Exhibit
10.1


 


Digital
Ally, Inc.


 


2015
Stock Option and Restricted Stock Plan


 


1. Purposes.


 


(a)
Background. This 2015 Stock Option and Restricted Stock Plan was adopted on March 27, 2015 by the Board of Directors,
subject to the approval of the Company’s stockholders. Options granted under the Plan prior to the stockholders’ approval
will be effective upon approval of the stockholders as of their respective dates of grant.


 


(b)
Eligible Award Recipients. The persons eligible to receive Awards are the Employees and Directors of the Company and
its Affiliates.


 


(c)
Available Awards. The purpose of the Plan is to provide a means by which eligible recipients may be given an opportunity
to benefit from increases in value of the Common Stock through the granting of the following: (i) Incentive Stock Options, (ii)
Nonqualified Stock Options, (iii) rights to acquire restricted stock, and (iv) stock appreciation rights.


 


(d)
General Purpose. The Company, by means of the Plan, seeks to retain the services of the group of persons eligible to
receive Awards, to secure and retain the services of new members of this group and to provide incentives for such persons to exert
maximum efforts for the success of the Company and its Affiliates.


 


2. Definitions.


 


(a)
“Affiliate” means any entity that controls, is controlled by, or is under common control with the
Company.


 


(b)
“Award” means any right granted under the Plan, including an Option, a right to acquire restricted
Common Stock, and a stock appreciation right.


 


(c)
“Award Agreement” means a written agreement between the Company and a holder of an Award (other than
an Option) evidencing the terms and conditions of an individual Award grant.


 


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


 


(e)
“Code” means the Internal Revenue Code of 1986, as amended, and the rules and regulations promulgated
thereunder.


 


(f)
“Committee” means a pre-existing or newly formed committee of members of the Board appointed by the
Board in accordance with subsection 3(c).


 






    	 



    	 



    

 


(g)
“Common Stock” means the shares of the Company’s common stock par value $0.001 and other rights
with respect to such shares.


 


(h)
“Company” means Digital Ally, Inc., a Nevada corporation.


 


(i)
“Continuous Service” means that the Participant’s service with the Company or an Affiliate,
whether as an Employee or Director is not interrupted or terminated. Unless otherwise provided in an Award Agreement or
Option Agreement, as applicable, the Participant’s Continuous Service shall not be deemed to have terminated merely
because of a change in the capacity in which the Participant renders service to the Company or an Affiliate as an Employee or
Director or a change in the entity for which the Participant renders such service, provided that there is no interruption or
termination of the Participant’s service to the Company or an Affiliate as an Employee or Director. The Board, in its
sole discretion, may determine whether Continuous Service shall be considered interrupted in the case of any leave of
absence, including sick leave, military leave or any other personal leave.


 


(j)
“Covered Employee” means the Company’s chief executive officer and the four (4) other highest
compensated officers of the Company for whom total compensation is required to be reported to stockholders under the Exchange
Act, as determined for purposes of Section 162(m) of the Code.


 


(k)
“Director” means a member of the Board of the Company.


 


(l)
“Disability” means the Participant’s inability, due to illness, accident, injury, physical or
mental incapacity or other disability, to carry out effectively the duties and obligations to the Company and its Affiliates
performed by such person immediately prior to such disability for a period of at least six (6) months, as determined in the
good faith judgment of the Board.


 


(m)
“Dollars” or “$” means United States dollars.


 


(n)
“Employee” means any person employed by the Company or an Affiliate. Service as a Director or payment
of a director’s fee by the Company or an Affiliate alone shall not be sufficient to constitute “employment”
by the Company or an Affiliate.


 


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


 


(p)
“Fair Market Value” means, as of any date, the value of the Common Stock determined as
follows:


 


(i) If
the Common Stock is listed on any established stock exchange, or traded on the Nasdaq Global Market, the Nasdaq Capital
Market or the Nasdaq OTC Bulletin Board, the Fair Market Value of the Common Stock shall be the closing sales price for such
stock (or the closing bid, if no sales were reported) as quoted on such exchange or market (or the exchange or market with
the greatest volume of trading in Common Stock if such stock is traded on more than one such exchange or market) on the last
market trading day prior to the day of determination, as reported by such exchange or market or such other source as the
Board reasonably deems reliable.


