Exhibit 10.1


 


ACURA PHARMACEUTICALS INC. 2016 STOCK
OPTION PLAN 


 


1. Purposes.
The Plan described herein, as amended and restated, shall be known as the “Acura Pharmaceuticals, Inc. 2016 Stock Option Plan”
(the “Plan”). The purposes of the Plan are to attract and retain the best available personnel for positions of substantial
responsibility, to provide additional incentive to Employees, Directors and Consultants of the Company or its Subsidiaries (as
defined in Section 2 below) to whom Option’s may be granted under this Plan, and to promote the success of the Company’s business.


 


Options granted hereunder
may be either “incentive stock options,” as defined in Section 422 of the Internal Revenue Code of 1986, as amended,
or “Non-ISO’s,” at the discretion of the Board and as reflected in the terms of the written option agreement.


 


The Plan is not intended
as an agreement or promise of employment. Neither the Plan, nor any Option granted pursuant to the Plan, shall confer on any person
any right to continue in the employ of the Company. The right of the Company to terminate an Employee is not limited by the Plan,
nor by any Option granted pursuant to the Plan, unless such right is specifically described by the terms of any such Option.


 


2. Definitions.
As used herein, the following definitions shall apply:


 


(a) “409A Award
Agreement” has the meaning set forth in Section 24.1.


 


(b) “Board”
shall mean the Committee, if one has been appointed, or the Board of Directors of the Company, if no Committee is appointed.


 


(c) “Change
of Control” shall mean means in one or a series of related transactions any of the following: (a) the acquisition (other
than solely from the Company) by any individual, entity or group (within the meaning of Section 13(d)(3) or 14(d)(2) of the Exchange
Act) other than the Company (or any entity of which a majority of the outstanding voting stock or voting power is beneficially
owned directly or indirectly by the Company) of the beneficial ownership (within the meaning of Rule 13d-3 promulgated under the
Securities Exchange Act of 1934 , as amended) of more than sixty-six and 2/3 percent (66.66%) of the combined voting power of the
then outstanding voting securities of the Company entitled to vote generally in the election of directors (the “Voting Securities”);
(b) a reorganization, merger, consolidation, share exchange, recapitalization, business combination or similar combination involving
the Company or its capital stock (a “Business Combination”), other than a Business Combination in which more than thirty-three
and 1/3 percent (33.33%) of the combined voting power of the outstanding voting securities of the surviving or resulting entity
immediately following the Business Combination is held by the persons who, immediately prior to the Business Combination, were
the holders of the Voting Securities; (c) a sale or other transfer (other than license) of all or substantially all of the Company’s
assets (measured by the value or earning power of the assets), including, without limitation, the sale by the Company of its rights
under license agreements or similar agreements relating to its technology (including the sale of royalty payment amounts payable
to the Company or its shareholders under such agreements); (d) the license or similar agreement by the Company to a third party
or third parties, in one or more transactions, of all rights in and to the Company’s technology and, as a result of such
transactions, all or substantially all of the Company’s activities consist of monitoring such arrangements and collecting
fees and payments due thereunder; or (e) a complete liquidation or dissolution of the Company.


 


(d) “Code”
shall mean the Internal Revenue Code of 1986, as amended.


 


(e) “Committee”
shall mean the Committee appointed under Section 4(a) hereof.


 


(f) “Common
Stock” shall mean the Common Stock, $.01 par value, of the Company.


 


(g) “Company”
shall mean Acura Pharmaceuticals, Inc., a New York corporation.


 






    	 	Page 1 of 11	 



     


    

 


(h) “Continuous
Service or Continuous Status as an Employee” shall mean the absence of any interruption or termination of service as an
Employee. Continuous Status as an Employee shall not be considered interrupted in the case of sick leave, military leave, or any
other leave of absence approved by the Board.


 


(i) “Director”
shall mean any person serving on the Board of Directors.


 


(j) “Employee”
shall mean any person, including officers, employed by the Company or any Parent or Subsidiary of the Company. The payment of a
Director’s fee by the Company shall not be sufficient to constitute “employment” by the Company.


 


(k) “Exchange
Act” shall mean the Securities Exchange Act of 1934, as amended.


