Participant with the Company's transfer agent, Continental Share Services, Inc. If certificates representing shares of Restricted Stock are issued, such certificates shall bear such restrictive legends as the Administrator and the Company's counsel deem necessary or advisable under this Plan, the applicable Award Agreement, Applicable Law, and any applicable securities laws, and shall be held in custody by the Company or its designee until the restrictions thereon have lapsed. The CUSIP number for the Company's Common Stock is 039217105.

Section 8.5 — Forfeiture

Upon the termination of a Participant's Continuous Service prior to the lapse of restrictions on all or any portion of a Restricted Stock Award, the unvested shares of Restricted Stock shall be immediately forfeited and returned to the Company without consideration (or, if the Participant paid a purchase price for such shares, repurchased by the Company at the original purchase price paid by the Participant), unless otherwise provided in the applicable Award Agreement. The Participant shall have no further rights with respect to any forfeited shares.

Upon forfeiture, the Company shall instruct Continental Share Services, Inc. (or any successor transfer agent) to cancel or transfer the forfeited shares as directed by the Company. If any dividends or other distributions on the forfeited shares were held in escrow or accumulated subject to vesting conditions, such amounts shall also be forfeited and returned to the Company.

ARTICLE 9: RESTRICTED STOCK UNITS

Section 9.1 — Grant of RSUs

The Administrator may grant Restricted Stock Units to eligible Employees, Consultants, and Directors, subject to the terms and conditions of this Plan. Each RSU shall represent the right to receive one (1) share of Common Stock (or the cash equivalent thereof, as determined by the Administrator) upon the satisfaction of applicable vesting conditions, as set forth in the applicable Award Agreement.

Each grant of RSUs shall be evidenced by an Award Agreement that shall specify the number of RSUs granted, the vesting schedule, the settlement terms, and such other terms and conditions as the Administrator shall determine, in each case consistent with the provisions of this Plan.

RSUs shall not constitute issued and outstanding shares of Common Stock of the Company and shall not entitle the Participant to any of the rights of a stockholder of the Company, except as otherwise expressly provided in this Article 9 or in the applicable Award Agreement.

Section 9.2 — Vesting

The vesting schedule applicable to each grant of RSUs shall be determined by the Administrator and set forth in the applicable Award Agreement. The Administrator may establish time-based vesting, performance-based vesting, or a combination thereof, as it deems appropriate.

Unless otherwise specified in the Award Agreement, RSUs shall vest in acco

ARBOR HEALTH TECHNOLOGIES INC.
2024 EQUITY INCENTIVE PLAN
Adopted by the Board of Directors: January 15, 2024
Effective Date: Immediately prior to the date of effectiveness of the Registration Statement on Form S-1 (File No. 333-276841) filed by the Company with the Securities and Exchange Commission in connection with the Company's initial public offering of shares of Common Stock on the New York Stock Exchange (the "Effective Date")
Registration Statement declared effective: February 8, 2024 IPO closing date: February 13, 2024
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ARTICLE 1: PURPOSE
The purpose of the Arbor Health Technologies Inc. 2024 Equity Incentive Plan (the "Plan") is to advance the interests of Arbor Health Technologies Inc., a Delaware corporation (the "Company"), and its stockholders by providing a means to attract, retain, and motivate employees, consultants, and members of the Board of Directors of the Company and its Affiliates who are expected to make important contributions to the Company's growth, success, and long-term value creation. The Plan is designed to enable the Company to offer equity-based and cash-based incentive compensation opportunities that are competitive within the healthcare services and software-as-a-service ("SaaS") industry, thereby strengthening the Company's ability to recruit and retain the high-caliber talent essential to the execution of the Company's strategic objectives.
Through the grant of Awards under this Plan, the Company seeks to align the interests of Participants with those of the Company's stockholders by encouraging and facilitating ownership of shares of Common Stock, thus providing Participants with a direct and meaningful stake in the Company's long-term performance and the appreciation in value of the Company's Common Stock.
The Plan succeeds the Company's 2014 Stock Incentive Plan (the "Prior Plan") with respect to the grant of new Awards following the Effective Date. No new Awards shall be granted under the Prior Plan on or after the Effective Date. Notwithstanding the foregoing, all Awards outstanding under the Prior Plan as of the Effective Date shall continue to be governed by the terms and conditions of the Prior Plan and the applicable award agreements thereunder, and nothing in this Plan shall be deemed to amend, modify, or otherwise affect any such outstanding awards.
ARTICLE 2: DEFINITIONS
As used in this Plan, the following terms shall have the meanings set forth below. Capitalized terms used but not defined herein shall have the meanings ascribed to them elsewhere in the Plan.
2.1 "Administrator" means the Board of Directors of the Company, or a Committee designated by the Board to administer the Plan. Unless the Board determines otherwise, the Administrator shall be the Compensation Committee of the Board. As of the date of adoption of this Plan, the Compensation Committee consists of Dr. Samuel Obadina (Chair), Diana Coltrane, and Carolyn Whittemore. To the extent that the Board or a Committee has delegated authority to one or more officers of the Company in accordance with Section 5.1, the term "Administrator" shall also refer to such officer(s) with respect to the scope of such delegated authority.
2.2 "Affiliate" means any entity that, directly or indirectly, controls, is controlled by, or is under common control with, the Company. For purposes of this definition, "control" (including the terms "controlled by" and "under common control with") means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of an entity, whether through the ownership of voting securities, by contract, or otherwise.
2.3 "Applicable Law" means the requirements and limitations imposed by, and the applicable provisions of, federal and state securities laws (including the Securities Act of 1933, as amended, and the Securities Exchange Act of 1934, as amended), the Internal Revenue Code of 1986, as amended, the rules and regulations promulgated by the Securities and Exchange Commission, the listing rules and corporate governance standards of the New York Stock Exchange (including the NYSE Listed Company Manual), the laws of the State of Delaware, and any other applicable law, regulation, rule, or governmental or regulatory requirement, whether domestic or foreign, that may be in effect from time to time.
2.4 "Award" means any Option, Stock Appreciation Right, Restricted Stock Award, Restricted Stock Unit, Performance Award, or Other Stock-Based Award granted under this Plan.