 


(ii) In
the absence of such markets for the Common Stock, the Fair Market Value shall be determined in good faith by
the Board.


 






    	 



    	 



    

 


(q)
“Incentive Stock Option” means an option designated as an incentive stock option in an Option
Agreement and that is granted in accordance with the requirements of, and that conforms to the applicable provisions of,
Section 422 of the Code.


 


(r)
“Independent Director” means (i) a Director who satisfies the definition of Independent Director or
similar definition under the applicable stock exchange or Nasdaq rules and regulations upon which the Common Stock is traded
from time to time and (ii) a Director who either (A) is not a current employee of the Company or an “affiliated
corporation” (within the meaning of Treasury Regulations promulgated under Section 162(m) of the Code), is not a former
employee of the Company or an “affiliated corporation” receiving compensation for prior services (other than
benefits under a tax qualified pension plan), was not an officer of the Company or an “affiliated corporation” at
any time and is not currently receiving direct or indirect remuneration from the Company or an “affiliated
corporation” for services in any capacity other than as a Director or (B) is otherwise considered an “outside
director” for purposes of Section 162(m) of the Code.


 


(s)
“Nonqualified Stock Option” means an option that is not designated in an Option Agreement as an
Incentive Stock Option or was not granted in accordance with the requirements of, and does not conform to the applicable
provisions of, Section 422 of the Code.


 


(t)
“Officer” means a person who is an officer of the Company within the meaning of Section 16 of the
Exchange Act and the rules and regulations promulgated thereunder.


 


(u)
“Option” means an Incentive Stock Option or a Nonqualified Stock Option granted pursuant to the
Plan.


 


(v)
“Option Agreement” means a written agreement between the Company and an Optionholder evidencing the
terms and conditions of an individual Option grant.


 


(w)
“Optionholder” means a person to whom an Option is granted pursuant to the Plan or, if applicable,
such other person who holds an outstanding Option.


 


(x)
“Participant” means a person to whom an Award is granted pursuant to the Plan or, if applicable, such
other person who holds an outstanding Award.


 


(y)
“Plan” means this Digital Ally, Inc. 2015 Stock Option and Restricted Stock Plan.


 


(z)
“Rule 16b-3” means Rule 16b-3 promulgated under the Exchange Act or any successor to Rule 16b-3, as in
effect from time to time.


 


(aa)
“Securities Act” means the Securities Act of 1933, as amended.


 


(bb)
“Ten Percent Stockholder” means a person who owns (or is deemed to own pursuant to Section 424(d) of
the Code) stock possessing more than ten percent (10%) of the total combined voting power of all classes of stock of the
Company or any parent corporation or any subsidiary corporation, both as defined in Section 424 of the Code.


 






    	 



    	 



    

 


3. Administration.


 


(a)
Administration by Board. The Board shall administer the Plan unless and until the Board delegates administration to
a Committee, as provided in subsection 3(c). The Board may, at any time and for any reason in its sole discretion, rescind some
or all of such delegation.


 


(b)
Powers of Board. The Board shall have the power, subject to, and within the limitations of, the express provisions
of the Plan:


 


(i) To
determine from time to time which of the persons eligible under the Plan shall be granted Awards; when and how each Award
shall be granted; what type or combination of types of Award shall be granted; the provisions of each Award granted (which
need not be identical), including the time or times when a person shall be permitted to receive Common Stock pursuant to an
Award; and the number of shares of Common Stock with respect to which an Award shall be granted to each such
person.


 


(ii) To
construe and interpret the Plan, Awards granted under it, Option Agreements and Award Agreements, and to establish, amend
and revoke rules and regulations for their administration. The Board, in the exercise of this power, may correct any defect,
omission or inconsistency in the Plan or in any Option Agreement or Award Agreement, in a manner and to the extent it shall
deem necessary or expedient to make the Plan fully effective.


