Exhibit 10.12


 


Applied
Blockchain, Inc.

2021 Incentive Plan


 






     


     


    







 


TABLE OF CONTENTS


 


	 	 	Page
	Article 1.	Establishment, Purpose, and Duration	1
	Article 2.	Definitions	1
	Article 3.	Administration	7
	Article 4.	Shares Subject to this Plan and Maximum Awards	8
	Article 5.	Eligibility and Participation	9
	Article 6.	Stock Options	9
	Article 7.	Stock Appreciation Rights	11
	Article 8.	Restricted Stock and Restricted Stock Units	12
	Article 9.	Performance Units/Performance Shares	14
	Article 10.	Cash-Based Awards and Other Stock-Based Awards	15
	Article 11.	Transferability of Awards	15
	Article 12.	Performance Measures	16
	Article 13.	Minimum Vesting of Share-Based Awards	18
	Article 14.	Dividend Equivalents	18
	Article 15.	Beneficiary Designation	18
	Article 16.	Rights of Participants	18
	Article 17.	Change of Control	19
	Article 18.	Amendment, Modification, Suspension, and Termination	21
	Article 19.	Withholding	22
	Article 20.	Successors	22
	Article 21.	General Provisions	22




 






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Applied
Blockchain, Inc.

2021 Incentive Plan


 


Article
1.                 Establishment,
Purpose, and Duration


 


1.1             
Establishment. Applied Blockchain, Inc. (the “Company”)
establishes an incentive compensation plan to be known as the Applied Blockchain, Inc. 2021 Incentive Plan (this “Plan”),
as set forth in this document.


 


This Plan permits
the grant of Nonqualified Stock Options, Incentive Stock Options, Stock Appreciation Rights, Restricted Stock, Restricted Stock Units,
Performance Shares, Performance Units, Cash-Based Awards, and Other Stock-Based Awards.


 


This Plan’s
effective date is the date this Plan is approved by the Company’s shareholders (the “Effective Date”), and this
Plan shall remain in effect as provided in Section 1.3 hereof.


 


1.2             
Purpose of this Plan. The purpose of this Plan is
to provide a means whereby Employees and certain Third Party Service Providers develop a sense of proprietorship and personal involvement
in the development and financial success of the Company, and to encourage them to devote their best efforts to the business of the Company,
thereby advancing the interests of the Company and its shareholders. A further purpose of this Plan is to provide a means through which
the Company may attract able individuals to become Employees and Third Party Service Providers and to provide a means whereby those individuals
upon whom the responsibilities of the successful administration and management of the Company are of importance, can acquire and maintain
stock ownership, thereby strengthening their concern for the welfare of the Company.


 


1.3             
Duration of this Plan. Unless sooner terminated
as provided herein, this Plan shall terminate ten (10) years from the Effective Date. After this Plan is terminated, no Awards may be
granted but Awards previously granted shall remain outstanding in accordance with their applicable terms and conditions and this Plan’s
terms and conditions. Notwithstanding the foregoing, no Incentive Stock Options may be granted more than ten (10) years after the earlier
of (a) adoption of this Plan by the Board, or (b) the Effective Date.


 


Article
2.                 Definitions


 


Whenever used in
this Plan, the following terms shall have the meanings set forth below, and when the meaning is intended, the initial letter of the word
shall be capitalized.


 


		2.1	“Affiliate”
                                            shall mean any corporation or other entity (including, but not limited to, a partnership
                                            or a limited liability company), that is affiliated with the Company through stock or equity
                                            ownership or otherwise, and is designated as an Affiliate for purposes of this Plan by the
                                            Committee.



 


		2.2	“Award”
                                            means, individually or collectively, a grant under this Plan of Nonqualified Stock
                                            Options, Incentive Stock Options, SARs, Restricted Stock, Restricted Stock Units, Performance
                                            Shares, Performance Units, Cash-Based Awards, or Other Stock-Based
Awards, in each case subject to the terms of this Plan.



 






     


     


    







 


		2.3	“Award
                                            Agreement” means either (i) a written agreement entered into by the Company and
                                            a Participant setting forth the terms and provisions applicable to an Award granted under
                                            this Plan, or (ii) a written or electronic statement issued by the Company to a Participant
                                            describing the terms and provisions of such Award, including any amendment or modification
                                            thereof. The Committee may provide for the use of electronic, internet or other non-paper
                                            Award Agreements, and the use of electronic, internet or other non-paper means for the acceptance
                                            thereof and actions thereunder by a Participant.



 


		2.4	“Beneficial
                                            Owner” shall have the meaning ascribed to such term in Rule 13d-3 of the General
                                            Rules and Regulations under the Exchange Act.



 


		2.5	“Board”
                                            or “Board of Directors” means the Board of Directors of the Company.



 


		2.6	“Cash-Based
                                            Award” means an Award, denominated in cash, granted to a Participant as described
                                            in Article 10.



 


		2.7	“Cause”
                                            means, unless otherwise specified in an Award Agreement or in an applicable employment
                                            agreement or similar agreement between the Company and a Participant, with respect to any
                                            Participant, as determined by the Committee in its sole discretion:



 


		(a)	willful refusal to follow the lawful directions
                                            of the Company or an Employee’s supervisor, which directions are consistent with normal
                                            business practice;



 


		(b)	indictment or conviction of, or plea of
                                            nolo contendere to, (i) any felony, or (ii) another crime involving dishonesty or moral turpitude,
                                            or Participant’s engaging in any embezzlement, financial misappropriation or fraud,
                                            related to their employment with, or provision of services to, the Company or any Subsidiary
                                            or Affiliate;



 


		(c)	engaging in any willful misconduct or
                                            gross negligence or willful act of dishonesty, including any violation of federal securities
                                            laws, or violence or threat of violence, which is materially injurious to the Company or
                                            any Subsidiary or Affiliate;



 


		(d)	repeated abuse of alcohol or drugs (legal
                                            or illegal) that, in the Company’s reasonable judgment, materially impairs Participant’s
                                            ability to perform their duties; or



 


		(e)	willful and knowing breach or violation
                                            of any material provision of their employment or agreement to provide services to the Company,
                                            including, but not limited to, any applicable
confidentiality, non-solicitation and non- competition requirements thereof.



 






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		2.8	“Change
                                            of Control” means the occurrence of any of the following events:



 


		(i)	Any Person, other than (x) a fiduciary
                                            holding securities under an employee benefit plan of the Company or any Subsidiary or Affiliate,
                                            or (y) any corporation owned, directly or indirectly, by shareholders of the Company in substantially
                                            the same proportions as their ownership of the Company’s Shares becomes the Beneficial
                                            Owner, directly or indirectly, of securities of the Company representing 50% or more of the
                                            total voting power represented by the Company's then outstanding voting securities;



 


		(ii)	the sale of disposition by the Company
                                            of all or substantially all of the Company’s assets;



 


		(iii)	the members of the Board of Directors
                                            as of the Effective Date (the “Incumbent Directors”) and any successor
                                            director whose appointment is endorsed by the Incumbent Directors or any such duly-endorsed
                                            successor director cease to constitute a majority of the Board; or



 


		(iv)	a merger or consolidation of the Company
                                            with any other corporation, other than a merger or consolidation which would result in the
                                            voting securities of the Company outstanding immediately prior thereto continuing to represent
                                            (either by remaining outstanding or by being converted into voting securities of the surviving
                                            entity or its parent) at least fifty percent (50%) of the total voting power represented
                                            by the voting securities of the Company or such surviving entity or its parent outstanding
                                            immediately after such merger or consolidation.



 


		2.9	“Code”
                                            means the U.S. Internal Revenue Code of 1986, as amended from time to time. For purposes
                                            of this Plan, references to sections of the Code shall be deemed to include references to
                                            any applicable regulations thereunder and any successor or similar provision.