2.5 "Award Agreement" means the written or electronic agreement, notice, or other instrument or document evidencing the terms and conditions of an Award granted under this Plan, as may be amended from time to time. Each Award Agreement shall be subject to the applicable terms and conditions of the Plan, and any provisions in an Award Agreement that are inconsistent with the Plan shall be governed by the Plan.
2.6 "Board" means the Board of Directors of Arbor Health Technologies Inc.
2.7 "Cause" means, unless otherwise defined in the applicable Award Agreement or in a written employment, consulting, or severance agreement between the Participant and the Company or an Affiliate, any of the following: (a) the Participant's willful misconduct or gross negligence in the performance of the Participant's duties to the Company or an Affiliate; (b) the Participant's conviction of, or plea of guilty or nolo contendere to, a felony or any crime involving moral turpitude, fraud, dishonesty, or embezzlement; (c) the Participant's material breach of any written agreement between the Participant and the Company or an Affiliate, including any non-competition, non-solicitation, confidentiality, or inventions assignment agreement; (d) the Participant's material violation of the Company's written policies or codes of conduct, including the Company's Code of Business Conduct and Ethics; (e) the Participant's willful and continued failure to perform the Participant's assigned duties after written notice from the Company and a reasonable opportunity to cure (to the extent such failure is curable); or (f) the Participant's material act of fraud, dishonesty, or misappropriation against the Company or any Affiliate.
2.8 "Change in Control" means the occurrence of any one or more of the following events:
(a) Acquisition of Voting Stock. The acquisition by any individual, entity, or group (within the meaning of Section 13(d)(3) or Section 14(d)(2) of the Exchange Act) (a "Person") of beneficial ownership (within the meaning of Rule 13d-3 under the Exchange Act) of more than fifty percent (50%) of the combined voting power of the then-outstanding voting securities of the Company entitled to vote generally in the election of directors (the "Outstanding Company Voting Securities"); provided, however, that for purposes of this subsection (a), the following acquisitions shall not constitute a Change in Control: (i) any acquisition directly from the Company; (ii) any acquisition by the Company or any Subsidiary; (iii) any acquisition by any employee benefit plan (or related trust) sponsored or maintained by the Company or any Subsidiary; or (iv) any acquisition by any Person pursuant to a transaction that complies with subsection (c)(i), (c)(ii), and (c)(iii) below;
(b) Change in Board Composition. Individuals who, as of the Effective Date, constitute the Board (the "Incumbent Board") cease for any reason to constitute at least a majority of the Board; provided, however, that any individual who becomes a member of the Board subsequent to the Effective Date whose election, or nomination for election by the Company's stockholders, was approved by a vote of at least a majority of the directors then comprising the Incumbent Board shall be considered as though such individual were a member of the Incumbent Board, but excluding, for this purpose, any such individual whose initial assumption of office occurs as a result of an actual or threatened election contest with respect to the election or removal of directors or other actual or threatened solicitation of proxies or consents by or on behalf of a Person other than the Board;
(c) Merger or Consolidation. Consummation of a reorganization, merger, consolidation, statutory share exchange, or similar form of corporate transaction involving the Company (a "Business Combination"), unless, immediately following such Business Combination, (i) all or substantially all of the individuals and entities who were the beneficial owners of the Outstanding Company Voting Securities immediately prior to such Business Combination beneficially own, directly or indirectly, more than fifty percent (50%) of the combined voting power of the then-outstanding voting securities entitled to vote generally in the election of directors of the entity resulting from such Business Combination (including an entity that, as a result of such transaction, owns the Company or all or substantially all of the Company's assets, either directly or through one or more subsidiaries), (ii) no Person (excluding any entity resulting from such Business Combination or any employee benefit plan or related trust of the Company or such entity resulting from such Business Combination) beneficially owns, directly or indirectly, more than fifty percent (50%) of the combined voting power of the then-outstanding voting securities entitled to vote generally in the election of directors of the entity resulting from such Business Combination, and (iii) at least a majority of the members of the board of directors of the entity resulting from such Business Combination were members of the Incumbent Board at the time of the execution of the initial agreement or the action of the Board providing for such Business Combination; or
(d) Liquidation or Sale of Assets. Consummation of a complete liquidation or dissolution of the Company, or the sale or other disposition of all or substantially all of the assets of the Company, other than to an entity with respect to which, following such sale or other disposition, the conditions described in subsection (c)(i), (c)(ii), and (c)(iii) above are satisfied.
Notwithstanding the foregoing, in no event shall the Company's initial public offering of shares of Common Stock on the New York Stock Exchange, or any transactions undertaken in connection therewith (including any reorganization, recapitalization, or change in the Company's capital structure), constitute a "Change in Control" for purposes of this Plan. Additionally, to the extent necessary to comply with Section 409A of the Code with respect to the payment of "nonqualified deferred compensation," a Change in Control shall be deemed to have occurred under the Plan only if such event also constitutes a "change in control event" within the meaning of Treasury Regulation Section 1.409A-3(i)(5).
2.9 "Code" means the Internal Revenue Code of 1986, as amended from time to time, and the Treasury Regulations and other guidance promulgated thereunder. Any reference to a specific section of the Code shall include any successor provision thereof.
2.10 "Committee" means the Compensation Committee of the Board, or such other committee of two or more members of the Board as may be designated by the Board to administer all or any portion of the Plan. Each member of the Committee shall qualify as (a) a "non-employee director" within the meaning of Rule 16b-3 promulgated under the Exchange Act, and (b) an "independent director" as defined under the rules and listing standards of the New York Stock Exchange (including Section 303A.02 and Section 303A.05 of the NYSE Listed Company Manual). If any member of the Committee does not satisfy the foregoing requirements, the Board shall appoint a replacement member who does satisfy such requirements.
2.11 "Common Stock" means the common stock of the Company, par value $0.001 per share, and such other securities as may be substituted for Common Stock pursuant to Article 3 hereof.
2.12 "Company" means Arbor Health Technologies Inc., a Delaware corporation, and any successor thereto.
2.13 "Consultant" means any natural person, including an advisor, who is engaged by the Company or an Affiliate to render bona fide services to the Company or such Affiliate, other than services rendered in connection with the offer or sale of securities in a capital-raising transaction, and who does not render such services as an Employee or Director. A Consultant must be a natural person who provides bona fide services to the Company or an Affiliate within the meaning of Form S-8 under the Securities Act.
