REED’S,
INC.


 


2015
INCENTIVE AND NONSTATUTORY STOCK OPTION PLAN


 


1.
Purposes of the Plan. The purposes of this Plan are to attract and retain the best available personnel, to provide
additional incentives to Employees, Directors and Consultants and to promote the success of the Company’s business.


 


2.
Definitions. The following definitions shall apply as used herein and in the individual Option Agreements except
as defined otherwise in an individual Option Agreement. In the event a term is separately defined in an individual Option Agreement,
such definition shall supersede the definition contained in this Section 2.


 


(a)
“Administrator” means the Board or any of the Committees appointed to administer the Plan.


 


(b)
“Affiliate” and “Associate” shall have the respective meanings ascribed to such terms in
Rule 12b-2 promulgated under the Exchange Act.


 


(c)
“Applicable Laws” means the legal requirements relating to the Plan and the Options under applicable provisions
of federal securities laws, state corporate and securities laws, the Code, the rules of any applicable stock exchange or national
market system, and the rules of any non-U.S. jurisdiction applicable to Options granted to residents therein.


 


(d)
“Assumed” means that pursuant to a Corporate Transaction either (i) the Option continues to be maintained by
the Company or (ii) the contractual obligations represented by the Option are assumed by the successor entity or its Parent in
connection with the Corporate Transaction with equitable and appropriate adjustments to the number and type of securities of the
successor entity or its Parent subject to the Option and the exercise price thereof which preserves the intrinsic value of the
Option existing at the time of the Corporate Transaction as determined in accordance with the instruments evidencing the agreement
to assume the Option.


 


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


 


(f)
“Change in Control” means a change in ownership or control of the Company after the Registration Date effected
through either of the following transactions:


 


(i)
the direct or indirect acquisition by any person or related group of persons (other than an acquisition from or by the Company
or by a Company-sponsored employee benefit plan or by a person that directly or indirectly controls, is controlled by, or is under
common control with, the Company) of beneficial ownership (within the meaning of Rule 13d-3 of the Exchange Act) of securities
possessing more than fifty percent (50%) of the total combined voting power of the Company’s then outstanding securities
pursuant to a tender or exchange offer made directly to the Company’s stockholders which a majority of the Continuing Directors
who are not Affiliates or Associates of the offeror do not recommend such stockholders accept, or


 


(ii)
a change in the composition of the Board over a period of twelve (12) months or less such that a majority of the Board members
(rounded up to the next whole number) ceases, by reason of one or more contested elections for Board membership, to be comprised
of individuals who are Continuing Directors.


 




    	 



    	 



    


 


(g)
“Code” means the Internal Revenue Code of 1986, as amended.


 


(h)
“Committee” means any committee composed of members of the Board appointed by the Board to administer the Plan.


 


(i)
“Common Stock” means the common stock of the Company, par value $0.0001 per share.


 


(j)
“Company” means Reed’s, Inc., a Delaware corporation, or any successor entity that adopts the
Plan in connection with a Corporate Transaction.


 


(k)
“Consultant” means any person (other than an Employee or a Director, solely with respect to rendering services
in such person’s capacity as a Director) who is engaged by the Company or any Related Entity to render consulting or advisory
services to the Company or such Related Entity.


 


(l)
“Continuing Directors” means members of the Board who either (i) have been Board members continuously for a
period of at least twelve (12) months or (ii) have been Board members for less than twelve (12) months and were elected or nominated
for election as Board members by at least a majority of the Board members described in clause (i) who were still in office at
the time such election or nomination was approved by the Board.


 


(m)
“Continuous Service” means that the provision of services to the Company or a Related Entity in any capacity
of Employee, Director or Consultant is not interrupted or terminated. In jurisdictions requiring notice in advance of an effective
termination as an Employee, Director or Consultant, Continuous Service shall be deemed terminated upon the actual cessation of
providing services to the Company or a Related Entity notwithstanding any required notice period that must be fulfilled before
a termination as an Employee, Director or Consultant can be effective under Applicable Laws. A Grantee’s Continuous Service
shall be deemed to have terminated either upon an actual termination of Continuous Service or upon the entity for which the Grantee
provides services ceasing to be a Related Entity. Continuous Service shall not be considered interrupted in the case of (i) any
approved leave of absence, (ii) transfers among the Company, any Related Entity, or any successor, in any capacity of Employee,
Director or Consultant, or (iii) any change in status as long as the individual remains in the service of the Company or a Related
Entity in any capacity of Employee, Director or Consultant (except as otherwise provided in an individual Option Agreement). An
approved leave of absence shall include sick leave, military leave or any other authorized personal leave. For purposes of each
Incentive Stock Option granted under the Plan, if such leave exceeds three (3) months, and reemployment upon expiration of such
leave is not guaranteed by statute or contract, then the Incentive Stock Option shall be treated as a Nonstatutory Stock Option
on the day three (3) months and one (1) day following the expiration of such three (3) month period.


 




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(n)
“Corporate Transaction” means any of the following transactions, provided, however, that the Administrator
shall determine under parts (iv) and (v) whether multiple transactions are related, and its determination shall be final, binding
and conclusive:


 


(i)
a merger or consolidation of the Company in which the Company is not the surviving entity, except for a transaction the principal
purpose of which is to change the state in which the Company is incorporated;


 


(ii)
the sale, transfer or other disposition of all or substantially all of the assets of the Company;


 


(iii)
the complete liquidation or dissolution of the Company;


 


(iv)
any reverse merger or series of related transactions culminating in a reverse merger (including, but not limited to, a tender
offer followed by a reverse merger) in which the Company is the surviving entity but (A) the shares of Common Stock outstanding
immediately prior to such merger are converted or exchanged by virtue of the merger into other property, whether in the form of
securities, cash or otherwise, or (B) in which securities possessing more than fifty percent (50%) of the total combined voting
power of the Company’s outstanding securities are transferred to a person or persons different from those who held such
securities immediately prior to such merger or the initial transaction culminating in such merger; or


 


(v)
acquisition in a single or series of related transactions by any person or related group of persons (other than the Company or
by a Company-sponsored employee benefit plan) of beneficial ownership (within the meaning of Rule 13d-3 of the Exchange Act) of
securities possessing more than fifty percent (50%) of the total combined voting power of the Company’s outstanding securities
but excluding any such transaction or series of related transactions that the Administrator determines shall not be a Corporate
Transaction.


 


(o)
“Director” means a member of the Board or the board of directors of any Related Entity.


 


(p)
“Disability” means such term (or word of like import) as defined under the long-term disability policy of the
Company or the Related Entity to which the Grantee provides services regardless of whether the Grantee is covered by such policy.
If the Company or the Related Entity to which the Grantee provides service does not have a long-term disability plan in place,
“Disability” means that a Grantee is unable to carry out the responsibilities and functions of the position held by
the Grantee by reason of any medically determinable physical or mental impairment for a period of not less than ninety (90) consecutive
days. A Grantee will not be considered to have incurred a Disability unless he or she furnishes proof of such impairment sufficient
to satisfy the Administrator in its discretion.


 




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(q)
“Employee” means any person, including an Officer or Director, who is in the employ of the Company or any Related
Entity, subject to the control and direction of the Company or any Related Entity as to both the work to be performed and the
manner and method of performance. The payment of a director’s fee by the Company or a Related Entity shall not be sufficient
to constitute “employment” by the Company.


 


(r)
“Exchange Act” means the Securities Exchange Act of 1934, as amended, or any successor thereto.