 


		2.10	“Committee”
                                            means the Compensation Committee of the Board or a subcommittee thereof, or any other
                                            committee designated by the Board to administer this Plan. The members of the Committee shall
                                            (i) be appointed from time to time by and shall serve at the discretion of the Board, and
                                            (ii) shall consist of “non-employee directors” as defined in Section 16 of the
                                            Exchange Act. If the Committee does not exist or cannot function for any reason, the Board
                                            may take any action under this Plan that would otherwise be the responsibility of the Committee.



 


		2.11	“Company”
                                            or “Corporation” means Applied Blockchain, Inc. and any successor thereto
                                            as provided in Article 20 herein.



 






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		2.12	“Effective
                                            Date” has the meaning set forth in Section 1.1.



 


		2.13	“Employee”
                                            means any individual performing services for the Company, an Affiliate, or a Subsidiary
                                            and designated as an employee of the Company, its Affiliates, and/or its Subsidiaries on
                                            the payroll records thereof. An Employee shall not include any individual during any period
                                            they are classified or treated by the Company, Affiliate, and/or Subsidiary as an independent
                                            contractor, a consultant, or any employee of an employment, consulting, or temporary agency
                                            or any other entity other than the Company, Affiliate, and/or Subsidiary, without regard
                                            to whether such individual is subsequently determined to have been, or is subsequently retroactively
                                            reclassified as a common-law employee of the Company, Affiliate, and/or Subsidiary during
                                            such period.



 


		2.14	“Exchange
                                            Act” means the Securities Exchange Act of 1934, as amended from time to time, or
                                            any successor act thereto.



 


		2.15	“Fair
                                            Market Value” means, on any given date, the closing price of a Share as reported
                                            by The Trading Market on such date, or if Shares were not traded on The Trading Market on
                                            such day, then on the next preceding day that Shares were traded on The Trading Market; in
                                            the event Shares are traded only on an exchange other than The Trading Market, references
                                            herein to The Trading Market shall mean such other exchange. The Company may use an alternate
                                            method of determining the value of Shares for accounting or any other purpose.



 


		2.16	“Good
                                            Reason” means, unless otherwise specified in an Award Agreement or in an applicable
                                            severance compensation or other employment-type or service agreement between the Company
                                            and a Participant, with respect to any Participant, as determined by the Committee in its
                                            sole discretion:



 


		(a)	a 10% or more diminution in Participant’s
                                            base salary as in effect on the last day of the immediately preceding calendar year or a
                                            30% or greater reduction in the amount of Participant’s target cash bonus as compared
                                            to the cash conus amount for the preceding year, provided, however, that a Company-wide
                                            compensation program, as determined by the Company, shall not constitute an event under this
                                            subparagraph (a);



 


		(b)	a material diminution in Participant’s
                                            title, or the nature or scope of Participant’s authority, duties, or responsibilities
                                            from those applicable to Participant immediately prior to the Change in Control; or



 


		(c)	the Company’s requiring Participant
                                            to be based at any office or location that is more than 25 miles from Participant’s
                                            principal place of employment prior to such change in location.



 






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In order
for one of the events set forth in (a), (b), or (c) to constitute a Good Reason, (x) Participant must notify the Company in writing
of such fact and the reasons therefor no later than 90 days after Participant knows or should have known that the relevant event has
occurred, (y) such grounds for termination (if susceptible to correction) are not corrected by the Company within thirty (30) days
after Participant’s notice (or, in the event that such grounds cannot be corrected with thirty (30) days, the Company has not
taken all reasonable steps within such thirty-day (30) period to correct such grounds as promptly as practicable thereafter); and
(z) Participant terminates Participant’s employment with the Company within thirty (30) days following expiration of such
thirty-day (30) period. Failure to satisfy the requirements of this paragraph will result in there not being a termination for Good
Reason for purposes of this Plan.


 


		2.17	“Grant
                                            Date” means the date an Award is granted to a Participant pursuant to this Plan.



 


		2.18	“Grant
                                            Price” means the price established at the time of grant of an SAR pursuant to Article
                                            7, used to determine whether there is any payment due upon exercise of the SAR.



 


		2.19	“Incentive
                                            Stock Option” or “ISO” means an Option to purchase Shares granted
                                            under Article 6 to an Employee and that is designated as an Incentive Stock Option and
                                            that is intended to meet the requirements of Code Section 422, or any successor provision.



 


		2.20	“Insider”
                                            shall mean an individual who is, on the relevant date, an officer, or director of the
                                            Company, or a more than ten percent (10%) Beneficial Owner of any class of the Company’s
                                            equity securities that is registered pursuant to Section 12 of the Exchange Act, as
                                            determined by the Board in accordance with Section 16 of the Exchange Act.



 


		2.21	“Nonqualified
                                            Stock Option” or “NQSO” means an Option that is not intended
                                            to meet the requirements of Code Section 422, or that otherwise does not meet such requirements.



 


		2.22	“Option”
                                            means an Incentive Stock Option or a Nonqualified Stock Option, as described in
                                            Article 6.



 


		2.23	“Option
                                            Price” means the price at which a Share may be purchased by a Participant pursuant
                                            to an Option.



 


		2.24	“Other
                                            Stock-Based Award” means an equity-based or equity-related Award not otherwise
                                            described by the terms of this Plan, granted pursuant to Article 10.



 


		2.25	“Participant”
                                            means any eligible individual as set forth in Article 5 to whom an Award is granted.



 


		2.26	“Performance-Based
                                            Compensation” means compensation under an Award that is subject to performance-based
                                            vesting, earning or payment conditions.



 






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		2.27	“Performance
                                            Measures” means measures as described in Article 12 on which the performance goals
                                            are based.



 


		2.28	“Performance
                                            Period” means the period of time during which the performance goals must be met
                                            in order to determine the amount and/or vesting, earning or payment of an Award.



 


		2.29	“Performance
                                            Share” means an Award under Article 9 herein and subject to the terms of this
                                            Plan, denominated in Shares, the value of which at the time it is payable is determined by
                                            the extent to which the applicable Performance Measures have been achieved.



 


		2.30	“Performance
                                            Unit” means an Award under Article 9 herein and subject to the terms of this Plan,
                                            denominated in units, the value of which at the time it is payable is determined by the extent
                                            to which the applicable Performance Measures have been achieved.



 


		2.31	“Period
                                            of Restriction” means the period when Restricted Stock or Restricted Stock Units
                                            are subject to a substantial risk of forfeiture (based on the passage of time, the achievement
                                            of performance goals, or upon the occurrence of other events as determined by the Committee,
                                            in its discretion), as provided in Article 8.



 


		2.32	“Person”
                                            shall have the meaning ascribed to such term in Section 3(a)(9) of the Exchange Act and
                                            used in Sections 13(d) and 14(d) thereof, including a “group” as defined in Section
                                            13(d) thereof.



 


		2.33	“Plan”
                                            means this Applied Blockchain, Inc. 2021 Incentive Plan.



 


		2.34	“Restricted
                                            Stock” means an Award granted to a Participant pursuant to Article 8.



 


		2.35	“Restricted
                                            Stock Unit” means an Award granted to a Participant pursuant to Article 8, except
                                            no Shares are actually awarded to the Participant on the Grant Date.



 


		2.36	“Share”
                                            means a share of common stock of the Company.



 


		2.37	“Stock
                                            Appreciation Right” or “SAR” means an Award, designated as an
                                            SAR, pursuant to the terms of Article 7 herein.



 


		2.38	“Subsidiary”
                                            means any corporation or other entity, whether domestic or foreign, in which the Company
                                            has or obtains, directly or indirectly, a proprietary interest of more than fifty percent
                                            (50%) by reason of stock ownership or otherwise.



 






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		2.39	“Third
                                            Party Service Provider” means any consultant, agent, advisor, or independent contractor
                                            who renders services to the Company, a Subsidiary, or an Affiliate that (a) are not in connection
                                            with the offer and sale of Company’s securities in a capital raising
transaction, and (b) do not directly or indirectly promote or maintain a market for the Company’s securities. Individuals who otherwise
meet the definition of a Third Party Service Provider under this Section 2.39, and who also serve as a non-employee director of the Company,
Subsidiary, or an Affiliate, shall be eligible for participation under this Plan, but only with respect to the services they provide
to the Company as a Third Party Service Provider.



