Exhibit 4.1


 





STRATA OIL & GAS INC.



2016 Stock Option Plan


 


 


1.          PURPOSE.


 


The purpose
of the STRATA OIL & GAS INC. 2016 Stock Option Plan (the "2016 Plan") is to provide to officers, directors,
consultants and advisors of Strata Oil & Gas Inc., a Canadian corporation (the "Corporation"), or any of its
subsidiaries, added incentives to attract, retain and motivate eligible persons whose present and potential contributions are important
to the success of the Corporation and any future subsidiaries, for high levels of performance and to reward unusual efforts which
increase the earnings and long-term growth of the Corporation. It is intended to accomplish the foregoing by providing for the
grant of "Incentive Stock Options" and "Nonqualified Stock Options" to qualified eligible individuals (hereinafter
referred to as “Optionee” or collectively as “Optionees”). Except where the context otherwise requires,
the term "Corporation" shall include Strata Oil & Gas Inc., a Canadian corporation, and all present and future subsidiaries
of the Corporation as defined in Section 424(e) and 424(f) of the Internal Revenue Code of 1986, as amended (the "Code").
Capitalized terms not defined in the text are defined in Section 2 hereof. The 2016 Plan is intended to be a written compensatory
plan within the meaning of Rule 701 promulgated under the Securities Act.


 


2.          CERTAIN DEFINITIONS.


 


As used in
this Plan, the following words and phrases shall have the respective meanings set forth below, unless the context clearly indicates
a contrary meaning.


 


(a)          "Board
of Directors" or "Board" shall mean the Board of Directors of the Corporation


 


(b)          "Officers" shall mean officers of the
Corporation


 


(c)          "Cause" shall mean any one or more of
the following


 


(i)          a material breach
of any term of employment, consultation or engagement with the Corporation by the Optionee


 


(ii)         the continuing,
repeated willful failure or refusal by the Optionee to substantially perform his responsibilities on behalf of the Corporation


 


(iii)        an
act or omission of the Optionee that is materially adverse to the business, goodwill or reputation of the Corporation


 


(iv)        an act of dishonesty


 


(v)          the commission of a felony


 


(vi)         the breach of a fiduciary duty or fraud


 


(vii)         an act of moral turpitude


 






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(viii)       subject to the provisions of
42 U.S.C. Sections 12111-12117 known as the "Americans with Disabilities Act," a determination by a physician licensed
in the jurisdiction the Optionee is employed that the Optionee is a chronic alcoholic or a narcotics addict; or


 


(ix) any "cause"
for termination or discharge as defined herein. The determination of the Option Committee with respect to whether a termination
for Cause has occurred shall be submitted to the Board of Directors, whose decision shall be final and conclusive.


 


(d)          "Change
of Control" shall mean (i) an acquisition of any voting securities of the Corporation (the "Voting Securities")
by any "Person" (as the term person is used for purposes of Section 13(d) or 14(d) of the Exchange Act), immediately
after which such Person has "Beneficial Ownership"(within the meaning of Rule 13d-3 promulgated under the Exchange Act)
of forty percent (40%) or more of the then outstanding shares or the combined voting power of the Corporation's then outstanding
"Voting Securities"; (ii) the individuals who, as of the Effective Date are members of the Board (the "Incumbent
Board"), cease for any reason to constitute at least two-thirds of the members of the Board; provided, however, that if the
election, or nomination of the members of the Corporation's common stockholders, of any new director was approved by a vote of
at least two-thirds of the Incumbent Board, such new director shall, for purposes of this Plan, be considered as a member of the
Incumbent Board; (iii) the consummation of (x) a merger, consolidation or reorganization with or into the Corporation or in which
securities of the Corporation are issued unless such merger, consolidation or reorganization is a "Non-Control Transaction";
(iv) a complete liquidation or dissolution of the Corporation; or (v) the sale or other disposition of all or substantially all
of the assets of the Corporation to any Person (other than a transfer to a Subsidiary or the distribution to the Corporation's
stockholders of the stock of a Subsidiary or any other assets).