2.14 "Continuous Service" means that the Participant's service with the Company or an Affiliate, whether as an Employee, Director, or Consultant, is not interrupted or terminated. A change in the capacity in which the Participant renders service to the Company or an Affiliate (for example, a change from Employee to Consultant status, or a change from Director to Employee status) shall not constitute a termination of Continuous Service, provided that such change does not result in an interruption in the Participant's service. A change in the entity for which the Participant renders service shall not constitute a termination of Continuous Service if the new entity is the Company or an Affiliate. The Administrator, in its sole discretion, shall determine whether a Participant's Continuous Service has terminated and the effective date of such termination, which determination shall be final and binding. Notwithstanding the foregoing, with respect to any Award that constitutes "nonqualified deferred compensation" within the meaning of Section 409A, a termination of Continuous Service shall not be deemed to have occurred for purposes of any provision of the Plan or any Award Agreement relating to the payment or settlement of such Award unless such termination is also a "separation from service" within the meaning of Section 409A.
2.15 "Covered Employee" means any individual who is, or who is reasonably expected to become, a "covered employee" within the meaning of Section 162(m) of the Code and the regulations promulgated thereunder. The Company acknowledges that, following the amendments to Section 162(m) enacted by the Tax Cuts and Jobs Act of 2017 (Public Law 115-97), the performance-based compensation exception under former Section 162(m)(4)(C) is generally no longer available for taxable years beginning after December 31, 2017, except with respect to certain grandfathered arrangements. Notwithstanding the foregoing, the term "Covered Employee" is used in this Plan for informational and administrative purposes.
2.16 "Disability" means, with respect to a Participant, such Participant's disability as defined in the applicable Award Agreement. In the absence of such a definition, "Disability" shall mean: (a) for purposes of determining the tax treatment of Incentive Stock Options, a disability within the meaning of Section 22(e)(3) of the Code (i.e., the inability to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment that can be expected to result in death or that has lasted or can be expected to last for a continuous period of not less than twelve (12) months); and (b) for all other purposes under the Plan, a disability within the meaning of Section 409A(a)(2)(C) of the Code and Treasury Regulation Section 1.409A-3(i)(4).
2.17 "Director" means a member of the Board of Directors of the Company.
2.18 "Effective Date" has the meaning set forth in Article 16 of this Plan.
2.19 "Employee" means any person treated as an employee of the Company or an Affiliate (including officers and Directors who are also employees) for purposes of federal income tax withholding. As of December 31, 2023, the Company and its Affiliates employed approximately 3,400 individuals, all of whom are eligible to participate in this Plan.
2.20 "Exchange Act" means the Securities Exchange Act of 1934, as amended from time to time, and the rules and regulations promulgated thereunder. Any reference to a specific section of the Exchange Act shall include any successor provision thereof.
2.21 "Fair Market Value" means, as of any date of determination:
(a) If the Common Stock is listed on the New York Stock Exchange (or any other established national securities exchange), the closing price of a share of Common Stock as reported on the New York Stock Exchange (or such other exchange) on such date of determination (or, if no shares of Common Stock were traded on such date, on the last preceding trading day on which shares of Common Stock were traded), as reported in The Wall Street Journal or such other source as the Administrator deems reliable. The Company's Common Stock is listed on the New York Stock Exchange under the ticker symbol "ARHT."
(b) If the Common Stock is not listed on a national securities exchange but is regularly quoted in a recognized quotation medium, the mean between the highest bid and lowest asked prices on such date (or, if no prices are quoted on such date, the last preceding date on which prices were quoted).
(c) If neither (a) nor (b) applies, including with respect to any date of determination occurring prior to the listing of the Common Stock on the New York Stock Exchange, the Fair Market Value of the Common Stock shall be determined in good faith by the Board, in a manner consistent with Section 409A of the Code and, as applicable, Section 422 of the Code, taking into account all relevant facts and circumstances, including independent appraisals where appropriate.
2.22 "Fiscal Year" means the fiscal year of the Company, which is the calendar year (January 1 through December 31).
2.23 "Incentive Stock Option" or "ISO" means an Option that is intended to qualify as an "incentive stock option" within the meaning of Section 422 of the Code and the Treasury Regulations promulgated thereunder.
2.24 "Non-Qualified Stock Option" or "NQSO" means an Option that is not intended to qualify as an Incentive Stock Option.
2.25 "Option" means an Incentive Stock Option or a Non-Qualified Stock Option granted pursuant to Article 6 of this Plan.
2.26 "Option Period" means the period during which an Option is exercisable, as set forth in the applicable Award Agreement, which period shall not exceed ten (10) years from the date of grant (or five (5) years from the date of grant in the case of an ISO granted to a Ten Percent Stockholder).
2.27 "Other Stock-Based Award" means an Award granted pursuant to Article 11 of this Plan.
2.28 "Participant" means any eligible Employee, Consultant, or Director who has been granted an Award under this Plan that remains outstanding, including any Award that has not been fully exercised, settled, or forfeited.
2.29 "Performance Award" means an Award granted pursuant to Article 10 of this Plan that is subject to the achievement of Performance Goals during a Performance Period.
2.30 "Performance Goals" means the criteria established by the Administrator for the purposes of determining the degree of vesting, earning, or payout of a Performance Award. Performance Goals may include, without limitation, one or more of the following criteria: revenue; Adjusted EBITDA; net income; earnings per share; operating income; operating margin; cash flow from operations; free cash flow; return on equity; return on assets; total stockholder return; customer growth or customer retention metrics; platform adoption metrics; revenue per customer; annual recurring revenue; net revenue retention rate; new bookings; operating expenses as a percentage of revenue; or any other objective financial, operational, or strategic measure selected by the Administrator. Performance Goals may be applied on an absolute basis, relative to a peer group or index, or relative to the Company's own historical performance.
2.31 "Performance Period" means the period over which the attainment of Performance Goals is measured, as established by the Administrator with respect to each Performance Award.
2.32 "Plan" means this Arbor Health Technologies Inc. 2024 Equity Incentive Plan, as may be amended from time to time.
2.33 "Prior Plan" means the Arbor Health Technologies Inc. 2014 Stock Incentive Plan, under which 12,000,000 shares of Common Stock were authorized for issuance, of which 11,200,000 shares have been granted as options (8,400,000 of which had vested as of the Effective Date), at a weighted average exercise price of $3.25 per share.