 


		2.40	“The
                                            Trading Market” means, initially, OTC Markets (including OTCQX, OTCQB and Pink
                                            Markets), or any of the following other markets that becomes the primary trading market for
                                            the Shares: The Nasdaq Capital Market, The Nasdaq Global Market, The Nasdaq Global Select
                                            Market, the New York Stock Exchange or the NYSE American (or any nationally recognized successor
                                            to any of the foregoing).



 


Article
3.                 Administration


 


3.1             
General. The Committee shall be responsible for
administering this Plan, subject to this Article 3 and the other provisions of this Plan. The Committee may employ attorneys, consultants,
accountants, agents, and other individuals, any of whom may be an Employee, and the Committee, the Company, and its officers and directors
shall be entitled to rely upon the advice, opinions, or valuations of any such individuals. All actions taken and all interpretations
and determinations made by the Committee shall be final and binding upon the Participants, the Company, and all other interested individuals.


 


3.2             
Authority of the Committee. The Committee shall
have full and exclusive discretionary power to interpret the terms and the intent of this Plan and any Award Agreement or other agreement
or document ancillary to or in connection with this Plan, to determine eligibility for Awards and to adopt such rules, regulations, forms,
instruments, and guidelines for administering this Plan as the Committee may deem necessary or proper. Such authority shall include,
but not be limited to, selecting Award recipients, establishing all Award terms and conditions, including the terms and conditions set
forth in Award Agreements, granting Awards as an alternative to or as the form of payment for grants or rights earned or due under compensation
plans or arrangements of the Company, construing any ambiguous provision of this Plan or any Award Agreement, and, subject to Article
18, adopting modifications and amendments to this Plan or any Award Agreement, including without limitation, any that are necessary to
comply with the laws of the countries and other jurisdictions in which the Company, its Affiliates, and/or its Subsidiaries operate.


 


3.3             
Delegation. The Committee may delegate to one or
more of its members or to one or more officers of the Company, and/or its Subsidiaries and Affiliates or to one or more agents or advisors
such administrative duties or powers as it may deem advisable, and the Committee or any individuals to whom it has delegated duties or
powers as aforesaid may employ one or more individuals to render advice with respect to any responsibility the Committee or such individuals
may have under this Plan. The Committee may, by resolution, authorize one or more officers of the Company to do one or both of the following
on the same basis as can the Committee: (a) designate Employees to be recipients of Awards and (b) determine the size of any such Awards;
provided, however, (i) the Committee shall not delegate such responsibilities to any such officer for Awards granted to an Employee who
is considered an Insider; (ii) the resolution providing such authorization sets forth the total number of Awards such officer(s) may
grant; and (iii) the officer(s) shall report periodically to the Committee regarding the nature and scope of the Awards granted pursuant
to the authority delegated.


 






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Article
4.                 Shares
Subject to this Plan and Maximum Awards


 


4.1              Number
of Shares Available for Awards and Maximum Amount of Non-Share Awards.


 


Subject
to adjustment as provided in Section 4.3:


 


		(a)	The maximum number of Shares available
                                            for issuance to Participants under this Plan is 80,000,000 Shares.



 


		(b)	The maximum aggregate number of Shares
                                            that may be issued in the aggregate pursuant to the exercise of Incentive Stock Options (“ISOs”)
                                            is 80,000,000 Shares.



 


		(c)	The aggregate number of Shares reserved
                                            for Awards under Section 4.1(a) and permitted to be granted as ISOs under Section 4.1(b)
                                            will automatically increase on January 1 of each year beginning with January 1, 2023, for
                                            a period of not more than nine (9) years, ending on (and including) January 1, 2031, by an
                                            amount equal to three percent (3%) of the total number of shares of Common Stock outstanding
                                            on December 31 of the preceding calendar year. Notwithstanding the foregoing, the Board may
                                            act prior to January 1 of a given year to provide that there will be no January 1 increase
                                            for such year or that the increase for such year will be a lesser number of Shares than provided
                                            herein.



 


4.2             
Share Usage. Shares covered by an Award shall only
be counted as used to the extent they are actually issued. The number of Shares available for Awards under this Plan shall be reduced
by one Share for each Share covered by such Award or to which such Award relates. Awards that do not entitle the holder thereof to receive
or purchase Shares shall not be counted against the aggregate number of Shares available for Awards under this Plan. In addition, any
Shares related to Awards which terminate by expiration, forfeiture, cancellation, or otherwise without the issuance of such Shares shall
be available again for grant under this Plan. In no event, however, will the following Shares again become available for Awards or increase
the number of Shares available for grant under this Plan: (i) Shares tendered by the Participant in payment of the exercise price of
an Option; (ii) Shares withheld from exercised Awards for tax withholding purposes; (iii) Shares subject to a SAR that are not issued
in connection with the settlement of that SAR; and (iv) Shares repurchased by the Company with proceeds received from the exercise of
an Option. The Shares available for issuance under this Plan may consist, in whole or in part, of authorized and unissued Shares, treasury
Shares, or Shares reacquired by the Company in any manner.


 






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4.3             
 Adjustments in Authorized Shares. In the event of
any corporate event or transaction (including, but not limited to, a change in the Shares of the Company or the capitalization of the
Company) such as a merger, consolidation, reorganization, recapitalization, separation, partial or complete liquidation, stock dividend,
stock split, reverse stock split, split up, spin-off, or other distribution of stock or property of the Company, combination of Shares,
exchange of Shares, dividend in kind, or other like change in capital structure, number of outstanding Shares or distribution (other
than normal cash dividends) to shareholders of the Company, or any similar corporate event or transaction, the Committee, in its sole
discretion, in order to prevent dilution or enlargement of Participants’ rights under this Plan, shall substitute or adjust, as
applicable, the number and kind of Shares that may be issued under this Plan or under particular forms of Awards, the number and kind
of Shares subject to outstanding Awards, the Option Price or Grant Price applicable to outstanding Awards, and other value determinations
applicable to outstanding Awards.


 


The Committee, in
its sole discretion, may also make appropriate adjustments in the terms of any Awards under this Plan to reflect or relate to such changes
or distributions and to modify any other terms of outstanding Awards, including modifications of performance goals and changes in the
length of Performance Periods. The determination of the Committee as to the foregoing adjustments, if any, shall be conclusive and binding
on Participants under this Plan.


 


Subject to the provisions
of Article 18 and notwithstanding anything else herein to the contrary, without affecting the number of Shares reserved or available
hereunder, the Committee may authorize the issuance or assumption of benefits under this Plan in connection with any merger, consolidation,
acquisition of property or stock, or reorganization upon such terms and conditions as it may deem appropriate (including, but not limited
to, a conversion of equity awards into Awards under this Plan in a manner consistent with paragraph 53 of FASB Interpretation No. 44),
subject to compliance with the rules under Code Sections 422 and 424, as and where applicable.


 


Article
5.                 Eligibility
and Participation


 


5.1             
Eligibility. Individuals eligible to participate
in this Plan include all Employees and Third Party Service Providers.


 


5.2             
Actual Participation. Subject to the provisions
of this Plan, the Committee may, from time to time, select from all eligible individuals, those individuals to whom Awards shall be granted
and shall determine, in its sole discretion, the nature of any and all terms permissible by law, and the amount of each Award.


 


Article
6.                 Stock
Options


 


6.1             
Grant of Options. Subject to the terms and provisions
of this Plan, Options may be granted to Participants in such number, and upon such terms, and at any time and from time to time
as shall be determined by the Committee, in its sole discretion; provided that ISOs may be granted only to Employees of the Company,
a parent, or Subsidiary (as permitted under Code Sections 422 and 424).