 


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


 


(i)
If the Common Stock is listed on one or more established stock exchanges or national market systems, including without limitation
the New York Stock Exchange, its Fair Market Value shall be the closing sales price for such stock (or the closing bid, if no
sales were reported) as quoted on the principal exchange or system on which the Common Stock is listed (as determined by the Administrator)
on the date of determination (or, if no closing sales price or closing bid was reported on that date, as applicable, on the last
trading date such closing sales price or closing bid was reported), as reported in The Wall Street Journal or such other source
as the Administrator deems reliable;


 


(ii)
If the Common Stock is regularly quoted on an automated quotation system (including the OTC Bulletin Board) or by a recognized
securities dealer, its Fair Market Value shall be the closing sales price for such stock as quoted on such system or by such securities
dealer on the date of determination, but if selling prices are not reported, the Fair Market Value of a share of Common Stock
shall be the mean between the high bid and low asked prices for the Common Stock on the date of determination (or, if no such
prices were reported on that date, on the last date such prices were reported), as reported in The Wall Street Journal or such
other source as the Administrator deems reliable; or


 


(iii)
In the absence of an established market for the Common Stock of the type described in (i) and (ii) above, the Fair Market Value
thereof shall be determined by the Administrator in good faith.


 


(t)
“Grantee” means an Employee, Director or Consultant who receives an Option under the Plan.


 


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


 


(v)
“Nonstatutory Stock Option” means an Option not intended to qualify as an Incentive Stock Option.


 




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


 


(x)
“Option” means an option to purchase Shares pursuant to an Option Agreement granted under the Plan.


 


(y)
“Option Agreement” means the written agreement or other instrument evidencing the grant of an Option, including
any amendments thereto. An Option Agreement may be in the form of an agreement to be executed by both the Grantee and the Company
(or an authorized representative of the Company) or certificates, notices or similar instruments.


 


(z)
“Parent” means a “parent corporation”, whether now or hereafter existing, as defined in Section
424(e) of the Code.


 


(aa)
“Plan” means this Reed’s, Inc. 2015 Incentive and Nonstatutory Stock Option Plan.


 


(bb)
“Registration Date” means the first to occur of (i) the closing of the first sale to the general public pursuant
to a registration statement filed with and declared effective by the Securities and Exchange Commission under the Securities Act
of 1933, as amended, of (A) the Common Stock or (B) the same class of securities of a successor corporation (or its Parent) issued
pursuant to a Corporate Transaction in exchange for or in substitution of the Common Stock; and (ii) in the event of a Corporate
Transaction, the date of the consummation of the Corporate Transaction if the same class of securities of the successor corporation
(or its Parent) issuable in such Corporate Transaction shall have been sold to the general public pursuant to a registration statement
filed with and declared effective by the Securities and Exchange Commission under the Securities Act of 1933, as amended, on or
prior to the date of consummation of such Corporate Transaction.


 


(cc)
“Related Entity” means any Parent or Subsidiary of the Company.


 


(dd)
“Replaced” means that pursuant to a Corporate Transaction the Option is replaced with a comparable stock award
or a cash incentive award or program of the Company, the successor entity (if applicable) or Parent of either of them which preserves
the intrinsic value of such Option existing at the time of the Corporate Transaction and provides for subsequent payout in accordance
with the same (or a more favorable) vesting schedule applicable to such Option. The determination of Option comparability shall
be made by the Administrator and its determination shall be final, binding and conclusive.


 


(ee)
“Rule 16b-3” means Rule 16b-3 promulgated under the Exchange Act or any successor thereto.


 


(ff)
“Share” means a share of the Common Stock.


 


(gg)
“Subsidiary” means a “subsidiary corporation”, whether now or hereafter existing, as defined in
Section 424(f) of the Code.


 




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3.
Stock and Cash Subject to the Plan.


 


(a)
Subject to the provisions of Section 10, below, the maximum aggregate number of Shares which may be issued pursuant to all Options
is 500,000 Shares. Notwithstanding the foregoing, subject to the provisions of Section 10, below, of the number of Shares specified
above, the maximum aggregate number of Shares available for grant of Incentive Stock Options shall be 500,000 Shares. The Shares
to be issued pursuant to Options may be authorized, but unissued, or reacquired Common Stock.


 


(b)
Shares that actually have been issued under the Plan pursuant to an Option shall not be returned to the Plan and shall not become
available for future issuance under the Plan. To the extent an Option (or portion thereof) is forfeited, canceled or expires (whether
voluntarily or involuntarily), the Shares subject to the forfeited, canceled or expired portion thereof shall also not be returned
to the Plan and shall not become available for future issuance under the Plan. Any Shares covered by an Option which are surrendered
(i) in payment of the Option exercise price (including pursuant to the “net exercise” of an option pursuant to Section
7(b)(v)) or (ii) in satisfaction of tax withholding obligations incident to the exercise of an Option shall be deemed to have
been issued for purposes of determining the maximum number of Shares which may be issued pursuant to all Options under the Plan.


 


4.
Administration of the Plan.


 


(a)
Plan Administrator.


 


(i)
Administration with Respect to Directors and Officers. With respect to grants of Options to Directors or Officers, the
Plan shall be administered by (A) the Board or (B) a Committee designated by the Board. Once appointed, such Committee shall continue
to serve in its designated capacity until otherwise directed by the Board.


 


(ii)
Administration With Respect to Consultants and Other Employees. With respect to grants of Options to Employees or Consultants
who are neither Directors nor Officers, the Plan shall be administered by (A) the Board or (B) a Committee designated by the Board.
Once appointed, such Committee shall continue to serve in its designated capacity until otherwise directed by the Board. The Board
or Committee may also authorize one or more Officers to administer the Plan with respect to Options to Employees or Consultants
who are neither Directors nor Officers (and to grant such Options) and may limit such authority as the Board or Committee, as
applicable, determines from time to time.


 


(iii)
Administration Errors. In the event an Option is granted in a manner inconsistent with the provisions of this subsection
(a), such Option shall be presumptively valid as of its grant date to the extent permitted by the Applicable Laws.


 


(b)
Powers of the Administrator. Subject to Applicable Laws and the provisions of the Plan (including any other powers given
to the Administrator hereunder), and except as otherwise provided by the Board or any Committee, the Administrator shall have
the authority, in its discretion to do all things that it determines to be necessary or appropriate in connection with the administration
of the Plan, including, without limitation:


 




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(i)
to select the Employees, Directors and Consultants to whom Options may be granted from time to time hereunder;


 


(ii)
to determine whether, when and to what extent Options are granted hereunder;


 


(iii)
to determine the number of Shares to be covered by each Option granted hereunder;


 


(iv)
to approve forms of Option Agreements for use under the Plan;


 


(v)
to determine the terms and conditions of any Option granted hereunder;


 


(vi)
to amend the terms of any outstanding Option granted under the Plan, provided that any amendment that would adversely affect the
Grantee’s rights under an outstanding Option shall not be made without the Grantee’s written consent, provided, however,
that an amendment or modification that may cause an Incentive Stock Option to become a Nonstatutory Stock Option shall not be
treated as adversely affecting the rights of the Grantee. The reduction of the exercise price of any Option awarded under the
Plan and canceling an Option at a time when its exercise price exceeds the Fair Market Value of the underlying Shares, in exchange
for another Option or for cash, in each case, shall not be subject to stockholder approval;


 


(vii)
to prescribe, amend and rescind rules and regulations relating to the Plan and to define terms not otherwise defined herein;


 


(viii)
to construe and interpret the terms of the Plan, any rules and regulations under the Plan and Options, including without limitation,
any notice of award or Option Agreement, granted pursuant to the Plan;


 


(ix)
to approve corrections in the documentation or administration of any Option;


 


(x)
to grant Options to Employees, Directors and Consultants employed outside the United States or to otherwise adopt or administer
such procedures or subplans that the Administrator deems appropriate or necessary on such terms and conditions different from
those specified in the Plan as may, in the judgment of the Administrator, be necessary or desirable to further the purpose of
the Plan; and


 


(xi)
to take such other action, not inconsistent with the terms of the Plan, as the Administrator deems appropriate.