 


(l) “Fair Market
Value” shall mean (i) the closing price for a share of the Common Stock on the exchange or quotation system which reports
or quotes the closing prices for a share of the Common Stock, as accurately reported for any date (or, if no shares of Common Stock
are traded on such date, for the immediately preceding date on which shares of Common Stock were traded) in The Wall Street Journal
(or if The Wall Street Journal no longer reports such price, in such other reliable publication (electronic or otherwise) as the
Board may select in its discretion or (ii) if no such price quotation is available, the price which the Committee acting in good
faith determines through any reasonable valuation method that a share of Common Stock might change hands between a willing buyer
and a willing seller, neither being under any compulsion to buy or to sell and both having reasonable knowledge of the relevant
facts (provided that such valuation method complies with Treas. Regulation 1.409A-1(b)(5)(iv), or any successor regulation).


 


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


 


(n) “Non-ISO”
shall mean an Option to purchase stock which is not intended by the Committee to satisfy the requirements of Section 422 of the
Code. A Non-ISO” shall also mean a non-qualified stock option.


 


(o) “Option”
shall mean a stock option granted pursuant to the Plan.


 


(p) “Optioned
Stock” shall mean the Common Stock subject to an Option.


 


(q) “Optionee”
shall mean an Employee, Director or Consultant who receives an Option.


 


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


 


(s) “Plan”
shall mean this Acura Pharmaceuticals, Inc. 2016 Stock Option Plan, as amended from time to time.


 


(t) “Rule 16b-3”
shall mean Rule 16b-3 of the General Rules and Regulations under the Exchange Act.


 


(u) “Section
409A Award” has the meaning set forth in Section 24.1.


 


(v) “Share”
shall mean a share of the Common Stock, as adjusted in accordance with Section 11 of the Plan.


 


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


 






    	 	Page 2 of 11	 



     


    

 


(x) “Ten Percent
Shareholder” shall mean a person who owns (after taking into account the attribution rules of Section 424(d) of the Code)
more than ten percent (10%) of the total combined voting power of all classes of stock of the Company, or a Subsidiary.


 


 3. Stock Authorized.




 


Subject to the provisions
of Section 11 of the Plan, the maximum aggregate number of shares which may be Optioned and sold under the Plan is 600,000 shares
of authorized, but unissued, or reacquired Common Stock. The maximum number of shares underlying Incentive Stock Options which
may be Optioned under the Plan is 600,000. The maximum number of shares which may be subject to Options granted to any one person
in any calendar year (including at fair market value on the date of grant) shall not exceed 60,000 shares (subject to adjustment
under Section 11 hereof consistent with Section 162(m) of the Code). If the shares that would be issued or transferred pursuant
to any Options are not issued or transferred and ceased to be issuable or transferable for any reason, the number of shares subject
to such Option will no longer be charged against a limitation provided for herein and may again be subject to Options. Notwithstanding
the proceeding sentence, with respect to any Option granted to any individual who is a “covered employee” within the
meaning of Section 162(m) of the Code that is cancelled, the number of shares subject to such Option shall continue to count against
the maximum number of shares which may be the subject of Options granted to such individual. For purposes of the preceding sentence
if, after grant, the exercise price of an Option is reduced, such reduction shall be treated as a cancellation of such Option and
the grant of a new Option, and both the cancellation of the Option and the new Option shall reduce the maximum number of shares
for which Options may be granted to the holder of such Option in a calendar year.


 


If an Option should
expire or become unexercisable for any reason without having been exercised in full, the unpurchased Shares which were subject
thereto shall, unless the Plan shall have been terminated, become available for further grant under the Plan.