 


Notwithstanding the foregoing, a Change
in Control shall not be deemed to occur solely because any Person (the "Subject Person") acquired Beneficial Ownership
of more than the permitted amount of the then outstanding Shares or Voting Securities as a result of the acquisition of Shares
or Voting Securities by the Corporation which, by reducing the number of Shares or Voting Securities then outstanding, increases
the proportional number of shares Beneficially Owned by the Subject Persons, provided that if a Change in Control would occur (but
for the operation of this sentence) as a result of the acquisition of Shares or Voting Securities by the Corporation, and after
such share acquisition by the Corporation, the Subject Person becomes the Beneficial Owner of any additional Shares or Voting Securities
which increases the percentage of the then outstanding Shares or Voting Securities Beneficially Owned by the Subject Person, then
a Change in Control shall occur.


 


(e)          "Disability"
shall mean the inability to engage in any substantial gainful activity by reason of any medically determined physical or mental
impairment which can be expected to result in death or which has lasted or can be expected to last for a continuous period of not
less than twelve (12) months as determined by the Option Committee in their sole discretion.


 


(f)          "Effective
Date" shall mean the earlier date on which the 2016 Plan is approved by either the Board or a majority of the outstanding
shares of capital stock of the Corporation entitled to vote thereon.


 


(g)          "Exchange
Act" shall mean the Securities and Exchange Act of 1934, as amended.


 






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(h)          "Fair Market
Value per Share" shall mean as of any date the fair market value of each of the Shares on such date (the "applicable
date") as determined by the Option Committee in good faith. The Option Committee is authorized to make its determination as
to the fair market value on the following basis: (i) if the Shares are not traded on a securities exchange and are not quoted on
the National Association of Securities Dealers, Inc.'s Automated Quotation System ("NASDAQ"), but are quoted on the Over
The Counter Electronic Bulletin Board operated by NASDAQ, "Fair Market Value per Share" shall be the mean between the
average daily bid and average daily asked prices of the Shares on the applicable date, as published on such bulletin board; (ii)
if the Shares are not traded on a securities exchange and are quoted on NASDAQ, "Fair Market Value per Share" shall be
the closing transaction price of the Shares on the applicable date, as reported on NASDAQ; (iii) if the Shares are traded on a
securities exchange, "Fair Market Value per Share" shall be the daily closing price of the Shares, on such securities
exchange as of the applicable date; or (iv) if the Shares are traded other than as described in (i), (ii) or (iii) above, or if
the Shares are not publicly traded, "Fair Market Value per Share" shall be the value determined by the Option Committee
in good faith based upon the fair market value as determined by completely independent and well qualified experts. In the case
of Shares described in (i), (ii) or (iii) above, if no prices are reported for the Shares on the applicable date, the "Fair
Market Value per Share" shall be the price reported for such Shares on the next preceding date on which there were reported
prices.


 


(i)          "Granting
Date" shall mean the date on which the grant of an Option is made effective by the Option Committee.


 


(j)          "Incentive
Stock Option" shall mean an Option intended to qualify for treatment as an incentive stock option under Section 422 of the
Code, and designated as an Incentive Stock Option.


 


(k)          "Non-Control
Transaction" shall mean a merger, consolidation or reorganization with or into the Corporation or in which securities of the
Corporation are issued where:


 


(a)          the stockholders of the Corporation,
immediately before such merger, consolidation or reorganization, own directly or indirectly immediately following such merger,
consolidation or reorganization, at least fifty percent (50%) of the combined voting power of the outstanding voting securities
of the corporation resulting from such merger or consolidation or reorganization (the "Surviving Corporation") in substantially
the same proportion as their ownership of the Voting Securities immediately before such merger, consolidation or reorganization,


 


(b)          the individuals who were
members of the Incumbent Board immediately prior to the execution of the agreement providing for such merger, consolidation or
reorganization constitute at least two-thirds of the members of the board of directors of the Surviving Corporation, or a corporation
beneficially directly or indirectly owning a majority of the Voting Securities of the Surviving Corporation, and


 


(c)          no Person other than (1)
the Corporation, (2) any Subsidiary, (3) any employee benefit plan (or any trust forming a part thereof) that, immediately prior
to such merger, consolidation or reorganization, was maintained by the Corporation or any Subsidiary, or (4) any Person who, immediately
prior to such merger, consolidation or reorganization had Beneficial Ownership of thirty percent (30%) or more of the then outstanding
Voting Securities or Shares, has Beneficial Ownership of thirty percent (30%) or more of the combined voting power of the Surviving
Corporation's then outstanding voting securities or its common stock.


 






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(l)          "Nonqualified Stock
Option" shall mean an Option issued under this Plan that does not constitute an Incentive Stock Option.


 


(m)          "Option" shall
mean any option to purchase Shares of the Corporation granted under the 2016 Plan, which may be either an Incentive Stock Option
or a Nonqualified Stock Option.


