Exhibit
10.1


 


APPLIED
ENERGETICS, INC.  


2018
Incentive Stock Plan


 


THIS
APPLIED ENERGETICS, INC. 2018 INCENTIVE STOCK PLAN (the “Plan”) is designed to retain directors, executives
and selected employees and consultants and reward them for making major contributions to the success of the Company. These objectives
are accomplished by making long-term incentive awards under the Plan thereby providing Participants with a proprietary interest
in the growth and performance of the Company.


 


1.            Definitions.


 


(a)          “Board”
- The Board of Directors of the Company.


 


(b)          “Code”
- The Internal Revenue Code of 1986, as amended from time to time.


 


(c)          “Committee”
- The Compensation Committee of the Company’s Board, or such other committee of the Board that is designated by the Board
to administer the Plan, composed of not less than two members of the Board all of whom are disinterested persons, as contemplated
by Rule 16b-3 (“Rule 16b-3”) promulgated under the Securities Exchange Act of 1934, as amended (the
“Exchange Act”).


 


(d)          “Company”
– APPLIED ENERGETICS, INC. and its subsidiaries including subsidiaries of subsidiaries.


 


(e)          “Exchange
Act” - The Securities Exchange Act of 1934, as amended from time to time.


 


(f)           “Fair
Market Value” - The fair market value of the Company’s issued and outstanding Stock as determined in good faith
by the Board or Committee.


 


(g)          “Grant”
- The grant of any form of stock option, stock award, or stock purchase offer, whether granted singly, in combination or in tandem,
to a Participant pursuant to such terms, conditions and limitations as the Committee may establish in order to fulfill the objectives
of the Plan.


 


(h)          “Grant
Agreement” - An agreement between the Company and a Participant that sets forth the terms, conditions and limitations
applicable to a Grant.


 


(i)           “Option”
- Either an Incentive Stock Option, in accordance with Section 422 of Code, or a Nonstatutory Option, to purchase the Company’s
Stock that may be awarded to a Participant under the Plan. A Participant who receives an award of an Option shall be referred
to as an “Optionee.”


 


(j)           “Participant”
- A director, officer, employee or consultant of the Company to whom an Award has been made under the Plan.


 




     


     


    

 


(k)          “Restricted
Stock Purchase Offer” - A Grant of the right to purchase a specified number of shares of Stock pursuant to a written
agreement issued under the Plan.


 


(l)           “Securities
Act” - The Securities Act of 1933, as amended from time to time.


 


(m)        
“Stock” - Authorized and issued or unissued shares of common stock of the Company.


 


(n)          “Stock
Award” - A Grant made under the Plan in stock or denominated in units of stock for which the Participant is not obligated
to pay additional consideration.


 


2.           Administration.
The Plan shall be administered by the Board, provided however, that the Board may delegate such administration to the Committee.
Subject to the provisions of the Plan, the Board and/or the Committee shall have authority to (a) grant, in its discretion, Incentive
Stock Options in accordance with Section 422 of the Code, or Nonstatutory Options, Stock Awards or Restricted Stock Purchase
Offers; (b) determine in good faith the fair market value of the Stock covered by any Grant; (c) determine which eligible persons
shall receive Grants and the number of shares, restrictions, terms and conditions to be included in such Grants; (d) construe
and interpret the Plan; (e) promulgate, amend and rescind rules and regulations relating to its administration, and correct defects,
omissions and inconsistencies in the Plan or any Grant; (f) consistent with the Plan and with the consent of the Participant,
as appropriate, amend any outstanding Grant or amend the exercise date or dates thereof; (g) determine the duration and purpose
of leaves of absence which may be granted to Participants without constituting termination of their employment for the purpose
of the Plan or any Grant; and (h) make all other determinations necessary or advisable for the Plan’s administration. The
interpretation and construction by the Board of any provisions of the Plan or selection of Participants shall be conclusive and
final. No member of the Board or the Committee shall be liable for any action or determination made in good faith with respect
to the Plan or any Grant made thereunder.


 


3.            Eligibility.


 


(a)          General:
The persons who shall be eligible to receive Grants shall be directors, officers, employees or consultants to the Company.
The term consultant shall mean any person, other than an employee, who is engaged by the Company to render services and is compensated
for such services. An Optionee may hold more than one Option. Any issuance of a Grant to an officer or director of the Company
subsequent to the first registration of any of the securities of the Company under the Exchange Act shall comply with the requirements
of Rule 16b-3.


 


(b)          Incentive
Stock Options: Incentive Stock Options may only be issued to employees of the Company. Incentive Stock Options may be granted
to officers or directors, provided they are also employees of the Company. Payment of a director’s fee shall not be sufficient
to constitute employment by the Company. 


 




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The
Company shall not grant an Incentive Stock Option under the Plan to any employee if such Grant would result in such employee holding
the right to exercise for the first time in any one calendar year, under all Incentive Stock Options granted under the Plan or
any other plan maintained by the Company, with respect to shares of Stock having an aggregate fair market value, determined as
of the date of the Option is granted, in excess of $100,000. Should it be determined that an Incentive Stock Option granted under
the Plan exceeds such maximum for any reason other than a failure in good faith to value the Stock subject to such option, the
excess portion of such option shall be considered a Nonstatutory Option. To the extent the employee holds two (2) or more such
Options which become exercisable for the first time in the same calendar year, the foregoing limitation on the exercisability
of such Option as Incentive Stock Options under the Federal tax laws shall be applied on the basis of the order in which such
Options are granted. If, for any reason, an entire Option does not qualify as an Incentive Stock Option by reason of exceeding
such maximum, such Option shall be considered a Nonstatutory Option.


 


(c)          Nonstatutory
Option: The provisions of the foregoing Section 3(b) shall not apply to any Option designated as a “Nonstatutory
Option” or which sets forth the intention of the parties that the Option be a Nonstatutory Option.


 


(d)          Stock
Awards and Restricted Stock Purchase Offers: The provisions of this Section 3 shall not apply to any Stock Award or Restricted
Stock Purchase Offer under the Plan.


 


4.            Stock.


 


(a)          Authorized
Stock: Stock subject to Grants may be either unissued or reacquired Stock.


 


(b)          Number
of Shares: Subject to adjustment as provided in Section 5(i) of the Plan, the total number of shares of Stock which may
be purchased or granted directly by Options, Stock Awards or Restricted Stock Purchase Offers, or purchased indirectly through
exercise of Options granted under the Plan shall not exceed Fifty Million (50,000,000) shares. If any Grant shall for any reason
terminate or expire, any shares allocated thereto but remaining unpurchased upon such expiration or termination shall again be
available for Grants with respect thereto under the Plan as though no Grant had previously occurred with respect to such shares.
Any shares of Stock issued pursuant to a Grant and repurchased pursuant to the terms thereof shall be available for future Grants
as though not previously covered by a Grant.


 


(c)          Reservation
of Shares: The Company shall reserve and keep available at all times during the term of the Plan such number of shares as
shall be sufficient to satisfy the requirements of the Plan. If, after reasonable efforts, which efforts shall not include the
registration of the Plan or Grants under the Securities Act, the Company is unable to obtain authority from any applicable regulatory
body, which authorization is deemed necessary by legal counsel for the Company for the lawful issuance of shares hereunder, the
Company shall be relieved of any liability with respect to its failure to issue and sell the shares for which such requisite authority
was so deemed necessary unless and until such authority is obtained.


 




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(d)          Application
of Funds:


 


The
proceeds received by the Company from the sale of Stock pursuant to the exercise of Options or rights under Stock Purchase Agreements
will be used for general corporate purposes.


 


(e)          No
Obligation to Exercise: The issuance of a Grant shall impose no obligation upon the Participant to exercise any rights under
such Grant.


 


5.            Terms
and Conditions of Options. Options granted hereunder shall be evidenced by agreements between the Company and the respective
Optionees, in such form and substance as the Board or Committee shall from time to time approve. The form of Incentive Stock Option
Agreement attached hereto as Exhibit A and the three forms of a Nonstatutory Stock Option Agreement for employees,
for directors and for consultants, attached hereto as Exhibit B-1, Exhibit B-2 and Exhibit B-3, respectively,
shall be deemed to be approved by the Board. Option agreements need not be identical, and in each case may include such provisions
as the Board or Committee may determine, but all such agreements shall be subject to and limited by the following terms and conditions:


 


(a)          Number
of Shares: Each Option shall state the number of shares to which it pertains.


 


(b)          Exercise
Price: Each Option shall state the exercise price, which shall be determined as follows:


 


(i)           Any
Incentive Stock Option granted to a person who at the time the Option is granted owns (or is deemed to own pursuant to Section 424(d)
of the Code) stock possessing more than ten percent (10%) of the total combined voting power or value of all classes of stock
of the Company (“Ten Percent Holder”) shall have an exercise price of no less than 110% of the Fair Market
Value of the Stock as of the date of grant; and


 


(ii)          Incentive
Stock Options granted to a person who at the time the Option is granted is not a Ten Percent Holder shall have an exercise price
of no less than 100% of the Fair Market Value of the Stock as of the date of grant.