 


 4. Administration.




 


(a) Procedure.
The Company’s Board of Directors may appoint a Committee to administer the Plan which shall be constituted so as to permit the
Plan to continue to comply with Rule 16b-3, as currently in effect or as hereafter modified or amended. The Committee appointed
by the Board of Directors shall consist of not less than two members of the Board of Directors, to administer the Plan on behalf
of the Board of Directors, subject to such terms and conditions as the Board of Directors may prescribe. Once appointed, the Committee
shall continue to serve until otherwise directed by the Board of Directors. From time to time, the Board of Directors may increase
the size of the Committee and appoint additional members thereof, remove members (with or without cause), and appoint new members
in substitution therefor, fill vacancies however caused, or remove all members of the Committee and thereafter directly administer
the Plan; provided, however, that at no time shall a Committee of less than two members administer the Plan. Subject to the provisions
of the Plan, the Committee shall be authorized to interpret the Plan, to establish, amend and rescind any rules and regulations
relating to the Plan and to make all other determinations necessary or advisable for the administration of the Plan. Notwithstanding
anything to the contrary contained herein, no member of the Committee shall serve as such under this Plan unless such person is
a “Non-Employee Director” within the meaning of Rule 16b-3(b)(3)(i) of the Exchange Act. A majority vote of the members
of the Committee shall be required for all of its actions.


 


A majority of the entire
Committee shall constitute a quorum, and the action of the majority of the Committee members present at any meeting at which a
quorum is present shall be the action of the Committee. All decisions, determinations, and interpretations of the Committee shall
be final and conclusive on all persons affected thereby and shall, as to Incentive Stock Options, be consistent with Section 422
of the Code. The Committee shall have all of the powers and duties set forth herein, as well as such additional powers and duties
as the Board of Directors may delegate to it; provided, however, that the Board of Directors expressly retains the right in its
sole discretion (i) to elect and to replace the members of the Committee, and (ii) to terminate or amend this Plan in any manner
consistent with applicable law.


 






    	 	Page 3 of 11	 



     


    

 


(b) Powers of the
Committee. Subject to the provisions of the Plan, the Committee shall have the authority, in its discretion: (i) to grant Incentive
Stock Options, in accordance with Section 422 of the Code, or to grant Non-ISO’s; (ii) to determine the Fair Market Value of the
Common Stock; (iii) to determine the exercise price per share of Options to be granted which exercise price shall be determined
in accordance with Section 8 of the Plan; (iv) to determine the persons to whom (including, without limitation, members of the
Committee) and the time or times at which, Options shall be granted and the number of Shares to be represented by each Option;
(v) to interpret the Plan; (vi) to prescribe, amend and rescind rules and regulations relating to the Plan; (vii) to determine
the terms and provisions of each Option granted (which need not be identical) and, with the consent of the holder thereof, modify
or amend each Option; (viii) to accelerate or defer (with the consent of the Optionee) the exercise date of any Option; (ix) to
authorize any person to execute on behalf of the Company any instrument required to effectuate the grant of an Option previously
granted by the Board; and (x) to make all other determinations deemed necessary or advisable for the administration of the Plan.


 


(c) Subject to the
provisions of this Plan and compliance with Rule 16b-3 of the Exchange Act, the Committee may grant options under this Plan to
members of the Company’s Board of Directors, including members of the Committee, and in such regard may determine:


 


(i) the time at which any such
Option shall be granted;


 


(ii) the
number of Shares covered by any such Option;


 


(iii) the
time or times at which, or the period during which, any such Option may be exercised or whether it may be exercised in whole or
in installments;


 


(iv) the
provisions of the agreement relating to any such Option; and


 


(v) the Option
Price of Shares subject to an Option granted such Board member.


 


(d) Effect of the
Committee’s Decision. All decisions, determinations and interpretations of the Committee shall be final and binding on all
Optionees and any other holders of any Options granted under the Plan.


 


5. Eligibility.
Incentive Stock Options may be granted only to Employees. Non-ISO’s may be granted to Employees as well as non-employee Directors
and Consultants of the Company as determined by the Board or any Committee. Any person who has been granted an Option may, if he
is otherwise eligible, be granted an additional Option or Options.


 


Each grant of an Option
shall be evidenced by an Option agreement, and each Option agreement shall (1) specify whether the Option is an Incentive Stock
Option or a Non-ISO and (2) incorporate such other terms and conditions as the Committee acting in its absolute discretion deems
consistent with the terms of this Plan, including, without limitation, a restriction on the number of shares of stock subject to
the Option which first become exercisable during any calendar year.