 






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6.2             
 Award Agreement. Each Option grant shall be evidenced
by an Award Agreement that shall specify the Option Price, the maximum duration of the Option, the number of Shares to which the Option
pertains, the conditions upon which an Option shall become vested and exercisable, and such other provisions as the Committee shall determine
which are not inconsistent with the terms of this Plan. The Award Agreement also shall specify whether the Option is intended to be an
ISO or a NQSO.


 


6.3             
Option Price. The Option Price for each grant of
an Option under this Plan shall be determined by the Committee in its sole discretion and shall be specified in the Award Agreement;
provided, however, the Option Price must be at least equal to one hundred percent (100%) of the Fair Market Value of the Shares as determined
on the Grant Date.


 


6.4             
Term of Options. Each Option granted to a Participant
shall expire at such time as the Committee shall determine at the time of grant; provided, however, no Option shall be exercisable later
than the day before the tenth (10th) anniversary date of its grant. Notwithstanding the foregoing, for Nonqualified Stock
Options granted to Participants outside the United States, the Committee has the authority to grant Nonqualified Stock Options that have
a term greater than ten (10) years.


 


6.5             
Exercise of Options. Subject to Article 13, Options
granted under this Article 6 shall be exercisable at such times and be subject to such restrictions and conditions as the Committee
shall in each instance approve, which terms and restrictions need not be the same for each grant or for each Participant.


 


6.6             
Payment. Options granted under this Article 6 shall
be exercised by the delivery of a notice of exercise to the Company or an agent designated by the Company in a form specified or accepted
by the Committee, or by complying with any alternative procedures which may be authorized by the Committee, setting forth the number
of Shares with respect to which the Option is to be exercised, accompanied by full payment for the Shares.


 


A condition of the
issuance of the Shares as to which an Option shall be exercised shall be the payment of the Option Price. The Option Price of any Option
shall be payable to the Company in full either: (a) in cash or its equivalent; (b) by tendering (either by actual delivery or attestation)
previously acquired Shares having an aggregate Fair Market Value at the time of exercise equal to the Option Price; (c) by a cashless
(broker-assisted) exercise; (d) by a combination of (a), (b) and/or (c); or (e) any other method approved or accepted by the Committee
in its sole discretion.


 


Subject to any governing
rules or regulations, as soon as practicable after receipt of written notification of exercise and full payment (including satisfaction
of any applicable tax withholding), the Company shall deliver to the Participant evidence of book entry Shares, or upon the Participant’s
request, Share certificates in an appropriate amount based upon the number of Shares purchased under the Option(s).


 


Unless otherwise
determined by the Committee, all payments under all of the methods indicated above shall be paid in United States dollars.


 






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6.7             
 Restrictions on Share Transferability. The Committee
may impose such restrictions on any Shares acquired pursuant to the exercise of an Option granted under this Article 6 as it may deem
advisable, including, without limitation, minimum holding period requirements, restrictions under applicable federal securities laws,
under the requirements of any stock exchange or market upon which such Shares are then listed and/or traded, or under any blue sky
or state securities laws applicable to such Shares.


 


6.8             
Termination of Employment. Each Participant’s
Award Agreement shall set forth the extent to which the Participant shall have the right to exercise the Option following termination
of the Participant’s employment or provision of services to the Company, its Affiliates, and/or its Subsidiaries, as the case may
be. Such provisions shall be determined in the sole discretion of the Committee, shall be included in the Award Agreement entered into
with each Participant, need not be uniform among all Options issued pursuant to this Article 6, and may reflect distinctions based on
the reasons for termination.


 


6.9             
Notification of Disqualifying Disposition. If any
Participant shall make any disposition of Shares issued pursuant to the exercise of an ISO under the circumstances described in Code
Section 421(b) (relating to certain disqualifying dispositions), such Participant shall notify the Company of such disposition within
ten (10) days thereof.


 


Article
7.                 Stock
Appreciation Rights


 


7.1             
Grant of SARs. Subject to the terms and conditions
of this Plan, SARs may be granted to Participants at any time and from time to time as shall be determined by the Committee


 


Subject to the terms
and conditions of this Plan, the Committee shall have complete discretion in determining the number of SARs granted to each Participant
and, consistent with the provisions of this Plan, in determining the terms and conditions pertaining to such SARs.


 


The Grant Price
for each grant of an SAR shall be determined by the Committee and shall be specified in the Award Agreement; provided, however, the Grant
Price on the Grant Date must be at least equal to one hundred percent (100%) of the Fair Market Value of the Shares as determined on
the Grant Date.


 


7.2             
SAR Agreement. Each SAR Award shall be evidenced
by an Award Agreement that shall specify the Grant Price, the term of the SAR, and such other provisions as the Committee shall determine.


 


7.3             
Term of SAR. The term of an SAR granted under this
Plan shall be determined by the Committee, in its sole discretion, and except as determined otherwise by the Committee and specified
in the SAR Award Agreement, no SAR shall be exercisable later than the tenth (10th) anniversary date of its grant. Notwithstanding
the foregoing, for SARs granted to Participants outside the United States, the Committee has the authority to grant SARs that have a
term greater than ten (10) years.


 






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7.4             
 Exercise of SARs. SARs may be exercised upon whatever
terms and conditions the Committee, in its sole discretion, imposes.


 


7.5             
Settlement of SARs. Upon the exercise of an SAR,
a Participant shall be entitled to receive payment from the Company in an amount determined by multiplying:


 


		(a)	The excess of the Fair Market Value of
                                            a Share on the date of exercise over the Grant Price; by



 


		(b)	The number of Shares with respect to which
                                            the SAR is exercised.



 


At the discretion
of the Committee, the payment upon SAR exercise may be in cash, Shares, or any combination thereof, or in any other manner approved by
the Committee in its sole discretion. The Committee’s determination regarding the form of SAR payout shall be set forth in the
Award Agreement pertaining to the grant of the SAR.


 


7.6             
Termination of Employment. Each Award Agreement
shall set forth the extent to which the Participant shall have the right to exercise the SAR following termination of the Participant’s
employment with or provision of services to the Company, its Affiliates, and/or its Subsidiaries, as the case may be. Such provisions
shall be determined in the sole discretion of the Committee, shall be included in the Award Agreement entered into with Participants,
need not be uniform among all SARs issued pursuant to this Plan, and may reflect distinctions based on the reasons for termination.


 


7.7             
Other Restrictions. The Committee shall impose such
other conditions and/or restrictions on any Shares received upon exercise of an SAR granted pursuant to this Plan as it may deem advisable
or desirable. These restrictions may include, but shall not be limited to, a requirement that the Participant hold the Shares received
upon exercise of an SAR for a specified period of time.


 


Article
8.                 Restricted
Stock and Restricted Stock Units


 


8.1             
Grant of Restricted Stock or Restricted Stock Units. Subject
to the terms and provisions of this Plan, the Committee, at any time and from time to time, may grant Shares of Restricted Stock and/or
Restricted Stock Units to Participants in such amounts as the Committee shall determine. Restricted Stock Units shall be similar to Restricted
Stock except that no Shares are actually awarded to the Participant on the Grant Date.


 


8.2             
Restricted Stock or Restricted Stock Unit Agreement.
Each Restricted Stock and/or Restricted Stock Unit grant shall be evidenced by an Award Agreement that shall specify the Period(s) of
Restriction, the number of Shares of Restricted Stock or the number of Restricted Stock Units granted, and such other provisions as the
Committee shall determine.


 


8.3             
Other Restrictions. The Committee shall impose such
other conditions and/or restrictions on any Shares of Restricted Stock or Restricted Stock Units granted pursuant to this Plan as it
may deem advisable including, without limitation, restrictions based upon the achievement of specific performance goals, time-based restrictions
on vesting following the attainment of the performance goals, time-based restrictions, and/or restrictions under applicable laws or under
the requirements of any stock exchange or market upon which such Shares are listed or traded, or holding requirements or sale restrictions
placed on the Shares by the Company upon vesting of such Restricted Stock or Restricted Stock Units.