 


The
express grant in the Plan of any specific power to the Administrator shall not be construed as limiting any power or authority
of the Administrator; provided that the Administrator may not exercise any right or power reserved to the Board. Any decision
made, or action taken, by the Administrator or in connection with the administration of this Plan shall be final, conclusive and
binding on all persons having an interest in the Plan. 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.


 




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(c)
Indemnification. In addition to such other rights of indemnification as they may have as members of the Board or as Officers
or Employees, members of the Board and any Officers or Employees to whom authority to act for the Board is delegated by the Administrator
or the Company shall be defended and indemnified by the Company to the extent permitted by law on an after-tax basis against all
reasonable expenses, including attorneys’ fees, actually and necessarily incurred in connection with the defense of any
claim, investigation, action, suit or proceeding, or in connection with any appeal therein, to which they or any of them may be
a party by reason of any action taken or failure to act under or in connection with the Plan, or any Option granted hereunder,
and against all amounts paid by them in settlement thereof (provided such settlement is approved by the Company) or paid by them
in satisfaction of a judgment in any such claim, investigation, action, suit or proceeding, except in relation to matters as to
which it shall be adjudged in such claim, investigation, action, suit or proceeding that such person is liable for gross negligence,
bad faith or intentional misconduct; provided, however, that within thirty (30) days after the institution of such claim, investigation,
action, suit or proceeding, such person shall offer to the Company, in writing, the opportunity at the Company’s expense
to defend the same.


 


5.
Eligibility. Nonstatutory Stock Options may be granted to Employees, Directors and Consultants as the Administrator
may determine from time to time. Incentive Stock Options may be granted only to Employees of the Company or a Parent or a Subsidiary
of the Company as the Administrator may determine from time to time. An Employee, Director or Consultant who has been granted
an Option may, if otherwise eligible, be granted additional Options. Options may be granted to such Employees, Directors or Consultants
who are residing in non-U.S. jurisdictions as the Administrator may determine from time to time.


 


6.
Terms and Conditions of Options.


 


(a)
Designation of Option. Each Option shall be designated in the Option Agreement as either an Incentive Stock Option or a
Nonstatutory Stock Option. However, notwithstanding such designation, an Option will qualify as an Incentive Stock Option under
the Code only to the extent the $100,000 limitation of Section 422(d) of the Code is not exceeded. The $100,000 limitation of
Section 422(d) of the Code is calculated based on the aggregate Fair Market Value of the Shares subject to Options designated
as Incentive Stock Options which become exercisable for the first time by a Grantee during any calendar year (under all plans
of the Company or any Parent or Subsidiary of the Company). For purposes of this calculation, Incentive Stock Options shall be
taken into account in the order in which they were granted, and the Fair Market Value of the Shares shall be determined as of
the grant date of the relevant Option. In the event that the Code or the regulations promulgated thereunder are amended after
the date the Plan becomes effective to provide for a different limit on the Fair Market Value of Shares permitted to be subject
to Incentive Stock Options, then such different limit will be automatically incorporated herein and will apply to any Options
granted after the effective date of such amendment.


 




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(b)
Conditions of Option. Subject to the terms of the Plan, the Administrator shall determine the provisions, terms, and conditions
of each Option including, but not limited to, the Option vesting schedule, repurchase provisions, rights of first refusal, forfeiture
provisions, form of payment (cash, Shares, or other consideration) upon exercise of the Option, payment contingencies, and satisfaction
of any performance criteria.


 


(c)
Term of Option. The term of each Option shall be the term stated in the Option Agreement, provided, however, that the term
of an Option shall be no more than ten (10) years from the date of grant thereof. However, in the case of an Incentive Stock Option
granted to a Grantee who, at the time the Option is granted, owns stock representing more than ten percent (10%) of the voting
power of all classes of stock of the Company or any Parent or Subsidiary of the Company, the term of the Incentive Stock Option
shall be five (5) years from the date of grant thereof or such shorter term as may be provided in the Option Agreement.


 


(d)
Transferability of Options. Incentive Stock Options may not be sold, pledged, assigned, hypothecated, transferred, or disposed
of in any manner other than by will or by the laws of descent or distribution and may be exercised, during the lifetime of the
Grantee, only by the Grantee. Nonstatutory Stock Options shall be transferable (i) by will and by the laws of descent and distribution
and (ii) during the lifetime of the Grantee, to the extent and in the manner authorized by the Administrator, but only to the
extent such transfers are made to family members, to family trusts, to family controlled entities, to charitable organizations,
and pursuant to domestic relations orders or agreements, in all cases without payment for such transfers to the Grantee. Unless
otherwise agreed to by the Administrator, all vesting, exercisability and forfeiture provisions that are conditioned on the Grantee’s
continued employment or service shall continue to be determined with reference to the Grantee’s employment or service (and
not to the status of the transferee) after any transfer of a Nonstatutory Stock Option pursuant to this Section 6(d), and the
responsibility to pay any taxes in connection with a Nonstatutory Stock Option shall remain with the Grantee notwithstanding any
transfer other than by will or the laws of descent and distribution. Notwithstanding the foregoing, the Grantee may designate
one or more beneficiaries of the Grantee’s Option in the event of the Grantee’s death on a beneficiary designation
form provided by the Administrator.


 


(e)
Time of Granting Options. The date of grant of an Option shall for all purposes be the date on which the Administrator
makes the determination to grant such Option, or such other later date as is determined by the Administrator.


 


7.
Option Exercise Price, Consideration and Taxes.


 


(a)
Exercise Price. The exercise price for an Option shall be as follows:


 


(i)
In the case of an Incentive Stock Option:


 


(A)
granted to an Employee who, at the time of the grant of such Incentive Stock Option owns stock representing more than ten percent
(10%) of the voting power of all classes of stock of the Company or any Parent or Subsidiary of the Company, the per Share exercise
price shall be not less than one hundred ten percent (110%) of the Fair Market Value per Share on the date of grant; or


 




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(B)
granted to any Employee other than an Employee described in the preceding paragraph, the per Share exercise price shall be not
less than one hundred percent (100%) of the Fair Market Value per Share on the date of grant.


 


(ii)
In the case of a Nonstatutory Stock Option, the per Share exercise price shall be not less than one hundred percent (100%) of
the Fair Market Value per Share on the date of grant.


 


(b)
Consideration. Subject to Applicable Laws, the consideration to be paid for the Shares to be issued upon exercise of an
Option including the method of payment, shall be determined by the Administrator (and, in the case of an Incentive Stock Option,
shall be determined at the time of grant). In addition to any other types of consideration the Administrator may determine, the
Administrator is authorized to accept as consideration for Shares issued under the Plan the following, provided that the portion
of the consideration equal to the par value of the Shares must be paid in cash or other legal consideration permitted by the Delaware
General Corporation Law:


 


(i)
cash;


 


(ii)
check;


 


(iii)
surrender of Shares or delivery of a properly executed form of attestation of ownership of Shares as the Administrator may require
which have a Fair Market Value on the date of surrender or attestation equal to the aggregate exercise price of the Shares as
to which said Option shall be exercised;


 


(iv)
if the exercise occurs on or after the Registration Date, payment through a broker-assisted cashless exercise program made available
by the Company;


 


(v)
payment through a “net exercise” procedure established by the Company such that, without the payment of any funds,
the Grantee may exercise the Option and receive the net number of Shares; or


 


(vi)
any combination of the foregoing methods of payment.