 


To the extent that
the aggregate Fair Market Value of the stock of the Company subject to Incentive Stock Options granted (determined as of the date
such an Incentive Stock Option is granted) which first become exercisable in any calendar year exceeds $100,000, such Options shall
be treated as Non-ISO’s. This $100,000 limitation shall be administered in accordance with the rules under Section 422(d) of the
Code.


 


6. Effective Date
and Term of Plan. The effective date of this Plan (“Effective Date”) shall be the date it is adopted by the Board,
provided the shareholders of the Company (acting at a duly called meeting of such shareholders or by the written consent of shareholders)
approve this Plan within twelve (12) months after such Effective Date. The effectiveness of Options granted under this Plan prior
to the date such shareholder approval is obtained shall be contingent on such shareholder approval.


 






    	 	Page 4 of 11	 



     


    

 


Subject to the provisions
of Section 13 hereof, no Option shall be granted under this Plan on or after the earlier of


 


(1) the tenth
anniversary of the Effective Date of this Plan in which event the Plan otherwise thereafter shall continue in effect until all
outstanding Options shall have been surrendered or exercised in full or no longer are exercisable, or


 


(2) the date
on which all of the Common Stock reserved for issuance under Section 3 of this Plan has (as a result of the exercise or expiration
of Options granted under this Plan) been issued or no longer is available for use under this Plan, in which event the Plan also
shall terminate on such date.


 


7. Term of Option.
An Option shall expire on the date specified in such Option, which date shall not be later than the tenth anniversary of the date
on which the Option was granted, except that, if any Employee, at any time an Incentive Stock Option is granted to him or her,
owns stock representing more than ten percent (10%) of the total combined voting power of all classes of Common Stock (or, under
Section 424(d) of the Code is deemed to own stock representing more than ten percent (10%) of the total combined voting power of
all such classes of Common Stock, by reason of the ownership of such classes of stock, directly or indirectly, by or for any brother,
sister, spouse, ancestor or lineal descendant of such Employee, or by or for any corporation, partnership, state or trust of which
such Employee is a shareholder, partner or beneficiary), the Incentive Stock Option granted him or her shall not be exercisable
after the expiration of five (5) years from the date of grant or such earlier expiration as provided in the particular Option agreement.


 


 8. Exercise Price and Consideration.




 


(a) The per Share exercise
price for the Shares to be issued pursuant to exercise of an Option shall be such price as is determined by the Board, but shall
be subject to the following:


 


(i) In the case of an
Incentive Stock Option


 


(A) granted
to an Employee who, immediately before 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, the per Share exercise price shall
be no less than 110% of the Fair Market Value per Share on the date of grant.


 


(B) granted
to any Employee, the per share exercise price shall be no less than 100% of the Fair Market Value per Share on the date of grant.


 


(ii) In the case of
a Non-ISO, the per share exercise price shall be determined by the Board on the date of grant.


 


(b) 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
Board and may consist entirely of


 


(i) cash;


 


(ii) check;


 


(iii) subject to section
402 of the Sarbanes-Oxley Act of 2002 as amended from time to time and subject to such
terms and conditions as the Committee may impose, promissory note, provided such promissory note shall be full recourse as to principal
and interest and shall bear interest at the market rate, which market rate shall be equal to the rate of interest available to
the Optionee in a third party arms-length loan transaction of similar nature and amount;


 






    	 	Page 5 of 11	 



     


    

 


(iv) Shares of Common
Stock having been held by the Optionee for at least six (6) months prior to being surrendered as consideration for the Shares to
be issued upon exercise of an Option and having a Fair Market Value on the date of surrender equal to the aggregate exercise price
of the Shares as to which said Option shall be exercised, or any combination of such methods of payment; or


 


(v) such other consideration
and method of payment for the issuance of Shares to the extent permitted under New York law.


 


(c) Without limiting
Section 8(b), the Option may be exercised though net exercise, together with other forms of acceptable consideration, such that
the number of Shares of Common Stock issued upon the exercise will be reduced by the largest number of whole Shares that has a
Fair Market Value on the date of exercise that does not exceed the aggregate exercise price (less the exercise price paid, if any,
with other acceptable forms of consideration) as a result of such exercise.