 


(iii)
To amend the Plan, an Award, an Award Agreement or an Option Agreement as provided in Section 12, provided that,
the Board shall not amend the Fair Market Value of an Award or extend the term of an Option or Award without obtaining the approval
of the stockholders if required by the rules of any stock exchange upon which the Common Stock is listed.


 


(iv)
To reprice any Options granted under the Plan by lowering the exercise price of an Option after it is granted, canceling an
Option at a time when its exercise price exceeds the Fair Market Value of the stock underlying the Option, in exchange for
another Option or Award, as well as any other action that is treated as a repricing under generally accepted accounting
principles.


 


(v) Generally,
to exercise such powers and to perform such acts as the Board deems necessary or expedient to promote the best interests of
the Company which are not in conflict with the provisions of the Plan.


 


(c)
Delegation to Committee. 


 


(i)
General. The Board may delegate administration of the Plan and its powers and duties thereunder to a Committee or Committees,
and the term “Committee” shall apply to any person or persons to whom such authority has been delegated. Upon such
delegation, the Committee shall have the powers theretofore possessed by the Board, including the power to delegate to a subcommittee
any of the administrative powers the Committee is authorized to exercise (and references in this Plan to the Board shall thereafter
be deemed to include the Committee or subcommittee), subject, however, to such resolutions, not inconsistent with the provisions
of the Plan, as may be adopted from time to time by the Board. In its absolute discretion, the Board may at any time and from
time to time exercise any and all rights and duties of the Committee under this Plan, except respecting matters under Rule 16b-3
of the Exchange Act or Section 162(m) of the Code, or any rules or regulations issued thereunder, which are required to be determined
in the sole discretion of the Committee.


 






    	 



    	 



    

 


(ii)
Committee Composition. A Committee shall consist solely of two (2) or more Independent Directors. Within the scope
of its authority, the Board or the Committee may (1) delegate to a committee of one or more members of the Board who are not Independent
Directors the authority to grant Awards to eligible persons who are either (a) not then Covered Employees and are not expected
to be Covered Employees at the time of recognition of income resulting from such Award or (b) not persons with respect to whom
the Company wishes to comply with Section 162(m) of the Code, and/or (2) delegate to a committee of one or more members of the
Board who are not Independent Directors or to the Company’s Chief Executive Officer the authority to grant Awards to eligible
persons who are not then subject to Section 16 of the Exchange Act.


 


(d)
Effect of Board’s Decision; No Liability. All determinations, interpretations and constructions made by the Board
in good faith shall not be subject to review by any person and shall be final, binding and conclusive on all persons. No member
of the Board or the Committee or any person to whom duties hereunder have been delegated shall be liable for any action, interpretation
or determination made in good faith, and such persons shall be entitled to full indemnification and reimbursement consistent with
applicable law and in the manner provided in the Company’s Articles of Incorporation and Bylaws, as the same may be amended
from time to time, or as otherwise provided in any agreement between any such member and the Company.


 


4. Stock
Subject to the Plan.


 





(a)
Stock Reserve. Subject to the provisions of Section 11 relating to adjustments upon changes in Common Stock, the shares
of Common Stock that may be issued pursuant to Awards shall not exceed in the aggregate three hundred thousand (300,000) shares
of Common Stock.


 


(b)
Reversion of Stock to the Stock Reserve. If any Award shall for any reason expire or otherwise terminate, in whole
or in part, without having been exercised in full, the shares of Common Stock not acquired under such Award shall revert to and
again become available for issuance under the Plan.


 


(c)
Source of Stock. The Common Stock subject to the Plan may be unissued stock or reacquired stock, bought on the market
or otherwise.


 


5. Eligibility.



 


(a)
Eligibility for Specific Awards. Incentive Stock Options may be granted only to Employees. Awards other than Incentive
Stock Options may be granted to Employees and Directors.