 


The
Administrator may at any time or from time to time, by adoption of or by amendment to the standard forms of Option Agreement,
or by other means, grant Options which do not permit all of the foregoing forms of consideration to be used in payment for the
Shares or which otherwise restrict one or more forms of consideration.


 


(c)
Taxes. Upon exercise of an Option, if required by Applicable Law, the Company shall withhold or collect from the Grantee
an amount sufficient to satisfy such tax obligations, including, but not limited to, by surrender of the whole number of Shares
covered by the Option, if applicable, sufficient to satisfy the applicable tax withholding obligations incident to the exercise
or vesting of an Option (calculated at the statutory minimum amount for such withholding).


 




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8.
Exercise of Option.


 


(a)
Procedure for Exercise; Rights as a Stockholder.


 


(i)
Any Option granted hereunder shall be exercisable at such times and under such conditions as determined by the Administrator under
the terms of the Plan and specified in the Option Agreement.


 


(ii)
An Option shall be deemed to be exercised when written notice of such exercise has been given to the Company in accordance with
the terms of the Option by the person entitled to exercise the Option and full payment for the Shares with respect to which the
Option is exercised has been made, including, to the extent selected, use of the broker-dealer sale and remittance procedure to
pay the purchase price as provided in Section 7(b)(v).


 


(b)
Exercise of Option Following Termination of Continuous Service.


 


(i)
An Option may not be exercised after the termination date of such Option set forth in the Option Agreement and may be exercised
following the termination of a Grantee’s Continuous Service only to the extent provided in the Option Agreement.


 


(ii)
Where the Option Agreement permits a Grantee to exercise an Option following the termination of the Grantee’s Continuous
Service for a specified period, the Option shall terminate to the extent not exercised on the last day of the specified period
or the last day of the original term of the Option, whichever occurs first.


 


(iii)
Any Option designated as an Incentive Stock Option to the extent not exercised within the time permitted by law for the exercise
of Incentive Stock Options following the termination of a Grantee’s Continuous Service shall convert automatically to a
Nonstatutory Stock Option and thereafter shall be exercisable as such to the extent exercisable by its terms for the period specified
in the Option Agreement.


 


9.
Conditions Upon Issuance of Shares.


 


(a)
If at any time the Administrator determines that the delivery of Shares pursuant to the exercise of an Option is or may be unlawful
under Applicable Laws, the vesting or right to exercise an Option or to otherwise receive Shares pursuant to the terms of an Option
shall be suspended until the Administrator determines that such delivery is lawful and shall be further subject to the approval
of counsel for the Company with respect to such compliance. The Company shall have no obligation to effect any registration or
qualification of the Shares under federal or state laws.


 


(b)
The Administrator may provide that the Shares issued upon exercise of an Option shall be subject to such further agreements, restrictions,
conditions or limitations as the Administrator in its discretion may specify prior to the exercise of such Option, including without
limitation, conditions on vesting or transferability, forfeiture or repurchase provisions and method of payment for the Shares
issued upon exercise of such Option (including the actual or constructive surrender of Shares already owned by the Grantee) or
payment of taxes arising in connection with an Option. Without limiting the foregoing, such restrictions may address the timing
and manner of any resales by the Grantee or other subsequent transfers by the Grantee of any Shares issued under an Option, including
without limitation (i) restrictions under an insider trading policy or pursuant to applicable law, (ii) restrictions designed
to delay and/or coordinate the timing and manner of sales by the Grantee and holders of other Company equity compensation arrangements,
(iii) restrictions as to the use of a specified brokerage firm for such resales or other transfers, and (iv) provisions requiring
Shares to be sold on the open market or to the Company in order to satisfy tax withholding or other obligations.


 




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10.
Adjustments Upon Changes in Capitalization. Subject to any required action by the stockholders of the Company and
Section 11 hereof, the number of Shares covered by each outstanding Option, and the number of Shares which have been authorized
for issuance under the Plan but as to which no Options have yet been granted or which have been returned to the Plan, the exercise
or purchase price of each such outstanding Option, as well as any other terms that the Administrator determines require adjustment
shall be proportionately adjusted for (i) any increase or decrease in the number of issued Shares resulting from a stock split,
reverse stock split, stock dividend, recapitalization, combination or reclassification of the Shares, or similar transaction affecting
the Shares, (ii) any other increase or decrease in the number of issued Shares effected without receipt of consideration by the
Company, (iii) any other transaction with respect to Common Stock including a corporate merger, consolidation, acquisition of
property or stock, separation (including a spin-off or other distribution of stock or property), reorganization, liquidation (whether
partial or complete) or any similar transaction; provided, however that conversion of any convertible securities of the Company
shall not be deemed to have been “effected without receipt of consideration” or (iv) any distribution of cash or other
assets to stockholders other than a normal cash dividend (collectively “adjustments”). Any such adjustments to outstanding
Options will be effected in a manner that precludes the enlargement of rights and benefits under such Options and shall be designed
to comply with Sections 409A and 424 of the Code (to the extent applicable). In connection with the foregoing adjustments, the
Administrator may, in its discretion, prohibit the exercise of Options during certain periods of time. Such adjustments shall
be made by the Administrator and its determination shall be final, binding and conclusive. Except as the Administrator determines,
no issuance by the Company of shares of stock of any class, or securities convertible into shares of stock of any class, shall
affect, and no adjustment by reason hereof shall be made with respect to, the number or price of Shares subject to an Option.


 


11.
Corporate Transactions and Changes in Control.


 


(a)
Termination of Option to Extent Not Assumed in Corporate Transaction. Effective upon the consummation of a Corporate Transaction,
all outstanding Options under the Plan shall terminate. However, all such Options shall not terminate to the extent they are Assumed
in connection with the Corporate Transaction.


 


(b)
Acceleration of Option Upon Corporate Transaction or Change in Control.


 




    	12



    	 



    


 


(i)
Corporate Transaction. Except as provided otherwise in an individual Option Agreement, in the event of a Corporate Transaction,
for the portion of each Option that is neither Assumed nor Replaced, such portion of the Option shall automatically become fully
vested and exercisable and be released from any repurchase or forfeiture rights (other than repurchase rights exercisable at Fair
Market Value) for all of the Shares at the time represented by such portion of the Option, immediately prior to the specified
effective date of such Corporate Transaction, provided that the Grantee’s Continuous Service has not terminated prior to
such date.


 


(ii)
Change in Control. Except as provided otherwise in an individual Option Agreement, in the event of a Change in Control
(other than a Change in Control which also is a Corporate Transaction), each Option which is at the time outstanding under the
Plan automatically shall become fully vested and exercisable and be released from any repurchase or forfeiture rights (other than
repurchase rights exercisable at Fair Market Value), immediately prior to the specified effective date of such Change in Control,
for all of the Shares at the time represented by such Option, provided that the Grantee’s Continuous Service has not terminated
prior to such date.


 


(c)
Effect of Acceleration on Incentive Stock Options. Any Incentive Stock Option accelerated under this Section 11 in connection
with a Corporate Transaction or Change in Control shall remain exercisable as an Incentive Stock Option under the Code only to
the extent the $100,000 dollar limitation of Section 422(d) of the Code is not exceeded.


 


12.
Effective Date and Term of Plan. Subject to approval of the Plan by the stockholders of the Corporation prior to
12 months following the date of grant of the first Option hereunder, this Plan shall be deemed effective as of the date it is
adopted by the Board. It shall continue in effect for a term of ten (10) years unless sooner terminated. Subject to Applicable
Laws, Options may be granted under the Plan upon its becoming effective.