 


(n)          "Option Agreement"
shall mean the document setting forth the terms and conditions of each Option.


 


(o)          "Option Committee"
shall mean the Committee selected and designated by the Board of Directors to administer the 2016 Plan, consisting of not less
than one (1) member of the Board of Directors. In the event the Board has not established an Option Committee, the functions will
be performed by the Board.


 


(p)          "Optionee" shall
mean the holder of an Option.


 


(q)          "Retirement" shall have
the meaning ascribed by the Option Committee.


 


(r)          "Securities Act" shall
mean the Securities Act of 1933, as amended.


 


(s)          "Shares" shall mean
the shares of common stock, $0.001 par value per share of the Corporation.


 


(t)          "Subsidiary" shall
mean any company (other than the Corporation) in an unbroken chain of companies beginning with the Corporation, if each of the
companies other than the last company in the unbroken chain owns stock possessing 50% or more of the total combined voting power
of all classes of stock in one of the other companies in such chain.


 


(u)          "Ten Percent Shareholder"
shall mean an individual who, at the time an Option is granted, owns stock possessing more than 10% of the total combined voting
power of all classes of stock of the Corporation or its parent, if any.


 


3.          SHARES
SUBJECT TO THE 2016 PLAN.


 


Subject to Section 8(b) hereof, the
total number of Shares reserved and available for grant and issuance pursuant to this Plan will be 12,000,000 Shares. Shares subject
to awards that are cancelled, forfeited, settled in cash or that expire by their terms will again be available for grant and issuance
in connection with other awards. At all times the Company will reserve and keep available a sufficient number of Shares as will
be required to satisfy the requirements of all awards granted and outstanding under this Plan.


 


4.          STOCK OPTIONS.


 


(a)          In General.
Awards under the 2016 Plan shall be granted in the form of Common Stock Options which may either qualify for treatment as Incentive
Stock Options or as Nonqualified Stock Options.


 






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(b)          Limitation
on Number of Shares. The aggregate number of Shares which may be issued and purchased under the 2016 Plan shall not exceed 12,000,000
Shares, subject to any Share adjustments as outlined herein. Shares may be either authorized and unissued Shares or issued Shares
reacquired by the Corporation. The total number of Shares subject to Options authorized under the 2016 Plan shall be subject to
increase or decrease, as necessary, in order to give effect to the adjustment provisions outlined herein and to give effect to
any amendment adopted as provided herein. Notwithstanding the above limitation, any Shares subject to an Option which terminates,
is cancelled or expires for any reason without being exercised in full, may again be subject to an Option under the 2016 Plan,
unless the 2016 Plan shall have been terminated. At the discretion of the Option Committee, existing Options may be cancelled and
new options granted at a lower price in the event of a decline in the market value of the Shares. If Shares issued upon exercise
of an Option under the 2016 Plan are tendered to the Corporation in partial or full payment of the exercise price of an Option
granted under the 2016 Plan, such tendered Shares shall not be available for subsequent Option grants under the 2016 Plan.


 


5.          ELIGIBILITY.


 


(a)          In General.
Only officers shall be eligible to receive grants of Incentive Stock Options. Directors, consultants and advisors of the Corporation
(whether or not employees of the Corporation) shall be eligible to receive grants of Nonqualified Stock Options. Within the foregoing
limits, the Option Committee, in its sole and absolute discretion, shall, from time to time, determine (i) the individuals or the
class of individuals to whom Options may be granted hereunder, (ii) the number of Shares to be covered by each of the Options granted
hereunder, (iii) the purchase price of the Shares and the method of payment for such Shares, (iv) the terms and provisions of the
respective Option Agreement and (v) the times at which such Options shall be granted. The Option Committee shall take into account
such factors as it shall deem relevant in connection with accomplishing the purpose of the 2016 Plan as set forth herein. All such
determinations and designations of individuals eligible to receive Options under the 2016 Plan shall be made in the absolute discretion
of the Option Committee and shall not require the approval of the stockholders, except as expressly set forth herein.


 


(b)          Additional Options.
An individual who has been granted an Option may be granted additional Options if the Option Committee or Board of Directors shall
so determine. In addition, Options may be granted to purchase shares of common stock remaining available for issuance under any
remaining plan of the Corporation or under the plan of another corporation assumed by the Corporation and any outstanding option
grants that expire or terminate, other than through exercise or share settlement, under this Plan or another plan of the Corporation,
or under the plan of another corporation assumed by the Corporation, will also become eligible for grant under the 2016 Plan. No
Options shall be granted under this Plan after the expiration of the tenth (10th) anniversary of the adoption of the 2016 Plan
by the Board of Directors.