 


For
the purposes of this Section 5(b), the Fair Market Value shall be as determined by the Board in good faith, which determination
shall be conclusive and binding; provided however, that if there is a public market for such Stock, the Fair Market Value per
share shall be the average of the bid and asked prices (or the closing price if such stock is listed on the NASDAQ National Market
System or Small Cap Issue Market) on the date of grant of the Option, or if listed on a stock exchange, the closing price on such
exchange on such date of grant.


 




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(c)          Medium
and Time of Payment: The exercise price shall become immediately due upon exercise of the Option and shall be paid in cash
or check made payable to the Company. Should the Company’s outstanding Stock be registered under Section 12(g) of the
Exchange Act at the time the Option is exercised, then the exercise price may also be paid as follows:


 


(i)           in
shares of Stock held by the Optionee for the requisite period necessary to avoid a charge to the Company’s earnings for
financial reporting purposes and valued at Fair Market Value on the exercise date, or


 


(ii)          through
a special sale and remittance procedure pursuant to which the Optionee shall concurrently provide irrevocable written instructions
(a) to a Company designated brokerage firm to effect the immediate sale of the purchased shares and remit to the Company, out
of the sale proceeds available on the settlement date, sufficient funds to cover the aggregate exercise price payable for the
purchased shares plus all applicable Federal, state and local income and employment taxes required to be withheld by the Company
by reason of such purchase and (b) to the Company to deliver the certificates for the purchased shares directly to such brokerage
firm in order to complete the sale transaction.


 


At
the discretion of the Board, exercisable either at the time of Option grant or of Option exercise, the exercise price may also
be paid (i) by Optionee’s delivery of a promissory note in form and substance satisfactory to the Company and permissible
under applicable securities rules and bearing interest at a rate determined by the Board in its sole discretion, but in no event
less than the minimum rate of interest required to avoid the imputation of compensation income to the Optionee under the Federal
tax laws, or (ii) in such other form of consideration permitted by the State of Delaware corporations law as may be acceptable
to the Board.


 


(d)          Term
and Exercise of Options: Any Option granted to an employee of the Company shall become exercisable over a period of no longer
than five (5) years, and no less than twenty percent (20%) of the shares covered thereby shall become exercisable annually.
No Option shall be exercisable, in whole or in part, prior to one (1) year from the date it is granted unless the Board shall
specifically determine otherwise, as provided herein. In no event shall any Option be exercisable after the expiration of ten
(10) years from the date it is granted, and no Incentive Stock Option granted to a Ten Percent Holder shall, by its terms, be
exercisable after the expiration of five (5) years from the date of the Option. Unless otherwise specified by the Board or the
Committee in the resolution authorizing such Option, the date of grant of an Option shall be deemed to be the date upon which
the Board or the Committee authorizes the granting of such Option.


 


Each
Option shall be exercisable to the nearest whole share, in installments or otherwise, as the respective Option agreements may
provide. During the lifetime of an Optionee, the Option shall be exercisable only by the Optionee and shall not be assignable
or transferable by the Optionee, and no other person shall acquire any rights therein. To the extent not exercised, installments
(if more than one) shall accumulate, but shall be exercisable, in whole or in part, only during the period for exercise as stated
in the Option agreement, whether or not other installments are then exercisable.


 


(e)          Termination
of Status as Employee, Consultant or Director: If Optionee’s status as an employee shall terminate for any reason other
than Optionee’s disability or death, then Optionee (or if the Optionee shall die after such termination, but prior to exercise,
Optionee’s personal representative or the person entitled to succeed to the Option) shall have the right to exercise the
portions of any of Optionee’s Incentive Stock Options which were exercisable as of the date of such termination, in whole
or in part, not less than 30 days nor more than three (3) months after such termination (or, in the event of “termination
for good cause” as that term is defined in Delaware case law related thereto, or by the terms of the Plan or the Option
Agreement or an employment agreement, the Option shall automatically terminate as of the termination of employment as to all shares
covered by the Option).


 




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With
respect to Nonstatutory Options granted to employees, directors or consultants, the Board may specify such period for exercise,
not less than 30 days (except that in the case of “termination for cause” or removal of a director, the Option
shall automatically terminate as of the termination of employment or services as to shares covered by the Option, following termination
of employment or services as the Board deems reasonable and appropriate. The Option may be exercised only with respect to installments
that the Optionee could have exercised at the date of termination of employment or services. Nothing contained herein or in any
Option granted pursuant hereto shall be construed to affect or restrict in any way the right of the Company to terminate the employment
or services of an Optionee with or without cause.


 


(f)           Disability
of Optionee: If an Optionee is disabled (within the meaning of Section 22(e)(3) of the Code) at the time of termination,
the three (3) month period set forth in Section 5(e) shall be a period, as determined by the Board and set forth in the Option,
of not less than six months nor more than one year after such termination.


 


(g)          Death
of Optionee: If an Optionee dies while employed by, engaged as a consultant to, or serving as a Director of the Company, the
portion of such Optionee’s Option which was exercisable at the date of death may be exercised, in whole or in part, by the
estate of the decedent or by a person succeeding to the right to exercise such Option at any time within (i) a period, as determined
by the Board and set forth in the Option, of not less than six (6) months nor more than one (1) year after Optionee’s death,
which period shall not be more, in the case of a Nonstatutory Option, than the period for exercise following termination of employment
or services, or (ii) during the remaining term of the Option, whichever is the lesser. The Option may be so exercised only with
respect to installments exercisable at the time of Optionee’s death and not previously exercised by the Optionee.


 


(h)          Nontransferability
of Option: No Option shall be transferable by the Optionee, except by will or by the laws of descent and distribution.


 


(i)           Recapitalization:
Subject to any required action of shareholders, the number of shares of Stock covered by each outstanding Option, and the
exercise price per share thereof set forth in each such Option, shall be proportionately adjusted for any increase or decrease
in the number of issued shares of Stock of the Company resulting from a stock split, stock dividend, combination, subdivision
or reclassification of shares, or the payment of a stock dividend, or any other increase or decrease in the number of such shares
affected without receipt of consideration by the Company; provided, however, the conversion of any convertible securities of the
Company shall not be deemed to have been “effected without receipt of consideration” by the Company.


 




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In
the event of a proposed dissolution or liquidation of the Company, a merger or consolidation in which the Company is not the surviving
entity, or a sale of all or substantially all of the assets or capital stock of the Company (collectively, a “Reorganization”),
unless otherwise provided by the Board, this Option shall terminate immediately prior to such date as is determined by the Board,
which date shall be no later than the consummation of such Reorganization. In such event, unless otherwise provided in the relevant
Option Agreement, if the entity which shall be the surviving entity does not tender to Optionee an offer, which it has no obligation
to do, to substitute for any unexercised Option a stock option or capital stock of such surviving of such surviving entity, as
applicable, which on an equitable basis shall provide the Optionee with substantially the same economic benefit as such unexercised
Option, then the Board may grant to such Optionee, in its sole and absolute discretion and without obligation, the right for a
period commencing thirty (30) days prior to and ending immediately prior to the date determined by the Board pursuant hereto for
termination of the Option or during the remaining term of the Option, whichever is the lesser, to exercise any unexpired Option
or Options without regard to the installment provisions of Paragraph 6(d) of the Plan; provided, that any such right granted shall
be granted to all Optionees not receiving an offer to receive substitute options on a consistent basis, and provided further,
that any such exercise shall be subject to the consummation of such Reorganization. Notwithstanding the foregoing, any Option
Agreement entered into under this Plan may provide for accelerated vesting or other appropriate adjustments, which may differ
from the provisions of this Section 5(j), in the event of a Reorganization, without further action by the Board.


 


Subject
to any required action of shareholders, if the Company shall be the surviving entity in any merger or consolidation, each outstanding
Option thereafter shall pertain to and apply to the securities to which a holder of shares of Stock equal to the shares subject
to the Option would have been entitled by reason of such merger or consolidation.


 


In
the event of a change in the Stock of the Company as presently constituted, which is limited to a change of all of its authorized
shares without par value into the same number of shares with a par value, the shares resulting from any such change shall be deemed
to be the Stock within the meaning of the Plan.


 


To
the extent that the foregoing adjustments relate to stock or securities of the Company, unless otherwise provided in the relevant
Option agreement, such adjustments shall be made by the Board, whose determination in that respect shall be final, binding and
conclusive. Except as expressly provided in this Section 5(i), the Optionee shall have no rights by reason of any subdivision
or consolidation of shares of stock of any class or the payment of any stock dividend or any other increase or decrease in the
number of shares of stock of any class, and the number or price of shares of Stock subject to any Option shall not be affected
by, and no adjustment shall be made by reason of, any dissolution, liquidation, merger, consolidation or sale of assets or capital
stock, or any issue by the Company of shares of stock of any class or securities convertible into shares of stock of any class.


 


The
Grant of an Option pursuant to the Plan shall not affect in any way the right or power of the Company to make any adjustments,
reclassifications, reorganizations or changes in its capital or business structure or to merge, consolidate, dissolve, or liquidate
or to sell or transfer all or any part of its business or assets.


