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(1)	Based on UT market research.

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*	A reconciliation of our non-GAAP measures and other information relating to such measures can be found in Annex C.

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(1)	Based on data from Radford’s Global Turnover Results survey for the Life Sciences Sector for the fourth quarter of 2019.

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*	Data as of November 2019.

**	Industry peers are defined as U.S.-domiciled, NYSE- or Nasdaq-listed companies with the same first two primary Standard Industrial Classification code digits as our company (28: Chemicals and Allied Products), but excluding our company from peer results. There were 513 companies in this dataset in the Sharkrepellent.net database as of November 4, 2019.

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Premium-Priced Stock Options. 50% of each Named Executive Officer’s equity award covering grants for 2019-2022 was granted with a premium-priced performance condition by virtue of an exercise price equal to 115% of our closing stock price on the date of the grant. Therefore, our stock price will have to grow by more than 15% above the share price on the grant date before our Named Executive Officers can realize any value from the award. These stock options will not vest (i.e., “cliff” vest) until the fourth anniversary of the grant date.

•	Market-Priced Stock Options. 50% of each Named Executive Officer’s equity award covering grants for the period of 2019-2022 was granted with an exercise price equal to our closing stock price on the date of grant. These awards will vest in equal thirds on the second, third and fourth anniversaries of the date of the grant, as retention incentive.

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•	General Independence: Christopher Causey, Raymond Dwek, Richard Giltner, Katherine Klein, Ray Kurzweil, Nilda Mesa, Judy Olian, Christopher Patusky, Louis Sullivan, and Tommy Thompson are independent in accordance with the Nasdaq listing standards.

•	Management Director: Martine Rothblatt is not independent due her employment as our Chief Executive Officer.

•	Audit Committee Standards: Richard Giltner, Christopher Patusky, and Tommy Thompson meet the heightened independence standards for audit committee members set forth in rules promulgated under the Securities Exchange Act of 1934, as amended (the Exchange Act).

•	Compensation Committee Standards: Christopher Causey, Nilda Mesa, and Louis Sullivan meet the heightened independence standards for compensation committee members under the Nasdaq listing standards.

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•	an annual cash retainer (payable quarterly) for service as a member of our Board

•	additional annual cash retainers (payable quarterly) for service on Board committees and for service as Lead Independent Director

•	stock options or restricted stock units (in either case, granted initially upon joining our Board, and thereafter on an annual basis) for service as a member of our Board

(1)	Compensation for service as Lead Independent Director is paid in addition to amounts paid for membership on our Board and for any committee chairmanship or membership.

(2)	Committee chairmen receive the compensation indicated for committee chairmanship in lieu of the compensation for committee membership. Compensation for committee chairmanship and committee membership is paid in addition to amounts paid for Board membership.

(3)	Annual awards are generally granted once per year on the date of the first meeting of our Board following our annual meeting of shareholders or for newly appointed directors, on or shortly following appointment to our Board.

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•	Form of Awards: Initial Grants and Annual Grants are paid in the form of stock options, restricted stock units (RSUs), or a combination of the two. For each grant, directors may elect to receive awards in any one of the following forms:

•	100% stock options

•	100% RSUs

•	50% stock options / 50% RSUs

•	Value of Awards: The aggregate value of each director’s annual equity-based award is $400,000. The aggregate value of an initial equity-based award upon joining our Board is $400,000, plus a pro rata portion of the annual equity-based award value based on the number of months remaining in our Board service year at the date of grant.

•	Deferral for RSUs: For directors who elect RSUs, our Compensation Committee has implemented a deferral program enabling directors to defer delivery of shares of common stock following vesting of the RSUs.

•	Calculation Methodology: Our Compensation Committee also sets the methodology for determining the precise numbers of stock options and/or RSUs for each grant. For the annual grants, generally occurring in June of each year, the following applies (subject to modification by our Compensation Committee in its discretion):

•

Stock Options: The number of stock options is calculated by dividing the equity value ($400,000, or $200,000, if the director has elected 50% options and 50% RSUs) by the fair value of each stock option, calculated in accordance with the Black Scholes Merton methodology utilized in calculating share-based compensation for financial reporting purposes. Black Scholes Merton inputs are the same as those used in our most recent quarterly report on Form 10-Q, except that the stock price input is the average closing price of our common stock over a recent time period prior to the date of grant (May 10 through June 10, in the case of annual grants).

•	RSUs: The number of RSUs is calculated by dividing the equity value ($400,000, or $200,000, if the director has elected 50% options and 50% RSUs) by the average closing price of our common stock over a recent time period prior to the date of grant (May 10 through June 10, in the case of annual grants).

•	Rounding: The resulting number of stock options or RSUs, calculated as above, is rounded to the nearest 10 shares.

•	Exercise Price: Stock options granted to non-employee directors have an exercise price equal to the closing price of our common stock as reported on the Nasdaq Global Select Market on the date of grant, or on the preceding trading day if the award is granted on a date when the Nasdaq is not open.

•	Grant Timing:

•	The date of grant for a new non-employee director’s initial award, consisting of the initial membership award and a prorated amount of the annual award for the remainder of the board service year, is the date of a director’s appointment or election to our Board.

•	The date of grant for annual awards is the date of the first meeting of our Board following our annual meeting of shareholders in the year of grant.

•	Vesting: Non-employee director awards become fully vested on the one year anniversary of the grant date, but only if the director attends at least 75% of the regularly scheduled meetings of our Board and his or her committee meetings from the date of grant until the date of our next annual meeting of shareholders.

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(1)	Includes (as applicable) annual cash retainer and fees for serving on our Board, the committees of our Board, as a committee chairman and as Lead Independent Director.

(2)

On June 26, 2019, each of our non-employee directors was granted stock options and/or RSUs. Each stock option had an exercise price of $76.36 per share and a grant date fair value of $27.91 per share, and each RSU had a grant date fair value of $76.36 per share. Amounts shown in these columns represent the aggregate grant date fair value of these stock options and RSUs, which were the only awards granted to non-employee directors in 2019, computed in accordance with applicable accounting standards. For a discussion of the valuation assumptions for stock options, see Note 9—Share-Based Compensation to the consolidated financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2019.

(3)	Consists of retroactive compensation paid to Mr. Causey in 2020 for his 2019 service, commencing July 31, 2019, on the board of directors of a private company in which we maintain a minority equity interest.

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*	For purposes of this illustration, we assume that 2019-2022 annual salary and cash bonus target remain unchanged over the four-year period, and that the annual bonus is earned at target each year.

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•	FDA clearance of the 510(k) application for the pharmacy-filled version of Remunity, enabling us to launch the product in the near term

•	Successful completion of the INCREASE study, which we believe will enable us to obtain FDA approval of a label expansion to extend our Tyvaso product to patients with a new indication, pulmonary hypertension associated with interstitial lung disease, which impacts about 30,000 patients in the U.S. alone, with no approved treatment options

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•	50% of the stock option award was granted with a 15% premium exercise price over our stock price at close on the date of grant, and vests in full (i.e., “cliff” vests) on the fourth anniversary of the grant date

•	50% of the stock option grant was granted with an exercise price equal to the closing price of our common stock on the date of grant, and vests in three equal installments on the second, third and fourth anniversary of the grant date

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•	Reviewing and advising on the structure of our compensation arrangements (i.e., base salary levels, cash incentive award target levels and the size of long-term incentive award targets) for our Chief Executive Officer and our other Named Executive Officers

•	Reviewing and advising on the structure of our compensation arrangements for our non-employee directors

•	Providing recommendations regarding the composition of our peer group

•	Analyzing publicly available proxy data for companies within our peer group and survey data relating to executive compensation

•	Conducting pay and performance analyses relative to our peer group

•	Updating our Compensation Committee on industry trends and best practices with respect to executive long-term incentive compensation program design, including types of long-term incentive compensation awards, size of long-term incentive compensation grants, and aggregate long-term incentive compensation grant usage

•	Reviewing our equity incentive awards against our design/cost targets and against industry norms

•	Reviewing the Compensation Discussion and Analysis for our Proxy Statement

•	Advising our Compensation Committee in connection with its risk assessment relating to our compensation programs

•	Preparing for and attending shareholder engagement sessions

•	Working on special or ad hoc projects for, or at the request of, our Compensation Committee as they arose

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(1)	Revenue, operating income, net income, ROIC (return on invested capital), return on equity, and return on assets all reflect trailing twelve-month data as of May 2018 when the peer group was approved

(2)	Market capitalization per employee as of May 2018 when the peer group was approved

(3)	The percentile rank shown above reflects values at the time of approval by our Compensation Committee

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*

Pursuant to our insider trading policy, directors, officers and employees are prohibited from purchasing our securities on margin, engaging in “short” sales of our common stock, or buying or selling puts, calls, futures contracts or other forms of derivative securities relating to our securities. In addition, our Board has adopted a policy prohibiting our directors and executive officers from pledging of shares of our common stock.

**	Our Board has the authority, to the extent permitted by governing law, to make retroactive adjustments to any cash award or equity award-based incentive compensation paid to our Named Executive Officers and certain other senior managers where the payment was predicated upon the achievement of certain financial results that were subsequently the subject of a restatement.

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(1)	Reflects increases in annual base salaries effective February 25, 2019 and first reflected in pay on March 15, 2019

(2)	Represents the difference in cash incentive award target as a percentage of salary, between 2018 and 2019

(3)

Represents the Black-Scholes-Merton grant date value of the stock options granted on March 15, 2019. The value shown is the annualized value, that is the total value divided by four, as the grant is intended to cover four years of equity for the performance years of 2019-2022. Half of the award was granted as market-priced stock options, which vest in equal thirds on the second, third and fourth anniversary of the grant. The remaining half of the award granted on March 15, 2019 were premium-priced stock options, granted with an exercise price at 115% of our closing stock price on the date of grant, and which vest in full on the fourth anniversary of the grant date. Percentage decrease compares the annualized value of these options to the target value of stock options granted in 2018.