 


(c)          Certain Limitations.
Incentive Stock Options may not be granted to an Optionee to the extent that the aggregate Fair Market Value per Share (determined
as of the Granting Date) of all Shares subject to the Incentive Stock Options granted under the 2016 Plan (or granted under any
other incentive stock option plan of the Corporation) which are exercisable for the first time by such Optionee during the same
calendar year exceeds One Hundred Thousand Dollars ($100,000).


 


(d)          Option Agreement.
Each Option granted pursuant to the 2016 Plan shall be evidenced by a written Option Agreement entered into between the Corporation
and the Optionee which shall contain such terms and provisions, including, but not limited to, the period of exercise, whether
in installments or otherwise, the exercise price and such other terms and conditions as the Option Committee shall, in its sole
discretion, determine to be appropriate and within the contemplation of the 2016 Plan. The terms and conditions of such written
Option Agreement need not be the same for all Options granted under the 2016 Plan.


 






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6.          ADMINISTRATION OF PLAN.


 


(a)          Option Committee.
This Plan shall be administered by the Option Committee, subject to the approval and ratification by the Board of Directors. Any
action of the Option Committee with respect to administration of the Plan shall be taken pursuant to (i) a majority vote at a meeting
of the Option Committee (to be documented by minutes), or (ii) the unanimous written consent of its members. The Option Committee
may meet in person, by telephone, or by any other means which it deems to be advisable and convenient. All actions taken by the
Option Committee shall be submitted to the Board of Directors for ratification and approval. If there is no Option Committee, the
Board of Directors shall act in lieu thereof.


 


(b)          Vacancies.
Vacancies in the Option Committee shall be filled by the Board of Directors. In addition, the Board of Directors may at any time
remove one or more members of the Option Committee and substitute others, and a majority of disinterested members of the Board
of Directors shall at all times have the right to exercise any and all rights and powers of the Option Committee.


 


(c)          Authority.
The Option Committee shall have the authority, exercisable in its discretion, subject to express provisions of this Plan and subject
to the approval and ratification by the Board of Directors, to: (i) construe and interpret the provisions of the Plan, decide all
questions and settle all controversies and disputes which may arise in connection with the Plan; (ii) prescribe, amend and rescind
rules and regulations relating to the administration of the Plan; (iii) determine the exercise price of the Shares covered by each
Option granted hereunder and the method of payment for such Shares, the individuals to whom, and the time or times at which, any
Option granted hereunder shall be granted and exercisable, the number of Shares covered by each Option granted hereunder, (iv)
determine the terms and provisions of the respective Option Agreements (which need not be identical); (v) determine, in the case
of employees, whether Options shall be Incentive Stock Options or Nonqualified Stock Options; (vi) determine the duration and purposes
of leaves of absence which may be granted to eligible individuals without constituting a termination of their employment for purposes
of the Plan; and (vii) make all other determinations necessary or advisable for the administration of the Plan. Determinations
of the Option Committee on matters referred to in this Section shall be conclusive and binding on all parties howsoever concerned.
With respect to Incentive Stock Options, the Option Committee shall administer the Plan in compliance with the provisions of Code
Section 422 as the same may hereafter be amended from time to time. No member of the Option Committee shall be liable for any action,
omission or determination made in good faith in connection with the Plan.


 


7.          EXERCISE PRICE.


 


(a)          Nonqualified
Stock Options. The exercise price of each Option intended to qualify as a Nonqualified Stock Option shall be determined by the
Option Committee, and in default of any specific determination shall be equal to One Hundred Percent (100%) of the Fair Market
Value per Share on the Granting Date of the Nonqualified Stock Option.


 


(b)          Incentive
Stock Option. The exercise price of each Option intended to qualify as an Incentive Stock Option shall be determined by the Option
Committee, and in default of any specific determination shall be equal to One Hundred Percent (100%) of the Fair Market Value per
Share on the Granting Date of the Incentive Stock Option. In the case of an Option intended to qualify as an Incentive Stock Option,
which is granted to a Ten Percent Shareholder, the exercise price per share shall in no event be less than 110% of the Fair Market
Value per Share determined as of the Granting Date.