 




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(j)           Rights
as a Shareholder: An Optionee shall have no rights as a shareholder with respect to any shares covered by an Option until
the effective date of the issuance of the shares following exercise of such Option by Optionee. No adjustment shall be made for
dividends (ordinary or extraordinary, whether in cash, securities or other property) or distributions or other rights for which
the record date is prior to the date such stock certificate is issued, except as expressly provided in Section 5(i) hereof.


 


(k)          Modification,
Acceleration, Extension, and Renewal of Options: Subject to the terms and conditions and within the limitations of the Plan,
the Board may modify an Option, or, once an Option is exercisable, accelerate the rate at which it may be exercised, and may extend
or renew outstanding Options granted under the Plan or accept the surrender of outstanding Options (to the extent not theretofore
exercised) and authorize the granting of new Options in substitution for such Options, provided such action is permissible under
Section 422 of the Code and applicable state securities rules. Notwithstanding the provisions of this Section 5(k),
however, no modification of an Option shall, without the consent of the Optionee, alter to the Optionee’s detriment or impair
any rights or obligations under any Option theretofore granted under the Plan.


 


(l)           Exercise
Before Exercise Date: At the discretion of the Board, the Option may, but need not, include a provision whereby the Optionee
may elect to exercise all or any portion of the Option prior to the stated exercise date of the Option or any installment thereof.
Any shares so purchased prior to the stated exercise date shall be subject to repurchase by the Company upon termination of Optionee’s
employment as contemplated by Section 5(n) hereof prior to the exercise date stated in the Option and such other restrictions
and conditions as the Board or Committee may deem advisable.


 


(m)         Other
Provisions: The Option agreements authorized under the Plan shall contain such other provisions, including, without limitation,
restrictions upon the exercise of the Options, as the Board or the Committee shall deem advisable. Shares shall not be issued
pursuant to the exercise of an Option, if the exercise of such Option or the issuance of shares thereunder would violate, in the
opinion of legal counsel for the Company, the provisions of any applicable law or the rules or regulations of any applicable governmental
or administrative agency or body, such as the Code, the Securities Act, the Exchange Act, applicable state securities rules, Delaware
corporation law, and the rules promulgated under the foregoing or the rules and regulations of any exchange upon which the shares
of the Company are listed. Without limiting the generality of the foregoing, the exercise of each Option shall be subject to the
condition that if at any time the Company shall determine that (i) the satisfaction of withholding tax or other similar liabilities,
or (ii) the listing, registration or qualification of any shares covered by such exercise upon any securities exchange or under
any state or federal law, or (iii) the consent or approval of any regulatory body, or (iv) the perfection of any exemption from
any such withholding, listing, registration, qualification, consent or approval is necessary or desirable in connection with such
exercise or the issuance of shares thereunder, then in any such event, such exercise shall not be effective unless such withholding,
listing registration, qualification, consent, approval or exemption shall have been effected, obtained or perfected free of any
conditions not acceptable to the Company.


 




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(n)          Repurchase
Agreement: The Board may, in its discretion, require as a condition to the Grant of an Option hereunder, that an Optionee
execute an agreement with the Company, in form and substance satisfactory to the Board in its discretion (“Repurchase
Agreement”), (i) restricting the Optionee’s right to transfer shares purchased under such Option without first
offering such shares to the Company or another shareholder of the Company upon the same terms and conditions as provided therein;
and (ii) providing that upon termination of Optionee’s employment with the Company, for any reason, the Company (or another
shareholder of the Company, as provided in the Repurchase Agreement) shall have the right at its discretion (or the discretion
of such other shareholders) to purchase and/or redeem all such shares owned by the Optionee on the date of termination of his
or her employment at a price equal to: (A) the fair value of such shares as of such date of termination; or (B) if such repurchase
right lapses at 20% of the number of shares per year, the original purchase price of such shares, and upon terms of payment permissible
under applicable state securities rules; provided that in the case of Options or Stock Awards granted to officers, directors,
consultants or affiliates of the Company, such repurchase provisions may be subject to additional or greater restrictions as determined
by the Board or Committee.


 


6.            Stock
Awards and Restricted Stock Purchase Offers.


 


(a)          Types
of Grants.


 


(i)           Stock
Award. All or part of any Stock Award under the Plan may be subject to conditions established by the Board or the Committee,
and set forth in the Stock Award Agreement, which may include, but are not limited to, continuous service with the Company, achievement
of specific business objectives, increases in specified indices, attaining growth rates and other comparable measurements of Company
performance. Such Awards may be based on Fair Market Value or other specified valuation. All Stock Awards will be made pursuant
to the execution of a Stock Award Agreement substantially in the form attached hereto as Exhibit C.


 


(ii)          Restricted
Stock Purchase Offer. A Grant of a Restricted Stock Purchase Offer under the Plan shall be subject to such (i) vesting contingencies
related to the Participant’s continued association with the Company for a specified time and (ii) other specified conditions
as the Board or Committee shall determine, in their sole discretion, consistent with the provisions of the Plan. All Restricted
Stock Purchase Offers shall be made pursuant to a Restricted Stock Purchase Offer substantially in the form attached hereto as
Exhibit D.


 


(b)          Conditions
and Restrictions. Shares of Stock which Participants may receive as a Stock Award under a Stock Award Agreement or Restricted
Stock Purchase Offer under a Restricted Stock Purchase Offer may include such restrictions as the Board or Committee, as applicable,
shall determine, including restrictions on transfer, repurchase rights, right of first refusal, and forfeiture provisions. When
transfer of Stock is so restricted or subject to forfeiture provisions it is referred to as “Restricted Stock”.
Further, with Board or Committee approval, Stock Awards or Restricted Stock Purchase Offers may be deferred, either in the form
of installments or a future lump sum distribution. The Board or Committee may permit selected Participants to elect to defer distributions
of Stock Awards or Restricted Stock Purchase Offers in accordance with procedures established by the Board or Committee to assure
that such deferrals comply with applicable requirements of the Code including, at the choice of Participants, the capability to
make further deferrals for distribution after retirement. Any deferred distribution, whether elected by the Participant or specified
by the Stock Award Agreement, Restricted Stock Purchase Offers or by the Board or Committee, may require the payment be forfeited
in accordance with the provisions of Section 6(c). Dividends or dividend equivalent rights may be extended to and made part
of any Stock Award or Restricted Stock Purchase Offers denominated in Stock or units of Stock, subject to such terms, conditions
and restrictions as the Board or Committee may establish.


 




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(c)          Cancellation
and Rescission of Grants. Unless the Stock Award Agreement or Restricted Stock Purchase Offer specifies otherwise, the Board
or Committee, as applicable, may cancel any unexpired, unpaid, or deferred Grants at any time if the Participant is not in compliance
with all other applicable provisions of the Stock Award Agreement or Restricted Stock Purchase Offer, the Plan and with the following
conditions:


 


(i)           A
Participant shall not render services for any organization or engage directly or indirectly in any business which, in the judgment
of the chief executive officer of the Company or other senior officer designated by the Board or Committee, is or becomes competitive
with the Company, or which organization or business, or the rendering of services to such organization or business, is or becomes
otherwise prejudicial to or in conflict with the interests of the Company. For Participants whose employment has terminated, the
judgment of the chief executive officer shall be based on the Participant’s position and responsibilities while employed
by the Company, the Participant’s post-employment responsibilities and position with the other organization or business,
the extent of past, current and potential competition or conflict between the Company and the other organization or business,
the effect on the Company’s customers, suppliers and competitors and such other considerations as are deemed relevant given
the applicable facts and circumstances. A Participant who has retired shall be free, however, to purchase as an investment or
otherwise, stock or other securities of such organization or business so long as they are listed upon a recognized securities
exchange or traded over-the-counter, and such investment does not represent a substantial investment to the Participant or a greater
than ten percent (10%) equity interest in the organization or business.


 


(ii)          A
Participant shall not, without prior written authorization from the Company, disclose to anyone outside the Company, or use in
other than the Company’s business, any confidential information or material, as defined in the Company’s Proprietary
Information and Invention Agreement or similar agreement regarding confidential information and intellectual property, relating
to the business of the Company, acquired by the Participant either during or after employment with the Company.


 


(iii)         A
Participant, pursuant to the Company’s Proprietary Information and Invention Agreement, shall disclose promptly and assign
to the Company all right, title and interest in any invention or idea, patentable or not, made or conceived by the Participant
during employment by the Company, relating in any manner to the actual or anticipated business, research or development work of
the Company and shall do anything reasonably necessary to enable the Company to secure a patent where appropriate in the United
States and in foreign countries.


 




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(iv)         Upon
exercise, payment or delivery pursuant to a Grant, the Participant shall certify on a form acceptable to the Committee that he
or she is in compliance with the terms and conditions of the Plan. Failure to comply with all of the provisions of this Section 6(c)
prior to, or during the six months after, any exercise, payment or delivery pursuant to a Grant shall cause such exercise, payment
or delivery to be rescinded. The Company shall notify the Participant in writing of any such rescission within two years after
such exercise, payment or delivery. Within ten days after receiving such a notice from the Company, the Participant shall pay
to the Company the amount of any gain realized or payment received as a result of the rescinded exercise, payment or delivery
pursuant to a Grant. Such payment shall be made either in cash or by returning to the Company the number of shares of Stock that
the Participant received in connection with the rescinded exercise, payment or delivery.