 






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To the extent deemed
appropriate by the Committee, the Company may retain the certificates representing Shares of Restricted Stock in the Company’s
possession until such time as all conditions and/or restrictions applicable to such Shares have been satisfied or lapse.


 


Except as otherwise
provided in this Article 8, Shares of Restricted Stock covered by each Restricted Stock Award shall become freely transferable by the
Participant after all conditions and restrictions applicable to such Shares have been satisfied or lapse (including satisfaction of any
applicable tax withholding obligations), and Restricted Stock Units shall be paid in cash, Shares, or a combination of cash and Shares
as the Committee, in its sole discretion shall determine.


 


8.4             
Certificate Legend. In addition to any legends placed
on certificates pursuant to Section 8.3, each certificate representing Shares of Restricted Stock granted pursuant to this Plan
may bear a legend such as the following or as otherwise determined by the Committee in its sole discretion:


 


The
sale or transfer of Shares of stock represented by this certificate, whether voluntary, involuntary, or by operation of law, is subject
to certain restrictions on transfer as set forth in the Applied Blockchain, Inc. 2021 Incentive Plan, and in the associated Award Agreement.
A copy of this Plan and such Award Agreement may be obtained from Applied Blockchain, Inc..


 


8.5             
Voting Rights. Unless otherwise determined by the
Committee and set forth in a Participant’s Award Agreement, to the extent permitted or required by law, as determined by the Committee,
Participants holding Shares of Restricted Stock granted hereunder may be granted the right to exercise full voting rights with respect
to those Shares during the Period of Restriction. A Participant shall have no voting rights with respect to any Restricted Stock Units
granted hereunder.


 


8.6             
Termination of Employment. Each Award Agreement
shall set forth the extent to which the Participant shall have the right to retain Restricted Stock and/or Restricted Stock Units following
termination of the Participant’s employment with or provision of services to the Company, its Affiliates, and/or its Subsidiaries,
as the case may be. Such provisions shall be determined in the sole discretion of the Committee, shall be included in the Award Agreement
entered into with each Participant, need not be uniform among all Shares of Restricted Stock or Restricted Stock Units issued pursuant
to this Plan, and may reflect distinctions based on the reasons for termination.


 


8.7              Section
83(b) Election. The Committee may provide in an Award Agreement that the Award of
Restricted Stock is conditioned upon the Participant making or refraining from making an election with respect to the Award under
Code Section 83(b). If a Participant makes an election pursuant to Code Section 83(b) concerning a Restricted Stock Award, the
Participant shall be required to file promptly a copy of such election with the Company.


 






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Article
9.                 Performance
Units/Performance Shares


 


9.1             
Grant of Performance Units/Performance Shares. Subject
to the terms and provisions of this Plan, the Committee, at any time and from time to time, may grant Performance Units and/or Performance
Shares to Participants in such amounts and upon such terms as the Committee shall determine. Performance Units and Performance Shares
that are earned (as described in Section 9.3) may be subject to vesting requirements as set forth in the applicable Award Agreement.


 


9.2             
Value of Performance Units/Performance Shares. Each
Performance Unit shall have an initial value that is established by the Committee at the time of grant. Each Performance Share shall
have an initial value equal to the Fair Market Value of a Share on the Grant Date. The Committee shall set performance goals in its discretion
which, depending on the extent to which they are met, will determine the value and/or number of Performance Units/Performance Shares
that may be earned by the Participant.


 


9.3             
Earning of Performance Units/Performance Shares.
Subject to the terms of this Plan, after the applicable Performance Period and vesting period, if any, have ended, the holder of
Performance Units/Performance Shares shall be entitled to receive payout on the value and number of Performance Units/Performance Shares
earned by the Participant over the Performance Period, to be determined as a function of the extent to which the corresponding performance
goals have been achieved.


 


9.4             
Form and Timing of Payment of Performance Units/Performance Shares.
Payment of earned and vested Performance Units/Performance Shares shall be as determined by the Committee and as evidenced in the Award
Agreement. Subject to the terms of this Plan, the Committee, in its sole discretion, may pay earned and vested Performance
Units/Performance Shares in the form of cash or in Shares (or in a combination thereof). Any Shares may be granted subject to any restrictions
deemed appropriate by the Committee. The determination of the Committee with respect to the form of payout of such Awards shall be set
forth in the Award Agreement pertaining to the grant of the Award.


 


9.5             
Termination of Employment. Each Award Agreement
shall set forth the extent to which the Participant shall have the right to retain Performance Units and/or Performance Shares following
termination of the Participant’s employment with, or performance of services to, the Company, its Affiliates, and/or its Subsidiaries,
as the case may be. Such provisions shall be determined in the sole discretion of the Committee, shall be included in the Award Agreement
entered into with each Participant, need not be uniform among all Awards of Performance Units or Performance Shares issued pursuant to
this Plan, and may reflect distinctions based on the reasons for termination.


 






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Article 10.            
Cash-Based Awards and Other Stock-Based Awards


 


10.1         
Grant of Cash-Based Awards. Subject to the terms
and provisions of this Plan, the Committee, at any time and from time to time, may grant Cash-Based Awards to Participants in such
amounts and upon such terms as the Committee may determine.


 


10.2         
Other Stock-Based Awards. The Committee may grant
other types of equity-based or equity-related Awards not otherwise described by the terms of this Plan (including the grant or offer
for sale of unrestricted Shares) in such amounts and subject to such terms and conditions, as the Committee shall determine. Such Awards
may involve the transfer of actual Shares to Participants, or payment in cash or otherwise of amounts based on the value of Shares and
may include, without limitation, Awards designed to comply with or take advantage of the applicable local laws of jurisdictions other
than the United States.


 


10.3         
Value of Cash-Based and Other Stock-Based Awards.
Each Cash-Based Award shall specify a payment amount or payment range as determined by the Committee. Each Other Stock-Based Award shall
be expressed in terms of Shares or units based on Shares, as determined by the Committee. The Committee may establish performance goals
in its discretion. If the Committee exercises its discretion to establish performance goals, the number and/or value of Cash-Based Awards
or Other Stock-Based Awards that will be paid out to the Participant will depend on the extent to which the performance goals are met.


 


10.4         
Payment of Cash-Based Awards and Other Stock-Based Awards.
Payment, if any, with respect to a Cash-Based Award or an Other Stock-Based Award shall be made in accordance with the terms of the Award,
in cash or Shares as the Committee determines.


 


10.5         
Termination of Employment. The Committee shall determine
the extent to which the Participant shall have the right to receive Cash-Based Awards or Other Stock-Based Awards following termination
of the Participant’s employment with, or provision of services to, the Company, its Affiliates, and/or its Subsidiaries, as the
case may be. Such provisions shall be determined in the sole discretion of the Committee, such provisions may be included in an agreement
entered into with each Participant, but need not be uniform among all Awards of Cash-Based Awards or Other Stock-Based Awards issued
pursuant to this Plan, and may reflect distinctions based on the reasons for termination.


 


Article
11.             Transferability
of Awards


 


11.1         
Transferability. Except as provided in Section 11.2
below, during a Participant’s lifetime, their Awards shall be exercisable only by the Participant. Awards shall not be transferable
other than by will or the laws of descent and distribution; no Awards shall be subject, in whole or in part, to attachment, execution,
or levy of any kind; and any purported transfer in violation hereof shall be null and void. The Committee may establish such procedures
as it deems appropriate for a Participant to designate a beneficiary to whom any amounts payable or Shares deliverable in the event of,
or following, the Participant’s death, may be provided.


 


11.2          Committee
Action. The Committee may, in its discretion, determine that notwithstanding Section 11.1,
any or all Awards (other than ISOs) shall be transferable to and exercisable by such transferees, and subject to such terms and
conditions, as the Committee may deem appropriate; provided, however, no Award may be transferred for value (as defined in the
General Instructions to Form S-8).