 


8.          PERIOD OF EXERCISE AND CERTAIN
LIMITATIONS ON RIGHT TO EXERCISE.


 


(a)          Period of
Exercise. Each Option granted under the Plan shall be exercisable at such times and under such conditions as may be determined
by the Option Committee at the Granting Date and as shall be set forth in the Option Agreement; provided, however, in no event
shall an Option be exercisable after the expiration of ten (10) years from its Granting Date. In no event may an Optionee defer
the date on which the Optionee has the right to exercise the Option under the terms of its original grant.


 






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(b)          Change of
Control. Unless otherwise provided in any Option Agreement, all Options granted pursuant to the Plan shall become fully and immediately
exercisable with respect to all Shares subject thereto, upon a Change of Control.


 


(c)          Effect
of Termination of Employment or Other Relationship. The effect of the termination of an Optionee's employment or other
relationship with the Corporation on such Optionee's eligibility to exercise any Options awarded pursuant to the Plan shall
be as follows:


 


		(i)	Disability or Death. If an Optionee ceases to be employed by, or ceases to have a relationship
with, the Corporation by reason of Disability or death, any Option heretofore granted which remains unexercised at the time of
termination shall become fully vested and exercisable and shall expire not later than one (1) year thereafter. During such one
(1) year period and prior to the expiration of the Option by its terms, the Optionee, or his or her executor or administrator or
the person or persons to whom the Option is transferred by will or the applicable laws of descent and distribution, may exercise
such Option, and except as so exercised, such Option shall expire at the end of one (1) year period unless such Option by its terms
expires before such date. The decision as to whether a termination by reason of Disability has occurred shall be made by the Option
Committee, whose decision shall be final and conclusive.



 


		(ii)	Retirement. If the Optionee ceases to be employed by, or ceases to have a relationship with the
Corporation by reason of Retirement, any Option heretofore granted which remains unexercised at the time of such Retirement shall
become fully vested and exercisable and shall expire, in the case of an Incentive Stock Option, not later than three (3) months
thereafter, or, in the case of a Nonqualified Stock Option, not later than one (1) year thereafter. During such period and prior
to the expiration of the Option by its terms, such Option may be exercised by the Optionee, and except as so exercised, shall expire
at the end of such relevant period unless such Option by its terms expires before such date. The decision as to whether a termination
is by reason of Retirement shall be made by the Option Committee, whose decision shall be final and conclusive.



 


		(iii)	Voluntary Termination or Termination by the Corporation. If an Optionee's employment by, or relationship
with, the Corporation is terminated voluntarily or, by the Corporation, whether such termination is for Cause or for no reason
whatsoever, any Option heretofore granted which remains unexercised at the time of such termination shall expire immediately, provided,
however, that the Option Committee may, in its sole and absolute discretion, within thirty (30) days of such termination, waive
the expiration of any Option awarded under the Plan, by giving written notice of such waiver to the Optionee's known email address
or at such Optionee's last known physical address. In the event of such waiver, the Optionee may exercise any such Options only
to such extent, for such time, and upon such terms and conditions set forth in subparagraph (i) above. The determination as to
whether a termination is voluntary or for Cause shall be made by the Option Committee, whose decision shall be final and conclusive.



 






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(d)          Shares held
for Investment. The Option Committee may, if it or counsel for the Corporation shall deem it necessary or desirable for any reason,
require as a condition of exercise, that the Optionee or any other person entitled to exercise an Option hereunder, represent in
writing to the Corporation at the time of exercise of such Option that it is their intention to acquire the Shares as to which
the Option is being exercised for investment purposes and not with a view to the sale or distribution thereof.


 


(e)          Transferability.
Options granted under the Plan to an Optionee shall not be transferable other than by will or the laws of descent and distribution,
and such Options shall be exercisable, during the Optionee's lifetime, only by him or his legal guardian or legal representative.
A transfer of an Option by will or the laws of descent and distribution shall not be effective unless the Option Committee shall
have been furnished with such evidence as it may deem necessary to establish the validity of the transfer.


 


(f)          Intended Treatment
as Incentive Stock Options. Incentive Stock Options granted pursuant to this Plan are intended to qualify as "incentive stock
options" pursuant to Code Section 422 and shall, whenever possible, be construed and administered so as to implement that
intent. If all or any part of an Option granted hereunder with the intention of qualifying as an Incentive Stock Option, shall
fail to so qualify, such Option or portion thereof that fails to so qualify shall be deemed a Nonqualified Stock Option granted
hereunder.