 


(d)          Nonassignability.


 


(i)           Except
pursuant to Section 6(e)(iii) and except as set forth in Section 6(d)(ii), no Grant or any other benefit under the Plan
shall be assignable or transferable, or payable to or exercisable by, anyone other than the Participant to whom it was granted.


 


(ii)          Where
a Participant terminates employment and retains a Grant pursuant to Section 6(e)(ii) in order to assume a position with a
governmental, charitable or educational institution, the Board or Committee, in its discretion and to the extent permitted by
law, may authorize a third party (including but not limited to the trustee of a “blind” trust), acceptable to the
applicable governmental or institutional authorities, the Participant and the Board or Committee, to act on behalf of the Participant
with regard to such Awards.


 


(e)          Termination
of Employment. If the employment or service to the Company of a Participant terminates, other than pursuant to
any of the following provisions under this Section 6(e), all unexercised, deferred and unpaid Stock Awards or Restricted
Stock Purchase Offers shall be cancelled immediately, unless the Stock Award Agreement or Restricted Stock Purchase Offer provides
otherwise:


 


(i)           Retirement
Under a Company Retirement Plan. When a Participant’s employment terminates as a result of retirement in accordance
with the terms of a Company retirement plan, the Board or Committee may permit Stock Awards or Restricted Stock Purchase Offers
to continue in effect beyond the date of retirement in accordance with the applicable Grant Agreement and the exercisability and
vesting of any such Grants may be accelerated.


 


(ii)          Rights
in the Best Interests of the Company. When a Participant resigns from the Company and, in the judgment of the Board or Committee,
the acceleration and/or continuation of outstanding Stock Awards or Restricted Stock Purchase Offers would be in the best interests
of the Company, the Board or Committee may (i) authorize, where appropriate, the acceleration and/or continuation of all or any
part of Grants issued prior to such termination and (ii) permit the exercise, vesting and payment of such Grants for such period
as may be set forth in the applicable Grant Agreement, subject to earlier cancellation pursuant to Section 9 or at such time
as the Board or Committee shall deem the continuation of all or any part of the Participant’s Grants are not in the Company’s
best interest.


 




    11 


     


    

 


(iii)         Death
or Disability of a Participant.


 


(1)       In
the event of a Participant’s death, the Participant’s estate or beneficiaries shall have a period up to the expiration
date specified in the Grant Agreement within which to receive or exercise any outstanding Grant held by the Participant under
such terms as may be specified in the applicable Grant Agreement. Rights to any such outstanding Grants shall pass by will or
the laws of descent and distribution in the following order: (a) to beneficiaries so designated by the Participant; if none, then
(b) to a legal representative of the Participant; if none, then (c) to the persons entitled thereto as determined by a court of
competent jurisdiction. Grants so passing shall be made at such times and in such manner as if the Participant were living.


 


(2)       In
the event a Participant is deemed by the Board or Committee to be unable to perform his or her usual duties by reason of mental
disorder or medical condition which does not result from facts which would be grounds for termination for cause, Grants and rights
to any such Grants may be paid to or exercised by the Participant, if legally competent, or a committee or other legally designated
guardian or representative if the Participant is legally incompetent by virtue of such disability.


 


(3)       After
the death or disability of a Participant, the Board or Committee may in its sole discretion at any time (1) terminate restrictions
in Grant Agreements; (2) accelerate any or all installments and rights; and (3) instruct the Company to pay the total of any accelerated
payments in a lump sum to the Participant, the Participant’s estate, beneficiaries or representative; notwithstanding that,
in the absence of such termination of restrictions or acceleration of payments, any or all of the payments due under the Grant
might ultimately have become payable to other beneficiaries.


 


(4)       In
the event of uncertainty as to interpretation of or controversies concerning this Section 6, the determinations of the Board
or Committee, as applicable, shall be binding and conclusive.


 


7.           Investment
Intent. All Grants under the Plan are intended to be exempt from registration under the Securities Act or registered thereunder
on Form S-8 or any other form available for such registration. Unless and until the granting of Options or sale and issuance of
Stock subject to the Plan are registered under the Securities Act or shall be exempt pursuant to the rules promulgated thereunder,
each Grant under the Plan shall provide that the purchases or other acquisitions of Stock thereunder shall be for investment purposes
and not with a view to, or for resale in connection with, any distribution thereof. Further, unless the issuance and sale of the
Stock have been registered under the Securities Act, each Grant shall provide that no shares shall be purchased upon the exercise
of the rights under such Grant unless and until (i) all then applicable requirements of state and federal laws and regulatory
agencies shall have been fully complied with to the satisfaction of the Company and its counsel, and (ii) if requested to do so
by the Company, the person exercising the rights under the Grant shall (i) give written assurances as to knowledge and experience
of such person (or a representative employed by such person) in financial and business matters and the ability of such person
(or representative) to evaluate the merits and risks of exercising the Option, and (ii) execute and deliver to the Company a letter
of investment intent and/or such other form related to applicable exemptions from registration, all in such form and substance
as the Company may require. If shares are issued upon exercise of any rights under a Grant without registration under the Securities
Act, subsequent registration of such shares shall relieve the purchaser thereof of any investment restrictions or representations
made upon the exercise of such rights.


 




    12 


     


    

 


8.             Amendment,
Modification, Suspension or Discontinuance of the Plan. The Board may, insofar as permitted by law, from time to time,
with respect to any shares at the time not subject to outstanding Grants, suspend or terminate the Plan or revise or amend it
in any respect whatsoever, except that without the approval of the shareholders of the Company, no such revision or amendment
shall (i) increase the number of shares subject to the Plan, (ii) decrease the price at which Grants may be granted, (iii) materially
increase the benefits to Participants, or (iv) change the class of persons eligible to receive Grants under the Plan; provided,
however, no such action shall alter or impair the rights and obligations under any Option, or Stock Award, or Restricted Stock
Purchase Offer outstanding as of the date thereof without the written consent of the Participant thereunder. No Grant may be issued
while the Plan is suspended or after it is terminated, but the rights and obligations under any Grant issued while the Plan is
in effect shall not be impaired by suspension or termination of the Plan.


 


In
the event of any change in the outstanding Stock by reason of a stock split, stock dividend, combination or reclassification of
shares, recapitalization, merger, or similar event, the Board or the Committee may adjust proportionally (a) the number of shares
of Stock (i) reserved under the Plan, (ii) available for Incentive Stock Options and Nonstatutory Options and (iii) covered by
outstanding Stock Awards or Restricted Stock Purchase Offers; (b) the Stock prices related to outstanding Grants; and (c) the
appropriate Fair Market Value and other price determinations for such Grants. In the event of any other change affecting the Stock
or any distribution (other than normal cash dividends) to holders of Stock, such adjustments as may be deemed equitable by the
Board or the Committee, including adjustments to avoid fractional shares, shall be made to give proper effect to such event. In
the event of a corporate merger, consolidation, acquisition of property or stock, separation, reorganization or liquidation, the
Board or the Committee shall be authorized to issue or assume stock options, whether or not in a transaction to which Section 424(a)
of the Code applies, and other Grants by means of substitution of new Grant Agreements for previously issued Grants or an assumption
of previously issued Grants.


 


9.             Tax
Withholding. The Company shall have the right to deduct applicable taxes from any Grant payment and withhold, at the time
of delivery or exercise of Options, Stock Awards or Restricted Stock Purchase Offers or vesting of shares under such Grants, an
appropriate number of shares for payment of taxes required by law or to take such other action as may be necessary in the opinion
of the Company to satisfy all obligations for withholding of such taxes. If Stock is used to satisfy tax withholding, such stock
shall be valued based on the Fair Market Value when the tax withholding is required to be made.


 




    13 


     


    

 


10.           Availability
of Information. During the term of the Plan and any additional period during which a Grant granted pursuant to the Plan
shall be exercisable, the Company shall make available, not later than one hundred and twenty (120) days following the close of
each of its fiscal years, such financial and other information regarding the Company as is required by the bylaws of the Company
and applicable law to be furnished in an annual report to the shareholders of the Company.


  


11.           Notice.
Any written notice to the Company required by any of the provisions of the Plan shall be addressed to the chief personnel officer
or to the chief executive officer of the Company, and shall become effective when it is received by the office of the chief personnel
officer or the chief executive officer.


 


12.           Indemnification
of Board. In addition to such other rights or indemnifications as they may have as directors or otherwise, and to the
extent allowed by applicable law, the members of the Board and the Committee may be indemnified by the Company against the reasonable
expenses, including attorneys’ fees, actually and necessarily incurred in connection with the defense of any claim, action,
suit or proceeding, or in connection with any appeal thereof, to which they or any of them may be a party by reason of any action
taken, or failure to act, under or in connection with the Plan or any Grant granted thereunder, and against all amounts paid by
them in settlement thereof (provided such settlement is approved by independent legal counsel selected by the Company) or paid
by them in satisfaction of a judgment in any such claim, action, suit or proceeding, except in any case in relation to matters
as to which it shall be adjudged in such claim, action, suit or proceeding that such Board or Committee member is liable for negligence
or misconduct in the performance of his or her duties; provided that within sixty (60) days after institution of any such action,
suit or Board proceeding the member involved shall offer the Company, in writing, the opportunity, at its own expense, to handle
and defend the same.