2.34 "Restricted Stock Award" means an Award of shares of Common Stock granted pursuant to Article 8 of this Plan that is subject to restrictions on transfer, vesting conditions, and/or forfeiture conditions, as set forth in the applicable Award Agreement.
2.35 "Restricted Stock Unit" or "RSU" means an Award granted pursuant to Article 9 of this Plan representing the right to receive one share of Common Stock (or the cash equivalent thereof) upon the satisfaction of applicable vesting conditions, as set forth in the applicable Award Agreement.
2.36 "SAR" or "Stock Appreciation Right" means an Award granted pursuant to Article 7 of this Plan that provides the Participant with the right to receive, upon exercise, an amount equal to the appreciation in value of a specified number of shares of Common Stock.
2.37 "Section 409A" means Section 409A of the Internal Revenue Code of 1986, as amended, and the Treasury Regulations and other official guidance promulgated thereunder. Any reference to Section 409A shall include any successor provision and any regulations or other formal guidance issued with respect thereto.
2.38 "Securities Act" means the Securities Act of 1933, as amended from time to time, and the rules and regulations promulgated thereunder. Any reference to a specific section of the Securities Act shall include any successor provision thereof.
2.39 "Subsidiary" means any corporation (or other entity that is treated as a corporation for tax purposes) in which the Company owns, directly or indirectly, stock possessing fifty percent (50%) or more of the total combined voting power of all classes of stock of such corporation, or any other entity (including partnerships and limited liability companies) in which the Company owns, directly or indirectly, fifty percent (50%) or more of the combined voting power or value of all classes of equity interests. For purposes of determining eligibility for Incentive Stock Options, the term "Subsidiary" shall have the meaning set forth in Section 424(f) of the Code.
2.40 "Ten Percent Stockholder" means an individual who, at the time of grant, owns (or is deemed to own pursuant to Section 424(d) of the Code) stock possessing more than ten percent (10%) of the total combined voting power of all classes of stock of the Company or any Subsidiary.
ARTICLE 3: SHARES SUBJECT TO THE PLAN
Section 3.1 — Share Reserve
Subject to adjustment as provided in Section 3.4 and the operation of the evergreen provision set forth in Section 3.2, the maximum aggregate number of shares of Common Stock that may be issued pursuant to Awards granted under this Plan shall be ten million three hundred thousand (10,300,000) shares, which represents approximately ten percent (10%) of the Company's post-IPO outstanding shares of Common Stock (103,000,000 shares). All shares of Common Stock reserved for issuance under this Plan are authorized from the Company's 400,000,000 shares of authorized Common Stock, par value $0.001 per share, as set forth in the Company's Amended and Restated Certificate of Incorporation filed with the Secretary of State of the State of Delaware on February 13, 2024.
The maximum aggregate number of shares of Common Stock that may be issued pursuant to the exercise of Incentive Stock Options under this Plan shall be ten million three hundred thousand (10,300,000) shares, subject to adjustment as provided in Section 3.4.
The maximum aggregate number of shares of Common Stock with respect to which Options or Stock Appreciation Rights may be granted to any single Participant during any single Fiscal Year shall not exceed two million (2,000,000) shares, subject to adjustment as provided in Section 3.4.
The maximum aggregate number of shares of Common Stock with respect to which Restricted Stock Awards, Restricted Stock Units, and other full-value Awards may be granted to any single Participant during any single Fiscal Year shall not exceed one million (1,000,000) shares, subject to adjustment as provided in Section 3.4.
The maximum aggregate amount that may be paid to any single Participant during any single Fiscal Year with respect to cash-denominated Performance Awards shall not exceed five million dollars ($5,000,000).
Shares of Common Stock issued under the Plan may be authorized but unissued shares, treasury shares, or shares purchased on the open market.
Section 3.2 — Annual Evergreen Provision
On the first day of each Fiscal Year beginning with the Fiscal Year commencing January 1, 2025, and continuing through and including the Fiscal Year commencing January 1, 2034, the number of shares of Common Stock reserved and available for issuance under this Plan shall automatically increase by an amount equal to the lesser of:
(a) three percent (3%) of the total number of shares of Common Stock outstanding on the last day of the immediately preceding Fiscal Year (determined on a fully-issued basis, without giving effect to the conversion, exercise, or settlement of any outstanding Awards, options, warrants, or convertible securities); and
(b) such lesser number of shares of Common Stock as may be determined by the Board prior to the applicable January 1.
The Board may act prior to the first day of any Fiscal Year to provide that there shall be no increase in the share reserve for such Fiscal Year, or to specify a lesser number of shares by which the share reserve shall increase. In no event shall the evergreen provision result in shares being added to the Plan if doing so would cause the total number of shares available for issuance under the Plan (including all shares previously issued pursuant to Awards, plus all shares then subject to outstanding Awards, plus all shares then available for future grants) to exceed a number determined by the Board to be appropriate in light of the Company's fully diluted capitalization and prevailing best practices for equity compensation plans in the healthcare technology industry.
Section 3.3 — Share Counting and Recycling
The following rules shall apply for purposes of determining the number of shares of Common Stock available for issuance under the Plan:
(a) Returned Shares. If any Award granted under this Plan expires, is forfeited, is cancelled, or terminates for any reason without the issuance of shares of Common Stock (or, in the case of Restricted Stock Awards, if shares are forfeited back to the Company), the shares of Common Stock subject to such Award (or the forfeited portion thereof) shall again become available for issuance under this Plan.
(b) Tax Withholding Shares. Shares of Common Stock that are withheld by the Company or tendered by a Participant (either by actual delivery or attestation) to satisfy tax withholding obligations arising in connection with the exercise, vesting, or settlement of an Award shall NOT be added back to the share reserve and shall not become available again for issuance under this Plan.
(c) Exercise Price Shares. Shares of Common Stock that are tendered by a Participant (either by actual delivery or attestation) or withheld by the Company to pay the exercise price of an Option shall NOT be added back to the share reserve and shall not become available again for issuance under this Plan.
(d) Open Market Repurchases. Shares of Common Stock repurchased by the Company on the open market using proceeds received from the exercise of Options shall NOT be added to the share reserve and shall not become available for issuance under this Plan.
(e) SAR Net Settlement. Upon the exercise of a Stock Appreciation Right that is settled in shares of Common Stock, only the net number of shares of Common Stock actually issued to the Participant upon such exercise shall be counted against the share reserve. The gross number of shares subject to the exercised SAR (less the net shares actually delivered) shall not be added back to the share reserve.