 


(b)
Ten Percent Stockholders. A Ten Percent Stockholder shall not be granted an Incentive Stock Option unless the exercise
price of such Option is at least one hundred ten percent (110%) of the Fair Market Value of the Common Stock at the date of grant
and the Option is not exercisable after the expiration of five (5) years from the date of grant.


 






    	 



    	 



    

 


6. Option
Provisions. 


 


Each
Option Agreement shall be subject to the terms and conditions of this Plan. Each Option and Option Agreement shall be in such
form and shall contain such terms and conditions as the Board shall deem appropriate. All Options shall be separately designated
Incentive Stock Options or Nonqualified Stock Options at the time of grant, and, if certificates are issued, a separate certificate
or certificates will be issued for the shares of Common Stock purchased on exercise of each type of Option. The provisions of
separate Options need not be identical.


 


(a)
Provisions Applicable to All Options. 


 


(i)
Consideration. The purchase price of the shares of Common Stock acquired pursuant to an Option shall be paid as follows:
(a) in cash or by certified or official bank check, payable to the order of the Company, in the amount (the “Purchase Price”)
equal to the exercise price of the Option multiplied by the number of shares plus payment of all taxes applicable upon such exercise;
(b) with shares owned by the Optionholder having a Fair Market Value at the time the Option is exercised equal to the Purchase
Price plus payment in cash of all taxes applicable upon such exercise, with the prior approval of the Board; (c) by surrendering
to the Company the right to acquire a number of shares having an aggregate value such that the amount by which the Fair Market
Value of such shares exceeds the aggregate exercise price is equal to the Purchase Price plus payment in cash of all taxes applicable
upon such exercise, with the prior approval of the Board; (d) any combination of the foregoing; or (e) a manner acceptable to
the Board.


 


(ii)
Vesting Generally. An Option may (A) vest, and therefore become exercisable, in periodic installments that may, but
need not, be equal, or (B) be fully vested at the time of grant. The Option may be subject to such other terms and conditions
on the time or times when it may be exercised (which may be based on performance or other criteria) as the Board may deem appropriate.
The vesting provisions, if any, of individual Options may vary. The provisions of this subsection 6(a)(ii) are subject to any
Option Agreement provisions governing the minimum number of Common Stock as to which an Option may be exercised.


 


(iii)
Termination of Continuous Service. Unless otherwise provided in the Option Agreement, in the event an Optionholder’s
Continuous Service terminates (other than upon the Optionholder’s death, Disability, retirement or as a result of a Change
of Control), all Options held by the Optionholder shall immediately terminate; provided, however, that an Option
Agreement may provide that if an Optionholder’s Continuous Service is terminated for reasons other than for cause, all vested
Options held by such person shall continue to be exercisable until the earlier of the expiration date of such Option or ninety
(90) days after the date of such termination. All such vested Options not exercised within the period described in the preceding
sentence shall terminate.


 


(iv)
Disability or Death of Optionholder. Unless otherwise provided in the Option Agreement, in the event of an Optionholder’s
Disability or death, all unvested Options shall immediately terminate, and all vested Options held by such person shall continue
to be exercisable for twelve months after the date of such Disability or death. All such vested Options not exercised within such
twelve-month period shall terminate.


 


(v)
Retirement. Unless otherwise provided in the Option Agreement, in the event of the Optionholder’s retirement,
all unvested Options shall automatically vest on the date of such retirement and all Options shall be exercisable for the earlier
of twelve (12) months after such retirement date or the expiration date of such Options. All such Options not exercised within
the period described in the preceding sentence shall terminate.


 






    	 



    	 



    

 


(b)
Provisions Applicable to Incentive Stock Options.


 


(i)
Term. Subject to the provisions of subsection 5(b) regarding Ten Percent Stockholders, no Incentive Stock Option shall
be exercisable after the expiration of ten (10) years from the date it was granted. Further, no grant of an Incentive Stock Option
shall be made under this Plan more than ten (10) years after the date the Plan is approved by the stockholders of the Company.