 


13.          Governing
Law. The Plan and all determinations made and actions taken pursuant hereto, to the extent not otherwise governed by the
Code or the securities laws of the United States, shall be governed by the law of the State of Delaware and construed accordingly.


 


14.
         Effective and Termination Dates. The Plan shall become effective
on the date it is approved by the holders of a majority of the shares of Stock then outstanding. If the Plan is not approved by
the holders of a majority of the shares of Stock within one (1) year from the date it is adopted and approved by the Board of
Directors of the Company, all stock options granted hereunder shall be deemed non-statutory options. The Plan shall terminate
ten years later, subject to earlier termination by the Board pursuant to Section 8.


 




    14 


     


    

 


The
foregoing 2018 INCENTIVE STOCK PLAN (consisting of 15 pages, including this page) was duly adopted and approved by the Board of
Directors on October __, 2018.


 


	 	APPLIED ENERGETICS, INC.
	 	an Delaware corporation
	 	 	 
	 	By: 	/
	 	Its: 	Bradford
Adamczyk 

        Principal
Executive Officer



 




    15 


     


    

 


EXHIBIT
A


 


APPLIED
ENERGETICS, INC. 


 


INCENTIVE
STOCK OPTION AGREEMENT 


	 


  


THIS
INCENTIVE STOCK OPTION AGREEMENT (“Agreement”) is made and entered into as of the date set forth below,
by and between APPLIED ENERGETICS, INC., a Delaware corporation (the “Company”), and the employee of the Company
named in Section 1(b). (“Optionee”):


 


In
consideration of the covenants herein set forth, the parties hereto agree as follows:


 


	 	1.	Option Information.


 


	 	(a)	Date
    of Option:	 	 
	 	(b)	Optionee:	 	 
	 	(c)	Number
    of Shares: 	 	 
	 	(d)	Exercise
    Price:	 	 


 


	 	2.	Acknowledgements.


 


(a)          Optionee
is an employee of the Company.


 


(b)          The
Board of Directors (the “Board” which term shall include an authorized committee of the Board of Directors)
and shareholders of the Company have heretofore adopted a 2018 Incentive Stock Plan (the “Plan”), pursuant
to which this Option is being granted.


 


(c)          The
Board has authorized the granting to Optionee of an incentive stock option (“Option”) as defined in Section 422
of the Internal Revenue Code of 1986, as amended, (the “Code”) to purchase shares of common stock of the Company
(“Stock”) upon the terms and conditions hereinafter stated and pursuant to a registration statement filed under
and in compliance with the Securities Act of 1933, as amended (the “Securities Act”), or an exemption therefrom.


 


3.            Shares;
Price. The Company hereby grants to Optionee the right to purchase, upon and subject to the terms and conditions herein stated,
the number of shares of Stock set forth in Section 1(c) above (the “Shares”) for cash (or other consideration
as is authorized under the Plan and acceptable to the Board, in their sole and absolute discretion) at the price per Share set
forth in Section 1(d) above (the “Exercise Price”), such price being not less than the fair market value
per share of the Shares covered by this Option as of the date hereof (unless Optionee is the owner of Stock possessing ten percent
or more of the total voting power or value of all outstanding Stock of the Company, in which case the Exercise Price shall be
no less than 110% of the fair market value of such Stock).


  




     A-1


     


    

 


4.            Term
of Option; Continuation of Employment. This Option shall expire, and all rights hereunder to purchase the Shares shall terminate
five (5) years from the date hereof. This Option shall earlier terminate subject to Sections 7 and 8 hereof upon, and as of the
date of, the termination of Optionee’s employment if such termination occurs prior to the end of such five (5) year period.
Nothing contained herein shall confer upon Optionee the right to the continuation of his or her employment by the Company or to
interfere with the right of the Company to terminate such employment or to increase or decrease the compensation of Optionee from
the rate in existence at the date hereof.


 


5.            Vesting
of Option. Subject to the provisions of Sections 7 and 8 hereof, this Option shall become exercisable during the term of Optionee’s
employment in four (4) equal annual installments of twenty-five percent (25%) of the Shares covered by this Option, the first
installment to be exercisable on the six (6) month anniversary of the date of this Option (the “Initial Vesting Date”),
with an additional twenty-five percent (25%) of such Shares becoming exercisable on each of the three (3) successive twelve
(12) month periods following the Initial Vesting Date. The installments shall be cumulative (i.e., this option may be exercised,
as to any or all Shares covered by an installment, at any time or times after an installment becomes exercisable and until expiration
or termination of this option).


 


6.            Exercise.
This Option shall be exercised by delivery to the Company of (a) written notice of exercise stating the number of Shares being
purchased (in whole shares only) and such other information set forth on the form of Notice of Exercise attached hereto as Appendix A,
(b) a check or cash in the amount of the Exercise Price of the Shares covered by the notice (or such other consideration as has
been approved by the Board of Directors consistent with the Plan) and (c) a written investment representation as provided for
in Section 13 hereof. Notwithstanding anything to the contrary contained in this Option, this Option may be exercised by
presentation and surrender of this Option to the Company at its principal executive offices with a written notice of the holder’s
intention to effect a cashless exercise, including a calculation of the number of shares of Common Stock to be issued upon such
exercise in accordance with the terms hereof (a “Cashless Exercise”). In the event of a Cashless Exercise,
in lieu of paying the Exercise Price in cash, the holder shall surrender this Option for that number of shares of Common Stock
determined by multiplying the number of Shares to which it would otherwise be entitled by a fraction, the numerator of which shall
be the difference between the then current Market Price per share of the Common Stock and the Exercise Price, and the denominator
of which shall be the then current Market Price per share of Common Stock. For example, if the holder is exercising 100,000 Options
at an exercise price of $0.75 per share through a cashless exercise when the Common Stock’s current Market Price per share
is $2.00 per share, then upon such Cashless Exercise the holder will receive 62,500 shares of Common Stock. Market Price is defined
as the average of the last reported sale prices on the principal trading market for the Common Stock during the five (5) trading
days immediately preceding such date. This Option shall not be assignable or transferable, except by will or by the laws of descent
and distribution, and shall be exercisable only by Optionee during his or her lifetime, except as provided in Section 8 hereof.


 




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7.            Termination
of Employment. If Optionee shall cease to be employed by the Company for any reason, whether voluntarily or involuntarily,
other than by his or her death, Optionee (or if the Optionee shall die after such termination, but prior to such exercise date,
Optionee’s personal representative or the person entitled to succeed to the Option) shall have the right at any time within
three (3) months following such termination of employment or the remaining term of this Option, whichever is the lesser, to exercise
in whole or in part this Option to the extent, but only to the extent, that this Option was exercisable as of the date of termination
of employment and had not previously been exercised; provided, however: (i) if Optionee is permanently disabled (within the meaning
of Section 22(e)(3) of the Code) at the time of termination, the foregoing three (3) month period shall be extended to six
(6) months; or (ii) if Optionee is terminated “for cause” or by the terms of the Plan or this Option Agreement
or by any employment agreement between the Optionee and the Company, this Option shall automatically terminate as to all Shares
covered by this Option not exercised prior to termination. Unless earlier terminated, all rights under this Option shall terminate
in any event on the expiration date of this Option as defined in Section 4 hereof.


 


8.            Death
of Optionee. If the Optionee shall die while in the employ of the Company, Optionee’s personal representative or the
person entitled to Optionee’s rights hereunder may at any time within six (6) months after the date of Optionee’s
death, or during the remaining term of this Option, whichever is the lesser, exercise this Option and purchase Shares to the extent,
but only to the extent, that Optionee could have exercised this Option as of the date of Optionee’s death; provided, in
any case, that this Option may be so exercised only to the extent that this Option has not previously been exercised by Optionee.


 


9.            No
Rights as Shareholder. Optionee shall have no rights as a shareholder with respect to the Shares covered by any installment
of this Option until the effective date of issuance of Shares following exercise of this Option, and no adjustment will be made
for dividends or other rights for which the record date is prior to the date such stock certificate or certificates are issued
except as provided in Section 10 hereof.


 


10.          Recapitalization.
Subject to any required action by the shareholders of the Company, the number of Shares covered by this Option, and the Exercise
Price thereof, shall be proportionately adjusted for any increase or decrease in the number of issued shares resulting from a
subdivision or consolidation of shares or the payment of a stock dividend, or any other increase or decrease in the number of
such shares effected without receipt of consideration by the Company; provided however that the conversion of any convertible
securities of the Company shall not be deemed having been “effected without receipt of consideration by the Company”.