 


9.          PAYMENT OF EXERCISE PRICE AND CANCELLATION
OF OPTIONS.


 


(a)          Notice of
Exercise. An Option granted under the Plan shall be exercised by giving written notice to the Secretary of the Corporation (or
such other person designated by the Option Committee) of the Optionee's intention to exercise one or more Options hereunder and
by delivering payment of the exercise price therewith, which shall be paid in full at the time of such exercise.


 


(b)          Method of
Settlement. The consideration to be paid for the Shares to be issued upon exercise of an Option, shall consist of cash or, with
the approval of the Option Committee (which may be withheld in its sole discretion), Shares having a fair market value on the date
of exercise, as determined by the Option Committee, at least equal to the exercise price or a combination of cash and Shares or,
with the approval of the Option Committee (which may be withheld in its sole discretion) may also be effected wholly or partly
by monies borrowed from the Corporation pursuant to a promissory note, the terms and conditions of which shall be determined from
time to time by the Option Committee, in its discretion, separately with respect to each exercise of Options and each Optionee,
or by such other method of payment as may be determined by the Option Committee in its sole discretion; provided, that each such
method and time for payment and each such borrowing and terms and conditions of repayment shall then be permitted by and be in
compliance with applicable law. An Optionee may purchase less than the total number of Shares for which an Option is then exercisable,
provided, however, that any partial exercise of an Option may not be less than for one hundred (100) Shares and shall not include
any fractional Shares. No Optionee or legal representative of an Optionee, as the case may be, will be, or will be deemed to be,
the owner of any Shares covered by an Option unless and until certificates for the Shares are issued to the Optionee or such Optionee's
representative under the Plan.


 






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10.          SHARE ADJUSTMENT.


 


If the outstanding
Shares of the class then subject to this Plan are increased or decreased, or are changed into or exchanged for a different number
or kind of shares or securities or other forms of property (including cash) or rights, as a result of one or more reorganizations,
recapitalizations, spin-offs, stock splits, reverse stock splits, stock dividends or the like, appropriate adjustments shall be
made in the number and/or kind of Shares or securities or other forms of property (including cash) or rights for which Options
may thereafter be granted under the Plan and for which Options then outstanding under the Plan may thereafter be exercised. Any
such Share adjustments shall be made without changing the aggregate value applicable to the unexercised portions of outstanding
Options and shall be treated as a "nonqualified deferred compensation plan" within the meaning of Code Section 409A or
any Options issued thereunder as being issued under a "nonqualified deferred compensation plan" within the meaning of
Code Section 409A. Any fractional Shares resulting from such adjustment shall be eliminated by rounding up to the nearest whole
number. Appropriate amendments to the Option Agreements shall be executed by the Corporation and the Optionees to the extent the
Option Committee determines that such amendments are necessary or desirable to reflect such Share adjustments. If determined by
the Option Committee to be appropriate, in the event of any Share adjustment involving the substitution of securities of a corporation
other than the Corporation, the Option Committee shall make arrangements for the assumption by such other corporation of any Options
then or thereafter outstanding under the Plan, without any change in the total exercise price applicable to the unexercised portion
of the Options but with an appropriate adjustment to the number of securities, kind of securities and exercise price for each of
the securities subject to the Options. The determination by the Option Committee as to what adjustment, amendments or arrangements
shall be made pursuant to this Section and the extent thereof, shall be final and conclusive.


 


In the event of
the proposed dissolution or liquidation of the Corporation, or a proposed sale of substantially all of the assets of the Corporation,
or in the event of any merger or consolidation of the Corporation with or into another corporation, or in the event of any corporate
separation or division, including, but not limited to, a split-up, split-off or spin-off, or other transaction in which the outstanding
Shares then subject to Options under the Plan are changed into or exchanged for property (including cash), rights and/or securities
other than, or in addition to, shares of the Corporation, the Option Committee may provide that the holder of each Option then
exercisable shall have the right to exercise such Option solely for the kind and amount of shares of stock and other securities,
property, cash or any combination thereof receivable upon such dissolution, liquidation, sale, consolidation or merger, or similar
corporate event, by a holder of the number of Shares for which such Option might have been exercised immediately prior to such
dissolution, liquidation, sale, consolidation or merger or similar corporate event; or, in the alternative, the Option Committee
may provide that each Option granted under the Plan shall terminate as of a date to be fixed by the Board of Directors, provided,
that no less than thirty (30) days prior written notice of the date so fixed shall be given to each Optionee who shall have the
right, during such thirty (30) day period preceding such termination, to exercise the Options as to all or any part of the Shares
covered thereby, including Shares as to which such Options would not otherwise be exercisable.