 


(ii)
Exercise Price of an Incentive Stock Option. Subject to the provisions of subsection 5(b) regarding Ten Percent Stockholders,
the exercise price of each Incentive Stock Option shall be not less than one hundred percent (100%) of the Fair Market Value of
the Common Stock subject to the Option on the date the Option is granted.


 


(iii)
Transferability of an Incentive Stock Option. An Incentive Stock Option shall not be transferable except by will or
by the laws of descent and distribution and shall be exercisable during the lifetime of the Optionholder only by the Optionholder.


 


(iv)
Incentive Stock Option $100,000 Limitation. Notwithstanding any other provision of the Plan or an Option Agreement,
the aggregate Fair Market Value of the Common Stock with respect to which Incentive Stock Options are exercisable for the first
time by an Optionholder in any calendar year, under the Plan or any other option plan of the Company or its Affiliates, shall
not exceed One Hundred Thousand Dollars ($100,000). For this purpose, the Fair Market Value of the Common Stock shall be determined
as of the time an Option is granted. The Options or portions thereof which exceed such limit (according to the order in which
they were granted) shall be treated as Nonqualified Stock Options.


 


(c)
Provisions Applicable to Nonqualified Stock Options.


 


(i)
Exercise Price of a Nonqualified Stock Option. The exercise price of each Nonqualified Stock Option shall be not less
than one hundred percent (100%) of the Fair Market Value of the Common Stock subject to the Option on the date the Option is granted.


 


(ii)
Transferability of a Nonqualified Stock Option. A Nonqualified Stock Option shall be transferable, if at all, to the
extent provided in the Option Agreement. If the Option Agreement does not provide for transferability, then the Nonqualified Stock
Option shall not be transferable except by will or by the laws of descent and distribution and shall be exercisable during the
lifetime of the Optionholder only by the Optionholder.


 


7.
Provisions of Awards Other than Options. 


 


(a)
Restricted Stock Awards. Each restricted stock Award agreement shall be in such form and shall contain such restrictions,
terms and conditions, if any, as the Board shall deem appropriate and shall be subject to the terms and conditions of this Plan.
The terms and conditions of restricted stock Award Agreements may change from time to time, and the terms and conditions of separate
restricted stock Award Agreements need not be identical, but each restricted stock Award Agreement shall include (through incorporation
of provisions hereof by reference in the agreement or otherwise) the substance of each of the following provisions:


 


(i)
Consideration. A restricted stock Award may be awarded in consideration for past services actually rendered, or for
future services to be rendered, to the Company or an Affiliate for its benefit.


 






    	 



    	 



    

 


(ii)
Vesting. Common Stock awarded under the restricted stock Award Agreement may (A) be subject to a vesting schedule to
be determined by the Board or (B) be fully vested at the time of grant.


 


(iii)
Termination of Participant’s Continuous Service. Unless otherwise provided in the restricted stock Award Agreement,
in the event a Participant’s Continuous Service terminates prior to a vesting date set forth in the restricted stock Award
Agreement, any unvested restricted stock Award shall be forfeited and automatically transferred to and reacquired by the Company
at no cost to the Company, and neither the Participant nor his or her heirs, executors, administrators or successors shall have
any right or interest in the restricted stock Award. Notwithstanding the foregoing, unless otherwise provided in the restricted
stock Award agreement, in the event a Participant’s Continuous Service terminates as a result of (A) being terminated by
the Company for reasons other than for cause, (B) death, (C) Disability, (D) retirement, or (E) a Change of Control (subject to
the provisions of Section 11(c) hereof), then any unvested restricted stock Award shall vest immediately upon such date.


 


(iv)
Transferability. Rights to acquire Common Stock under the restricted stock Award Agreement shall be transferable by
the Participant only upon such terms and conditions as are set forth in the restricted stock Award Agreement, as the Board shall
determine in its discretion, so long as Common Stock awarded under the restricted stock Award Agreement remain subject to the
terms of the restricted stock Award Agreement.