(f) Cash-Settled Awards. Awards that are settled entirely in cash shall not reduce the share reserve.
(g) No Recycling from Prior Plan. Shares of Common Stock subject to awards granted under the Prior Plan that are outstanding as of the Effective Date and that are subsequently forfeited, expire unexercised, or are cancelled after the Effective Date shall NOT be added to the share reserve under this Plan. Such shares shall remain subject to the Prior Plan and shall not become available for issuance under this Plan.
Section 3.4 — Adjustments for Capital Changes
In the event of any stock split, reverse stock split, stock dividend, recapitalization, combination of shares, reclassification of shares, spin-off, reorganization, partial or complete liquidation, or other similar change in the capital structure of the Company (including an extraordinary dividend or distribution in a form other than Common Stock), or in the event of any merger, consolidation, acquisition of property or shares, separation, reorganization (other than a mere reincorporation or the creation of a holding company), or other similar transaction or event that affects the Common Stock, the Administrator shall, in such manner as it deems equitable and appropriate, proportionately adjust the following in order to prevent the dilution or enlargement of benefits intended to be made available under the Plan:
(i) the aggregate number and kind of shares of Common Stock reserved for issuance under the Plan pursuant to Section 3.1 (including the ISO sub-limit);
(ii) the number and kind of shares of Common Stock subject to each outstanding Award;
(iii) the exercise price, base price, or purchase price per share of each outstanding Option and Stock Appreciation Right;
(iv) the per-person annual Award limits set forth in Section 3.1; and
(v) the number of shares subject to the annual evergreen provision set forth in Section 3.2.
All such adjustments shall be made in a manner consistent with Section 409A of the Code and, with respect to Incentive Stock Options, in a manner consistent with Section 424(a) of the Code. The Administrator's determination with respect to any such adjustments shall be final, binding, and conclusive. Except as expressly provided herein, no issuance by the Company of shares of stock of any class, or securities convertible into shares of stock of any class, shall affect, and no adjustment by reason thereof shall be made with respect to, the number or price of shares of Common Stock subject to an Award.
Section 3.5 — Substitute Awards
Awards may be granted under this Plan in assumption of, or in substitution for, outstanding awards previously granted by an entity that is acquired by the Company or an Affiliate, or with which the Company or an Affiliate combines, in each case in a transaction constituting a "change in the ownership or effective control" or a "change in the ownership of a substantial portion of the assets" of such entity within the meaning of Section 409A (or a transaction to which Section 424(a) of the Code applies) ("Substitute Awards"). Substitute Awards shall not reduce the share reserve set forth in Section 3.1 and shall not be subject to the per-person annual Award limits set forth in Section 3.1. The terms and conditions of Substitute Awards may vary from the terms and conditions required by the Plan to the extent the Administrator deems appropriate to conform, in whole or in part, to the provisions of the awards in substitution for which they are granted, subject to compliance with Applicable Law and Section 409A.
ARTICLE 4: ELIGIBILITY
Section 4.1 — General Eligibility
Awards may be granted under this Plan to any Employee, Consultant, or Director of the Company or any of its Affiliates, as determined by the Administrator. The Administrator shall select the Participants to whom Awards shall be granted, shall determine the type and amount of each Award, and shall establish the terms and conditions of each Award, in each case subject to the provisions of this Plan.
Incentive Stock Options may be granted only to Employees of the Company or a Subsidiary (within the meaning of Section 424(f) of the Code). Non-Qualified Stock Options, Stock Appreciation Rights, Restricted Stock Awards, Restricted Stock Units, Performance Awards, and Other Stock-Based Awards may be granted to any eligible Employee, Consultant, or Director.
As of December 31, 2023, the Company and its Affiliates had approximately 3,400 employees, all of whom are eligible to receive Awards under this Plan. In addition, the Company's seven (7) members of the Board of Directors, as well as any Consultants engaged by the Company or its Affiliates, are eligible to receive Awards (other than ISOs, in the case of non-employee Directors and Consultants).
The grant of an Award to an eligible person shall not obligate the Company to grant additional Awards to such person or to any other person, nor shall it imply any right of any person to receive future Awards.
Section 4.2 — Non-Employee Director Compensation Limit
Notwithstanding any other provision of this Plan, the aggregate grant date fair value (computed as of the date of grant in accordance with applicable financial accounting rules) of all Awards granted to any non-employee Director during any single Fiscal Year, taken together with any cash fees, retainers, or other cash compensation paid or payable to such non-employee Director for services as a Director during such Fiscal Year, shall not exceed seven hundred fifty thousand dollars ($750,000); provided, however, that such limit shall be one million dollars ($1,000,000) for the Fiscal Year in which such non-employee Director first commences service on the Board. For the avoidance of doubt, compensation paid to a Director for services rendered in a capacity other than as a Director (for example, as a Consultant or as an employee of the Company) shall not be counted toward the foregoing limits.
ARTICLE 5: ADMINISTRATION
Section 5.1 — Authority of the Administrator
The Plan shall be administered by the Administrator. Subject to the terms of this Plan and Applicable Law, the Administrator shall have full power and authority to:
(a) select and designate the Employees, Consultants, and Directors who shall be granted Awards;
(b) determine the type or types of Awards to be granted to each Participant;
(c) determine the number of shares of Common Stock to be covered by (or with respect to which payments, rights, or other matters are to be calculated in connection with) each Award;
(d) determine the terms and conditions of each Award, including the exercise price, base price, purchase price, vesting schedule, performance conditions, restriction period, settlement terms, payment terms, and any other term or condition, in each case consistent with the provisions of this Plan;
(e) interpret and construe the Plan, any Award Agreement, and any rules and regulations adopted under the Plan, and to make all factual determinations, including the determination of eligibility and entitlement to benefits under the Plan;
(f) establish, amend, suspend, or rescind such rules and regulations and appoint such agents as it deems necessary or appropriate for the proper administration of the Plan;
(g) determine the Fair Market Value of the Common Stock in accordance with Section 2.21;
(h) determine whether, to what extent, and under what circumstances Awards may be settled, cancelled, forfeited, exchanged, or surrendered;
(i) modify, amend, or adjust the terms and conditions of any Award, subject to the provisions of Article 13 and Article 14;
(j) accelerate the vesting, exercisability, or settlement of any Award, including upon a Change in Control, Disability, death, retirement, or other termination of service;
(k) determine whether, to what extent, and under what circumstances cash, shares of Common Stock, other property, or other forms of consideration shall be delivered in satisfaction of any rights under the Plan;
(l) prescribe the form of each Award Agreement and any other form, notice, or document required under the Plan; and
(m) make all other determinations and take all other actions that the Administrator deems necessary or desirable for the administration of the Plan.