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*	Cash profit is defined as net income for 2019 as reported in our Annual Report on Form 10-K for the year ended December 31, 2019, adjusted to add the following expenses, net of relevant benefits (or subtracted, to the extent the expense item is a net benefit):

•	Interest expense

•	Non-cash charges (including, without limitation, amortization and depreciation)

•	Tax expense (including penalties and interest)

•	Extraordinary, non-recurring and unusual items (including without limitation, license fees, milestone payments, gains/losses on acquisition/disposal of assets, asset impairments; restructuring costs; foreign currency adjustments; discontinued operations)

•	Legal expenses related to (a) intellectual property prosecution and defense; (b) litigation and government investigation and enforcement proceedings; and (c) amounts paid to settle/resolve legal disputes, litigation and government investigations and enforcement proceedings

•	Share-based compensation expense

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*	Multiplier calculated independently for each metric; interpolate between performance levels

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Revenue. At the time we established our 2019 Company-Wide Milestones, we anticipated generic competition for both Adcirca and Remodulin in 2019, but still set a very aggressive revenue goal for our management team, far above analyst consensus (as shown below). This goal required growth in Tyvaso, Orenitram and Unituxin and required very strong performance from Remodulin despite generic competition for the majority of the year. Our industry is cyclical, and the impact of generic competition is a reality in our sector that must be considered when determining revenue performance expectations year over year. The entry of generic competition directly impacts revenue performance, resulting in occasional years without revenue growth over the prior year. For this reason, among others, our 2019 revenue target was lower as compared to our 2018 actual performance (although it was higher than our 2018 target). Ultimately, we were able to achieve our revenue goal by delivering strong performance with increased revenue for

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Cash Profit. The same competitive dynamics inherently impact cash profits, and as a result we set our 2019 cash profit target below our 2018 actual cash profit (although above our 2018 target). Despite heavy investment in our R&D pipeline to drive future revenue generation, we believe it is important to maintain industry-leading profitability. When viewed as a percentage of revenue, our cash profit target consistently leads to profit margins at the top quintile of our peer group, as shown by the chart below. Because not all companies report the same non-GAAP financial measures, the chart below shows how our cash profit performance led to top-quintile performance in 2019 based on a uniform profitability metric: adjusted EBITDASO margin, or earnings before interest, taxes, depreciation, amortization, and share-based compensation expense (as further adjusted for one-time items that were excluded from the company’s reported adjusted earnings), divided by revenues:

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Balance Sheet Strength. Our historically strong profitability, which has been appropriately incentivized and rewarded by our Company-Wide Milestone Program, has generated strong free cash flow resulting in an extremely healthy balance sheet. At December 31, 2019, we had cash, cash equivalents and marketable securities totaling $1.4 billion (net of our outstanding indebtedness of $850 million). This is incredibly important, especially in light of current concerns surrounding the COVID-19 pandemic, which could have lasting impacts on a number of companies within our industry. Indeed, on March 23, 2020, Jefferies Equity Research screened over 1,000 companies, and highlighted United Therapeutics among a list of just six companies (along with Home Depot, Honeywell and T. Rowe, for example) with a “Fortress Balance Sheet” that are best positioned to weather the storm.

•	FDA Approvals: 12 points (full credit) awarded for achieving two key FDA approvals, compared to a goal of one FDA approval. Specifically, the FDA approved our label expansion for Orenitram reflecting the successful results of our FREEDOM-EV study and granted initial clearance for the Remunity system pump (patient filled)

•	Late-Stage R&D Programs: Ten points (full credit) awarded for progressing eight registration-stage programs (compared to a goal of six programs), listed below:

•	INCREASE, a phase III study of Tyvaso for WHO Group 3 pulmonary hypertension associated with interstitial lung disease

•	DISTINCT, a phase III study of Unituxin for small cell lung cancer

•	SAPPHIRE, a phase II/III study of a gene therapy product for PAH

•	Registration study of ex-vivo lung perfusion technology to increase the utilization of donated lungs for transplantation

•	PERFECT, a phase III study of Tyvaso for WHO Group 3 pulmonary hypertension associated with chronic obstructive pulmonary disease

•	Submission of an NDA for Trevyent, a registration-stage drug-device combination product for PAH

•	ADVANCE OUTCOMES, a phase III event-based study of ralinepag in PAH patients

•	ADVANCE CAPACITY, a phase III study of the effect of ralinepag on exercise capacity in PAH patients

•	Earlier-Stage R&D Programs: Two points (full credit) awarded for progressing two early stage development programs (compared to a goal of one):

•	Treprostinil Technosphere, a dry powder inhalation form of treprostinil

•	LNG01 (formerly SM04646), a Wnt pathway inhibitor for treatment of idiopathic pulmonary fibrosis

•	New Product Candidates: One point (full credit) awarded for progressing two new product candidates into early stage development (compared to a goal of one):

•	RemoPro, a less painful form of Remodulin for subcutaneous delivery

•	Unexisome™, an exosome product for the treatment of bronchopulmonary dysplasia

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Premium-Priced Stock Options. 50% of each Named Executive Officer’s equity award covering grants for 2019-2022 was granted in March 2019 in the form of stock options with an exercise price equal to 115% of our closing stock price on the date of the grant. Therefore, our stock price will have to grow by more than 15% above the grant date before our Named Executive Officers can realize any value from the award. As a result, the first 15% return goes to our shareholders before we reward our executives. These performance stock options will vest in full (i.e., “cliff” vest) on the fourth anniversary of the grant date for retention.

•	Market-Priced Stock Options. 50% of each Named Executive Officer’s equity award covering grants for the period of 2019-2022 was granted in March 2019 in the form of stock options with an exercise price equal to our closing stock price on the date of grant. These awards will vest in equal thirds on the second, third and fourth anniversary of the date of the grant, which also aids in retention.

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•	50% of the award was awarded as a stock option with a 15% premium exercise price. That means the first 15% of stock price appreciation goes to our shareholders before we reward our executives

•	The award will not have any intrinsic value unless we have stock price growth over a multi-year period. This long-term focus addresses concerns raised by certain shareholders regarding the necessity of reducing short-term financial goals in light of generic competition

•	The award eliminates the one-year performance period in our prior program, which was the source of concern for some of our shareholders

•	The award eliminates the duplicated metrics between our short-term and long-term incentive programs, addressing a shareholder concern

•	The vesting of the award is weighted toward the end of the four-year period with the majority of the vesting occurring in years three and four for the market-priced portion and the premium-priced award cliff-vests on the fourth anniversary

•	The award has an eight-year term, meaning our share price must grow more quickly than the more typical ten-year term of a stock option

•	The total volume of pay, when measured on an annualized basis, is significantly reduced as compared with the continuation of the program utilized in 2017 and 2018, which also addresses a concern raised by shareholders

•	Total shareholder dilution over the four-year period is also reduced, as compared with the 2017 and 2018 program

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(1)	Increases in base salaries for each of our Named Executive Officers became effective on March 1, 2017, 2018 and February 25, 2019

(2)

Amounts shown represent the aggregate grant date fair value of stock options granted in each reported year, computed in accordance with applicable accounting standards. For a discussion of valuation assumptions for stock options for 2019 see Note 9—Share Based Compensation to the consolidated financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2019. The stock options were awarded under our 2015 SIP. The value of 2017 and 2018 stock option awards with performance conditions are reported at target, calculated using the Black Scholes Merton value in accordance with GAAP. For awards granted in respect of the 2017 and 2018 performance years, the number of shares earned may exceed target for “stretch” performance, up to a maximum number of shares. If the maximum number of shares were used in calculating the Black Scholes Merton value of these awards, the grant date fair value would be as follows

(3)

Amounts shown for each year represent the total cash awards earned by each Named Executive Officer under our Company-Wide Milestone Program for the respective year, although the awards were not paid until March of the following year. The payouts were determined based on our attainment of specific, pre-established performance Milestones. For example, the amounts reported for 2019 reflect cash earned in respect of 2019 performance but paid in March 2020. For information on the amounts earned for 2019, see the section entitled Cash Incentive Award Program in the Compensation Discussion and Analysis above.

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(4)

Amounts shown represent the change in the actuarial present value of retirement benefits under the SERP calculated in accordance with GAAP under SEC requirements. The assumptions used in calculating the change in the actuarial present value of SERP benefits are described in the footnotes to the Pension Benefits in 2019 table below. The change in pension value from year to year as reported in the table will vary based on these assumptions and may not represent the value that a Named Executive Officer will accrue or receive under the SERP. The change in the amounts reported for 2019 compared to 2018 was primarily driven by the decrease in the discount rate and the lump sum interest rate. We note that there were no changes in the terms of our SERP in 2019 versus 2018.

(5)

The amounts shown represent the aggregate incremental cost that can be attributed to lease, insurance, and maintenance payments made on vehicles used by a Named Executive Officer or for monthly automobile allowances, travel expenses for family members to our functions (collectively, the perquisites), and “matching contributions” under our 401(k) Plan equal to 40% of each participant’s qualifying salary contributions.

(6)

Our Canadian subsidiary paid a portion of Dr. Rothblatt’s total base salary in the amount of 120,000 Canadian dollars. The value of this portion in U.S. dollars has been estimated for the purposes of disclosure here by using the average exchange rate for each respective year. In 2017, 2018, and 2019, our Canadian subsidiary paid the equivalent of US$92,407, US$92,614, and US$90,436 of Dr. Rothblatt’s total base salary, respectively.

(1)	Increases in base salaries for each of our Named Executive Officers became effective on March 1, 2017, 2018 and February 25, 2019.