 


13.
Amendment, Suspension or Termination of the Plan.


 


(a)
The Board may at any time amend, suspend or terminate the Plan; provided, however, that no such amendment shall be made without
the approval of the Company’s stockholders to the extent such approval is required by Applicable Laws.


 


(b)
No Option may be granted during any suspension of the Plan or after termination of the Plan.


 


(c)
No suspension or termination of the Plan (including termination of the Plan under Section 12, above) shall adversely affect any
rights under Options already granted to a Grantee.


 


14.
Limitation of Liability. The inability of the Company to obtain authority from any regulatory body having jurisdiction,
which authority is deemed by the Company’s counsel to be necessary to the lawful issuance and sale of any Shares hereunder,
shall relieve the Company of any liability in respect of the failure to issue or sell such Shares as to which such requisite authority
shall not have been obtained.


 




    	13



    	 



    


 


15.
No Effect on Terms of Employment/Consulting Relationship. The Plan shall not confer upon any Grantee any right with
respect to the Grantee’s Continuous Service, nor shall it interfere in any way with his or her right or the right of the
Company or a Related Entity to terminate the Grantee’s Continuous Service at any time, with or without cause including,
but not limited to, Cause, and with or without notice. The ability of the Company or any Related Entity to terminate the employment
of a Grantee who is employed at will is in no way affected by its determination that the Grantee’s Continuous Service has
been terminated for Cause for the purposes of this Plan.


 


16.
No Effect on Retirement and Other Benefit Plans. Except as specifically provided in a retirement or other benefit
plan of the Company or a Related Entity, Options shall not be deemed compensation for purposes of computing benefits or contributions
under any retirement plan of the Company or a Related Entity, and shall not affect any benefits under any other benefit plan of
any kind or any benefit plan subsequently instituted under which the availability or amount of benefits is related to level of
compensation. The Plan is not a “Retirement Plan”, “Pension Plan” or “Welfare Plan” under
the Employee Retirement Income Security Act of 1974, as amended.


 


17.
Unfunded Obligation. Grantees shall have the status of general unsecured creditors of the Company. Any amounts payable
to Grantees pursuant to the Plan shall be unfunded and unsecured obligations for all purposes, including, without limitation,
Title I of the Employee Retirement Income Security Act of 1974, as amended. Neither the Company nor any Related Entity shall be
required to segregate any monies from its general funds, or to create any trusts, or establish any special accounts with respect
to such obligations. The Company shall retain at all times beneficial ownership of any investments, including trust investments,
which the Company may make to fulfill its payment obligations hereunder. Any investments or the creation or maintenance of any
trust or any Grantee account shall not create or constitute a trust or fiduciary relationship between the Administrator, the Company
or any Related Entity and a Grantee, or otherwise create any vested or beneficial interest in any Grantee or the Grantee’s
creditors in any assets of the Company or a Related Entity. The Grantees shall have no claim against the Company or any Related
Entity for any changes in the value of any assets that may be invested or reinvested by the Company with respect to the Plan.


 


18.
Construction. Captions and titles contained herein are for convenience only and shall not affect the meaning or
interpretation of any provision of the Plan. Except when otherwise indicated by the context, the singular shall include the plural
and the plural shall include the singular. Use of the term “or” is not intended to be exclusive, unless the context
clearly requires otherwise.


 


19.
Nonexclusivity of the Plan. Neither the adoption of the Plan by the Board, the submission of the Plan to the stockholders
of the Company for approval, nor any provision of the Plan will be construed as creating any limitations on the power of the Board
to adopt such additional compensation arrangements as it may deem desirable, including, without limitation, the granting of Options
otherwise than under the Plan, and such arrangements may be either generally applicable or applicable only in specific cases.


 


20.
Governing Law. This Plan and any agreements or other documents hereunder shall be interpreted and construed in accordance
with the laws of Delaware to the extent not preempted by federal law. Any reference in this Plan or in the agreement or other
document evidencing any Options to a provision of law or to a rule or regulation shall be deemed to include any successor law,
rule or regulation of similar effect or applicability.


 


The
foregoing 2015 Incentive and Nonstatutory Stock Option Plan (consisting of 15 pages, including this page) was duly adopted and
approved by the Board of Directors on April 6, 2015.


 


	/s/ Judy
    Holloway Reed	 
	Judy Holloway Reed,	 
	Secretary	 



 




    	14



    	 



    




 


REED’S,
INC. 


 


2015
INCENTIVE AND NONSTATUTORY STOCK OPTION PLAN


 


NOTICE
OF STOCK OPTION AWARD


 


Grantee’s
Name and Address:  


 


You
(the “Grantee”) have been granted an option to purchase shares of Common Stock, subject to the terms and conditions
of this Notice of Stock Option Award (the “Notice”), the Reed’s, Inc. 2015 Incentive and Nonstatutory Stock
Option Plan, as amended from time to time (the “Plan”) and the Stock Option Award Agreement (the “Option Agreement”)
attached hereto, as follows. Unless otherwise defined herein, the terms defined in the Plan shall have the same defined meanings
in this Notice.


 


	Date
    of Award 	 	 	 	 
	 	 	 	 	 
	Exercise Price
    per Share 	$		 
	 	 	 	 	 
	Total
    Number of Shares Subject to the Option (the “Shares”)	 	 	 	 
	 	 	 	 	 
	Total Exercise
    Price 	$	 	 
	 	 	 	 	 
	Type of Option:
    	 	 	 	 
	 	 	[  ]	Incentive Stock
    Option	 
	 	 	 	 	 
	 	 	[  ]	Nonstatutory Stock
    Option	 
	 	 	 	 	 
	Expiration Date:
    	 	 	 


 


Vesting
Schedule:


 


Subject
to the Grantee’s Continuous Service and other limitations set forth in this Notice, the Plan and the Option Agreement, the
Option may be exercised, in whole or in part, in accordance with the following schedule:


 


	 
	 


 




    	 



    	 



    

  


Definition:


 


“Cause”
shall mean a finding by the Administrator, with respect to the termination by the Company or a Related Entity, that the Grantee
(i) committed theft, dishonesty or falsification of any documents or records related to the Company or any of its Related Entities;
(ii) improperly used or disclosed the Company’s or any of its Related Entity’s confidential or proprietary information;
(iii) took any action which has a material detrimental effect on the reputation or business of the Company or any of its Related
Entities; (iv) failed or was unable to perform any reasonable assigned duties, provided, however, that if such failure
or inability is reasonably capable of being cured, the Grantee is provided with a reasonable opportunity to cure such failure
or inability; (v) materially breached any employment or service agreement between the Grantee and the Company or any of its Related
Entities or applicable policy of the Company or any of its Related Entities, which breach is not cured pursuant to the terms of
such agreement or policy; or (vi) was convicted (including any plea of guilty or nolo contendere) of any criminal act that, in
the determination of the Board, impairs the Grantee’s ability to perform his or her duties with the Company or any of its
Related Entities.


 


IN
WITNESS WHEREOF, the Company and the Grantee have executed this Notice and agree that the Option is to be governed by the terms
and conditions of this Notice, the Plan, and the Option Agreement.


 


	 	REED’S,
    INC.	 
	 	 	 	 