 


11.          SUBSTITUTE OPTIONS.


 


The Corporation
may grant options under the Plan in substitution for options held by employees of another corporation who become employees of the
Corporation as the result of a merger or consolidation of the employing corporation with the Corporation, or as a result of the
acquisition by the Corporation, of property or stock of the employing corporation. The Corporation may direct that substitute options
be granted on such terms and conditions as the Board of Directors considers appropriate in the circumstances.


 






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12.          OTHER EMPLOYEE BENEFITS.


 


Except as to plans
which by their terms include such amounts as compensation, the amount of any compensation deemed to be received by an employee
as a result of the exercise of an option or the sale of Shares received upon such exercise shall not constitute compensation for
purposes of determining such employee's benefits under any other employee benefit plan or program in which the employee is a participant
at any time, including, without limitation, benefits under any bonus, pension, profit-sharing, life insurance or salary continuation
plan, except as otherwise specifically determined by the Board of Directors.


 


13.          TERMS AND CONDITIONS OF OPTIONS.


 


(a)          Withholding
of Taxes. As a condition to the exercise, in whole or in part, of any Options, the Option Committee may in its sole discretion
require the Optionee to pay, in addition to the exercise price of the Shares covered by the Options an amount equal to any Federal,
state or local taxes that may be required to be withheld in connection with the exercise of such Options. Alternatively, the Corporation
may issue or transfer the Shares pursuant to exercise of the Options net of the number of Shares sufficient to satisfy the withholding
tax requirements. For withholding tax purposes, the Shares shall be valued on the date the withholding obligation is incurred.
In the event an Optionee makes a Code Section 83(b) election in connection with a Nonqualified Stock Option granted under the Plan,
the Optionee shall immediately notify the Corporation of such election. In the case of an Incentive Stock Option, an Optionee who
disposes of Shares acquired pursuant to such Incentive Stock Option either (a) within two (2) years after the Granting Date or
(b) within one (1) year after the issuance of such Shares to the Optionee upon exercise thereof, shall notify the Corporation of
such disposition and the amount realized upon such disposition.


 


(b)          No Rights
to Continued Employment or Relationship. Nothing contained in the Plan or in any Option Agreement shall obligate the Corporation
to continue to employ or to continue any other relationship with any Optionee for any period or interfere in any way with the right
of the Corporation to reduce such Optionee's compensation or to terminate the Corporation's employment or relationship with any
Optionee at any time.


 


(c)          Time of Granting
Options. The Granting Date shall be the day the Corporation executes the Option Agreement; provided, however, that if appropriate
resolutions of the Option Committee indicate that an Option is to be granted as of and on some prior or future date, the Granting
Date shall be such prior or future date.


 


(d)          Privileges
of Stock Ownership. No Optionee shall be entitled to the privileges of stock ownership as to any Shares not actually issued and
delivered to such Optionee. No Shares shall be issued upon the exercise of any Option unless and until, in the opinion of the Corporation's
counsel, all applicable laws, rules and regulations of any governmental or regulatory agencies and any exchanges upon which stock
of the Corporation may be listed, shall have been fully complied with.


 


(e)          Securities
Laws Compliance. The Corporation will diligently comply with all applicable securities laws before any Options are granted under
the Plan and before any Shares are issued pursuant to the exercise of any Options. Without limiting the generality of the foregoing,
the Corporation may require from the Optionee such investment representation or such agreement, if any, as counsel for the Corporation
may consider necessary or advisable in order to comply with the Securities Act as then in effect, and may require that the Optionee
agree that any sale of the Shares will be made only in such manner as is permitted by the Option Committee. The Option Committee
in its discretion may cause the Options and Shares underlying such Options to be registered under the Securities Act by the filing
of a Form S-8 Registration Statement covering the Options and Shares. The Optionee shall take any action reasonably requested by
the Corporation in connection with registration or qualification of the Shares under federal and state securities laws.


 






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(f)          Option Agreement.
Each Incentive Stock Option and Nonqualified Stock Option granted under this Plan shall be evidenced by a written Option Agreement
executed by the Corporation and the Optionee containing such terms and conditions as are deemed desirable by the Option Committee
and are not inconsistent with the purpose of the Plan as set forth herein.