 






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Article
12.             Performance Measures


 


12.1         
Performance Measures. The performance goals upon
which the payment or vesting of an Award depends may include, without limitation, the following Performance Measures:


 


		(a)	Net earnings or Net Income (before or
                                            after taxes);



 


		(b)	Earnings per share (basic or diluted);



 


		(c)	Net sales or revenue growth;



 


		(d)	Net operating profit;



 


		(e)	Return measures (including, but not limited
                                            to, return on assets, capital, invested capital, equity, sales, or revenue);



 


		(f)	Cash flow (including, but not limited
                                            to, throughput, operating cash flow, free cash flow, cash flow return on equity, and cash
                                            flow return on investment);



 


		(g)	Earnings before or after taxes, interest,
                                            depreciation, and/or amortization;



 


		(h)	Earnings before taxes;



 


		(i)	Gross or operating margins;



 


		(j)	Corporate value measures;



 


		(k)	Capital expenditures;



 


		(l)	Unit volumes;



 


		(m)	Productivity ratios;



 


		(n)	Share price (including, but
not limited to, growth measures and total shareholder return);



 


		(o)	Cost or expense;



 


		(p)	Margins (including, but not
limited to, debt or profit);



 


		(q)	Operating efficiency;



 






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		(r)	Market share;



 


		(s)	Customer satisfaction;



 


		(t)	Working capital targets or any element
                                            thereof;



 


		(u)	Economic value added or EVA® (net
                                            operating profit after tax minus the sum of capital multiplied by the cost of capital);



 


		(v)	Health, safety and environmental performance;



 


		(w)	Corporate advocacy metrics;



 


		(x)	Strategic milestones (including, but
                                            not limited to, debt reduction, improvement of cost of debt, equity or capital, completion
                                            of projects, achievement of synergies or integration objectives, or improvements to credit
                                            rating, inventory turnover, weighted average cost of capital, implementation of significant
                                            new processes, productivity or production, product quality, and any combination of the foregoing);



 


		(y)	Strategic sustainability metrics (including,
                                            but not limited to, corporate governance, enterprise risk management, employee development,
                                            and portfolio restructuring); and



 


		(z)	Stockholder equity or net worth.



 


Any one or more Performance
Measure(s) may be used to measure the performance of any Participant, the Company, Subsidiary, and/or Affiliate as a whole or any business
unit or line of business of the Company, Subsidiary, and/or Affiliate or any combination thereof, as the Committee may deem appropriate,
or any of the above Performance Measures on an absolute, gross, total, net per share, average, adjusted or relative basis (or measure
based on changes therein), including, as compared to the performance of a group of comparator companies, or published or special index
that the Committee, in its sole discretion, deems appropriate, or the Company may select Performance Measure (n) above as compared to
various stock market indices. The Committee also has the authority to provide for accelerated vesting of any Award based on the achievement
of performance goals pursuant to the Performance Measures specified in this Article 12.


 


12.2         
Evaluation of Performance. The Committee may provide
in any such Award that any evaluation of performance may include or exclude any of the following events that occurs during a Performance
Period: (a) asset write-downs, (b) litigation or claim judgments or settlements, (c) the effect of changes in tax laws, accounting principles,
or other laws or provisions affecting reported results, (d) any reorganization and restructuring programs, (e) extraordinary nonrecurring
items as described in management’s discussion and analysis of financial condition and results of operations appearing in the Company’s
annual report to shareholders for the applicable year, (f) acquisitions or divestitures, and (g) foreign exchange gains and losses.


 






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12.3         
 Adjustment of Performance-Based Compensation. The
Committee shall retain the discretion to adjust such Awards upward or downward, either on a formula or discretionary basis or any combination,
as the Committee determines.


 


Article
13.             Minimum Vesting
of Share-Based Awards


 


Notwithstanding any
other provision of this Plan to the contrary, Awards granted pursuant to Article 6, 7, 8, 9 or 10 of this Plan shall be subject to a
minimum vesting period of at least one (1) year, provided, however, (a) such vesting may be cliff or graded (starting no earlier
than one (1) year after grant), (b) the Committee may provide for earlier vesting as specified in an Award Agreement, and (c) no more
than five percent (5%) of the maximum number of Shares authorized for issuance under this Plan pursuant to Section 4.1(a) may be granted
with a minimum vesting period of less than one (1) year.


 


Article
14.             Dividend Equivalents


 


Any Participant
selected by the Committee may be granted dividend equivalents based on the dividends declared on Shares that are subject to any Award,
to be credited as of dividend payment dates, during the period between the date the Award is granted and the date the Award is exercised,
vests or expires, as determined by the Committee. Such dividend equivalents shall be converted to cash or additional Shares by such formula
and at such time and subject to such limitations as may be determined by the Committee. Notwithstanding the foregoing, for all Awards,
the payment of dividends and dividend equivalents prior to an Award becoming vested shall be prohibited, and the Committee shall determine
the extent to which dividends and dividend equivalents may accrue during the vesting period and become payable upon vesting.


 


Article
15.             Beneficiary Designation


 


Each Participant
under this Plan may, from time to time, name any beneficiary or beneficiaries (who may be named contingently or successively) to whom
any benefit under this Plan is to be paid in case of their death before they receive any or all of such benefit. Each such designation
shall revoke all prior designations by the same Participant, shall be in a form prescribed by the Committee, and will be effective
only when filed by the Participant in writing with the Company, or the Company’s designated agent, during the Participant’s
lifetime. In the absence of any such beneficiary designation, benefits remaining unpaid or rights remaining unexercised at the Participant’s
death shall be paid to or exercised by the Participant’s executor, administrator, or legal representative on behalf of the Participant’s
estate.


 


Article
16.             Rights of Participants


 


16.1         
Employment. Nothing in this Plan or an Award Agreement
shall interfere with or limit in any way the right of the Company, its Affiliates, and/or its Subsidiaries, to terminate any Participant’s
employment or service to the Company at any time or for any reason not prohibited by law, nor confer upon any Participant any right to
continue their employment, or service as a Third Party Service Provider, for any specified period of time.


 






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Neither an Award
nor any benefits arising under this Plan shall constitute an employment contract with the Company, its Affiliates, and/or its Subsidiaries
and, accordingly, subject to Articles 3 and 18, this Plan and the benefits hereunder may be terminated at any time in the sole and
exclusive discretion of the Committee without giving rise to any liability on the part of the Company, its Affiliates or Subsidiaries,
or the Committee.


 


16.2         
Participation. No individual shall have the right
to be selected to receive an Award under this Plan, or, having been so selected, to be selected to receive a future Award.


 


16.3         
Rights as a Shareholder. Except as otherwise provided
herein, a Participant shall have none of the rights of a shareholder with respect to Shares covered by any Award until the Participant
becomes the record holder of such Shares.


 


Article
17.             Change of Control


 


17.1         
Change of Control of the Company. Notwithstanding
any other provision of this Plan to the contrary, the provisions of this Article 17 shall apply in the event of a Change of Control,
unless otherwise determined by the Committee in connection with the grant of an Award as reflected in the applicable Award Agreement
or other agreement between the Participant and the Company or a subsidiary or Affiliate.


 


(a)                 
If, upon a Change of Control, a Participant receives a new Award which qualifies as a “Replacement Award” (as defined
below), the Award shall continue subject to the terms of the Replacement Award.


 


(b)                 
If, upon a Change of Control that results in the Company’s Shares no longer being traded on The Trading Market or another
established securities market and no Replacement Award is granted to a Participant, the unvested portion of an Award whose vesting is
based only on a service requirement shall become immediately vested and exercisable, as applicable, upon the Change of Control.