	 	Dated:		 
	 	 	 	 
	 	Signed:
    	 	 
	 	 	 	 
	 	Print
    Name: 	 	 


 


THE
GRANTEE ACKNOWLEDGES AND AGREES THAT THE SHARES SUBJECT TO THE OPTION SHALL VEST, IF AT ALL, ONLY DURING THE PERIOD OF THE GRANTEE’S
CONTINUOUS SERVICE (NOT THROUGH THE ACT OF BEING HIRED, BEING GRANTED THE OPTION OR ACQUIRING SHARES HEREUNDER). THE GRANTEE FURTHER
ACKNOWLEDGES AND AGREES THAT NOTHING IN THIS NOTICE, THE OPTION AGREEMENT OR THE PLAN SHALL CONFER UPON THE GRANTEE ANY RIGHT
WITH RESPECT TO FUTURE AWARDS OR CONTINUATION OF THE GRANTEE’S CONTINUOUS SERVICE, NOR SHALL IT INTERFERE IN ANY WAY WITH
THE GRANTEE’S RIGHT OR THE RIGHT OF THE COMPANY OR RELATED ENTITY TO WHICH THE GRANTEE PROVIDES SERVICES TO TERMINATE THE
GRANTEE’S CONTINUOUS SERVICE, WITH OR WITHOUT CAUSE, AND WITH OR WITHOUT NOTICE. THE GRANTEE ACKNOWLEDGES THAT UNLESS THE
GRANTEE HAS A WRITTEN EMPLOYMENT AGREEMENT WITH THE COMPANY TO THE CONTRARY, THE GRANTEE’S STATUS IS AT WILL.


 




    	2



    	 



    

  


The
Grantee acknowledges receipt of a copy of the Plan and the Option Agreement, and represents that he or she is familiar with the
terms and provisions thereof, and hereby accepts the Option subject to all of the terms and provisions hereof and thereof. The
Grantee has reviewed this Notice, the Plan and the Option Agreement in their entirety, has had an opportunity to obtain the advice
of counsel prior to executing this Notice, and fully understands all provisions of this Notice, the Plan and the Option Agreement.
The Grantee hereby agrees that all questions of interpretation and administration relating to this Notice, the Plan and the Option
Agreement shall be resolved by the Administrator in accordance with Section 13 of the Option Agreement. The Grantee further agrees
to the venue selection and waiver of a jury trial in accordance with Section 14 of the Option Agreement. The Grantee further agrees
to notify the Company upon any change in the residence address indicated in this Notice.


 


	 	GRANTEE	 	 
	 	 	 	 
	 	Dated:	 	 
	 	 	 	 
	 	Signed: 	 	 
	 	 	 	 
	 	Print Name: 	 	 


 




    	3



    	 



    

 


REED’S,
INC. 2015 INCENTIVE AND NONSTATUTORY STOCK OPTION PLAN


 


STOCK
OPTION AWARD AGREEMENT


 


1.
Grant of Option. Reed’s, Inc., a Delaware corporation (the “Company”), hereby grants to the Grantee
(the “Grantee”) named in the Notice of Stock Option Award (the “Notice”), an option (the “Option”)
to purchase the Total Number of Shares of Common Stock subject to the Option (the “Shares”) set forth in the Notice,
at the Exercise Price per Share set forth in the Notice (the “Exercise Price”) subject to the terms and provisions
of the Notice, this Stock Option Award Agreement (the “Option Agreement”) and the Company’s 2015 Incentive and
Nonstatutory Stock Option Plan, as amended from time to time (the “Plan”), which are incorporated herein by reference.
Unless otherwise defined herein, the terms defined in the Plan shall have the same defined meanings in this Option Agreement.


 


If
designated in the Notice as an Incentive Stock Option, the Option is intended to qualify as an Incentive Stock Option as defined
in Section 422 of the Code. However, notwithstanding such designation, the Option will qualify as an Incentive Stock Option under
the Code only to the extent the $100,000 dollar limitation of Section 422(d) of the Code is not exceeded. The $100,000 limitation
of Section 422(d) of the Code is calculated based on the aggregate Fair Market Value of the Shares subject to options designated
as Incentive Stock Options which become exercisable for the first time by the Grantee during any calendar year (under all plans
of the Company or any Parent or Subsidiary of the Company). For purposes of this calculation, Incentive Stock Options shall be
taken into account in the order in which they were granted, and the Fair Market Value of the shares subject to such options shall
be determined as of the grant date of the relevant option.


 


2. Exercise
of Option.


 


(a)
Right to Exercise. The Option shall be exercisable during its term in accordance with the Vesting Schedule set out in the Notice
and with the applicable provisions of the Plan and this Option Agreement. The Option shall be subject to the provisions of Section
11 of the Plan relating to the exercisability or termination of the Option in the event of a Corporate Transaction or Change in
Control. The Grantee shall be subject to reasonable limitations on the number of requested exercises during any monthly or weekly
period as determined by the Administrator. In no event shall the Company issue fractional Shares.


 


(b)
Method of Exercise. The Option shall be exercisable by delivery of an exercise notice (a form of which is attached as Exhibit
A) or by such other procedure as specified from time to time by the Administrator which shall state the election to exercise the
Option, the whole number of Shares in respect of which the Option is being exercised, and such other provisions as may be required
by the Administrator. The exercise notice shall be delivered in person, by certified mail, or by such other method (including
electronic transmission) as determined from time to time by the Administrator to the Company accompanied by payment of the Exercise
Price and, if required, all applicable income and employment taxes required to be withheld. The Option shall be deemed to be exercised
upon receipt by the Company of such notice accompanied by the Exercise Price, which, to the extent selected, shall be deemed to
be satisfied by use of the broker-dealer sale and remittance procedure to pay the Exercise Price provided in Section 3(d) below
to the extent such procedure is available to the Grantee at the time of exercise and such an exercise would not violate any Applicable
Law.


 




    	4



    	 



    

  


(c)
Taxes. To the extent required by Applicable Law, upon exercise of the Option, the Company or the Grantee’s employer may
offset or (from any amount owed by the Company or the Grantee’s employer to the Grantee) or collect from the Grantee or
other person an amount sufficient to satisfy such tax obligations. Furthermore, in the event of any determination that the Company
has failed to collect a sum sufficient to pay all taxes due in connection with the Option, the Grantee agrees to pay the Company
the amount of such deficiency in cash within five (5) days after receiving a written demand from the Company to do so, whether
or not the Grantee is an employee of the Company at that time.


 


3.
Method of Payment. Payment of the Exercise Price shall be made by any of the following, or a combination thereof,
at the election of the Grantee; provided, however, that such exercise method does not then violate any Applicable Law and, provided
further, that the portion of the Exercise Price equal to the par value of the Shares must be paid in cash or other legal consideration
permitted by the Delaware General Corporation Law:


 


(a)
cash;


 


(b)
check;


 


(c)
surrender of Shares held for the requisite period, if any, necessary to avoid a charge to the Company’s earnings for financial
reporting purposes, or delivery of a properly executed form of attestation of ownership of Shares as the Administrator may require
which have a Fair Market Value on the date of surrender or attestation equal to the aggregate Exercise Price of the Shares as
to which the Option is being exercised;


 


(d)
if permitted by the Administrator, payment through a “net exercise” such that, without the payment of any funds, the
Grantee may exercise the Option and receive the net number of Shares equal to (i) the number of Shares as to which the Option
is being exercised, multiplied by (ii) a fraction, the numerator of which is the Fair Market Value per Share (on such date as
is determined by the Administrator) less the Exercise Price per Share, and the denominator of which is such Fair Market Value
per Share (the number of net Shares to be received shall be rounded down to the nearest whole number of Shares); or


 


(e)
if permitted by the Administrator, payment through a broker-dealer sale and remittance procedure pursuant to which the Grantee
(i) shall provide written instructions to a Company-designated brokerage firm to effect the immediate sale of some or all of the
purchased Shares and remit to the Company sufficient funds to cover the aggregate exercise price payable for the purchased Shares
and (ii) shall provide written directives to the Company to deliver the certificates for the purchased Shares directly to such
brokerage firm in order to complete the sale transaction.