 


(d) The Company has
the right to require the Optionee upon the exercise of an Option to pay to the Company the amount of any federal, state and local
taxes which the Company is required to withhold upon the exercise of the Option. In lieu of requiring cash payment of any such
taxes, the Company shall, in its discretion or at the Optionee’s request, instead withhold from the Shares of Common Stock
to be issued under the Option a number of Shares of Common Stock whose value is equal to the amount of such taxes. Valuation for
this purpose shall be the Fair Market Value on the date of exercise.


 


 9. Exercise of Option. 




 


(a) Procedure for
Exercise; Rights as a Shareholder. Any Option granted hereunder shall be exercisable at such times and under such conditions
as determined by the Committee, including performance criteria with respect to the Company and/or the Optionee, and as shall be
permissible under the terms of the Plan.


 


An Option may not be
exercised for a fraction of a Share.


 


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 received by the Company. Full payment may, as authorized by the Board, consist of any consideration and method of payment
allowable under Section 8(b) or 8(c) of the Plan. Until the issuance, which in no event will be delayed more than thirty (30) days
from the date of the exercise of the Option, (as evidenced by the appropriate entry on the books of the Company or of a duly authorized
transfer agent of the Company) of the stock certificate evidencing such Shares, no right to vote or receive dividends or any other
rights as a shareholder shall exist with respect to the Optioned Stock, notwithstanding the exercise of the Option. 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 the Plan.


 


Exercise of an Option
in any manner shall result in a decrease in the number of Shares which thereafter may be available, both for purposes of the Plan
and for sale under the Option, by the number of Shares as to which the Option is exercised.


 


(b) Termination
of Status as an Employee, or Director or Consultant with Respect to Non-ISO’s. Non-ISO’s granted pursuant to the Plan may be
exercised notwithstanding the termination of the Optionee’s status as an employee, a non-employee Director or a Consultant, except
as provided in the Plan or as provided by the terms of the Option agreement.


 


(c) Termination
of Service as an Employee with Respect to Incentive Stock Options. If the Continuous Service of any Employee terminates, he
or she may, but only within thirty (30) days (or such other period of time not exceeding three (3) months as is determined by the
Committee) after the date he or she ceases to be an Employee of the Company, exercise his or her Incentive Stock Option to the
extent that he or she was entitled to exercise it as of the date of such termination. To the extent that he or she was not entitled
to exercise the Incentive Stock Option at the date of such termination, or if he or she does not exercise such Option (which he
or she was entitled to exercise) within the time specified herein, the Option shall terminate.


 






    	 	Page 6 of 11	 



     


    

 


(d) Disability of
Optionee. Notwithstanding the provisions of Section 9(c) above, subject to Section 24 hereof, in the event an Employee is unable
to continue his or her Continued Service with the Company as a result of his or her total and permanent disability (within the
meaning of Section 22(e)(3) of the Code), he or she may, but only within three (3) months (or such other period of time not exceeding
twelve (12) months as is determined by the Committee) from the date of disability, exercise his or her Option to the extent he
or she was entitled to exercise it at the date of such disability. To the extent that he or she was not entitled to exercise the
Option at the date of disability, or if he or she does not exercise such Option (which he or she was entitled to exercise) within
the time specified herein, the Option shall terminate.


 


(e) Death of Optionee.
In the event of the death of an Optionee:


 


(i) during
the term of the Option who is at the time of his or her death an Employee of the Company and who shall have been in Continuous
Status as an Employee, a Director or Consultant since the date of grant of the Option, the Option may be exercised, subject to
Section 24 hereof, at any time within twelve (12) months following the date of death, by the Optionee’s estate or by a person who
acquired the right to exercise the Option by bequest or inheritance, but only to the extent of the right to exercise that would
have accrued had the Optionee continued living one (1) month after the date of death; or


 


(ii) within
thirty (30) days (or such other period of time not exceeding three (3) months as is determined by the Committee) after the termination
of Continuous Status as an Employee, a Director or Consultant, subject to Section 24 hereof, the Option may be exercised, at any
time within three (3) months following the date of death, by the Optionee’s estate or by a person who acquired the right to exercise
the Option by bequest or inheritance, but only to the extent of the right to exercise that had accrued at the date of termination;
except in the case of a Non-ISO, as otherwise provided in any option agreement between the Company and the Optionee.