 


(c)                 
Notwithstanding subparagraph (a) and except as may be otherwise provided in an Award Agreement, upon a Change of Control, with
respect to Awards that are Performance Shares or Performance Units issued pursuant to Article 9 of this Plan, a pro-rata portion of the
Award shall be immediately earned, vested and payable; such portion shall be determined based on the portion of the Performance Period
that has elapsed as of (i) the date of the Change of Control, if the Performance Measure is based on stock price, or (ii) the end of
the last full calendar quarter preceding or commensurate with the date of the Change of Control if the Performance Measure is not based
on stock price (in each case, the “Adjusted Measurement Date”). The Award amount that will be considered earned and
payable will be calculated based on the higher of target or actual performance measured as of the Adjusted Measurement Date. To the extent
any earned Awards that are Performance Shares or Performance Units have not been paid prior to the Change of Control because they are
subject to vesting, such earned but unvested Awards shall become immediately vested, and payable upon the Change of Control.


 


(d)                  Except
as provided in subparagraph (c) or as otherwise provided in an Award Agreement, if, following a Change of Control, the
Company’s Shares continue to be traded on The Trading Market or another established securities market, outstanding Awards
shall continue in effect and be treated as Replacement Awards as described in subparagraph (a).


 






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(e)                 
Notwithstanding any of subparagraphs (a), (b) or (d) of this Section 17.1, the Committee may, in its sole discretion, determine
that any or all outstanding Awards granted under this Plan, whether or not exercisable, will be canceled and terminated, and that in
connection with such cancellation and termination, the holder of such Award may receive for each Share of Common Stock subject to such
Awards a cash payment (or the delivery of shares of stock, other securities or a combination of cash, stock and securities equivalent
to such cash payment) equal to the difference, if any, between the consideration received by shareholders of the Company in respect of
a Share of Common Stock in connection with such transaction and the purchase price per share, if any, under the Award multiplied by the
number of Shares of Common Stock subject to such Award; provided that if such product is zero or less or to the extent that the Award
is not then exercisable, the Awards will be canceled and terminated without payment therefor.


 


17.2         
Replacement Awards. An Award shall be considered
a Replacement Award if: (i) it has a value at least equal to the value of the Award it is replacing as determined by the Committee in
its sole discretion; (ii) it relates to publicly traded equity securities of the Company or its successor in the Change of Control or
another entity that is affiliated with the Company or its successor following the Change of Control; and (iii) its other terms and conditions
are not less favorable to the Participant than the terms and conditions of the Award it is replacing (including the provisions that would
apply in the event of a subsequent Change of Control). Without limiting the generality of the foregoing, the Replacement Award may take
the form of a continuation of the Award it is replacing if the requirements of the preceding sentence are satisfied. The determination
of whether the conditions of this Section 17.2 are satisfied shall be made by the Committee, as constituted immediately before the Change
of Control, in its sole discretion.


 


17.3         
Reduction of Excess Parachute Payments. Except as
may be provided in an employment or severance compensation or other service agreement between the Company and the Participant, if, in
connection with a Change of Control, a Participant’s payment of any Awards will cause the Participant to be liable for federal
excise tax under Code Section 4999 levied on certain “excess parachute payments” as defined in Code Section 280G (“Excise
Tax”), then the payments made pursuant to the Awards shall be reduced (or repaid to the Company, if previously paid or provided)
as provided below:


 


(a)       If
the payments due upon of Change of Control under this Plan and any other agreement between a Participant and the Company, exceed 2.99
times the Participant’s “base amount,” as defined in Code Section 280G, a reduced payment amount shall be calculated
by reducing the payments to the minimum extent necessary so that no portion of any payment, as so reduced or repaid, constitutes an excess
parachute payment. If it is determined that any Excise Tax is payable by a Participant, the Participant shall receive either (i) all
payments otherwise due; or (ii) the reduced payment amount described in the preceding sentence, whichever will provide the Participant
with the greater after-tax economic benefit taking into account for these purposes any applicable Excise Tax.


 






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(b)       Whether
payments are to be reduced pursuant to this Section 17.3, and the extent to which they are to be so reduced, will be determined solely
by the Company in good faith and the Company will notify the Participant in writing of its determination.


 


(c)       In
no event shall a Participant be entitled to receive any kind of gross-up payment or Excise Tax reimbursement from the Company.


 


Article
18.             Amendment, Modification,
Suspension, and Termination


 


18.1         
Amendment, Modification, Suspension, and Termination. Subject
to Section 18.3, the Committee may, at any time and from time to time, alter, amend, modify, suspend, or terminate this Plan and
any Award Agreement in whole or in part; provided, however, that, (i) without the prior approval of the Company’s shareholders
and except as provided in Section 4.3, Options or SARs issued under this Plan will not be repriced, repurchased (including a cash buyout),
replaced, or regranted through cancellation, or by lowering the Option Price of a previously granted Option or the Grant Price of a previously
granted SAR, (ii) any amendment of this Plan must comply with the rules of The Trading Market, and (iii) no material amendment of this
Plan shall be made without shareholder approval if shareholder approval is required by law, regulation, or stock exchange rule.


 


18.2         
Adjustment of Awards Upon the Occurrence of Certain Unusual or Nonrecurring Events.
The Committee may make adjustments in the terms and conditions of, and the criteria included in, Awards in recognition of unusual or
nonrecurring events (including, without limitation, the events described in Section 4.3 hereof) affecting the Company or the financial
statements of the Company or of changes in applicable laws, regulations, or accounting principles, whenever the Committee determines
that such adjustments are appropriate in order to prevent unintended dilution or enlargement of the benefits or potential benefits intended
to be made available under this Plan. The determination of the Committee as to the foregoing adjustments, if any, shall be conclusive
and binding on Participants under this Plan.


 


18.3         
Awards Previously Granted. Notwithstanding any other
provision of this Plan to the contrary (other than Section 18.4), no termination, amendment, suspension, or modification of this Plan
or an Award Agreement shall adversely affect in any material way any Award previously granted under this Plan, without the written
consent of the Participant holding such Award.


 


18.4         
Amendment to Conform to Law. Notwithstanding any
other provision of this Plan to the contrary, the Committee may amend this Plan or an Award Agreement, to take effect retroactively or
otherwise, as deemed necessary or advisable for the purpose of conforming this Plan or an Award Agreement to any present or future law
relating to plans of this or similar nature (including, but not limited to, Code Section 409A), and to the administrative regulations
and rulings promulgated thereunder. By accepting an Award under this Plan, a Participant agrees to any amendment made pursuant to this
Section 18.4 to any Award granted under this Plan without further consideration or action.


 






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Article 19.            
Withholding


 


19.1         
Tax Withholding. The Company shall have the power
and the right to deduct or withhold from any amounts due and owing to the Participant, or require a Participant to remit to the Company,
up to the maximum statutory amount to satisfy federal, state, and local taxes, domestic or foreign, required by law or regulation to
be withheld with respect to any taxable event arising as a result of this Plan.


 


19.2         
Share Withholding. With respect to withholding required
upon the lapse of restrictions on Restricted Stock and Restricted Stock Units, or upon the achievement of performance goals related to
Performance Shares, or any other taxable event arising as a result of an Award granted hereunder, the Committee may establish provisions
in the applicable Award Agreements to satisfy the withholding requirement, in whole or in part, by having the Company withhold whole
Shares having a Fair Market Value on the date the tax is to be determined up to the maximum statutory total tax withholding that could
be imposed on the transaction.


 


Article
20.             Successors


 


All obligations
of the Company under this Plan with respect to Awards granted hereunder shall be binding on any successor to the Company, regardless
of whether the existence of such successor is the result of a direct or indirect purchase, merger, consolidation, or otherwise, of all
or substantially all of the business and/or assets of the Company.