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(2)

Amounts shown reflect the aggregate grant date fair value of stock options granted in each reported year, computed in accordance with applicable accounting standards. For a discussion of valuation assumptions for stock options for 2019 see Note 9—Share Based Compensation to the consolidated financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2019. The stock options were awarded under our 2015 SIP. 2017 was a transition year where we issued equity awards in March 2017 based on 2016 performance (based on the timing of our historical program), as well as awards reflecting each Named Executive Officer’s 2017 equity award opportunity. The value of 2017 and 2018 stock option awards with performance conditions are reported at target, calculated using the Black Scholes Merton value in accordance with GAAP. For awards granted in respect of the 2016 performance year, target and maximum are equivalent. For awards granted in respect of the 2017 and 2018 performance years, the number of shares earned may exceed target for “stretch” performance, up to a maximum number of shares. If the maximum number of shares were used in calculating the Black Scholes Merton value of these awards, the grant date fair value would be as follows:

(3)

Amounts shown represent the total cash awards earned by each Named Executive Officer under our Company-Wide Milestone Program for the year, although the awards were not paid until March of the following year. The payouts were determined based on our attainment of specific, pre-established performance Milestones. For example, the amounts reported for 2019 reflect cash earned in respect of 2019 performance but paid in March 2020. For information on the amounts earned for 2019, see the section entitled Cash Incentive Award Program in the Compensation Discussion and Analysis above.

(4)

Amounts shown represent the change in the actuarial present value of retirement benefits under the SERP calculated in accordance with GAAP under SEC requirements. The assumptions used in calculating the change in the actuarial present value of SERP benefits are described in the footnotes to the Pension Benefits in 2019 table below. The change in pension value from year to year as reported in the table will vary based on these assumptions and may not represent the value that a Named Executive Officer will accrue or receive under the SERP. The change in the amounts reported for 2019 compared to 2018 was primarily driven by the decrease in the discount rate and the lump sum interest rate. We note that there were no changes in the terms of our SERP in 2019 versus 2018.

(5)

The amounts shown represent the aggregate incremental cost that can be attributed to lease, insurance, and maintenance payments made on vehicles used by a Named Executive Officer or for monthly automobile allowances, travel expenses for family members to our functions (collectively, the perquisites), and “matching contributions” under our 401(k) Plan equal to 40% of each participant’s qualifying salary contributions.

(6)

Our Canadian subsidiary paid a portion of Dr. Rothblatt’s total base salary in the amount of 120,000 Canadian dollars. The value of this portion in U.S. dollars has been estimated for the purposes of disclosure here by using the spot exchange rate on the dates on which Dr. Rothblatt was paid. In 2017, 2018, and 2019, our Canadian subsidiary paid the equivalent of US$92,407, US$92,614, and US$90,436 of Dr. Rothblatt’s total base salary, respectively.

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(1)

This award of stock options represents 50% of the Named Executive Officer’s four-year equity grant of stock options covering the 2019-2022 period. These options were granted with an exercise price equal to 115% of the fair market value of our common stock on the date of grant. These stock options cliff vest on the fourth anniversary of the date of grant and expire on the eighth anniversary of the date of grant. See the Compensation Discussion and Analysis above for more details on the 2019-2022 equity program for our Named Executive Officers.

(2)

This award of stock options represents 50% of the Named Executive Officer’s four-year equity grant of stock options covering the 2019-2022 period. These options were granted with an exercise price equal to the fair market value of our common stock on the date of grant. These stock options vest in equal installments on the second, third and fourth anniversaries of the date of grant and expire on the eighth anniversary of the date of grant. See the Compensation Discussion and Analysis above for more details on the 2019-2022 equity program for our Named Executive Officers.

(3)

Actual cash incentive awards earned under the program in 2019 are reported in the Summary Compensation Table under the column entitled “Non-Equity Incentive Plan Compensation.” While there are threshold performance criteria and payout levels for 75% of the cash incentive program (based on the Milestones related to cash profits, revenues and manufacturing), there is no threshold performance level for the entirety of the program because the R&D Milestone does not contain threshold / minimum performance criteria.

(4)	The grant date fair value of stock options is generally the amount that we will recognize as an expense over the award’s vesting period, computed in accordance with applicable accounting standards.

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(1)	These stock options were fully vested upon grant pursuant to Dr. Rothblatt’s employment agreement

(2)	These stock options have been transferred to trusts beneficially owned by Dr. Rothblatt and her spouse, for estate planning purposes

(3)	These stock options or STAP awards vest in one-fourth increments on each of the first four anniversaries of the date of grant

(4)	These stock options vest in one-third increments on each of the first three anniversaries of the date of grant

(5)	These stock options were subject to a three-year (2017-2019) performance threshold tied to average cash profit margin. These stock options were fully earned as of December 31, 2019 and vested at March 15, 2020.

(6)

These stock options are subject to a three-year (2018-2020) performance threshold tied to average cash profit margin. To the extent earned, these stock options vest at the end of the three-year performance period. Given performance to-date has fallen above target, the number of shares shown is at “maximum”. The number of shares that are ultimately earned may be lower, depending on performance over the relevant three-year period.

(7)	These stock options were subject to a one-year performance threshold tied to Company-Wide Milestone Performance. Once earned, shares vest in equal installments over a three-year period. The number of shares shown reflect the number of shares earned based on actual performance.

(8)	One-time STAP award granted upon Mr. Edgemond’s commencement of employment, which vested in full on February 28, 2015

(9)	These stock options cliff vest (100%) on the fourth anniversary of the date of grant

(10)	These stock options vest in one-third increments on the second, third and fourth anniversaries of the date of grant

(11)	These STAP awards cliff vested (100%) on the fifth anniversary of the date of grant

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(1)

Represents the difference between the exercise price of the stock options or STAP award and the fair market value of our common stock on the date of exercise, multiplied by the number of options or STAP awards exercised. STAP awards convey the right to receive an amount in cash equal to the positive difference between the exercise price and the closing price of our common stock on the date of exercise.

(2)	All options exercised by Dr. Rothblatt during 2019 had been held for nearly 10 years, and were nearing their expiration date of December 31, 2019

(1)	Reflects the number of years (up to the maximum of 15 years under the terms of the SERP) since each Named Executive Officer commenced employment with us, through December 31, 2019

(2)	Reflects the number of years since each Named Executive Officer commenced employment with us, through December 31, 2019

(3)

The present values of accumulated benefits are based on assumptions used in the financial disclosures for the year ended December 31, 2019 including a discount rate of 2.63% and a lump sum interest rate of 3.00%. The present value represents the lump sum value of the accrued benefit which is based on service and earnings as of December 31, 2019, and assumes payment at age 60, the normal retirement date under the SERP. No preretirement death, disability, or termination is assumed. For a discussion of valuation assumptions, see Note 12—Employee Benefit Plans to the consolidated financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2019.

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(1)	Benefits upon termination while continuing as a senior advisor are applicable only to employment agreements with Dr. Rothblatt and Mr. Mahon

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(2)

The value shown is based on the positive difference between the aggregate exercise price of all accelerated stock options and/or STAP awards and the aggregate market value of the underlying shares calculated based on the closing market price of our common stock on December 31, 2019, $88.08. Per the terms of awards containing performance vesting criteria, acceleration will result in the vesting of the “target” number of shares. Both Dr. Rothblatt and Mr. Mahon have waived their contractual provision providing for stock option vesting acceleration if they resign while continuing as a senior advisor for these grants.

(3)

Dr. Rothblatt’s employment agreement provides for SERP benefits under her employment agreement upon reaching age 65, including three additional years of service. Given Dr. Rothblatt has attained retirement age and has already reached the maximum number of years of service under the SERP, this additional benefit is no longer applicable. As a result, the value included in this table represents the normal benefits Dr. Rothblatt would receive upon retirement, in accordance with the terms of the SERP.

(4)	Represents the estimated value of continued health care benefits for a three-year period after termination, outplacement services for 12 months and the fair value of one currently leased vehicle

(5)	Represents the estimated value of continued health care benefits for a two-year period after termination and outplacement services equal to $10,000

*	Payment is equal to greater of payment for the prior year, or the average of such payments for the prior two years

**	Provision has been waived with respect to the 2019-2022 four-year stock options granted to Dr. Rothblatt and Mr. Mahon

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*	Payment is equal to greater of payment for the prior year, or the average of such payments for the prior two years.

•	In the case of Dr. Rothblatt, her willful and continued failure to substantially perform her duties, or willfully engaging in gross misconduct that is materially injurious to us

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In the case of the other Named Executive Officers, (i) failure to perform any of the material terms or provisions of his employment agreement; (ii) negligent or unsatisfactory performance of duties, after notice and the opportunity to correct such performance; (iii) employment or profession related misconduct; (iv) conviction of a crime involving a felony, fraud or embezzlement; or (v) misappropriation of our funds or misuse of assets

•

In the case of Dr. Rothblatt, without her consent, the occurrence of any of the following: (i) the assignment of any duties that are inconsistent with her position as Chairman and Chief Executive Officer; (ii) a material adverse change in her reporting responsibilities, titles or offices; (iii) failure to re-elect her to any position she held with us; (iv) a reduction in her base salary or failure to increase her salary consistent with certain other executive salary increases; (v) relocation of 25 miles or more or additional substantially more burdensome travel requirements; (vi) failure to continue her as a participant in any bonus or other incentive plans in which she was participating; (vii) failure to keep in effect certain benefit plans and arrangements; (viii) failure to obtain a successor entity’s assumption of the employment agreement; (ix) failure to abide by certain provisions in the employment agreement; or (x) any other material breach of the employment agreement

•	In the case of Mr. Mahon, his authority and responsibilities being materially diminished without cause

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•	the Plan allows for awards to be granted with performance-based vesting conditions;

•	stock options and stock appreciation rights may not be granted with exercise prices lower than the fair market value of the underlying shares on the grant date;

•	no award may vest prior to the first anniversary of grant, subject to limited exceptions for death, disability, or a change in control;

•	the share pool under the Plan is not subject to liberal “recycling” provisions (among other things, shares used to pay the exercise price for stock options do not again become available for grant under the Plan);

•	at any time when the exercise price of a stock option or stock appreciation right is above the market value of our common stock, we cannot, without shareholder approval, directly or indirectly “reprice” those awards;

•	stock options granted under the Plan cannot be subject to a “reload” feature;

•	we have the authority under the Plan to cancel outstanding awards (vested or unvested) in the event the applicable plan participant engages in an “act of misconduct” (as such term is defined in the Plan); and

•	the Plan specifies limits on cash and equity compensation that may be provided annually to our non-employee directors.