All decisions, determinations, and interpretations made by the Administrator shall be final, binding, and conclusive on all persons, including the Company, its Affiliates, Participants, beneficiaries, and any other persons claiming rights under the Plan or any Award.
The Administrator may, to the extent permitted by Applicable Law, delegate to one or more officers of the Company (including the Chief Executive Officer, Dr. Nathaniel Rourke) the authority to grant Awards to Employees who are not officers subject to Section 16 of the Exchange Act, and to determine the terms and conditions of such Awards, subject to such limitations on the aggregate number of shares and per-person maximums as the Administrator may establish. Any such delegation shall be set forth in a written resolution of the Administrator specifying the scope and limitations of the delegated authority. The Administrator may not delegate its authority with respect to Awards granted to persons who are subject to Section 16 of the Exchange Act or to non-employee Directors.
Section 5.2 — Committee Composition
The Committee shall consist of no fewer than two (2) members of the Board. Each member of the Committee shall qualify as: (a) a "non-employee director" within the meaning of Rule 16b-3 promulgated under the Exchange Act; and (b) an "independent director" as defined under the rules and listing standards of the New York Stock Exchange, including Section 303A.05 of the NYSE Listed Company Manual.
As of the date of adoption of this Plan, the Compensation Committee of the Board consists of Dr. Samuel Obadina (Chair), Diana Coltrane, and Carolyn Whittemore. The Board may, at any time and from time to time, change the composition of the Committee, appoint additional members, remove members (with or without cause), and fill vacancies on the Committee, in each case subject to the requirements of this Section 5.2.
The Committee may act by a majority of its members at a meeting, or by unanimous written consent without a meeting, in accordance with the Company's Amended and Restated Bylaws and the charter of the Compensation Committee.
Section 5.3 — Indemnification
Each member of the Administrator (including each member of the Committee and the Board, and each officer to whom authority has been delegated pursuant to Section 5.1) shall be indemnified and held harmless by the Company against and from any and all losses, costs, liabilities, and expenses (including attorneys' fees) that may be imposed upon or reasonably incurred by such person in connection with or resulting from any claim, action, suit, or proceeding to which such person may be a party or in which such person may be involved by reason of any action or failure to act under this Plan, to the fullest extent permitted under applicable law, including the Delaware General Corporation Law, and under the Company's Amended and Restated Certificate of Incorporation and Amended and Restated Bylaws. The foregoing right of indemnification shall not be exclusive of any other rights of indemnification to which such persons may be entitled under the Company's organizational documents, any insurance policy, any agreement, any vote of stockholders or disinterested directors, or otherwise, and shall be in addition to all other rights of indemnification and advancement of expenses to which such persons may be entitled.
ARTICLE 6: STOCK OPTIONS
Section 6.1 — Grant of Options
The Administrator may grant Options to eligible Employees, Consultants, and Directors, subject to the terms and conditions of this Plan. Each Option shall be designated in the applicable Award Agreement as either an Incentive Stock Option or a Non-Qualified Stock Option. If an Option is not expressly designated as an Incentive Stock Option, or if an Option designated as an Incentive Stock Option fails to qualify as such for any reason, such Option shall be treated as a Non-Qualified Stock Option.
Incentive Stock Options may be granted only to Employees of the Company or a Subsidiary (within the meaning of Section 424(f) of the Code). Non-Qualified Stock Options may be granted to any eligible Employee, Consultant, or Director.
Each grant of an Option shall be evidenced by an Award Agreement that shall specify the number of shares of Common Stock subject to the Option, the exercise price, the vesting schedule, the Option Period, whether the Option is an ISO or NQSO, and such other terms and conditions as the Administrator shall determine, in each case consistent with the provisions of this Plan.
Section 6.2 — Exercise Price
The per-share exercise price of each Option granted under this Plan shall be established by the Administrator at the time of grant and shall not be less than one hundred percent (100%) of the Fair Market Value of a share of Common Stock on the date of grant. In the case of an Incentive Stock Option granted to a Ten Percent Stockholder, the per-share exercise price shall not be less than one hundred ten percent (110%) of the Fair Market Value of a share of Common Stock on the date of grant.
Notwithstanding any other provision of this Plan, in no event shall the per-share exercise price of any Option be less than the Fair Market Value of a share of Common Stock on the date of grant, as required for compliance with Section 409A of the Code.
Section 6.3 — Vesting and Exercisability
The vesting schedule applicable to each Option shall be determined by the Administrator and set forth in the applicable Award Agreement. Unless otherwise specified in the Award Agreement, Options shall vest in accordance with the following standard vesting schedule: twenty-five percent (25%) of the shares subject to the Option shall vest and become exercisable on the first anniversary of the date of grant (the "cliff vesting date"), and the remaining seventy-five percent (75%) shall vest and become exercisable in equal monthly installments over the thirty-six (36) months following the cliff vesting date, in each case subject to the Participant's Continuous Service through each applicable vesting date. The Administrator may, in its discretion, establish alternative vesting schedules, including quarterly installments, annual installments, performance-based vesting, or any other schedule deemed appropriate.
The Administrator may, in its discretion and subject to the terms of this Plan, accelerate the vesting and exercisability of any Option at any time and for any reason, including without limitation upon a Change in Control, the Participant's Disability, the Participant's death, or such other circumstances as the Administrator deems appropriate. Any such acceleration shall be set forth in the Award Agreement or in a resolution of the Administrator.
No Option shall be exercisable to the extent that it has not yet vested, except as otherwise expressly provided in the applicable Award Agreement or by action of the Administrator.
Section 6.4 — Option Period (Term)
Each Option shall be exercisable for a period specified in the applicable Award Agreement (the "Option Period"), which shall in no event extend beyond the tenth (10th) anniversary of the date of grant. In the case of an Incentive Stock Option granted to a Ten Percent Stockholder, the Option Period shall not extend beyond the fifth (5th) anniversary of the date of grant.
If the Option Period is not specified in the Award Agreement, the Option Period shall be ten (10) years from the date of grant (or five (5) years for an ISO granted to a Ten Percent Stockholder).