 


Article
21.             General Provisions


 


21.1         
Forfeiture Events. Any
Awards granted under this Plan will be subject to recoupment in accordance with any clawback policy that the Company currently has in
effect, or is required to adopt or modify, pursuant to the listing standards of any national securities exchange or association on which
the Company’s securities are listed or as is otherwise required by the Dodd-Frank Wall Street Reform and Consumer Protection Act
or the Sarbanes-Oxley Act of 2002, or other applicable law (“Clawback Policy”). In addition, the Committee or the
Board may impose such clawback, recovery or recoupment provisions in an Award Agreement as the Committee or the Board determines necessary
or appropriate, including but not limited to a reacquisition right in respect of previously acquired Shares or other cash or property
as set forth in the Award Agreement. No recovery of compensation under this Section will be an event giving rise to a right to resign
for “good reason” or “constructive termination” (or similar term) under any agreement or otherwise with the Company.


 


21.2         
Legend. The certificates for Shares may include
any legend which the Committee deems appropriate to reflect any restrictions on transfer of such Shares.


 


21.3         
Gender and Number. Except where otherwise indicated
by the context, any masculine term used herein also shall include the feminine, the plural shall include the singular, and the singular
shall include the plural.


 






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21.4         
 Severability. In the event any provision of this
Plan shall be held illegal or invalid for any reason, the illegality or invalidity shall not affect the remaining parts of this Plan,
and this Plan shall be construed and enforced as if the illegal or invalid provision had not been included.


 


21.5         
Requirements of Law. The granting of Awards and
the issuance of Shares under this Plan shall be subject to all applicable laws, rules, and regulations, and to such approvals by any
governmental agencies or national securities exchanges as may be required.


 


21.6         
Delivery of Title. The Company shall have no obligation
to issue or deliver evidence of title for Shares issued under this Plan prior to:


 


		(a)	Obtaining any approvals from governmental
                                            agencies that the Company determines are necessary or advisable; and



 


		(b)	Completion of any registration or other
                                            qualification of the Shares under any applicable national or foreign law or ruling of any
                                            governmental body that the Company determines to be necessary or advisable.



 


21.7         
Inability to Obtain Authority. 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.


 


21.8         
Investment Representations. The Committee may require
any individual receiving Shares pursuant to an Award under this Plan to represent and warrant in writing that the individual is acquiring
the Shares for investment and without any present intention to sell or distribute such Shares.


 


21.9         
Employees Based Outside the United States. Notwithstanding
any provision of this Plan to the contrary, in order to comply with the laws in other countries in which the Company, its Affiliates,
and/or its Subsidiaries operate or have Employees or Third Party Service Providers, the Committee, in its sole discretion, shall have
the power and authority to:


 


		(a)	Determine which Affiliates and Subsidiaries
                                            shall be covered by this Plan;



 


		(b)	Determine which Employees and/or Third
                                            Party Service Providers outside the United States are eligible to participate in this Plan;



 


		(c)	Modify the terms and conditions of any
                                            Award granted to Employees or Third Party Service Providers outside the United States to
                                            comply with applicable foreign laws;



 


		(d)	Establish subplans and modify exercise
                                            procedures and other terms and procedures, to the extent such actions may be necessary or
                                            advisable. Any subplans and modifications to Plan terms and procedures established under this Section 21.9 by
the Committee shall be attached to this Plan document as appendices; and



 






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		(e)	Take any action, before or after an Award
                                            is made, that it deems advisable to obtain approval or comply with any necessary local government
                                            regulatory exemptions or approvals.



 


Notwithstanding
the above, the Committee may not take any actions hereunder, and no Awards shall be granted, that would violate applicable law.


 


21.10     
Uncertificated Shares. To the extent that this Plan
provides for issuance of certificates to reflect the transfer of Shares, the transfer of such Shares may be effected on a noncertificated
basis, to the extent not prohibited by applicable law or the rules of any stock exchange.


 


21.11     
Unfunded Plan. Participants shall have no right,
title, or interest whatsoever in or to any investments that the Company, and/or its Subsidiaries, and/or its Affiliates may make to aid
it in meeting its obligations under this Plan. Nothing contained in this Plan, and no action taken pursuant to its provisions, shall
create or be construed to create a trust of any kind, or a fiduciary relationship between the Company and any Participant, beneficiary,
legal representative, or any other individual. To the extent that any individual acquires a right to receive payments from the Company,
its Subsidiaries, and/or its Affiliates under this Plan, such right shall be no greater than the right of an unsecured general creditor
of the Company, a Subsidiary, or an Affiliate, as the case may be. All payments to be made hereunder shall be paid from the general funds
of the Company, a Subsidiary, or an Affiliate, as the case may be and no special or separate fund shall be established and no segregation
of assets shall be made to assure payment of such amounts except as expressly set forth in this Plan.


 


21.12     
No Fractional Shares. No fractional Shares shall
be issued or delivered pursuant to this Plan or any Award. The Committee shall determine whether cash, Awards, or other property shall
be issued or paid in lieu of fractional Shares or whether such fractional Shares or any rights thereto shall be forfeited or otherwise
eliminated.


 


21.13     
Retirement and Welfare Plans. Neither Awards made
under this Plan nor Shares or cash paid pursuant to such Awards may be included as “compensation” for purposes of computing
the benefits payable to any Participant under the Company’s or any Subsidiary’s or Affiliate’s retirement plans (both
qualified and non-qualified) or welfare benefit plans unless such other plan expressly provides that such compensation shall be taken
into account in computing a Participant’s benefit.


 


21.14      Deferred
Compensation. If any Award would be considered deferred compensation as defined under Code
Section 409A and if this Plan fails to meet the requirements of Code Section 409A with respect to such Award, then such Award shall
be null and void. However, the Committee may permit deferrals of compensation pursuant to the terms of a Participant’s Award
Agreement, a separate plan or a subplan which meets the requirements of Code Section 409A and any related guidance. Additionally, to
the extent any Award is subject to Code Section 409A, notwithstanding any provision herein to the contrary, this Plan does not
permit the acceleration or delay of the time or schedule of any distribution related to such Award, except as permitted by Code
Section 409A, the regulations thereunder, and/or the Secretary of the United States Treasury.


 






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21.15     
Nonexclusivity of this Plan. The adoption of this
Plan shall not be construed as creating any limitations on the power of the Board or Committee to adopt such other compensation arrangements
as it may deem desirable for any Participant.


 


21.16     
No Constraint on Corporate Action. Nothing in this
Plan shall be construed to: (i) limit, impair, or otherwise affect the Company’s or a Subsidiary’s or an Affiliate’s
right or power to make adjustments, reclassifications, reorganizations, or changes of its capital or business structure, or to merge
or consolidate, or dissolve, liquidate, sell, or transfer all or any part of its business or assets; or (ii) limit the right or power
of the Company or a Subsidiary or an Affiliate to take any action which such entity deems to be necessary or appropriate.


 


21.17     
Governing Law. This Plan shall be governed by the
laws of the State of Texas, without regard to choice-of-law principles. The Participants consent to personal and exclusive jurisdiction
and venue Dallas County in the State of Texas. Any controversy or claim arising out of or relating to (i) a Participant’s employment
with the Company or a Subsidiary or Affiliate and/or (ii) the Plan, or the breach thereof, shall be settled by arbitration administered
by the American Arbitration Association in accordance with its Employment Arbitration Rules before a single arbitrator in Dallas, Texas,
and judgment on the award rendered by the arbitrator may be entered in any court having jurisdiction thereof. The Company and the Participant
will each be responsible for their own attorneys’ fees and expenses incurred in connection with any such arbitration. The decision
arrived at by the arbitrator shall be binding upon all parties to the arbitration and no appeal shall lie therefrom, except as provided
by the Federal Arbitration Act. These arbitration procedures are intended to be the exclusive method of resolving any claim or dispute
arising out of or related to this Plan, including the applicability of this Section; provided, however, that any party seeking injunctive
relief in connection with a breach or anticipated breach of the Plan will do so in a state or federal court of competent jurisdiction
within Dallas County in the State of Texas.


 


As evidence of its
adoption of this Plan, the Company has caused this document to be executed by its duly authorized officer the ____ day of ______________,
2021.


 


	 	APPLIED BLOCKCHAIN, INC.
	 	 
	 	By:	            
	 	Name:
	 	Title:




 






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