(1)

Certain outstanding stock options were issued under our Amended and Restated Equity Incentive Plan (the Prior Plan), which was approved by security holders in 1997. Information regarding this plan is contained in Note 9—Share Based Compensation to the consolidated financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2019. No further awards may be granted pursuant to the Prior Plan following shareholder approval of the Plan in June 2015 (but outstanding awards under the Prior Plan will continue to be governed by the Prior Plan). Any shares subject to awards that are forfeited under the Prior Plan will not become available for the issuance of future awards under either the Plan or the Prior Plan.

(2)	This is the Plan being amended and restated and does not include the additional shares to be made available for issuance if the 2020 Restatement is approved. The fungible share ratio of 1.35:1 will apply to full-value awards granted under the 2020 Restatement.

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(1)	These figures reflect time-based full-value awards granted during the applicable fiscal year and both time-based and performance-based stock option awards granted during the applicable fiscal year.

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(1)

All outstanding stock options were issued under our two equity incentive plans approved by security holders—the Prior Plan and the Plan. The majority of outstanding RSUs were issued under the Plan. In addition, our employees have outstanding rights to purchase our common stock at a discount as part of our Employee Stock Purchase Plan (ESPP). No further awards will be issued under the Prior Plan. Information regarding these plans is contained in Note 9—Share-Based Compensation to our consolidated financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2019.

(2)

We have one equity incentive plan, the United Therapeutics Corporation 2019 Inducement Stock Incentive Plan (the 2019 Inducement Plan), that has not been approved by our shareholders, as permitted by the Nasdaq Stock Market rules. The 2019 Inducement Plan was approved by our Board of Directors in February 2019 and provides for the issuance of up to 99,000 shares in the aggregate of our common stock under awards granted to newly-hired employees. Currently, we grant only restricted stock units to newly-hired employees under the 2019 Inducement Plan. Information regarding this plan is contained in Note 9—Share-Based Compensation to our consolidated financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2019.

(3)

Column (a) includes 8,088,680 shares of our common stock issuable upon the exercise of outstanding stock options issued under the Prior Plan and the Plan; 307,304 shares issuable upon the vesting of outstanding RSUs issued under the 2015 Plan; and 3,421 shares issuable upon the vesting of outstanding RSUs issued under the 2019 Inducement Plan. The Plan and 2019 Inducement Plan use a share counting formula for determining the number of shares available for issuance under the plans. In accordance with this formula, each option issued under the Plan counts as one share, while each RSU issued under the Plan and the 2019 Inducement Plan counted as 2.14 shares since that was the existing fungible share ratio effective as of December 31, 2019. If the 2020 Restatement is approved, the Plan will shift to a fungible share ratio of 1.35:1 effective as of March 17, 2020. The number under column (a) represents the actual number of shares issuable under our outstanding awards without giving effect to the share counting formula.

(4)	Column (b) represents the weighted average exercise price of the outstanding stock options only. The outstanding RSUs are not included in this calculation because they do not have an exercise price.

(5)

Column (c) includes 91,679, 2,386,955, and 2,695,451 of shares available for future issuance under the 2019 Inducement Plan, the Plan and the ESPP, respectively. Under the ESPP, employees may purchase shares based upon a 6-month offering period at an amount equal to the lesser of (1) 85 percent of the closing market price of our common stock on the first day of the offering period, or (2) 85 percent of the closing market price of our common stock on the last day of the offering period. Refer to Note 9—Share-Based Compensation—Employee Stock Purchase Plan in our consolidated financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2019 for more information. The number under column (c) assumes that all 310,725 outstanding RSUs included in column (a) vest. Each RSU is only counted as one share in column (a) since only one share is issuable upon vesting. However, if any RSU included in column (a) does not vest, the number of shares available for future issuance will increase by 2.14 because of the share counting formula described in note (3) above. If the 2020 Restatement is approved, the Plan will shift to a fungible share ratio of 1.35:1 effective as of March 17, 2020.

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•	reviewed and discussed United Therapeutics’ 2019 audited consolidated financial statements with our management and EY, including discussions about critical accounting policies, other financial accounting and reporting principles and practices appropriate for us, and the reasonableness of significant judgments

•	reviewed and discussed management’s assessments of the effectiveness of internal controls over financial reporting and EY’s related assessments and auditing procedures

•	discussed with EY the overall scope of and plans for our audits and reviews. Our Audit Committee has met with EY, with and without management present, to discuss our financial reporting processes and internal accounting controls. We have reviewed all important audit findings prepared by EY

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•

discussed with EY matters that are required to be discussed by applicable Public Company Accounting Oversight Board (PCAOB) requirements. EY also provided to our Audit Committee the written disclosures and the letter required by applicable requirements of the PCAOB regarding its communications with our Audit Committee concerning independence. We also discussed with EY their independence, including any relationships that may have an impact on their objectivity and independence, and satisfied ourselves as to EY’s independence. We also reviewed and pre-approved the scope and fees for all audit and other services performed by EY for us.

•	met and reviewed with members of senior management and EY the certifications provided by our Chairman and Chief Executive Officer and our Chief Financial Officer under the Sarbanes-Oxley Act of 2002 and the rules and regulations of the SEC relating to these certifications and the overall certification process

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•	executive officers’ compensation that is subject to required Proxy Statement disclosure or Compensation Committee approval

•	non-employee director compensation that is subject to required Proxy Statement disclosure

•	certain transactions with other companies and certain charitable contributions that do not exceed the greater of $200,000 or 5% of the other company’s or non-profit organization’s total annual revenues or receipts

•	transactions where all shareholders receive proportional benefits

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*	Less than one percent.

(1)

Beneficial ownership is determined in accordance with the rules of the SEC and generally includes ownership of those shares over which the person has sole or shared voting or investment power. Beneficial ownership also includes ownership of shares of our common stock subject to rights and options currently exercisable or convertible, or exercisable or convertible within 60 days after April 10, 2020. Except where indicated otherwise, and subject to community property laws where applicable, to our knowledge, the persons listed in the table above have sole voting and investment power with respect to their shares of our common stock.

(2)

Ownership percentage is based on 44,002,068 shares of our common stock outstanding on April 10, 2020, plus, as to the holder thereof and no other person, the number of shares (if any) that the person has the right to acquire as of April 10, 2020, or within 60 days thereafter, through the exercise of stock options or other similar rights (including, in the case of Dr. Rothblatt, stock options held by trusts beneficially owned by Dr. Rothblatt and her spouse).

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(3)	Represents the number of outstanding, vested STAP awards on April 10, 2020. None of the individuals in the table above have STAP awards scheduled to vest within 60 days after April 10, 2020. Because STAP awards are cash settled and do not involve the issuance of shares of stock, they are excluded from the other columns of this table.

(4)	Beneficial ownership information obtained from a Schedule 13G/A filed by BlackRock, Inc. on February 4, 2020 reporting beneficial ownership as of December 31, 2019. According to the Schedule 13G/A, BlackRock, Inc. has sole voting power over 4,441,611 shares and sole investment power over 4,464,085 shares.

(5)	Beneficial ownership information obtained from a Schedule 13G/A filed by The Vanguard Group on February 12, 2020, reporting beneficial ownership as of December 31, 2019. According to the Schedule 13G/A, The Vanguard Group has sole voting power over 22,587 shares, shared voting power over 11,538 shares, sole investment power over 4,023,966 shares, and shared investment power over 28,081 shares.

(6)

Beneficial ownership information obtained from a Schedule 13G/A filed by the Renaissance Technologies LLC and Renaissance Technologies Holdings Corporation (together, Renaissance) on February 13, 2020, reporting beneficial ownership as of December 31, 2019. According to the Schedule 13G/A, Renaissance has sole voting power over 3,323,603 shares, sole investment power over 3,522,207 shares, and shared investment power over 22,226 shares.

(7)

Beneficial ownership information obtained from a Schedule 13G/A filed by FMR LLC (FMR) and Abigail Johnson on February 7, 2020, reporting beneficial ownership as of December 31, 2019. According to the Schedule 13G/A, FMR has sole voting power over 137,499 shares and sole investment power over 2,383,549 shares, while Ms. Johnson has sole investment power over 2,383,549 shares. According to the Schedule 13G/A, neither FMR nor Ms. Johnson has sole power to vote or direct the voting of shares owned directly by various investment companies registered under the Investment Company Act advised by Fidelity Management & Research Company, a wholly owned subsidiary of FMR LLC, which power resides with the Fidelity Funds’ Board of Trustees.

(8)

Includes currently exercisable options held by Dr. Rothblatt to purchase 1,591,283 shares, and options held by trusts beneficially owned by Dr. Rothblatt and her spouse to purchase 1,723,869 shares. Also includes 663,879 shares held indirectly by trust, 166 shares held by Dr. Rothblatt’s spouse and 14,983 shares held by charitable organizations, and over which Dr. Rothblatt has investment and voting power.

(9)	Includes currently exercisable options to purchase 382,169 shares.

(10)	Includes currently exercisable options to purchase 323,280 shares.

(11)	Includes currently exercisable options to purchase 234,941 shares.

(12)	Includes currently exercisable options to purchase 28,740 shares.

(13)	Includes currently exercisable options to purchase 39,620 shares.

(14)	Includes currently exercisable options to purchase 42,470 shares.

(15)	Includes currently exercisable options to purchase 33,360 shares. Also includes 1,300 shares held in a family trust with Mr. Patusky as trustee.

(16)	Includes currently exercisable options to purchase 28,740 shares.

(17)	Includes currently exercisable options to purchase 24,120 shares.

(18)	Includes currently exercisable options to purchase 28,450 shares. Also includes 975 shares held jointly by Mr. Causey and his children.

(19)	Includes currently exercisable options to purchase 25,000 shares.

(20)	Includes currently exercisable options to purchase 15,000 shares.