 


 10. Transferability of Options. 




 


(a) 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 life time of the Optionee only by the Optionee.


 


(b) Non-ISOs 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 Optionee, only by the Optionee; provided that the Board, in its
sole discretion, may permit limited transferability, from time to time, on a general or specific basis, and may impose conditions
and limitations on any permitted transferability. Following transfer, any such Options shall continue to be subject to the same
terms and conditions as were applicable immediately prior to transfer, provided that for purposes of determining the rights of
exercise under the Option, the term “Optionee” shall be deemed to refer to the transferee. The termination of service
as an employee, non-employee director or consultant shall continue to be applied with respect to the original Optionee, following
which the options shall be exercisable by the transferee only to the extent, and for the periods specified in Section 9 of the
Plan and in the Option agreement.


 


11. Adjustments
upon Changes in Capitalization or Merger. Subject to any required action by the shareholders of the Company, the number of
shares of Common Stock covered by each outstanding Option, and the number of shares of Common Stock 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 upon cancellation
or expiration of an Option, as well as the price per share of Common Stock covered by each such outstanding Option, shall be proportionately
adjusted for any increase or decrease in the number of issued shares of Common Stock resulting from a stock split or the payment
of a stock dividend with respect to the Common Stock or any other increase or decrease in the number of issued shares of Common
Stock effected without receipt of consideration by the Company; provided, however, that conversion of any convertible securities
of the Company shall not be deemed to have been “effected without receipt of consideration.” Such adjustment shall be
made by the Board, whose determination in that respect shall be final, binding and conclusive. Except as expressly provided herein,
no issuance by the Company of shares of stock of any class, or securities convertible into shares of stock of any class, shall
affect, and no adjustment by reason thereof shall be made with respect to, the number or exercise price of shares of Common Stock
subject to an Option.


 






    	 	Page 7 of 11	 



     


    

 


In the event of a Change
of Control, the proposed dissolution or liquidation of the Company, or in the event of a proposed sale of all or substantially
all of the assets of the Company, or the merger of the Company, the Board may, in the exercise of its sole discretion in such instances,
accelerate the vesting of all or any portion of Options then outstanding.


 


In the event of a Change
in Control, the Board may in its discretion and upon at least 10 days’ advance notice to the affected persons, cancel any outstanding
Options and pay to the holders thereof, in cash or stock, or any combination thereof, the value of such Options based upon the
price per share of Common Stock received or to be received by other shareholders of the Company in the Change of Control transaction.
In the case of any Option with an exercise price that equals or exceeds the price paid for a share of Common Stock in connection
with the Change in Control transaction, the Committee may cancel the Option without consideration therefor.


 


12. Time for Granting
Options. The date of grant of an Option shall, for all purposes, be the date on which the Board makes the determination granting
such Option. Notice of the determination shall be given to each Employee, non-employee Director and Consultant to whom an Option
is so granted within a reasonable time after the date of such grant.


 


13. Amendment and
Termination of the Plan. (a) The Board may amend or terminate the Plan from time to time in such respects as the Board may
deem advisable; provided that, the following revisions or amendments shall require approval of the holders of a majority of the
outstanding shares of the Company entitled to vote:


 


(i) any increase
in the number of Shares subject to the Plan, other than in connection with an adjustment under Section 11 of the Plan;


 


(ii) any
change in the class of Employees which are eligible participants for Options under the Plan; or


 


(iii) if
shareholder approval of such amendment is required for continued compliance with Rule 16b-3.


 


(b) Shareholder
Approval. Any amendment requiring shareholder approval under Section 13(a) of the Plan shall be solicited as described in Section
17 of the Plan.


 


(c) Effect of Amendment
or Termination. Any such amendment or termination of the Plan shall not affect Options already granted and such Options shall
remain in full force and effect as if this Plan had not been amended or terminated, unless mutually agreed otherwise between the
Optionee and the Board, which agreement must be in writing and signed by the Optionee and the Company.