 




    	5



    	 



    

  


4.
Restrictions on Exercise. The Option may not be exercised if the issuance of the Shares subject to the Option upon
such exercise would constitute a violation of any Applicable Laws. If the exercise of the Option within the applicable time periods
set forth in Section 5, 6 and 7 of this Option Agreement is prevented by the provisions of this Section 4, the Option shall remain
exercisable until one (1) month after the date the Grantee is notified by the Company that the Option is exercisable, but in any
event no later than the Expiration Date set forth in the Notice.


 


5. Termination
or Change of Continuous Service.


 


(a)
In the event of the Grantee’s change in status from Employee, Director or Consultant to any other status of Employee, Director
or Consultant, the Option shall remain in effect and the Option shall continue to vest in accordance with the Vesting Schedule
set forth in the Notice; provided, however, that with respect to any Incentive Stock Option that shall remain in effect after
a change in status from Employee to Director or Consultant, such Incentive Stock Option shall cease to be treated as an Incentive
Stock Option and shall be treated as a Non-Qualified Stock Option on the day three (3) months and one (1) day following such change
in status.


 


(b)
In the event the Grantee’s Continuous Service is terminated by the Company or a Related Entity for Cause (other than pursuant
to clause (iv) or (v) of the definition of Cause), the Grantee may, but only within thirty (30) days commencing on the date of
Grantee’s termination (“Termination Date”) but in no event later than the Expiration Date, exercise the portion
of the Option that was vested on the Termination Date.


 


(c)
In the event the Grantee’s Continuous Service is terminated by the Company or a Related Entity for Cause pursuant to clause
(iv) or (v) of the definition of Cause or terminated by the Grantee for any reason, the Grantee may, but only within ninety (90)
days commencing on the Termination Date but in no event later than the Expiration Date, exercise the portion of the Option that
was vested on the Termination Date.


 


(d)
In the event the Grantee’s Continuous Service is terminated by the Company or a Related Entity without Cause the Grantee
may, but only within one ninety (90) days commencing on the Termination Date but in no event later than the Expiration Date, exercise
the portion of the Option that was vested on the Termination Date.


 


(e)
The post-termination exercise periods described in this Section 5 shall commence on the Termination Date. In no event shall the
Option be exercised later than the Expiration Date set forth in the Notice.


 


(f)
If the Grantee does not exercise the Option within the applicable post-termination exercise period, the Option shall terminate.


 




    	6



    	 



    

  


6.
Disability of Grantee. In the event the Grantee’s Continuous Service terminates as a result of his or her
Disability, the Grantee may, but only within one hundred eighty (180) days commencing on the Termination Date (but in no event
later than the Expiration Date), exercise the portion of the Option that was vested on the Termination Date. If the Grantee does
not exercise the Option within the time specified herein, the Option shall terminate.


 


7.
Death of Grantee. In the event of the termination of the Grantee’s Continuous Service as a result of his or
her death, the person who acquired the right to exercise the Option pursuant to Section 8 may exercise the portion of the Option
that was vested at the date of termination within one hundred eighty (180) days commencing on the date of death (but in no event
later than the Expiration Date). If the Option is not exercised within the time specified herein, the Option shall terminate.


 


8.
Transferability of Option. The Option, if an Incentive Stock Option, may not be transferred in any manner other
than by will or by the laws of descent and distribution and may be exercised during the lifetime of the Grantee only by the Grantee.
The Option, if a Non-Qualified Stock Option, may not be transferred in any manner other than by will or by the laws of descent
and distribution, provided, however, that a Non-Qualified Stock Option may be transferred during the lifetime of the Grantee to
the extent and in the manner authorized by the Administrator. Notwithstanding the foregoing, the Grantee may designate one or
more beneficiaries of the Grantee’s Incentive Stock Option or Non-Qualified Stock Option in the event of the Grantee’s
death on a beneficiary designation form provided by the Administrator. Following the death of the Grantee, the Option, to the
extent provided in Section 7, may be exercised (a) by the person or persons designated under the deceased Grantee’s beneficiary
designation or (b) in the absence of an effectively designated beneficiary, by the Grantee’s legal representative or by
any person empowered to do so under the deceased Grantee’s will or under the then applicable laws of descent and distribution.
The terms of the Option shall be binding upon the executors, administrators, heirs, successors and transferees of the Grantee.


 


9.
Term of Option. The Option must be exercised no later than the Expiration Date set forth in the Notice or such earlier
date as otherwise provided herein. After the Expiration Date or such earlier date, the Option shall be of no further force or
effect and may not be exercised.


 


10.
Tax Consequences. The Grantee may incur tax liability as a result of the Grantee’s purchase or disposition
of the Shares. THE GRANTEE SHOULD CONSULT A TAX ADVISER BEFORE EXERCISING THE OPTION OR DISPOSING OF THE SHARES.


 


11.
Entire Agreement: Governing Law. The Notice, the Plan and this Option Agreement constitute the entire agreement
of the parties with respect to the subject matter hereof and supersede in their entirety all prior undertakings and agreements
of the Company and the Grantee with respect to the subject matter hereof, and may not be modified adversely to the Grantee’s
interest except by means of a writing signed by the Company and the Grantee. Nothing in the Notice, the Plan and this Option Agreement
(except as expressly provided therein) is intended to confer any rights or remedies on any persons other than the parties. The
Notice, the Plan and this Option Agreement are to be construed in accordance with and governed by the internal laws of the State
of Delaware without giving effect to any choice of law rule that would cause the application of the laws of any jurisdiction other
than the internal laws of the State of Delaware to the rights and duties of the parties. Should any provision of the Notice, the
Plan or this Option Agreement be determined to be illegal or unenforceable, such provision shall be enforced to the fullest extent
allowed by law and the other provisions shall nevertheless remain effective and shall remain enforceable.


 




    	7



    	 



    

  


12.
Construction. The captions used in the Notice and this Option Agreement are inserted for convenience and shall not
be deemed a part of the Option for construction or interpretation. Except when otherwise indicated by the context, the singular
shall include the plural and the plural shall include the singular. Use of the term “or” is not intended to be exclusive,
unless the context clearly requires otherwise.


 


13.
Administration and Interpretation. Any question or dispute regarding the administration or interpretation of the
Notice, the Plan or this Option Agreement shall be submitted by the Grantee or by the Company to the Administrator. The resolution
of such question or dispute by the Administrator shall be final and binding on all persons.


 


14.
Venue and Waiver of Jury Trial. The Company, the Grantee, and the Grantee’s assignees pursuant to Section
8 (the “parties”) agree that any suit, action, or proceeding arising out of or relating to the Notice, the Plan or
this Option Agreement shall be brought in the United States District Court for the Central District of California (or should such
court lack jurisdiction to hear such action, suit or proceeding, in a California state court in the County of Los Angeles) and
that the parties shall submit to the jurisdiction of such court. The parties irrevocably waive, to the fullest extent permitted
by law, any objection the party may have to the laying of venue for any such suit, action or proceeding brought in such court.
THE PARTIES ALSO EXPRESSLY WAIVE ANY RIGHT THEY HAVE OR MAY HAVE TO A JURY TRIAL OF ANY SUCH SUIT, ACTION OR PROCEEDING. If any
one or more provisions of this Section 14 shall for any reason be held invalid or unenforceable, it is the specific intent of
the parties that such provisions shall be modified to the minimum extent necessary to make it or its application valid and enforceable.