(21)	Includes currently exercisable options to purchase 6,560 shares.

(22)	Includes currently exercisable options to purchase 4,527,602 shares.

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(a)	“Act” means the Securities Exchange Act of 1934, as amended.

(b)	“Administrator” means the Administrator of the Plan in accordance with Section 19.

(c)	“Affiliate” means, with respect to any entity, any other corporation, organization, association, partnership, sole proprietorship or other type of entity, whether incorporated or unincorporated, directly or indirectly controlling or controlled by or under direct or indirect common control with such entity.

(d)	“Award” means an Incentive Stock Option, Nonqualified Stock Option, Stock Appreciation Right, Restricted Stock, Restricted Stock Unit, Stock Award or Incentive Bonus granted to a Participant pursuant to the provisions of the Plan, any of which the Administrator may structure to qualify in whole or in part as a Performance Award.

(e)	“Award Agreement” means a written agreement or other instrument as may be approved from time to time by the Administrator implementing the grant of each Award. An Agreement may be in the form of an agreement to be executed by both the Participant and the Company (or an authorized representative of the Company) or certificates, notices or similar instruments as approved by the Administrator.

(f)	“Board” means the board of directors of the Company.

(g)

“Cause” has the meaning specified in the Participant’s employment agreement (if any) or otherwise means (1) any act of personal dishonesty taken by the Participant in connection with his or her responsibilities as an employee or other service provider and intended to result in substantial personal enrichment of the Participant; (2) the Participant’s conviction of a felony; (3) an act by the Participant which constitutes willful or gross misconduct and which is demonstrably and materially injurious to the Company; or (4) continued substantial willful violations by the Participant of the Participant’s duties after there has been delivered to the Participant a written demand for performance from the Company which specifically sets forth the factual basis for the Company’s belief that the Participant has not substantially performed his or her duties.

(h)	“Change in Control” means, and shall be deemed to have occurred:

(1)

if any person or group (as used in Section 13(d) of the Act) (other than the Company, any trustee or other fiduciary holding securities under an employee benefit plan of the Company, or any company owned, directly or indirectly, by the shareholders of the Company in substantially the same proportions as their ownership of stock of the Company) becomes the “beneficial owner” (as defined in Rule 13d-3 under the Act) of securities of the Company representing more than 30% of (a) the Shares then outstanding or (b) the combined voting power (other than in the election of directors) of all voting securities of the Company then outstanding; or

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(2)

if, during any period of 24 consecutive months, individuals who at the beginning of such period constituted the Board, and any director whose election or nomination for election by the Company’s shareholders was approved by a vote of at least two-thirds (2/3) of the directors then still in office who either were directors at the beginning of the period or whose election or nomination for election was previously so approved (the “Incumbent Board”), cease for any reason (other than death or disability) to constitute at least a majority thereof; or

(3)

upon the consummation of a reorganization, merger, statutory share exchange or consolidation or similar transaction involving the Company or any of its subsidiaries unless, following such event, (A) all or substantially all of the individuals and entities that were the beneficial owners of the Company’s common stock or the combined voting power of all voting securities of the Company immediately prior to such transaction beneficially own, directly or indirectly, more than 50% of the then outstanding shares of common stock (or, for a non-corporate entity, equivalent securities) and the combined voting power of the then-outstanding voting securities entitled to vote generally in the election of directors (or, for a non-corporate entity, equivalent governing body), as the case may be, of the entity resulting from such transaction (including, without limitation, an entity that, as a result of such transaction, owns the Company either directly or through one or more subsidiaries) in substantially the same proportions as their ownership immediately prior to such transaction of the Company’s common stock or voting securities, as the case may be, (B) no person (excluding any corporation resulting from such transaction or any employee benefit plan (or related trust) of the Company or such corporation resulting from such transaction) beneficially owns, directly or indirectly, 30% or more of, respectively, the then-outstanding shares of common stock of the corporation resulting from such transaction or the combined voting power of the then-outstanding voting securities of such corporation, except to the extent that such ownership existed prior to the transaction, and (C) at least a majority of the members of the board of directors (or, for a non-corporate entity, equivalent governing body) of the entity resulting from such transaction were members of the Incumbent Board at the time of the execution of the initial agreement or of the action of the Board providing for such transaction; or

(4)	upon the complete liquidation of the Company or the sale or disposition by the Company of all or substantially all of the Company’s assets, other than a liquidation of the Company into a wholly-owned subsidiary.

(i)	“Code” means the Internal Revenue Code of 1986, as amended from time to time, and the rulings and regulations issued thereunder.

(j)	“Company” means United Therapeutics Corporation.

(k)

“Disability” means, in the Company’s reasonable judgment, either (a) the Participant has been unable to perform the Participant’s duties because of a physical or mental impairment for 80% or more of the normal working days during six consecutive calendar months or 50% or more of the normal working days during twelve consecutive calendar months, or (b) the Participant has become totally and permanently incapable of performing the usual duties of his or her employment with the Company on account of a physical or mental impairment.

(l)

“Fair Market Value” means, as of any date, the closing price of a Share on the principal exchange on which Shares are then trading, if any (or as reported on any composite index which includes such principal exchange). If Shares are not traded as of a particular date, the Fair Market Value of a Share as of such date shall be the closing price on the preceding trading date. If Shares not publicly traded on an exchange and not quoted on Nasdaq or a successor quotation system, the Fair Market Value of a Share shall be established by the Administrator in good faith.

(m)	“Incentive Bonus” means a bonus opportunity awarded under Section 10 pursuant to which a Participant may become entitled to receive an amount based on satisfaction of such performance criteria as are specified in the Award Agreement or otherwise.

(n)	“Incentive Stock Option” means a stock option that is intended to qualify as an “incentive stock option” within the meaning of Section 422 of the Code.

(o)	“Nonemployee Director” means each person who is, or is elected to be, a member of the Board and who is not an employee of the Company or any Subsidiary.

(p)	“Nonqualified Stock Option” means a stock option that is not intended to qualify as an “incentive stock option” within the meaning of Section 422 of the Code.

(q)	“Option” means an Incentive Stock Option and/or a Nonqualified Stock Option granted pursuant to Section 6 of the Plan.

(r)	“Participant” means any individual described in Section 3 to whom Awards have been granted from time to time by the Administrator and any authorized transferee of such individual.

(s)	“Person” has the same meaning as set forth in Sections 13(d) and 14(d)(2) of the Act.

(t)	“Performance Award” means an Award, the grant, issuance, retention, vesting or settlement of which is subject to satisfaction of one or more Qualifying Performance Criteria established pursuant to Section 14.

(u)	“Plan” means the 2015 United Therapeutics Corporation Stock Incentive Plan as set forth herein and as amended from time to time.

(v)	“Qualifying Performance Criteria” has the meaning set forth in Section 14(b).

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(w)	“Restricted Stock” means Shares granted pursuant to Section 8 of the Plan.

(x)	“Restricted Stock Unit” means an Award granted to a Participant pursuant to Section 8 pursuant to which Shares or cash in lieu thereof may be issued in the future.

(y)	“Share” means a share of the Company’s par value common stock, subject to adjustment as provided in Section 13.

(z)

“Stock Appreciation Right” means a right granted pursuant to Section 7 of the Plan that entitles the Participant to receive, in cash or Shares or a combination thereof, as determined by the Administrator, value equal to or otherwise based on the excess of (i) the Fair Market Value of a specified number of Shares at the time of exercise over (ii) the exercise price of the right, as established by the Administrator on the date of grant.

(aa)	“Stock Award” means an award of Shares to a Participant pursuant to Section 9 of the Plan.

(ab)

“Subsidiary” means any corporation (other than the Company), limited liability company or other form of entity in an unbroken chain of entities beginning with the Company where each of the entities in the unbroken chain other than the last entity owns stock possessing at least 50 percent or more of the total combined voting power of all classes of stock in one of the other entities in the chain, and if specifically determined by the Administrator in the context other than with respect to Incentive Stock Options, may include an entity in which the Company has a significant ownership interest or that is directly or indirectly controlled by the Company.

(ac)	“Substitute Awards” means Awards granted or Shares issued by the Company in assumption of, or in substitution or exchange for, awards previously granted, or the right or obligation to make future awards, by a company acquired by the Company or any Subsidiary or with which the Company or any Subsidiary combines.

(ad)

“Termination of Employment” means ceasing to serve as an employee of the Company and its Subsidiaries or, with respect to a Nonemployee Director or other non-employee service provider, ceasing to serve as such for the Company, except that with respect to all or any Awards held by a Participant (i) the Administrator may determine that a transition of employment to service with a partnership, joint venture or corporation not meeting the requirements of a Subsidiary in which the Company or a Subsidiary is a party is not considered a Termination of Employment, (ii) unless otherwise determined by the Administrator, service as a member of the Board or other service provider shall not be deemed to constitute continued employment with respect to Awards granted to a Participant while he or she served as an employee, (iii) service as an employee of the Company or a Subsidiary shall constitute continued employment with respect to Awards granted to a Participant while he or she served as a member of the Board or other service provider, and (iv) the Administrator may determine that an approved leave of absence or approved employment on a less than full-time basis is considered a Termination of Employment. The Administrator shall determine whether any corporate transaction, such as a sale or spin-off of a division or subsidiary that employs a Participant, shall be deemed to result in a Termination of Employment with the Company and its Subsidiaries for purposes of any affected Participant’s Awards, and the Administrator’s decision shall be final and binding.

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(a)

Aggregate Limits. The aggregate number of Shares issuable pursuant to all Awards shall not exceed 10,000,000; provided that (i) any Shares granted under Options or Stock Appreciation Rights shall be counted against this limit on a one-for-one basis, and (ii) any Shares granted prior to March 17, 2020, as Awards other than Options or Stock Appreciation Rights shall be counted against this limit as 2.14 Shares for every one (1) Share subject to such Award and (iii) any Shares granted on or after March 17, 2020, as Awards other than Options or Stock Appreciation Rights shall be counted against this limit as 1.35 Shares for every one (1) Share subject to such Award. The aggregate number of Shares available for grant under this Plan and the number of Shares subject to outstanding Awards shall be subject to adjustment as provided in Section 13. The Shares issued pursuant to Awards granted under this Plan may be shares that are authorized and unissued or shares that were reacquired by the Company, including shares purchased in the open market.