 


14. Conditions upon
Issuance of Shares. Shares shall not be issued pursuant to the exercise of an Option unless the exercise of such Option and
the issuance and delivery of such Shares pursuant thereto shall comply with all relevant provisions of law, including, without
limitation, the Securities Act of 1933, as amended, the Exchange Act, the rules and regulations promulgated thereunder, and the
requirements of any stock exchange upon which the Shares may then be listed, and shall be further subject to the approval of counsel
for the Company with respect to such compliance.


 






    	 	Page 8 of 11	 



     


    

 


As a condition to the
exercise of an Option, the Company may require the person exercising such Option to represent and warrant at the time of any such
exercise that the Shares are being purchased only for investment and without any present intention to sell or distribute such Shares
if, in the opinion of counsel for the Company, such a representation is required by any of the aforementioned relevant provisions
of law.


 


15. Reservation
of Shares. The Company, during the term of this Plan, will at all times reserve and keep available such number of Shares as
shall be sufficient to satisfy the requirements of the Plan.


 


16. Option Agreement.
Options shall be evidenced by written Option agreements in such form as the Committee shall approve.


 


17. Shareholder
Approval. This Plan shall not be effective until approved by the affirmative vote of the holders of a majority of the votes
cast at a meeting of shareholders entitled to vote thereon, where a quorum is present. The approval of such shareholders of the
Company shall be (1) solicited substantially in accordance with Section 14(a) of the Exchange Act and the rules and regulations
promulgated thereunder, or (2) solicited after the Company has furnished in writing to the holders entitled to vote substantially
the same information concerning the Plan as that which would be required by the rules and regulations in effect under Section 14(a)
of the Exchange Act at the time such information is furnished.


 


18. Miscellaneous
Provisions. An Optionee shall have no rights as a shareholder with respect to any Shares covered by his Option until the date
of the issuance of a stock certificate to him for such shares.


 


19. Other Provisions.
The stock option agreement authorized under the Plan shall contain such other provisions, including, without limitation, restrictions
upon the exercise of the Option, as the Committee shall deem advisable. Any such stock option agreement shall contain such limitations
and restrictions upon the exercise of the Option as shall be necessary in order that such option will be an Incentive Stock Option
as defined in Section 422 of the Code if an Incentive Stock Option is intended to be granted.


 


20. Indemnification
of Committee. In addition to such other rights of indemnification as they may have as Directors or as members of the Committee,
the members of the Committee shall be indemnified by the Company against the reasonable expenses, including attorneys’ fees actually
and necessarily incurred in connection with the defense of any 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 thereunder, and against all amounts paid by them in settlement thereof (provided such settlement is approved
by independent legal counsel selected by the Company) or paid by them in satisfaction of a judgment in any such action, suit or
proceeding, except in relation to matters as to which it shall be adjudged in such action, suit or proceeding that such Board member
is liable for negligence or misconduct in the performance of his duties; provided that within sixty (60) days after institution
of any such action, suit or proceeding a Board member shall in writing offer the Company the opportunity, at its own expense, to
handle and defend the same.


 


21. Application
of Funds. The proceeds received by the Company from the sale of Common Stock pursuant to Options will be used for general corporate
purposes.


 


22. No Obligation
to Exercise Option. The granting of an Option shall impose no obligation upon the Optionee to exercise such Option.


 


23. Other Compensation
Plans. The adoption of the Plan shall not affect any other stock option or incentive or other compensation plans in effect
for the Company or any Subsidiary, nor shall the Plan preclude the Company from establishing any other forms of incentive or other
compensation for employees and Directors of the Company or any Subsidiary.


 






    	 	Page 9 of 11	 



     


    

 


24. Compliance with Section 409A of
the Code


 


24.1. Options Subject
to Code Section 409A. Notwithstanding anything to the contrary contained in the Plan, any Option that constitutes, or
provides for, a deferral of compensation subject to Section 409A of the Code (a “Section 409A Award”) shall satisfy the
requirements of Section 409A of the Code and this Section 24, to the extent applicable. The Option agreement with respect to a
Section 409A Award (the “409A Award Agreement”) shall incorporate the terms and conditions required by Section 409A of
the Code and this Section 24.


