2015 Equity and Incentive Plan
General. The purpose of the Companys 2015 Equity and Incentive Plan, as amended and restated (the Equity Plan) is to
promote the long-term growth and profitability of the Company and our subsidiaries by providing employees, directors, consultants, advisors and other persons who work for us and our subsidiaries with incentives to maximize shareholder value and
otherwise contribute to our continued success. In addition, we believe the Equity Plan is a critical component to help us attract, retain and reward the best talent and align their interests with our shareholders.
Administration of the Equity Plan. Our Board of Directors may appoint the Compensation Committee or such other committee consisting of two
or more members (in each case, the Committee) to administer the Equity Plan, and our Board of Directors has currently designated the Compensation Committee to serve this function. The Committee has the right to select the persons who
receive awards under the Equity Plan, to set the terms and conditions of such awards (including the term, exercise price, vesting conditions, and the consequences of termination of employment), and to interpret and administer the Equity Plan.
Subject to the express provisions of the Equity Plan, the Committee is authorized and empowered to do all things that the Committee in its discretion determines to be necessary or appropriate in connection with the administration and operation of
the Equity Plan.
Types of Awards. The Equity Plan provides for the grant of non-qualified
stock options (NQSOs), incentive stock options (ISOs), stock appreciation rights (SARs), restricted stock, restricted stock units, performance shares, performance units, annual incentive awards and other
stock-based awards to eligible participants. ISOs may only be granted to employees of the Company or its subsidiaries.
Shares Available for
Issuance. The aggregate number of shares that will be available for issuance pursuant to awards granted under the Equity Plan is 8,566,816 shares (the Share Pool), subject to adjustment as described in the Equity Plan, of
which 3,126,340 shares remain available for issuance as of April 15, 2021. The shares issued by the Company under the Equity Plan will be authorized but unissued shares or shares currently held (or subsequently acquired) as treasury shares,
including shares purchased on the open market or in private transactions.
If shares awarded under the Equity Plan are not issued, or are reacquired by
the Company, as a result of a forfeiture of restricted stock or a restricted stock unit, or the termination, expiration or cancellation of an NQSO, ISO, SAR, performance share or performance unit, or the settlement of an award in cash in lieu of
shares, that number of shares will be added back to the Share Pool. If the exercise price of an option, or the purchase price and/or tax withholding obligation under any award is satisfied by the Company retaining shares or by the participant
tendering shares (either by actual delivery or attestation), the number of shares so retained or tendered shall be deemed delivered for purposes of determining the Share Pool and shall not be available for further awards under the Equity Plan. To
the extent a SAR is settled in shares of common stock, the gross number of shares subject to such SAR shall be deemed delivered for purposes of determining the Share Pool and shall not be available for further awards under the Equity Plan. Shares
reacquired by the Company on the open market or otherwise using cash proceeds from the exercise of options shall not be added back to the Share Pool.
Amendment and Termination. Our Board of Directors or the Committee may amend or terminate the Equity Plan in whole or in part at any time,
but the amendment or termination cannot adversely affect any rights or obligations with respect to an award previously granted without the affected participants written consent. The Company must obtain the approval of the shareholders before
amending the Equity Plan to the extent required by Section 422 of the Internal Revenue Code or the rules of the NYSE or other applicable law.
The
Committee may amend an outstanding award agreement in a manner not inconsistent with the terms of the Equity Plan, but the amendment will not be effective without the participants written consent if the amendment is materially adverse to the
participant. The Committee cannot amend outstanding awards, without shareholder approval, to reduce the exercise price of outstanding awards, or cancel outstanding options or SARs in exchange for cash, another award or stock option or SAR with an
option exercise price or SAR price that is less than the option exercise price or SAR price of the original stock option or SAR.
Employee Stock Purchase Plan
The purpose of the Companys ESPP is to encourage ownership of our common stock by eligible employees of the
Company and certain of our subsidiaries and to help such employees provide for their future security and to encourage them to remain in the employment of the Company and its subsidiaries. Specifically, the ESPP provides eligible employees of
the Company and certain of our subsidiaries an opportunity to use payroll deductions to purchase shares of our common stock on periodic purchase dates at a discount. The Compensation Committee believes that the ESPP is a valued benefit for our
eligible employee base. For a summary of the material terms of the ESPP, please see Proposal 4 Amendment to the PROG Holdings, Inc. Employee Stock Purchase Plan.
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