 




     A-3


     


    

 


In
the event of a proposed dissolution or liquidation of the Company, a merger or consolidation in which the Company is not the surviving
entity, or a sale of all or substantially all of the assets or capital stock of the Company (collectively, a “Reorganization”),
unless otherwise provided by the Board, this Option shall terminate immediately prior to such date as is determined by the Board,
which date shall be no later than the consummation of such Reorganization. In such event, if the entity which shall be the surviving
entity does not tender to Optionee an offer, for which it has no obligation to do so, to substitute for any unexercised Option
a stock option or capital stock of such surviving of such surviving entity, as applicable, which on an equitable basis shall provide
the Optionee with substantially the same economic benefit as such unexercised Option, then the Board may grant to such Optionee,
in its sole and absolute discretion and without obligation, the right for a period commencing thirty (30) days prior to and ending
immediately prior to the date determined by the Board pursuant hereto for termination of the Option or during the remaining term
of the Option, whichever is the lesser, to exercise any unexpired Option or Options without regard to the installment provisions
of Section 5; provided, however, that such exercise shall be subject to the consummation of such Reorganization.


 


Subject
to any required action by the shareholders of the Company, if the Company shall be the surviving entity in any merger or consolidation,
this Option thereafter shall pertain to and apply to the securities to which a holder of Shares equal to the Shares subject to
this Option would have been entitled by reason of such merger or consolidation, and the installment provisions of Section 5
shall continue to apply.


 


In
the event of a change in the shares of the Company as presently constituted, which is limited to a change of all of its authorized
Stock without par value into the same number of shares of Stock with a par value, the shares resulting from any such change shall
be deemed to be the Shares within the meaning of this Option.


 


To
the extent that the foregoing adjustments relate to shares or securities of the Company, such adjustments shall be made by the
Board, whose determination in that respect shall be final, binding and conclusive. Except as hereinbefore expressly provided,
Optionee shall have no rights by reason of any subdivision or consolidation of shares of Stock of any class or the payment of
any stock dividend or any other increase or decrease in the number of shares of stock of any class, and the number and price of
Shares subject to this Option shall not be affected by, and no adjustments shall be made by reason of, any dissolution, liquidation,
merger, consolidation or sale of assets or capital stock, or any issue by the Company of shares of stock of any class or securities
convertible into shares of stock of any class.


 


The
grant of this Option shall not affect in any way the right or power of the Company to make adjustments, reclassifications, reorganizations
or changes in its capital or business structure or to merge, consolidate, dissolve or liquidate or to sell or transfer all or
any part of its business or assets.


 




     A-4


     


    

 


11.          Additional
Consideration. Should the Internal Revenue Service determine that the Exercise Price established by the Board as the fair
market value per Share is less than the fair market value per Share as of the date of Option grant, Optionee hereby agrees to
tender such additional consideration, or agrees to tender upon exercise of all or a portion of this Option, such fair market value
per Share as is determined by the Internal Revenue Service.


 


12.          Modifications,
Extension and Renewal of Options. The Board or Committee, as described in the Plan, may modify, extend or renew this Option
or accept the surrender thereof (to the extent not theretofore exercised) and authorize the granting of a new option in substitution
therefore (to the extent not theretofore exercised), subject at all times to the Plan, and Section 422 of the Code. Notwithstanding
the foregoing provisions of this Section 12, no modification shall, without the consent of the Optionee, alter to the Optionee’s
detriment or impair any rights of Optionee hereunder.


 


13.          Investment
Intent; Restrictions on Transfer.


 


(a)       Optionee
represents and agrees that if Optionee exercises this Option in whole or in part, Optionee will in each case acquire the Shares
upon such exercise for the purpose of investment and not with a view to, or for resale in connection with, any distribution thereof;
and that upon such exercise of this Option in whole or in part, Optionee (or any person or persons entitled to exercise this Option
under the provisions of Sections 7 and 8 hereof) shall furnish to the Company a written statement to such effect, satisfactory
to the Company in form and substance. If the Shares represented by this Option are registered under the Securities Act, either
before or after the exercise of this Option in whole or in part, the Optionee shall be relieved of the foregoing investment representation
and agreement and shall not be required to furnish the Company with the foregoing written statement.


 


(b)       Optionee
further represents that Optionee has had access to the financial statements or books and records of the Company, has had the opportunity
to ask questions of the Company concerning its business, operations and financial condition, and to obtain additional information
reasonably necessary to verify the accuracy of such information.


 


(c)       Unless
and until the Shares represented by this Option are registered under the Securities Act, all certificates representing the Shares
and any certificates subsequently issued in substitution therefor and any certificate for any securities issued pursuant to any
stock split, share reclassification, stock dividend or other similar capital event shall bear legends in substantially the following
form:


 


THESE
SECURITIES HAVE NOT BEEN REGISTERED OR OTHERWISE QUALIFIED UNDER THE SECURITIES ACT OF 1933 (THE ’SECURITIES ACT’)
OR UNDER THE APPLICABLE OR SECURITIES LAWS OF ANY STATE. NEITHER THESE SECURITIES NOR ANY INTEREST THEREIN MAY BE SOLD, TRANSFERRED,
PLEDGED OR OTHERWISE DISPOSED OF IN THE ABSENCE OF REGISTRATION UNDER THE SECURITIES ACT OR ANY APPLICABLE SECURITIES LAWS OF
ANY STATE, UNLESS PURSUANT TO EXEMPTIONS THEREFROM.


 




     A-5


     


    

 


THE
SHARES REPRESENTED BY THIS CERTIFICATE HAVE BEEN ISSUED PURSUANT TO THAT CERTAIN INCENTIVE STOCK OPTION AGREEMENT DATED ____________
BETWEEN THE COMPANY AND THE ISSUEE WHICH RESTRICTS THE TRANSFER OF THESE SHARES WHICH ARE SUBJECT TO REPURCHASE BY THE COMPANY
UNDER CERTAIN CONDITIONS.


 


as
well as such other legend or legends as the Company and its counsel deem necessary or appropriate. Appropriate stop transfer instructions
with respect to the Shares have been placed with the Company’s transfer agent.


 


14.          Effects
of Early Disposition. Optionee understands that if an Optionee disposes of shares acquired hereunder within two
(2) years after the date of this Option or within one (1) year after the date of issuance of such shares to Optionee, such Optionee
will be treated for income tax purposes as having received ordinary income at the time of such disposition of an amount generally
measured by the difference between the purchase price and the fair market value of such stock on the date of exercise, subject
to adjustment for any tax previously paid, in addition to any tax on the difference between the sales price and Optionee’s
adjusted cost basis in such shares. The foregoing amount may be measured differently if Optionee is an officer, director or ten percent
holder of the Company. Optionee agrees to notify the Company within ten (10) working days of any such disposition.


 


15.          Stand-off
Agreement. Optionee agrees that in connection with any registration of the Company’s securities under the
Securities Act, and upon the request of the Company or any underwriter managing an underwritten offering of the Company’s
securities, Optionee shall not sell, short any sale of, loan, grant an option for, or otherwise dispose of any of the Shares (other
than Shares included in the offering) without the prior written consent of the Company or such managing underwriter, as applicable,
for a period of at least one year following the effective date of registration of such offering.


 


16.          Restriction
Upon Transfer. The Shares may not be sold, transferred or otherwise disposed of and shall not be pledged or otherwise
hypothecated by the Optionee except as hereinafter provided.


 


(a)       Repurchase
Right on Termination Other Than for Cause. For the purposes of this Section, a “Repurchase Event” shall
mean an occurrence of one of (i) termination of Optionee’s employment by the Company, voluntary or involuntary and with
or without cause; (ii) retirement or death of Optionee; (iii) bankruptcy of Optionee, which shall be deemed to have occurred as
of the date on which a voluntary or involuntary petition in bankruptcy is filed with a court of competent jurisdiction; (iv) dissolution
of the marriage of Optionee, to the extent that any of the Shares are allocated as the sole and separate property of Optionee’s
spouse pursuant thereto (in which case this Section shall only apply to the Shares so affected); or (v) any attempted transfer
by the Optionee of Shares, or any interest therein, in violation of this Agreement. Upon the occurrence of a Repurchase Event,
the Company shall have the right (but not an obligation) to repurchase all or any portion of the Shares of Optionee at a price
equal to the fair value of the Shares as of the date of the Repurchase Event.


 




     A-6


     


    

 


(b)       Repurchase
Right on Termination for Cause. In the event Optionee’s employment is terminated by the Company “for cause”,
then the Company shall have the right (but not an obligation) to repurchase Shares of Optionee at a price equal to the Exercise
Price. Such right of the Company to repurchase Shares shall apply to 100% of the Shares for one (1) year from the date of this
Agreement; and shall thereafter lapse at the rate of twenty percent (20%) of the Shares on each anniversary of the date of
this Agreement. In addition, the Company shall have the right, in the sole discretion of the Board and without obligation, to
repurchase upon termination for cause all or any portion of the Shares of Optionee, at a price equal to the fair value of the
Shares as of the date of termination, which right is not subject to the foregoing lapsing of rights. In the event the Company
elects to repurchase the Shares, the stock certificates representing the same shall forthwith be returned to the Company for cancellation.