 


24.2. Distributions
under a Section 409A Award.


 


(a) Subject to subsection
(b), any shares of Common Stock, cash or other property or amounts to be paid or distributed upon the grant, issuance, vesting,
exercise or payment of a Section 409A Award shall be distributed in accordance with the requirements of Section 409A(a)(2) of the
Code, and shall not be distributed earlier than:


 


(i) the Optionee’s
separation from service,


 


(ii) the date
the Optionee becomes disabled,


 


(iii) the Optionee’s
death,


 


(iv) a specified
time (or pursuant to a fixed schedule) specified under the 409A Award Agreement at the date of the deferral of such compensation,


 


(v) to the extent
provided by the Secretary of the Treasury, a change in the ownership or effective control of the Company or a Subsidiary, or in
the ownership of a substantial portion of the assets of the Company or a Subsidiary, or


 


(vi) the occurrence
of an unforeseeable emergency with respect to the Optionee.


 


(b) In the case of
an Optionee who is a specified employee, the requirement of paragraph (a)(i) shall be met only if the distributions with respect
to the Section 409A Award may not be made before the expiration of the applicable holding period under Section 409A, if any, after
the Optionee’s separation from service (or, if earlier, the date of the Optionee’s death). For purposes of this subsection (b),
an Optionee shall be a specified employee if such Optionee is a key employee (as defined in Section 416(i) of the Code without
regard to paragraph (5) thereof) of a corporation any stock of which is publicly traded on an established securities market or
otherwise, as determined under Section 409A(a)(2)(B)(i) of the Code and the Treasury Regulations thereunder.


 


(c) The requirement
of paragraph (a)(vi) shall be met only if, as determined under Treasury Regulations under Section 409A(a)(2)(B)(ii) of the Code,
the amounts distributed with respect to the unforeseeable emergency do not exceed the amounts necessary to satisfy such unforeseeable
emergency plus amounts necessary to pay taxes reasonably anticipated as a result of the distribution, after taking into account
the extent to which such unforeseeable emergency is or may be relieved through reimbursement or compensation by insurance or otherwise
or by liquidation of the Optionee’s assets (to the extent the liquidation of such assets would not itself cause severe financial
hardship).


 


(d) For
purposes of this Section 24, the terms specified herein shall have the respective meanings ascribed thereto under Section 409A
of the Code and the Treasury Regulations thereunder.


 


24.3. Prohibition
on Acceleration of Benefits. The time or schedule of any distribution or payment of any shares of Common Stock, cash or other
property or amounts under a Section 409A Award shall not be accelerated, except as otherwise permitted under Section 409A(a)(3)
of the Code and the Treasury Regulations thereunder.


 






    	 	Page 10 of 11	 



     


    

 


24.4. Compliance
in Form and Operation. A Section 409A Award, and any election under or with respect to
such Section 409A Award, shall comply in form and operation with the requirements of Section 409A of the Code and the Treasury
Regulations thereunder.


 


25. Clawback.
Notwithstanding any other provision in this Plan, any Option which is subject to recovery under any law, government regulation
or stock exchange listing requirement, will be subject to such deductions and clawbacks as may be required to be made pursuant
to such law, government regulation or stock exchange listing requirement (or any policy adopted by the Company pursuant to such
law, government regulation or stock exchange listing requirement).


 


26. Singular, Plural;
Gender. Whenever used herein, nouns in the singular shall include the plural, and the masculine pronoun shall include the feminine
gender.


 


27. Headings, Etc.,
No Part of Plan. Headings of Articles and Sections hereof are inserted for convenience and reference; they constitute no part
of the Plan.


 


28. Governing Law.
The Plan shall be governed by and construed in accordance with the laws of the State of New York, except to the extent preempted
by Federal law. The Plan is intended to comply with Rule 16b-3. Any provisions inconsistent with Rule 16b-3 shall be inoperative
and shall not affect the validity of the Plan, unless the Board of Directors shall expressly resolve that the Plan is no longer
intended to comply with Rule 16b-3.


 


Dated: April 28, 2016


 



    	 	Page 11 of 11