 


14.          RESTRICTED SHARES.


 


(a)          In General.
The Option Committee may, in its discretion, issue restricted Shares upon the exercise of any Options granted under the Plan. Such
restricted Shares shall be subject to such vesting requirements and restrictions on transferability as may be determined by the
Option Committee.


 


(b)          Legend. All
stock certificates issued with respect to restricted Shares shall bear an appropriate legend referring to the terms, conditions,
and restrictions applicable to such Shares.


 


(c)          Rights Appurtenant
to Restricted Shares. The issuance of restricted Shares shall not affect the rights of the Optionee as a stockholder of the Corporation
including, but not limited to the right to receive dividends on and to vote with respect to such restricted Shares, except that
additional shares issued with respect to restricted Shares including, but not limited to, stock dividends or stock splits or any
securities issued in exchange for restricted Shares shall be subject to the same restrictions as are applicable to the restricted
Shares.


 


15.          PLAN AMENDMENT AND TERMINATION.


 


(a)          Authority
of Option Committee. In addition to the authority of the Option Committee set forth herein, the Option Committee or Board of Directors,
as applicable, may at any time discontinue granting Options under the Plan or otherwise suspend, amend or terminate the Plan and
may, without the consent of an Optionee, make such modification of the terms and conditions of Options theretofore granted as it
shall deem advisable. Any amendment or modification made pursuant to the provisions of this Section shall be effective immediately
upon adoption, unless otherwise provided therein, subject to approval thereof (i) within twelve (12) months before or after the
effective date of such amendment or modification by stockholders of the Corporation holding not less than a majority vote of the
voting power of the Corporation voting in person or by proxy at a duly held stockholders meeting when required to maintain or satisfy
the requirements of Code Section 422 with respect to Incentive Stock Options, or Code Section 162(m) with respect to performance-based
compensation, (ii) by any appropriate governmental agency if required, or (iii) by a securities exchange or automated quotation
system if required. No Option may be granted during any suspension or after termination of the Plan.


 


(a)          Ten (10) Year
Maximum Term. Unless previously terminated by the Option Committee, this Plan shall terminate on the tenth (10th) anniversary of
the Effective Date. No Options shall be granted under the Plan thereafter.


 


(b)          Effect on
Options Granted. Any amendment, suspension or termination of the Plan shall not, without the consent of the Optionee, alter or
impair any rights or obligations under any Option theretofore granted.


 


15.          EFFECTIVE DATE OF PLAN.


 


The Plan shall
be effective upon the approval of the Board of Directors of the Corporation (the "Effective Date").


 






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16.          MISCELLANEOUS PROVISIONS.


 


(a)          Limitation
on Benefits. No Option may be exercised, to the extent such exercise will create an "excess parachute payment" as defined
in Section 280G of the Code.


 


(b)          Exculpation
and Indemnification. The Corporation shall indemnify and hold harmless the Option Committee and Board of Directors from and against
any and all liabilities, costs and expenses incurred by such persons as a result of any act, or omission to act, in connection
with the performance of such persons' duties, responsibilities and obligations under the Plan, other than such liabilities, costs
and expenses as may result from gross negligence, bad faith, willful conduct and/or criminal acts of such persons.


 


(c)          Use of Proceeds.
The proceeds from the exercise of Shares granted under the Plan shall constitute and be considered as general funds of the Corporation
which may be used for any and all corporate purposes as determined by the Board of Directors.


 


(d)          Compliance
with Applicable Laws. The inability of the Corporation to obtain from any regulatory body having jurisdiction, the authority deemed
by the Corporation's counsel to be necessary to the lawful issuance and sale of any Shares upon the exercise of an Option shall
relieve the Corporation of any liability in respect of the non-issuance or sale of such Shares as to which requisite authority
shall not have been obtained.


 


(e)          Non-Uniform
Determinations. The Option Committee's determination under the Plan (including without limitation determinations of the persons
to receive Options, the form, amount and timing of such Options, the terms and provisions of such Options and the Option Agreements
evidencing same) need not be uniform and may be made by it selectively among persons who receive, or are eligible to receive, Options
under the Plan, whether or not such persons are similarly situated.


 


 


ADOPTED ON
BEHALF OF THE BOARD OF DIRECTORS:


 


 


 


/s/ Trevor Newton


Trevor Newton,
President


 


Dated: November
17, 2016


 


 


 


 


 


 






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