 


(b)
Grant of Stock Appreciation Rights. Stock appreciation rights to receive in shares of Common Stock the excess of the
Fair Market Value of Common Stock on the date the rights are surrendered over the Fair Market Value of Common Stock on the date
of grant may be granted to any Employee or Director selected by the Board. A stock appreciation right may be granted (i) in connection
and simultaneously with the grant of another Award, (ii) with respect to a previously granted Award, or (iii) independent of another
Award. A stock appreciation right shall be subject to such terms and conditions not inconsistent with this Plan as the Board shall
impose and shall be evidenced by a written stock appreciation right agreement, which shall be executed by the Participant and
an authorized officer of the Company. The Board, in its discretion, may determine whether a stock appreciation right is to qualify
as performance-based compensation as described in Section 162(m)(4)(C) of the Code and stock appreciation right agreements evidencing
stock appreciation rights intended to so qualify shall contain such terms and conditions as may be necessary to meet the applicable
provisions of Section 162(m) of the Code. The Board may, in its discretion and on such terms as it deems appropriate, require
as a condition of the grant of a stock appreciation right that the Participant surrender for cancellation some or all of the Awards
previously granted to such person under this Plan or otherwise. A stock appreciation right, the grant of which is conditioned
upon such surrender, may have an exercise price lower (or higher) than the exercise price of the surrendered Award, may contain
such other terms as the Board deems appropriate, and shall be exercisable in accordance with its terms, without regard to the
number of shares, price, exercise period or any other term or condition of such surrendered Award.


 


8. Availability
of Stock.


 


Subject
to the restrictions set forth in Section 4(a), during the terms of the Awards, the Company shall keep available at all times the
number of shares of Common Stock required to satisfy such Awards.


 






    	 



    	 



    

 


9. Use
of Proceeds from Stock.


 





Proceeds
from the sale of Common Stock pursuant to Awards shall constitute general funds of the Company.


 


10. Miscellaneous.


 





(a)
Exercise of Awards. Awards shall be exercisable at such times, or upon the occurrence of such event or events as the
Board shall determine at or subsequent to grant. Awards may be exercised in whole or in part. Common Stock purchased upon the
exercise of an Award shall be paid for in full at the time of such purchase.


 


(b)
Acceleration of Exercisability and Vesting. The Board shall have the power to accelerate the time at which an Award
may first be exercised or the time during which an Award or any part thereof will vest in accordance with the Plan, notwithstanding
the provisions in the Award stating the time at which it may first be exercised or the time during which it will vest.


 


(c)
Stockholder Rights.


 





(i)
Options. Unless otherwise provided in and upon the terms and conditions in the Option Agreement, no Participant shall
be deemed to be the holder of, or to have any of the rights of a holder with respect to, any Common Stock subject to an Option
unless and until such Participant has satisfied all requirements for exercise of, and has exercised, the Option pursuant to its
terms.


 


(ii)
Restricted Stock. Unless otherwise provided in and upon the terms and conditions in the restricted stock Award Agreement,
a Participant shall have the right to receive all dividends and other distributions paid or made respecting such restricted stock,
provided, however, no unvested restricted stock shall have any voting rights of a stockholder respecting such unvested restricted
stock unless and until such unvested restricted stock become vested.


 


(d)
No Employment or other Service Rights. Nothing in the Plan or any instrument executed or Award granted pursuant thereto
shall confer upon any Participant any right to continue to serve the Company or an Affiliate in the capacity in effect at the
time the Award was granted, or any other capacity, or shall affect the right of the Company or an Affiliate to terminate with
or without notice and with or without cause (i) the employment of an Employee or an Affiliate or (ii) the service of a Director
of the Company or an Affiliate.


 


(e)
Withholding Obligations. If the Company has or will have a legal obligation to withhold the taxes related to the grant,
vesting or exercise of the Award, such Award may not be granted, vested or exercised in whole or in part, unless such tax obligation
is first satisfied in a manner satisfactory to the Company. To the extent provided by the terms of an Award Agreement or Option
Agreement, the Participant may satisfy any federal, state or local tax withholding obligation relating to the exercise or acquisition
of Common Stock under an Award by any of the following means (in addition to the Company’s right to withhold from any compensation
paid to the Participant by the Company) or by a combination of such means: (i) tendering a cash payment in Dollars; (ii) authorizing
the Company to withhold Common Stock from the Common Stock otherwise issuable to the Participant as a result of the exercise or
acquisition of Common Stock under the Award, provided, however, that no shares of Common Stock are withheld with a value exceeding
the minimum amount of tax required to be withheld by law; or (iii) delivering to the Company owned and unencumbered Common Stock.