Section 6.5 — Method of Exercise
Options shall be exercised by delivery of written or electronic notice to the Company (or its designated agent), in such form as the Administrator may require, specifying the number of shares of Common Stock with respect to which the Option is being exercised. Such notice shall be accompanied by full payment of the aggregate exercise price and any applicable tax withholding obligations.
The aggregate exercise price may be paid by one or more of the following methods, as permitted by the Administrator and specified in the applicable Award Agreement:
(a) Cash or Check. Payment in United States dollars by cash, personal check, certified check, bank draft, or wire transfer.
(b) Net Exercise / Cashless Exercise. A "cashless exercise" through a broker-assisted program established by the Company, in which the broker delivers to the Company the aggregate exercise price from the proceeds of the sale of shares of Common Stock acquired upon exercise.
(c) Stock Tender. Delivery (either by actual delivery or by attestation) of shares of Common Stock previously owned by the Participant and held for at least six (6) months (or such other period as the Administrator may require to avoid adverse accounting treatment), valued at the Fair Market Value on the date of exercise.
(d) Net Share Settlement. A "net exercise" procedure pursuant to which the Company withholds from the shares otherwise issuable upon exercise that number of shares having an aggregate Fair Market Value (on the date of exercise) equal to the aggregate exercise price and, if applicable, the amount of tax withholding obligations, and delivers to the Participant only the net number of shares.
(e) Combination. Any combination of the foregoing methods.
(f) Other Methods. Any other method approved by the Administrator that is consistent with Applicable Law and the terms of the Plan.
No shares of Common Stock shall be issued upon exercise of an Option until the aggregate exercise price has been paid in full and all applicable withholding taxes have been satisfied.
Section 6.6 — Termination of Service
The following provisions shall apply to the exercise of vested Options following termination of a Participant's Continuous Service, unless otherwise provided in the applicable Award Agreement or in a written employment, consulting, or severance agreement between the Participant and the Company or an Affiliate:
(a) Termination Other Than for Cause, Disability, or Death. If a Participant's Continuous Service terminates for any reason other than Cause, Disability, or death, the Participant may exercise any vested and unexercised Options for a period of three (3) months following the date of such termination (or such longer period as may be specified in the applicable Award Agreement), but in no event beyond the original expiration date of the Option. Any portion of an Option that is not vested as of the date of termination shall be forfeited immediately upon such termination.
(b) Disability. If a Participant's Continuous Service terminates by reason of Disability, the Participant (or the Participant's legal representative) may exercise any vested and unexercised Options for a period of twelve (12) months following the date of such termination (or such longer period as may be specified in the applicable Award Agreement), but in no event beyond the original expiration date of the Option.
(c) Death. If a Participant's Continuous Service terminates by reason of death, or if the Participant dies within the period following termination during which the Option remains exercisable under this Section 6.6, the Participant's estate, personal representative, or beneficiary (as applicable) may exercise any vested and unexercised Options for a period of twelve (12) months following the date of death (or such longer period as may be specified in the applicable Award Agreement), but in no event beyond the original expiration date of the Option.
(d) Termination for Cause. If a Participant's Continuous Service is terminated for Cause, all outstanding Options held by the Participant (whether vested or unvested) shall immediately terminate and be forfeited as of the date of such termination, and the Participant shall have no right to exercise any such Options after the date of termination. Furthermore, if the Administrator determines at any time after a Participant's termination of Continuous Service that grounds for termination for Cause existed at the time of such termination, all outstanding Options held by the Participant shall be deemed to have terminated as of the date of such termination.
In no event shall any Option be exercisable after the expiration of the original Option Period.
Section 6.7 — ISO Limitations
The aggregate Fair Market Value (determined as of the date of grant) of shares of Common Stock with respect to which Incentive Stock Options become exercisable for the first time by any Participant during any calendar year (under this Plan and all other plans of the Company and its Subsidiaries) shall not exceed one hundred thousand dollars ($100,000). To the extent that the aggregate Fair Market Value of shares with respect to which ISOs granted to a Participant become exercisable for the first time during any calendar year exceeds such limit, the Options or portions thereof that exceed such limit (determined in the order in which they were granted) shall be treated as Non-Qualified Stock Options, notwithstanding any designation to the contrary in the applicable Award Agreement.
Incentive Stock Options shall contain such additional terms and conditions as may be required to satisfy the requirements of Section 422 of the Code and the Treasury Regulations promulgated thereunder. The Administrator shall have no liability to any Participant or any other person if an Option designated as an ISO fails to qualify as such for any reason, and any such Option shall be treated as an NQSO.
ARTICLE 7: STOCK APPRECIATION RIGHTS
Section 7.1 — Grant of SARs
The Administrator may grant Stock Appreciation Rights to eligible Employees, Consultants, and Directors, subject to the terms and conditions of this Plan. SARs may be granted independently of, or in tandem with, Options. A SAR granted in tandem with an Option shall be exercisable only to the extent that the related Option is exercisable and shall terminate upon the termination or exercise of the related Option (and vice versa).
Each SAR shall entitle the Participant, upon exercise, to receive an amount (in cash, shares of Common Stock, or a combination thereof, as determined by the Administrator) equal to the excess, if any, of the Fair Market Value of a share of Common Stock on the date of exercise over the per-share exercise price of the SAR, multiplied by the number of shares of Common Stock with respect to which the SAR is exercised.
Each grant of a SAR shall be evidenced by an Award Agreement that shall specify the number of shares subject to the SAR, the exercise price, the vesting schedule, the term, the form of settlement, and such other terms and conditions as the Administrator shall determine, in each case consistent with the provisions of this Plan.
Section 7.2 — SAR Exercise Price
The per-share exercise price of each SAR granted under this Plan shall be established by the Administrator at the time of grant and shall not be less than one hundred percent (100%) of the Fair Market Value of a share of Common Stock on the date of grant. In no event shall the per-share exercise price of any SAR be less than the Fair Market Value of a share of Common Stock on the date of grant, as required for compliance with Section 409A of the Code.
For a SAR granted in tandem with an Option, the exercise price of the SAR shall be equal to the exercise price of the related Option.
Section 7.3 — Vesting, Term, and Exercise
The vesting schedule applicable to each SAR shall be determined by the Administrator and set forth in the applicable Award Agreement. The Administrator may establish time-based vesting, performance-based vesting, or any combination thereof.