 


(c)       Exercise
of Repurchase Right. Any Repurchase Right under Paragraphs 16(a) or 16(b) shall be exercised by giving notice of exercise
as provided herein to Optionee or the estate of Optionee, as applicable. Such right shall be exercised, and the repurchase price
thereunder shall be paid, by the Company within a ninety (90) day period beginning on the date of notice to the Company of the
occurrence of such Repurchase Event (except in the case of termination of employment or retirement, where such option period shall
begin upon the occurrence of the Repurchase Event). Such repurchase price shall be payable only in the form of cash (including
a check drafted on immediately available funds) or cancellation of purchase money indebtedness of the Optionee for the Shares.
If the Company can not purchase all such Shares because it is unable to meet the financial tests set forth in Delaware corporation
law, the Company shall have the right to purchase as many Shares as it is permitted to purchase under such sections. Any Shares
not purchased by the Company hereunder shall no longer be subject to the provisions of this Section 16.


 


(d)       Right
of First Refusal. In the event Optionee desires to transfer any Shares during his or her lifetime, Optionee shall first offer
to sell such Shares to the Company. Optionee shall deliver to the Company written notice of the intended sale, such notice to
specify the number of Shares to be sold, the proposed purchase price and terms of payment, and grant the Company an option for
a period of thirty days following receipt of such notice to purchase the offered Shares upon the same terms and conditions. To
exercise such option, the Company shall give notice of that fact to Optionee within the thirty (30) day notice period and agree
to pay the purchase price in the manner provided in the notice. If the Company does not purchase all of the Shares so offered
during foregoing option period, Optionee shall be under no obligation to sell any of the offered Shares to the Company, but may
dispose of such Shares in any lawful manner during a period of one hundred and eighty (180) days following the end of such notice
period, except that Optionee shall not sell any such Shares to any other person at a lower price or upon more favorable terms
than those offered to the Company.


 




     A-7


     


    

   


(e)       Acceptance
of Restrictions. Acceptance of the Shares shall constitute the Optionee’s agreement to such restrictions and the legending
of his certificates with respect thereto. Notwithstanding such restrictions, however, so long as the Optionee is the holder of
the Shares, or any portion thereof, he shall be entitled to receive all dividends declared on and to vote the Shares and to all
other rights of a shareholder with respect thereto.


 


(f)       
Permitted Transfers. Notwithstanding any provisions in this Section 16 to the contrary, the Optionee may transfer
Shares subject to this Agreement to his or her parents, spouse, children, or grandchildren, or a trust for the benefit of the
Optionee or any such transferee(s); provided, that such permitted transferee(s) shall hold the Shares subject to all the provisions
of this Agreement (all references to the Optionee herein shall in such cases refer mutatis mutandis to the permitted transferee,
except in the case of clause (iv) of Section 16(a) wherein the permitted transfer shall be deemed to be rescinded); and provided
further, that notwithstanding any other provisions in this Agreement, a permitted transferee may not, in turn, make permitted
transfers without the written consent of the Optionee and the Company.


 


(g)       Release
of Restrictions on Shares. All other restrictions under this Section 16 shall terminate five (5) years following the
date of this Agreement, or when the Company’s securities are publicly traded, whichever occurs earlier.


 


17.          Notices.
Any notice required to be given pursuant to this Option or the Plan shall be in writing and shall be deemed to be delivered
upon receipt or, in the case of notices by the Company, five (5) days after deposit in the U.S. mail, postage prepaid, addressed
to Optionee at the address last provided to the Company by Optionee for his or her employee records.


 


18.          Agreement
Subject to Plan; Applicable Law. This Option is made pursuant to the Plan and shall be interpreted to comply therewith. A
copy of such Plan is available to Optionee, at no charge, at the principal office of the Company. Any provision of this Option
inconsistent with the Plan shall be considered void and replaced with the applicable provision of the Plan. This Option has been
granted, executed and delivered in the State of Delaware, and the interpretation and enforcement shall be governed by the laws
thereof and subject to the exclusive jurisdiction of the courts therein.


 




     A-8


     


    

 


IN
WITNESS WHEREOF, the parties hereto have executed this Option as of the date first above written. 


	 	 	 	 
	 	COMPANY:	APPLIED ENERGETICS, INC.
	 	 	a Delaware corporation
	 	 	 	 
	 	 	By: 	 
	 	 	Name: 	 
	 	 	Title:	 
	 	 	 	 
	 	OPTIONEE:	 	 
	 	 	 	 
	 	 	By: 	 
	 	 	 	(signature)
	 	 	Name:	 


 




     A-9


     


    

 


Appendix A


 


NOTICE
OF EXERCISE


 


APPLIED
ENERGETICS, INC.


 





 



 





 



 





 



 


Re:
Incentive Stock Option


 


1)       Notice
is hereby given pursuant to Section 6 of my Incentive Stock Option Agreement that I elect to purchase the number of shares
set forth below at the exercise price set forth in my option agreement:  


Incentive
Stock Option Agreement dated: ____________


 


Number
of shares being purchased: ____________


 


Exercise
Price: $____________


 


A
check in the amount of the aggregate price of the shares being purchased is attached.


 


OR


 


2)       I
elect a cashless exercise pursuant to Section 6 of my Incentive Stock Option. The Average Market Price as of _______ was
$_____.


 


I
hereby confirm that such shares are being acquired by me for my own account for investment purposes, and not with a view to, or
for resale in connection with, any distribution thereof. I will not sell or dispose of my Shares in violation of the Securities
Act of 1933, as amended, or any applicable federal or state securities laws. Further, I understand that the exemption from taxable
income at the time of exercise is dependent upon my holding such stock for a period of at least one year from the date of exercise
and two years from the date of grant of the Option.


 


I
understand that the certificate representing the Option Shares will bear a restrictive legend within the contemplation of the
Securities Act and as required by such other state or federal law or regulation applicable to the issuance or delivery of the
Option Shares.


 


I
agree to provide to the Company such additional documents or information as may be required pursuant to the Company’s 2018
Incentive Stock Plan.


 


	 	By: 	 
	 	 	(signature)
	 	Name: 


 




     A-10


     


    

 


EXHIBIT
B-1


 


APPLIED
ENERGETICS, INC. 


 


EMPLOYEE
NONSTATUTORY STOCK OPTION AGREEMENT 


	 


 


THIS
EMPLOYEE NONSTATUTORY STOCK OPTION AGREEMENT (“Agreement”) is made and entered into as of the date set
forth below, by and between APPLIED ENERGETICS, INC., a Delaware corporation (the “Company”), and the following
employee of the Company (“Optionee”):


 


In
consideration of the covenants herein set forth, the parties hereto agree as follows:


 


1.            Option
Information.


 


	 	 	 	 	 
	 	(a)	Date
    of Option:	 	 
	 	(b)	Optionee:	 	 
	 	(c)	Number
    of Shares: 	 	 
	 	(d)	Exercise
    Price:	 	 
	 	(e)	Vesting
    Schedule	 	 


 


2.            Acknowledgements.


 


(a)       Optionee
is an employee of the Company.


 


(b)       The
Board of Directors (the “Board” which term shall include an authorized committee of the Board of Directors)
and shareholders of the Company have heretofore adopted a 2018 Incentive Stock Plan (the “Plan”), pursuant
to which this Option is being granted; and


 


(c)       The
Board has authorized the granting to Optionee of a nonstatutory stock option (“Option”) to purchase shares
of common stock of the Company (“Stock”) upon the terms and conditions hereinafter stated and pursuant to a
registration statement filed under and in compliance with the Securities Act of 1933, as amended (the “Securities Act”),
or an exemption therefrom.


 


3.            Shares;
Price. Company hereby grants to Optionee the right to purchase, upon and subject to the terms and conditions herein stated,
the number of shares of Stock set forth in Section 1(c) above (the “Shares”) for cash or on a cashless
basis (or other consideration as is acceptable to the Board of Directors of the Company, in their sole and absolute discretion)
at the price per Share set forth in Section 1(d) above (the “Exercise Price”).


 




     B-1-1


     


    

 


4.            Term
of Option; Continuation of Service. This Option shall expire, and all rights hereunder to purchase the Shares shall terminate,
five (5) years from the date hereof. This Option shall earlier terminate subject to Sections 7 and 8 hereof upon, and as of the
date of, the termination of Optionee’s employment if such termination occurs prior to the end of such five (5) year period.
Nothing contained herein shall confer upon Optionee the right to the continuation of his or her employment by the Company or to
interfere with the right of the Company to terminate such employment or to increase or decrease the compensation of Optionee from
the rate in existence at the date hereof.


 


5.           Vesting
of Option. Subject to the provisions of Sections 7 and 8 hereof, this Option shall become exercisable during the term of Optionee’s
employment according to terms deemed acceptable to the Board of Directors of Company in their sole and absolute discretion according
to the schedule set forth in Section 1(e) above (the “Vesting Schedule”).