 






    	 



    	 



    

 


(f)
Listing and Qualification of Stock. This Plan and the grant and exercise of Awards hereunder, and the obligation of
the Company to sell and deliver Common Stock under such Awards, shall be subject to all applicable United States federal and state
laws, rules and regulations, and any other laws applicable to the Company, and to such approvals by any government or regulatory
agency as may be required. The Company, in its discretion, may postpone the issuance or delivery of Common Stock upon any exercise
of an Award until completion of any stock exchange listing, or the receipt of any required approval from any stock exchange or
other qualification of such Common Stock under any United States federal or state law rule or regulation as the Company may consider
appropriate, and may require any individual to whom an Award is granted, such individual’s beneficiary or legal representative,
as applicable, to make such representations and furnish such information as the Board may consider necessary, desirable or advisable
in connection with the issuance or delivery of the Common Stock in compliance with applicable laws, rules and regulations.


 


(g)
Non-Uniform Determinations. The Board’s determinations under this Plan (including, without limitation, determinations
of the persons to receive Awards, the form, term, provisions, amount and timing of the grant of such Awards and of the agreements
evidencing the same) need not be uniform and may be made by it selectively among persons who receive, or are eligible to receive,
Awards under this Plan, whether or not such persons are similarly situated.


 


11.
Adjustments Upon Changes in Stock.


 





(a)
Capitalization Adjustments. If any change is made in the Common Stock subject to the Plan, or subject to any Award,
without the receipt of consideration by the Company (through merger, consolidation, reorganization, recapitalization, reincorporation,
stock dividend, dividend in property other than cash, stock split, liquidating dividend, combination of stock, exchange of stock,
change in corporate structure or other transaction), the Plan will be appropriately adjusted in the class(es) and maximum number
of securities subject to the Plan pursuant to subsection 4(a) and the maximum number of securities subject to award to any person
pursuant to subsection 5(c), and the outstanding Awards will be appropriately adjusted in the class(es) and number of securities
and price per stock of Common Stock subject to such outstanding Awards. The Board shall make such adjustments, and its determination
shall be final, binding and conclusive. (The conversion of any convertible securities of the Company shall not be treated as a
transaction “without receipt of consideration” by the Company.)


 


(b)
Dissolution or Liquidation. In the event of a dissolution or liquidation of the Company, then all outstanding Awards
shall terminate immediately prior to such event.


 


(c)
Asset Sale, Merger, Consolidation or Reverse Merger. In the event of a Change of Control (as defined below), any unvested
Awards shall vest immediately prior to the closing of the Change of Control, and the Board shall have the power and discretion
to provide for the Participant’s election alternatives regarding the terms and conditions for the exercise of, or modification
of, any outstanding Awards granted hereunder, provided, however, such alternatives shall not affect the then current exercise
provisions without such Participant’s consent. The Board may provide that Awards granted hereunder must be exercised in
connection with the closing of such transaction, and that if not so exercised such Awards will expire. Any such determinations
by the Board may be made generally with respect to all Participants, or may be made on a case-by-case basis with respect to particular
Participants. For the purpose of this Plan, a “Change of Control” shall have occurred in the event one or more persons
acting individually or as a group (i) acquires sufficient additional stock to constitute more than fifty percent (50%) of (A)
the total Fair Market Value of all Common Stock issued and outstanding or (B) the total voting power of all shares of capital
stock authorized to vote for the election of directors; (ii) acquires, in a twelve (12) month period, thirty-five percent (35%)
or more of the voting power of all shares of capital stock authorized to vote for the election of directors, or alternatively
a majority of the members of the board is replaced during any twelve (12) month period by directors whose appointment was not
endorsed by a majority of the members of the board; or (iii) acquires, during a twelve (12) month period, more than forty percent
(40%) of the total gross fair market value of all of the Company’s assets. Notwithstanding the foregoing, the provisions
of this Section 11(c) shall not apply to (i) any transaction involving any stockholder that individually or as a group owns more
than fifty percent (50%) of the outstanding Common Stock on the date this Plan is approved by the Company’s stockholders,
until such time as such stockholder first owns less than forty percent (40%) of the total outstanding Common Stock, or (ii) any
transaction undertaken for the purpose of reincorporating the Company under the laws of another jurisdiction, if such transaction
does not materially affect the beneficial ownership of the Company’s capital stock.