(b)

Issuance of Shares. For purposes of Section 5(a), the aggregate number of Shares issued under this Plan at any time shall equal only the number of Shares actually issued upon exercise or settlement of an Award. Notwithstanding the foregoing, Shares subject to an Award under the Plan may not again be made available for issuance under the Plan if such Shares are: (i) Shares that were subject to a stock-settled Stock Appreciation Right and were not issued upon the net settlement or net exercise of such Stock Appreciation Right, (ii) Shares used to pay the exercise price of an Option, (iii) Shares delivered to or withheld by the Company to pay the withholding taxes related to an Award, or (iv) Shares repurchased on the open market with the proceeds of an Option exercise. Shares subject to Awards that have been canceled, expired, forfeited or otherwise not issued under an Award and Shares subject to Awards settled in cash shall not count as Shares issued under this Plan. Any Shares that were subject to Options or Stock Appreciation Rights and that again become available for Awards under the Plan pursuant to this Section shall be added as one (1) Share for every one (1) Share subject to such Options or Stock Appreciation Rights.  Any Shares that were subject to Awards other than Options or Stock Appreciation Rights that again become available for Awards under the Plan pursuant to this Section shall (i) prior to March 17, 2020 be added as 2.14 Shares for every one (1) Share subject to such Awards and (ii) from and after March 17, 2020, be added as 1.35 Shares for every one (1) Share subject to such Awards.

(c)

Individual and Tax Code Limits. The aggregate number of Shares subject to Awards granted under this Plan during any calendar year to any one Participant shall not exceed 1,000,000, which number shall be calculated and adjusted pursuant to Section 13, but which number shall not count any tandem SARs (as defined in Section 7). The aggregate number of Shares that may be issued pursuant to the exercise of Incentive Stock Options granted under this Plan shall not exceed 10,000,000, which number shall be calculated and adjusted pursuant to Section 13 only to the extent that such calculation or adjustment will not affect the status of any option intended to qualify as an Incentive Stock Option under Section 422 of the Code. The maximum cash amount payable pursuant to that portion of an Incentive Bonus granted in any calendar year to any Participant under this Plan shall not exceed $5,000,000.

(d)	Director Awards.

(1)

The aggregate dollar value of Awards (based on the aggregate accounting value on the date of grant) granted pursuant to this Plan during any calendar year to any Nonemployee Director shall not exceed $400,000 for annual equity grants (plus, for the year an individual first becomes a Nonemployee Director (x) an initial equity grant valued at $400,000, plus (y) a pro-rata portion of the $400,000 annual equity-based award value based on the number of months remaining in the Board service year at the date of grant), payable in Options, Restricted Stock Units, or a split evenly between Options and Restricted Stock Units, based on an election by the Nonemployee Director. Such dollar limits shall be converted into a number of Awards as follows:

(A)

Options: The number of Options shall be calculated by dividing the equity value (e.g., $400,000) by the fair value of each Option, calculated in accordance with the Black-Scholes methodology utilized by the Company in calculating share-based compensation for financial reporting purposes. Black-Scholes inputs shall be the same as those used in the Company’s most recent quarterly report on Form 10-Q or Annual Report on Form 10-K, except that the Share price input shall be the average closing price of the Shares over a recent time period prior to the date of grant (May 10 through June 10, in the case of annual grants made in June).

(B)	Restricted Stock Units: The number of Restricted Stock Units shall be calculated by dividing the equity value (e.g., $400,000) by the average closing price of the Shares over a recent time period prior to the date of grant (May 10 through June 10, in the case of annual grants paid in June).

(C)	Rounding: The resulting number of Options and/or Restricted Stock Units, calculated as above, shall be rounded to the nearest 10 Shares.

(2)

In addition, the amount of cash compensation paid or payable by the Company to a Nonemployee Director with respect to any calendar year shall not exceed $60,000 (with additional cash compensation of $35,000 for the lead independent director, $25,000 for each committee chairmanship, and $15,000 for each other committee membership), plus a prorated portion of the aggregate cash compensation for the roles in which the Nonemployee Director serves for the year an individual first becomes a Nonemployee Director, to reflect the number of months then remaining in the Board service year as of the date the individual becomes a Nonemployee Director. For the avoidance of doubt, cash compensation shall be counted towards the limit specified in this subclause in the year earned (regardless of whether deferred), and any interest or other earnings on such compensation shall not count towards the limit.

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(e)

Substitute Awards. Substitute Awards shall not reduce the Shares authorized for issuance under the Plan or authorized for grant to a Participant in any calendar year. Additionally, in the event that a company acquired by the Company or any Subsidiary, or with which the Company or any Subsidiary combines, has shares available under a pre-existing plan approved by shareholders and not adopted in contemplation of such acquisition or combination, the shares available for grant pursuant to the terms of such pre-existing plan (as adjusted, to the extent appropriate, using the exchange ratio or other adjustment or valuation ratio or formula used in such acquisition or combination to determine the consideration payable to the holders of common stock of the entities party to such acquisition or combination) may be used for Awards under the Plan and shall not reduce the Shares authorized for issuance under the Plan; provided that Awards using such available shares shall not be made after the date awards or grants could have been made under the terms of the pre-existing plan, absent the acquisition or combination, and shall only be made to individuals who were employees, directors or other service providers of such acquired or combined company before such acquisition or combination.

(a)

Option Awards. Options may be granted at any time and from time to time prior to the termination of the Plan to Participants as determined by the Administrator. No Participant shall have any rights as a shareholder with respect to any Shares subject to Options hereunder until said Shares have been issued. Each Option shall be evidenced by an Award Agreement. Options granted pursuant to the Plan need not be identical but each Option must contain and be subject to the terms and conditions set forth below.

(b)

Price. The Administrator will establish the exercise price per Share under each Option, which, in no event will be less than the Fair Market Value of the Shares on the date of grant; provided, however, that the exercise price per Share with respect to an Option that is granted in connection with a merger or other acquisition as a substitute or replacement award for options held by optionees of the acquired entity may be less than 100% of the Fair Market Value of the Shares on the date such Option is granted if such exercise price is based on a formula set forth in the terms of the options held by such optionees or in the terms of the agreement providing for such merger or other acquisition. The exercise price of any Option may be paid in Shares, cash or a combination thereof, as determined by the Administrator, including an irrevocable commitment by a broker to pay over such amount from a sale of the Shares issuable under an Option, the delivery of previously owned Shares and withholding of Shares deliverable upon exercise, or in such other form as is acceptable to the Administrator.

(c)

Provisions Applicable to Options. The date on which Options become exercisable shall be determined at the sole and absolute discretion of the Administrator and set forth in an Award Agreement. However, in no event shall any Option vest before the first anniversary of the date of grant; provided that, if so determined by the Committee, an Option may fully or partially vest before such anniversary in the event of the Participant’s death or disability or a Change in Control. Unless otherwise determined by the Administrator, an approved leave of absence or employment on a less than full-time basis shall not result in an adjustment to the vesting period and/or exercisability of an Option to reflect the effects of any period during which the Participant is on an approved leave of absence or is employed on a less than full-time basis. In no event may any Option include a reload feature.

(d)

Term of Options and Termination of Employment: The Administrator shall establish the term of each Option, which in no case shall exceed a period of ten (10) years from the date of grant. Unless an Option earlier expires upon the expiration date established pursuant to the foregoing sentence, upon the Participant’s Termination of Employment, his or her rights to exercise an Option then held shall be only as follows, unless the Administrator specifies otherwise:

(1)

General. If a Participant’s Termination of Employment is for any reason other than the Participant’s death, Disability, or termination for Cause, Options granted to the Participant may continue to be exercised in accordance with their terms for a period of ninety (90) days after such Termination of Employment, but only to the extent the Participant was entitled to exercise the Options on the date of such termination.

(2)

Death. If a Participant dies either while an employee or officer of the Company or a Subsidiary or member of the Board, or after the Termination of Employment other than for Cause but during the time when the Participant could have exercised an Option, the Options issued to such Participant shall become fully vested and exercisable by the personal representative of such Participant or other successor to the interest of the Participant for one year after the Participant’s death.

(3)	Disability. If a Participant’s Termination of Employment is due to Disability, then all of the Participant’s Options shall immediately fully vest, and the Options held by the Participant at the time of such Termination of Employment shall be exercisable by the Participant or the personal representative of such Participant for one year following such Termination of Employment.

(4)	Termination for Cause. If a Participant is terminated for Cause, the Participant shall have no further right to exercise any Options previously granted. The Administrator or one or more officers designated by the Administrator shall determine whether a termination is for Cause.

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(e)

Incentive Stock Options. Notwithstanding anything to the contrary in this Section 6, in the case of the grant of an Option intending to qualify as an Incentive Stock Option: (i) if the Participant owns stock possessing more than 10 percent of the combined voting power of all classes of stock of the Company, the exercise price of such Option must be at least 110 percent of the Fair Market Value of the Shares on the date of grant and the Option must expire within a period of not more than five (5) years from the date of grant, and (ii) Termination of Employment will occur when the person to whom an Award was granted ceases to be an employee (as determined in accordance with Section 3401(c) of the Code and the regulations promulgated thereunder) of the Company and its corporate Subsidiaries. Notwithstanding anything in this Section 6 to the contrary, options designated as Incentive Stock Options shall not be eligible for treatment under the Code as Incentive Stock Options (and will be deemed to be Nonqualified Stock Options) to the extent that either (a) the aggregate Fair Market Value of Shares (determined as of the time of grant) with respect to which such Options are exercisable for the first time by the Participant during any calendar year (under all plans of the Company and any corporate Subsidiary) exceeds $100,000, taking Options into account in the order in which they were granted, or (b) such Options otherwise remain exercisable but are not exercised within three (3) months of Termination of Employment (or such other period of time provided in Section 422 of the Code).