 


15.
Notices. Any notice required or permitted hereunder shall be given in writing and shall be deemed effectively given
upon personal delivery, upon deposit for delivery by an internationally recognized express mail courier service or upon deposit
in the United States mail by certified mail (if the parties are within the United States), with postage and fees prepaid, addressed
to the other party at its address as shown in these instruments, or to such other address as such party may designate in writing
from time to time to the other party.


 


[Signature
page follows]


 




    	8



    	 



    

 


[Signature
page to Stock Option Award Agreement]


 


	Submitted
    by Grantee:	 	Accepted
    by:
	 	 	 	 	 
		 	REED’S,
    INC.
	 	 	 	a
    Delaware corporation
	 	 	 	 	 
	By:	 	 	By:	 
	 	 	 	 	 
	Name:	 	 	Name:	 
	 	 	 	 	 
	 	 	 	Its:	 
	 	 	 	 	 
	Date:	 	 	Date:	
	 	 	 	 	 
	Address:	 	 	Address:
    13000 South Spring Street
		 	 	Los
    Angeles, CA 90061


 




    	9



    	 



    

 


EXHIBIT
A


 


REED’S,
INC. 2015 INCENTIVE AND NONSTATUTORY STOCK OPTION PLAN


 


EXERCISE
NOTICE


 


Reed’s
Inc.


13000 South
Spring Street


Los Angeles,
CA 90061


Attention:
Secretary


 


1.
Exercise of Option. Effective as of today, ______________, 20___ the undersigned (the “Grantee”) hereby
elects to exercise the Grantee’s option to purchase _____________ shares of the Common Stock (the “Shares”)
of Reed’s, Inc. (the “Company”) under and pursuant to the Company’s 2015 Incentive and Nonstatutory Stock
Option Plan, as amended from time to time (the “Plan”) and the [ ] Incentive [ ] Non-Qualified Stock Option Award
Agreement (the “Option Agreement”) and Notice of Stock Option Award (the “Notice”) dated _____________,
20___.


 


Unless
otherwise defined herein, the terms defined in the Plan shall have the same defined meanings in this Exercise Notice.


 


2.
Representations of the Grantee. The Grantee acknowledges that the Grantee has received, read and understood the
Notice, the Plan and the Option Agreement and agrees to abide by and be bound by their terms and conditions.


 


3.
Rights as Stockholder. Until the stock certificate evidencing such Shares is issued (as evidenced by the appropriate
entry on the books of the Company or of a duly authorized transfer agent of the Company), no right to vote or receive dividends
or any other rights as a stockholder shall exist with respect to the Shares, notwithstanding the exercise of the Option. The Company
shall issue (or cause to be issued) such stock certificate promptly after the Option is exercised. No adjustment will be made
for a dividend or other right for which the record date is prior to the date the stock certificate is issued, except as provided
in Section 11 of the Plan.


 


4.
Delivery of Payment. The Grantee herewith delivers to the Company the full Exercise Price for the Shares, which,
to the extent selected, shall be deemed to be satisfied by use of the broker-dealer sale and remittance procedure to pay the Exercise
Price provided in Section 3(e) of the Option Agreement.


 


5.
Tax Consultation. The Grantee understands that the Grantee may suffer adverse tax consequences as a result of the
Grantee’s purchase or disposition of the Shares. The Grantee represents that the Grantee has consulted with any tax consultants
the Grantee deems advisable in connection with the purchase or disposition of the Shares and that the Grantee is not relying on
the Company for any tax advice.


 




    	10



    	 



    

  


6.
Taxes. The Grantee agrees to satisfy all applicable foreign, federal, state and local income and employment tax
withholding obligations and has made arrangements to satisfy such obligations. In the case of an Incentive Stock Option, the Grantee
also agrees, as partial consideration for the designation of the Option as an Incentive Stock Option, to notify the Company in
writing within thirty (30) days of any disposition of any shares acquired by exercise of the Option if such disposition occurs
within two (2) years from the Date of Award or within one (1) year from the date the Shares were transferred to the Grantee.


 


7.
Successors and Assigns. The Company may assign any of its rights under this Exercise Notice to single or multiple
assignees, and this agreement shall inure to the benefit of the successors and assigns of the Company. This Exercise Notice shall
be binding upon the Grantee and his or her heirs, executors, administrators, successors and assigns.


 


8.
Construction. The captions used in this Exercise Notice are inserted for convenience and shall not be deemed a part
of this agreement for construction or interpretation. Except when otherwise indicated by the context, the singular shall include
the plural and the plural shall include the singular. Use of the term “or” is not intended to be exclusive, unless
the context clearly requires otherwise.


 


9.
Administration and Interpretation. The Grantee hereby agrees that any question or dispute regarding the administration
or interpretation of this Exercise Notice shall be submitted by the Grantee or by the Company to the Administrator. The resolution
of such question or dispute by the Administrator shall be final and binding on all persons.


 


10.
Governing Law; Severability. This Exercise Notice is to be construed in accordance with and governed by the internal
laws of the State of Delaware without giving effect to any choice of law rule that would cause the application of the laws of
any jurisdiction other than the internal laws of the State of Delaware to the rights and duties of the parties. Should any provision
of this Exercise Notice be determined by a court of law to be illegal or unenforceable, such provision shall be enforced to the
fullest extent allowed by law and the other provisions shall nevertheless remain effective and shall remain enforceable.


 


11.
Notices. Any notice required or permitted hereunder shall be given in writing and shall be deemed effectively given
upon personal delivery, upon deposit for delivery by an internationally recognized express mail courier service or upon deposit
in the United States mail by certified mail (if the parties are within the United States), with postage and fees prepaid, addressed
to the other party at its address as shown below beneath its signature, or to such other address as such party may designate in
writing from time to time to the other party.


 


12.
Further Instruments. The parties agree to execute such further instruments and to take such further action as may
be reasonably necessary to carry out the purposes and intent of this agreement.


 




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13.
Entire Agreement. The Notice, the Plan and the Option Agreement are incorporated herein by reference and together
with this Exercise Notice constitute the entire agreement of the parties with respect to the subject matter hereof and supersede
in their entirety all prior undertakings and agreements of the Company and the Grantee with respect to the subject matter hereof,
and may not be modified adversely to the Grantee’s interest except by means of a writing signed by the Company and the Grantee.
Nothing in the Notice, the Plan, the Option Agreement and this Exercise Notice (except as expressly provided therein) is intended
to confer any rights or remedies on any persons other than the parties.


  


	Submitted
    by Grantee:	 	Accepted
    by:
	 	 	 	 	 
		 	REED’S,
    INC.
	 	 	 	a
    Delaware corporation
	 	 	 	 	 
	By:	 	 	By:	 
	 	 	 	 	 
	Name:	 	 	Name:	 
	 	 	 	 	 
	 	 	 	Its:	 
	 	 	 	 	 
	Date:	 	 	Date:	
	 	 	 	 	 
	Address:	 	 	Address:
    13000 South Spring Street
		 	 	Los
    Angeles, CA 90061


 




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EXHIBIT
B


 


STOCK
ASSIGNMENT SEPARATE FROM CERTIFICATE


 


[Please
sign this document but do not date it. The date and information of the transferee will be completed if and when the shares are
assigned.]


 


FOR
VALUE RECEIVED, _________________ hereby sells, assigns and transfers unto _____________________, ____________________________
( ) shares of the Common Stock of Reed’s, Inc., a Delaware corporation (the “Company”), standing in his name
on the books of, represented by Certificate No. ________herewith, and does hereby irrevocably constitute and appoint the Secretary
of the Company attorney to transfer the said stock in the books of the Company with full power of substitution.


 


	DATED:
    ____________


 




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