 






    	 



    	 



    

 


12.
Amendment of the Plan and Awards.


 





(a)
Amendment of Plan. The Board at any time, and from time to time, may amend the Plan. However, except as provided in
Section 11 relating to adjustments upon changes in Common Stock, no amendment shall be effective unless approved by the stockholders
of the Company to the extent stockholder approval is necessary to satisfy the requirements of Section 422 of the Code, Rule 16b-3
or any applicable Nasdaq or securities exchange listing requirements.


 


(b)
Stockholder Approval. The Board may, in its sole discretion, submit any other amendment to the Plan for stockholder
approval, including, but not limited to, amendments to the Plan intended to satisfy the requirements of Section 162(m) of the
Code and the regulations thereunder regarding the exclusion of performance-based compensation from the limit on corporate deductibility
of compensation paid to certain executive officers.


 


(c)
Contemplated Amendments. It is expressly contemplated that the Board may amend the Plan in any respect the Board deems
necessary or advisable to provide eligible Employees with the maximum benefits provided or to be provided under the provisions
of the Code and the regulations promulgated thereunder relating to Incentive Stock Options and/or to bring the Plan and/or Incentive
Stock Options granted under it into compliance therewith.


 


(d)
No Impairment of Rights. Rights under any Award granted before amendment of the Plan shall not be impaired by any amendment
of the Plan unless the Participant consents in writing.


 


(e)
Amendment of Awards. Subject to Section 3(b)(iii), the Board at any time, and from time to time, may amend the terms
of any one or more Awards; provided, however, that the rights under any Award shall not be impaired by any such amendment unless
the applicable Participant consents in writing.


 


13.
Termination or Suspension of the Plan. 


 


(a)
Plan Term. The Board may suspend or terminate the Plan at any time. Unless sooner terminated, the Plan shall terminate
on the day before the tenth (10th) anniversary of the date the Plan is adopted by the stockholders of the Company. No Awards may
be granted under the Plan while the Plan is suspended or after it is terminated.


 


(b)
No Impairment of Rights. Suspension or termination of the Plan shall not impair rights and obligations under any Award
granted while the Plan is in effect except with the written consent of the Participant.


 


(c)
Savings Clause. This Plan is intended to comply in all aspects with applicable laws and regulations. In case any one
or more of the provisions of this Plan shall be held invalid, illegal or unenforceable in any respect under applicable law or
regulation, the validity, legality and enforceability of the remaining provisions shall not in any way be affected or impaired
thereby and the invalid, illegal or unenforceable provision shall be deemed null and void; however, to the extent permissible
by law, any provision which could be deemed null and void shall first be construed, interpreted or revised retroactively to permit
this Plan to be construed in compliance with all applicable laws so as to foster the intent of this Plan.


 


14.
Effective Date of Plan.


 





The
Plan shall become effective as determined by the Board, but no Award shall be exercised (or, in the case of a restricted stock
Award, shall be granted) unless and until the Plan has been approved by the stockholders of the Company, which approval shall
be within twelve (12) months before or after the date the Plan is adopted by the Board.


 


15. Choice
of Law. 


 


The
law of the state of Nevada shall govern all questions concerning the construction, validity and interpretation of this Plan, without
regard to such state’s conflict of laws rules.