(a)

Restricted Stock and Restricted Stock Unit Awards. Restricted Stock and Restricted Stock Units may be granted at any time and from time to time prior to the termination of the Plan to Participants as determined by the Administrator. Restricted Stock is an award or issuance of Shares the grant, issuance, retention, vesting and/or transferability of which is subject during specified periods of time to such conditions (including continued employment or performance conditions) and terms as the Administrator deems appropriate. Restricted Stock Units are Awards denominated in units of Shares under which the issuance of Shares is subject to such conditions (including continued employment or performance conditions) and terms as the Administrator deems appropriate. Each grant of Restricted Stock and Restricted Stock Units shall be evidenced by an Award Agreement. Unless determined otherwise by the Administrator, each Restricted Stock Unit will be equal to one Share and will entitle a Participant to either the issuance of Shares or payment of an amount of cash determined with reference to the value of Shares. To the extent determined by the Administrator, Restricted Stock and Restricted Stock Units may be satisfied or settled in Shares, cash or a combination thereof. Restricted Stock and Restricted Stock Units granted pursuant to the Plan need not be identical but each grant of Restricted Stock and Restricted Stock Units must contain and be subject to the terms and conditions set forth below.

(b)

Contents of Agreement. Each Award Agreement shall contain provisions regarding (i) the number of Shares or Restricted Stock Units subject to such Award or a formula for determining such number, (ii) the purchase price of the Shares, if any, and the means of payment, (iii) the performance criteria, if any, and level of achievement versus these criteria that shall determine the number of Shares or Restricted Stock Units granted, issued, retainable and/or vested, (iv) such terms and conditions on the grant, issuance, vesting and/or forfeiture of the Shares or Restricted Stock Units as may be determined from time to time by the Administrator, (v) the term of the performance period, if any, as to which performance will be measured for determining the number of such Shares or Restricted Stock Units, and (vi) restrictions on the transferability of the Shares or Restricted Stock Units. Shares issued under a Restricted Stock Award may be issued in the name of the Participant and held by the Participant or held by the Company, in each case as the Administrator may provide.

(c)

Vesting and Performance Criteria. The grant, issuance, retention, vesting and/or settlement of shares of Restricted Stock and Restricted Stock Units will occur when and in such installments as the Administrator determines or under criteria the Administrator establishes, which may include Qualifying Performance Criteria. However, in no event shall any shares of Restricted Stock or Restricted Stock Units vest before the first anniversary of the date of grant; provided that, if so determined by the Committee, shares of Restricted Stock and Restricted Stock Units may fully or partially vest before such anniversary in the event of the Participant’s death or disability or a Change in Control.

(d)	Termination of Employment. Unless the Administrator provides otherwise:

(i)	General. In the event of Termination of Employment for any reason other than death or Disability, any Restricted Stock or Restricted Stock Units still subject in full or in part to restrictions at the date of such Termination of Employment shall automatically be forfeited and returned to the Company.

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(ii)	Death or Disability. In the event a Participant’s Termination of Employment is because of death or Disability, the restrictions remaining on any or all Shares remaining subject to a Restricted Stock or Restricted Stock Unit Award shall lapse.

(e)

Voting Rights. Unless otherwise determined by the Administrator, Participants holding shares of Restricted Stock granted hereunder may exercise full voting rights with respect to those shares during the period of restriction. Participants shall have no voting rights with respect to Shares underlying Restricted Stock Units unless and until such Shares are reflected as issued and outstanding shares on the Company’s stock ledger.

(f)

Dividends and Distributions. Participants in whose name Restricted Stock is granted shall be entitled to receive all dividends and other distributions paid with respect to those Shares, unless determined otherwise by the Administrator. The Administrator will determine whether any such dividends or distributions will be automatically reinvested in additional shares of Restricted Stock and subject to the same restrictions on transferability as the Restricted Stock with respect to which they were distributed or whether such dividends or distributions will be paid in cash. Shares underlying Restricted Stock Units shall be entitled to dividends or dividend equivalents only to the extent provided by the Administrator. Notwithstanding anything herein to the contrary, in no event shall dividends, distributions or dividend equivalents be currently payable with respect to unvested or unearned Restricted Stock and Restricted Stock Unit awards.

(g)

Payment of Restricted Stock Units. In all events, unless payment with respect to a Restricted Stock Unit is deferred in a manner consistent with Section 409A of the Code, the Shares and/or cash underlying such Restricted Stock Unit shall be paid to the Participant no later than two and one-half months following the end of the year in which the Restricted Stock Unit is no longer subject to a substantial risk of forfeiture.

(h)

Legending of Restricted Stock. The Administrator may also require that certificates representing shares of Restricted Stock be retained and held in escrow by a designated employee or agent of the Company or any Subsidiary until any restrictions applicable to shares of Restricted Stock so retained have been satisfied or lapsed. Any certificates evidencing shares of Restricted Stock awarded pursuant to the Plan shall bear the following legend:

(a)

Grant. Stock Awards may be granted at any time and from time to time prior to the termination of the Plan to Participants as determined by the Administrator. Stock Awards shall be subject to such terms and conditions, consistent with the other provisions of the Plan, as may be determined by the Administrator. However, in no event shall any Stock Award vest before the first anniversary of the date of grant; provided that, if so determined by the Committee, a Stock Award may fully or partially vest before such anniversary in the event of the Participant’s death or disability or a Change in Control.

(b)

Rights as a Shareholder. A Participant shall have all voting, dividend, liquidation and other rights with respect to Shares issued to the Participant as a Stock Award under this Section 9 upon the Participant becoming the holder of record of the Shares granted pursuant to such Stock Award; provided, that the Administrator may impose such restrictions on the assignment or transfer of Shares awarded pursuant to a Stock Award as it considers appropriate.

(a)	General. Each Incentive Bonus Award will confer upon the Participant the opportunity to earn a future payment tied to the level of achievement with respect to one or more performance criteria established for a performance period of not less than one year.

(b)

Incentive Bonus Document. Unless otherwise determined by the Administrator, the terms of any Incentive Bonus will be set forth in an Award Agreement. Each Award Agreement evidencing an Incentive Bonus shall contain provisions regarding (i) the target and maximum amount payable to the Participant as an Incentive Bonus, (ii) the performance criteria and level of achievement versus these criteria that shall determine the amount of such payment, (iii) the term of the performance period as to which performance shall be measured for determining the amount of any payment, (iv) the timing of any payment earned by virtue of performance, (v) restrictions on the alienation or transfer of the Incentive Bonus prior to actual payment, (vi) forfeiture provisions and (vii) such further terms and conditions, in each case not inconsistent with this Plan as may be determined from time to time by the Administrator.

(c)	Performance Criteria. The Administrator shall establish the performance criteria and level of achievement versus these criteria that shall determine the target and maximum amount payable under an Incentive Bonus, which criteria may be based on financial performance and/or personal performance evaluations.

(d)

Timing and Form of Payment. The Administrator shall determine the timing of payment of any Incentive Bonus. Payment of the amount due under an Incentive Bonus may be made in cash or in Shares, as determined by the Administrator. The Administrator may provide for or, subject to such terms and conditions as the Administrator may specify, may permit a Participant to elect for the payment of any Incentive Bonus to be deferred to a specified date or event. In all events, unless payment of an Incentive Bonus is deferred in a manner consistent with Section 409A of the Code, any Incentive Bonus shall be paid to the Participant no later than two and one-half months following the end of the year in which the Incentive Bonus is no longer subject to a substantial risk of forfeiture.

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(e)

Discretionary Adjustments. Notwithstanding satisfaction of any performance goals, the amount paid under an Incentive Bonus on account of either financial performance or personal performance evaluations may, to the extent specified in the Award Agreement or other document evidencing the Award, be adjusted by the Administrator on the basis of such further considerations as the Administrator shall determine.

(a)

General. The number and kind of Shares available for issuance under this Plan (including under any Awards then outstanding), and the number and kind of Shares subject to the limits set forth in Section 5 of this Plan, shall be equitably adjusted by the Administrator to reflect any reorganization, reclassification, combination of shares, stock split, reverse stock split, spin-off, dividend or distribution of securities, property or cash (other than regular, quarterly cash dividends), or any other event or transaction that affects the number or kind of Shares outstanding. Such adjustment shall be designed to comply with Sections 409A and 424 of the Code as applicable, or, except as otherwise expressly provided in Section 5(c) of this Plan, may be designed to treat the Shares available under the Plan and subject to Awards as if they were all outstanding on the record date for such event or transaction or to increase the number of such Shares to reflect a deemed reinvestment in Shares of the amount distributed to the Company’s securityholders. The terms of any outstanding Award shall also be equitably adjusted by the Administrator as to price, number or kind of Shares subject to such Award, vesting, and other terms to reflect the foregoing events, which adjustments need not be uniform as between different Awards or different types of Awards.

(b)

Change in Control. The Administrator may determine the effect of a Change in Control on outstanding Awards in a manner that, in the Administrator’s discretion, is fair and equitable to Participants. Such effects, which need not be the same for every Participant, may include, without limitation: (x) the substitution for the Shares subject to any outstanding Award, or portion thereof, of stock or other securities of the surviving corporation or any successor corporation to the Company, or a parent or subsidiary thereof, in which event the aggregate purchase or exercise price, if any, of such Award, or portion thereof, shall remain the same, and/or (y) the conversion of any outstanding Award, or portion thereof, into a right to receive cash or other property upon or following the consummation of the Change in Control in an amount equal to the value of the consideration to be received by holders of Shares in connection with such transaction for one Share, less the per share purchase or exercise price of such Award, if any, multiplied by the number of Shares subject to such Award, or a portion thereof.

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(a)

General. The Administrator may establish performance criteria and level of achievement versus such criteria that shall determine the number of Shares to be granted, retained, vested, issued or issuable under or in settlement of or the amount payable pursuant to an Award, which criteria may be based on Qualifying Performance Criteria or other standards of financial performance and/or personal performance evaluations.