No SAR shall be exercisable after the expiration of ten (10) years from the date of grant. SARs may be exercised in whole or in part, subject to the applicable vesting conditions.
Upon exercise of a SAR, settlement shall be made in shares of Common Stock, cash, or a combination thereof, as determined by the Administrator and set forth in the applicable Award Agreement. If settled in shares of Common Stock, the number of shares delivered shall be determined by dividing the aggregate spread amount (the excess of the Fair Market Value over the exercise price, multiplied by the number of shares with respect to which the SAR is exercised) by the Fair Market Value of a share of Common Stock on the date of exercise, rounded down to the nearest whole share.
Section 7.4 — Termination of Service
The provisions of Section 6.6 (Termination of Service) applicable to Options shall apply equally to Stock Appreciation Rights granted under this Article 7, with such modifications as are appropriate to reflect the terms of SARs, unless otherwise provided in the applicable Award Agreement.
ARTICLE 8: RESTRICTED STOCK AWARDS
Section 8.1 — Grant of Restricted Stock
The Administrator may grant Restricted Stock Awards to eligible Employees, Consultants, and Directors, subject to the terms and conditions of this Plan. Each Restricted Stock Award shall consist of shares of Common Stock that are issued to the Participant subject to restrictions on transfer, vesting conditions, and/or forfeiture conditions, as set forth in the applicable Award Agreement.
Each grant of a Restricted Stock Award shall be evidenced by an Award Agreement that shall specify the number of shares of Common Stock subject to the Award, the restriction period (or periods), the conditions upon which the restrictions shall lapse, the purchase price (if any, which may be zero), and such other terms and conditions as the Administrator shall determine, in each case consistent with the provisions of this Plan.
Section 8.2 — Restrictions and Conditions
During the restriction period applicable to a Restricted Stock Award, the shares of Common Stock subject to such Award may not be sold, assigned, transferred, pledged, hypothecated, or otherwise disposed of or encumbered by the Participant, except as otherwise provided in the applicable Award Agreement or as permitted by the Administrator.
The restrictions imposed on shares of Restricted Stock shall lapse in accordance with the vesting schedule or conditions established by the Administrator, which may be based on the Participant's Continuous Service, the achievement of Performance Goals, or a combination of the foregoing, as set forth in the applicable Award Agreement. The Administrator may, in its discretion, impose additional restrictions on shares of Restricted Stock, including restrictions on the right to vote and the right to receive dividends.
The Administrator may, in its discretion and subject to the terms of this Plan, accelerate the lapse of restrictions on all or any portion of a Restricted Stock Award at any time and for any reason, including without limitation upon a Change in Control, the Participant's Disability, the Participant's death, or such other circumstances as the Administrator deems appropriate.
Section 8.3 — Rights as a Stockholder
Subject to the restrictions set forth in this Article 8 and in the applicable Award Agreement, a Participant who has been granted a Restricted Stock Award shall have the rights of a stockholder of the Company with respect to the shares of Common Stock subject to such Award, including the right to vote such shares and the right to receive dividends with respect to such shares; provided, however, that the treatment of dividends on shares of Restricted Stock shall be as specified in the applicable Award Agreement.
The Administrator may provide that any dividends paid on unvested shares of Restricted Stock shall be (a) paid to the Participant currently in cash or in additional shares of Common Stock, (b) accumulated and held in escrow by the Company (or a designated agent), subject to the same vesting conditions as the underlying shares of Restricted Stock, and paid to the Participant only if and when the underlying shares vest, or (c) subject to such other treatment as specified in the applicable Award Agreement. In no event shall dividends on unvested shares of Restricted Stock be paid to the Participant prior to the vesting of such shares unless the applicable Award Agreement expressly provides otherwise.
Section 8.4 — Certificates and Legends
Shares of Common Stock subject to a Restricted Stock Award may be evidenced in such manner as the Administrator shall determine, including by book-entry registration in the name of the Participant with the Company's transfer agent, Continental Share Services, Inc. If certificates representing shares of Restricted Stock are issued, such certificates shall bear such restrictive legends as the Administrator and the Company's counsel deem necessary or advisable under this Plan, the applicable Award Agreement, Applicable Law, and any applicable securities laws, and shall be held in custody by the Company or its designee until the restrictions thereon have lapsed. The CUSIP number for the Company's Common Stock is 039217105.
Section 8.5 — Forfeiture
Upon the termination of a Participant's Continuous Service prior to the lapse of restrictions on all or any portion of a Restricted Stock Award, the unvested shares of Restricted Stock shall be immediately forfeited and returned to the Company without consideration (or, if the Participant paid a purchase price for such shares, repurchased by the Company at the original purchase price paid by the Participant), unless otherwise provided in the applicable Award Agreement. The Participant shall have no further rights with respect to any forfeited shares.
Upon forfeiture, the Company shall instruct Continental Share Services, Inc. (or any successor transfer agent) to cancel or transfer the forfeited shares as directed by the Company. If any dividends or other distributions on the forfeited shares were held in escrow or accumulated subject to vesting conditions, such amounts shall also be forfeited and returned to the Company.
ARTICLE 9: RESTRICTED STOCK UNITS
Section 9.1 — Grant of RSUs
The Administrator may grant Restricted Stock Units to eligible Employees, Consultants, and Directors, subject to the terms and conditions of this Plan. Each RSU shall represent the right to receive one (1) share of Common Stock (or the cash equivalent thereof, as determined by the Administrator) upon the satisfaction of applicable vesting conditions, as set forth in the applicable Award Agreement.
Each grant of RSUs shall be evidenced by an Award Agreement that shall specify the number of RSUs granted, the vesting schedule, the settlement terms, and such other terms and conditions as the Administrator shall determine, in each case consistent with the provisions of this Plan.
RSUs shall not constitute issued and outstanding shares of Common Stock of the Company and shall not entitle the Participant to any of the rights of a stockholder of the Company, except as otherwise expressly provided in this Article 9 or in the applicable Award Agreement.
Section 9.2 — Vesting
The vesting schedule applicable to each grant of RSUs shall be determined by the Administrator and set forth in the applicable Award Agreement. The Administrator may establish time-based vesting, performance-based vesting, or a combination thereof, as it deems appropriate.
Unless otherwise specified in the Award Agreement, RSUs shall vest in acco