(b)

Qualifying Performance Criteria. For purposes of this Plan, the term “Qualifying Performance Criteria” shall mean any one or more of the following performance criteria, or derivations of such performance criteria, either individually, alternatively or in any combination, applied to either the Company as a whole or to a business unit or Subsidiary, either individually, alternatively or in any combination, and measured either annually or cumulatively over a period of years, on an absolute basis or relative to a pre-established target, to previous years’ results or to a designated comparison group, in each case as specified by the Administrator: (i) net earnings or earnings per share (including earnings before interest, taxes, depreciation, license fees, share-based compensation, and/or amortization, or other non-GAAP profitability measures), (ii) income, net income or operating income, (iii) revenues, (iv) net sales, (v) return on sales, (vi) return on equity, (vii) return on capital (including return on total capital or return on invested capital), (viii) return on assets or net assets, (ix) economic value added measurements, (x) return on invested capital, (xi) return on operating revenue, (xii) cash flow (before or after dividends), (xiii) stock price, (xiv) total shareholder return, (xv) market capitalization, (xvi) economic value added, (xvii) debt leverage (debt to capital), (xviii) operating profit or net operating profit, (xix) operating margin or profit margin, (xx) cash from operations, (xxi) market share, (xxii) product development or release schedules, (xxiii) new product innovation, (xxiv) cost reductions, (xxv) customer service, or (xxvi) customer satisfaction. The Committee (A) shall appropriately adjust any evaluation of performance under a Qualifying Performance Criterion to eliminate the effects of charges for restructurings, discontinued operations, extraordinary items and all items of gain, loss or expense determined to be extraordinary or unusual in nature or related to the disposal of a segment of a business or related to a change in accounting principle all as determined in accordance with applicable accounting provisions, as well as the cumulative effect of accounting changes, in each case as determined in accordance with generally accepted accounting principles or identified in the Company’s financial statements or notes to the financial statements, and (B) may appropriately adjust any evaluation of performance under a Qualifying Performance Criterion to exclude any of the following events that occurs during a performance period: (i) asset write- downs, (ii) litigation, claims, judgments or settlements, (iii) the effect of changes in tax law or other such laws or provisions affecting reported results, and (iv) accruals of any amounts for payment under this Plan or any other compensation arrangement maintained by the Company.

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(a)

Administrator of the Plan. The Plan shall be administered by the Administrator who shall be the Compensation Committee of the Board or, in the absence of a Compensation Committee, the Board itself. Any power of the Administrator may also be exercised by the Board, except to the extent that the grant or exercise of such authority would cause any Award or transaction to become subject to (or lose an exemption under) the short-swing profit recovery provisions of Section 16 of the Act. To the extent that any permitted action taken by the Board conflicts with action taken by the Administrator, the Board action shall control. The Compensation Committee may by resolution authorize one or more officers of the Company to perform any or all things that the Administrator is authorized and empowered to do or perform under the Plan, and for all purposes under this Plan, such officer or officers shall be treated as the Administrator; provided, however, that no such officer shall designate himself or herself as a recipient of any Awards granted under authority delegated to such officer. The Compensation Committee may delegate any or all aspects of the day-to-day administration of the Plan to one or more officers or employees of the Company or any Subsidiary, and/or to one or more agents.

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(b)

Powers of Administrator. Subject to the express provisions of this Plan, the Administrator shall be authorized and empowered to do all things that it determines to be necessary or appropriate in connection with the administration of this Plan, including, without limitation: (i) to prescribe, amend and rescind rules and regulations relating to this Plan and to define terms not otherwise defined herein; (ii) to determine which persons are Participants, to which of such Participants, if any, Awards shall be granted hereunder and the timing of any such Awards; (iii) to grant Awards to Participants and determine the terms and conditions thereof, including the number of Shares subject to Awards and the exercise or purchase price of such Shares and the circumstances under which Awards become exercisable or vested or are forfeited or expire, which terms may but need not be conditioned upon the passage of time, continued employment, the satisfaction of performance criteria, the occurrence of certain events (including a Change in Control), or other factors; (iv) to establish and verify the extent of satisfaction of any performance goals or other conditions applicable to the grant, issuance, exercisability, vesting and/or ability to retain any Award; (v) to prescribe and amend the terms of the agreements or other documents evidencing Awards made under this Plan (which need not be identical) and the terms of or form of any document or notice required to be delivered to the Company by Participants under this Plan; (vi) to determine the extent to which adjustments are required pursuant to Section 13; (vii) to interpret and construe this Plan, any rules and regulations under this Plan and the terms and conditions of any Award granted hereunder, and to make exceptions to any such provisions in if the Administrator, in good faith, determines that it is necessary to do so in light of extraordinary circumstances and for the benefit of the Company (provided that nothing in this Section 19(b) permits the Committee to provide that any Award may vest before the first anniversary of the date of grant other than in connection with the Participant’s death or disability or a Change in Control); (viii) to approve corrections in the documentation or administration of any Award; and (ix) to make all other determinations deemed necessary or advisable for the administration of this Plan. The Administrator may, in its sole and absolute discretion, without amendment to the Plan, waive or amend the operation of Plan provisions respecting exercise after termination of employment or service to the Company or an Affiliate and, except as otherwise provided herein, adjust any of the terms of any Award (subject to the proviso in item (vii) of the immediately preceding sentence). Except in connection with a corporate transaction involving the Company (including, without limitation, any stock dividend, distribution (whether in the form of cash, Shares, other securities or other property), stock split, extraordinary cash dividend, recapitalization, Change in Control, reorganization, merger, consolidation, split-up, spin-off, combination, repurchase or exchange of Shares or other securities, or similar transaction(s)), the Company may not, without obtaining shareholder approval: (w) amend the terms of outstanding Options or Stock Appreciation Rights to reduce the exercise price of such outstanding Options or Stock Appreciation Rights; (x) cancel outstanding Options or Stock Appreciation Rights in exchange for Options or Stock Appreciation Rights with an exercise price that is less than the exercise price of the original Options or Stock Appreciation Rights; (y) cancel outstanding Options or Stock Appreciation Rights with an exercise price above the current stock price in exchange for cash or other securities; or (z) otherwise amend, exchange or reprice Options or Stock Appreciation Rights.

(c)

Determinations by the Administrator. All decisions, determinations and interpretations by the Administrator regarding the Plan, any rules and regulations under the Plan and the terms and conditions of or operation of any Award granted hereunder, shall be final and binding on all Participants, beneficiaries, heirs, assigns or other persons holding or claiming rights under the Plan or any Award. The Administrator shall consider such factors as it deems relevant, in its sole and absolute discretion, to making such decisions, determinations and interpretations including, without limitation, the recommendations or advice of any officer or other employee of the Company and such attorneys, consultants and accountants as it may select.

(d)

Subsidiary Awards. In the case of a grant of an Award to any Participant employed by a Subsidiary, such grant may, if the Administrator so directs, be implemented by the Company issuing any subject Shares to the Subsidiary, for such lawful consideration as the Administrator may determine, upon the condition or understanding that the Subsidiary will transfer the Shares to the Participant in accordance with the terms of the Award specified by the Administrator pursuant to the provisions of the Plan. Notwithstanding any other provision hereof, such Award may be issued by and in the name of the Subsidiary and shall be deemed granted on such date as the Administrator shall determine.

(e)

Indemnification of Administrator. Neither any member nor former member of the Administrator nor any individual to whom authority is or has been delegated shall be personally responsible or liable for any act or omission in connection with the performance of powers or duties or the exercise of discretion or judgment in the administration and implementation of the Plan. Each person who is or shall have been a member of the Administrator shall be indemnified and held harmless by the Company from and against any cost, liability or expense imposed or incurred in connection with such person’s or the Administrator’s taking or failing to take any action under the Plan. Each such person shall be justified in relying on information furnished in connection with the Plan’s administration by any employee, officer, agent or expert employed or retained by the Administrator or the Company.

(a)	increase the maximum number of Shares for which Awards may be granted under this Plan;

(b)	reduce the price at which Options or Stock Appreciation Rights may be granted below the price provided for in Section 6(a);

(c)	amend the last sentence of Section 19(b) (relating to direct and indirect repricings of outstanding Options and Stock Appreciation Rights);

(d)	amend the proviso in Section 19(b)(vii);

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(e)	extend the term of this Plan;

(f)	change the class of persons eligible to be Participants;

(g)	otherwise amend the Plan in any manner requiring shareholder approval by law or under Nasdaq Global Select Market listing requirements (or the listing requirements of any successor exchange or market that is the primary stock exchange or market for trading of Shares); or

(h)	increase the individual maximum limits in Sections 5(c) and (d).

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•

Non-GAAP Diluted EPS (see the 2019 Performance in Review section above): Non-GAAP earnings is defined as net loss, adjusted for: (1) share-based compensation expense (including expenses relating to stock options, restricted stock units, share tracking awards and our employee stock purchase plan); (2) impairments charges; (3) license-related fees; (4) net unrealized and realized gains on equity securities; and (5) tax benefit on non-GAAP earnings adjustments. Non-GAAP earnings is divided by diluted weighted average shares outstanding to derive non-GAAP diluted earnings per share (EPS). A reconciliation of net loss to non-GAAP earnings is presented below (millions, except per share data):

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Adjusted EBITDASO (see the 2019 Compensation Decisions section above): Adjusted EBITDASO is defined as net loss, adjusted for: (1) depreciation and amortization expense; (2) share-based compensation expense (including expenses relating to stock options, restricted stock units, share tracking awards and our employee stock purchase plan); (3) impairment charges; (4) license-related fees; (5) interest expense, net; (6) net unrealized and realized gains on equity securities; and (7) income tax benefit. Adjusted EBITDASO is divided by total revenues to derive adjusted EBITDASO margin. A reconciliation of net loss to adjusted EBITDASO is presented below (in millions, except percentages):

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