 


6.            Exercise.
This Option shall be exercised by delivery to the Company of (a) written notice of exercise stating the number of Shares being
purchased (in whole shares only) and such other information set forth on the form of Notice of Exercise attached hereto as Appendix A,
(b) a check or cash in the amount of the Exercise Price of the Shares covered by the notice (or such other consideration as has
been approved by the Board of Directors consistent with the Plan) and (c) a written investment representation as provided for
in Section 13 hereof. Notwithstanding anything to the contrary contained in this Option, this Option may be exercised by
presentation and surrender of this Option to the Company at its principal executive offices with a written notice of the holder’s
intention to effect a cashless exercise, including a calculation of the number of shares of Common Stock to be issued upon such
exercise in accordance with the terms hereof (a “Cashless Exercise”). In the event of a Cashless Exercise,
in lieu of paying the Exercise Price in cash, the holder shall surrender this Option for that number of shares of Common Stock
determined by multiplying the number of Shares to which it would otherwise be entitled by a fraction, the numerator of which shall
be the difference between the then current Market Price per share of the Common Stock and the Exercise Price, and the denominator
of which shall be the then current Market Price per share of Common Stock. For example, if the holder is exercising 100,000 Options
with a per exercise price of $0.75 per share through a cashless exercise when the Common Stock’s current Market Price per
share is $2.00 per share, then upon such Cashless Exercise the holder will receive 62,500 shares of Common Stock. Market Price
is defined as the average of the last reported sale prices on the principal trading market for the Common Stock during the five
(5) trading days immediately preceding such date. This Option shall not be assignable or transferable, except by will or by the
laws of descent and distribution, and shall be exercisable only by Optionee during his or her lifetime, except as provided in
Section 8 hereof.


 




     B-1-2


     


    

   


7.            Termination
of Employment. If Optionee shall cease to be employed by the Company for any reason, whether voluntarily or involuntarily,
other than by his or her death, Optionee (or if the Optionee shall die after such termination, but prior to such exercise date,
Optionee’s personal representative or the person entitled to succeed to the Option) shall have the right at any time within
three (3) months following such termination of employment or the remaining term of this Option, whichever is the lesser, to exercise
in whole or in part this Option to the extent, but only to the extent, that this Option was exercisable as of the date of termination
of employment and had not previously been exercised; provided, however: (i) if Optionee is permanently disabled (within the meaning
of Section 22(e)(3) of the Code) at the time of termination, the foregoing three (3) month period shall be extended to six
(6) months; or (ii) if Optionee is terminated “for cause”, or by the terms of the Plan or this Option Agreement or
by any employment agreement between the Optionee and the Company, this Option shall automatically terminate as to all Shares covered
by this Option not exercised prior to termination.


 


Unless
earlier terminated, all rights under this Option shall terminate in any event on the expiration date of this Option as defined
in Section 4 hereof.


 


8.            Death
of Optionee. If the Optionee shall die while in the employ of the Company, Optionee’s personal representative or the
person entitled to Optionee’s rights hereunder may at any time within six (6) months after the date of Optionee’s
death, or during the remaining term of this Option, whichever is the lesser, exercise this Option and purchase Shares to the extent,
but only to the extent, that Optionee could have exercised this Option as of the date of Optionee’s death; provided, in
any case, that this Option may be so exercised only to the extent that this Option has not previously been exercised by Optionee.


 


9.            No
Rights as Shareholder. Optionee shall have no rights as a shareholder with respect to the Shares covered by any installment
of this Option until the effective date of issuance of the Shares following exercise of this Option, and no adjustment will be
made for dividends or other rights for which the record date is prior to the date such stock certificate or certificates are issued
except as provided in Section 10 hereof.


 


10.          Recapitalization.
Subject to any required action by the shareholders of the Company, the number of Shares covered by this Option, and the Exercise
Price thereof, shall be proportionately adjusted for any increase or decrease in the number of issued shares resulting from a
subdivision or consolidation of shares or the payment of a stock dividend, or any other increase or decrease in the number of
such shares effected without receipt of consideration by the Company; provided however that the conversion of any convertible
securities of the Company shall not be deemed having been “effected without receipt of consideration by the Company”.


  




     B-1-3


     


    

  


In
the event of a proposed dissolution or liquidation of the Company, a merger or consolidation in which the Company is not the surviving
entity, or a sale of all or substantially all of the assets or capital stock of the Company (collectively, a “Reorganization”),
unless otherwise provided by the Board, this Option shall terminate immediately prior to such date as is determined by the Board,
which date shall be no later than the consummation of such Reorganization. In such event, if the entity which shall be the surviving
entity does not tender to Optionee an offer, for which it has no obligation to do so, to substitute for any unexercised Option
a stock option or capital stock of such surviving of such surviving entity, as applicable, which on an equitable basis shall provide
the Optionee with substantially the same economic benefit as such unexercised Option, then the Board may grant to such Optionee,
in its sole and absolute discretion and without obligation, the right for a period commencing thirty (30) days prior to and ending
immediately prior to the date determined by the Board pursuant hereto for termination of the Option or during the remaining term
of the Option, whichever is the lesser, to exercise any unexpired Option or Options without regard to the installment provisions
of Section 5; provided, however, that such exercise shall be subject to the consummation of such Reorganization.


 


Subject
to any required action by the shareholders of the Company, if the Company shall be the surviving entity in any merger or consolidation,
this Option thereafter shall pertain to and apply to the securities to which a holder of Shares equal to the Shares subject to
this Option would have been entitled by reason of such merger or consolidation, and the installment provisions of Section 5
shall continue to apply.


 


In
the event of a change in the shares of the Company as presently constituted, which is limited to a change of all of its authorized
Stock without par value into the same number of shares of Stock with a par value, the shares resulting from any such change shall
be deemed to be the Shares within the meaning of this Option.


 


To
the extent that the foregoing adjustments relate to shares or securities of the Company, such adjustments shall be made by the
Board, whose determination in that respect shall be final, binding and conclusive. Except as hereinbefore expressly provided,
Optionee shall have no rights by reason of any subdivision or consolidation of shares of Stock of any class or the payment of
any stock dividend or any other increase or decrease in the number of shares of stock of any class, and the number and price of
Shares subject to this Option shall not be affected by, and no adjustments shall be made by reason of, any dissolution, liquidation,
merger, consolidation or sale of assets or capital stock, or any issue by the Company of shares of stock of any class or securities
convertible into shares of stock of any class.


 


The
grant of this Option shall not affect in any way the right or power of the Company to make adjustments, reclassifications, reorganizations
or changes in its capital or business structure or to merge, consolidate, dissolve or liquidate or to sell or transfer all or
any part of its business or assets.


 




     B-1-4


     


    

   


11.       Taxation
upon Exercise of Option. Optionee understands that, upon exercise of this Option, Optionee will recognize income, for Federal
and state income tax purposes, in an amount equal to the amount by which the fair market value of the Shares, determined as of
the date of exercise, exceeds the Exercise Price. The acceptance of the Shares by Optionee shall constitute an agreement by Optionee
to report such income in accordance with then applicable law and to cooperate with Company in establishing the amount of such
income and corresponding deduction to the Company for its income tax purposes. Withholding for federal or state income and employment
tax purposes will be made, if and as required by law, from Optionee’s then current compensation, or, if such current compensation
is insufficient to satisfy withholding tax liability, the Company may require Optionee to make a cash payment to cover such liability
as a condition of the exercise of this Option.


 


12.       Modification,
Extension and Renewal of Options. The Board or Committee, as described in the Plan, may modify, extend or renew this Option
or accept the surrender thereof (to the extent not theretofore exercised) and authorize the granting of a new option in substitution
therefore (to the extent not theretofore exercised), subject at all times to the Plan and the Code. Notwithstanding the foregoing
provisions of this Section 12, no modification shall, without the consent of the Optionee, alter to the Optionee’s
detriment or impair any rights of Optionee hereunder.


 


13.       Investment
Intent; Restrictions on Transfer.


 


(a)          Optionee
represents and agrees that if Optionee exercises this Option in whole or in part, Optionee will in each case acquire the Shares
upon such exercise for the purpose of investment and not with a view to, or for resale in connection with, any distribution thereof;
and that upon such exercise of this Option in whole or in part, Optionee (or any person or persons entitled to exercise this Option
under the provisions of Sections 7 and 8 hereof) shall furnish to the Company a written statement to such effect, satisfactory
to the Company in form and substance. If the Shares represented by this Option are registered under the Securities Act, either
before or after the exercise of this Option in whole or in part, the Optionee shall be relieved of the foregoing investment representation
and agreement and shall not be required to furnish the Company with the foregoing written statement.


 


(b)         Optionee
further represents that Optionee has had access to the financial statements or books and records of the Company, has had the opportunity
to ask questions of the Company concerning its business, operations and financial condition, and to obtain additional information
reasonably necessary to verify the accuracy of such information


 




     B-1-5


     


    

 


(c)          Unless
and until the Shares represented by this Option are registered under the Securities Act, all certificates representing the Shares
and any certificates subsequently issued in substitution therefor and any certificate for any securities issued pursuant to any
stock split, share reclassification, stock dividend or other similar capital event shall bear legends in substantially the following
form:


 


THESE
SECURITIES HAVE NOT BEEN REGISTERED OR OTHERWISE QUALIFIED UNDER THE SECURITIES ACT OF 1933 (THE ’SECURITIES ACT’)
OR UNDER THE APPLICABLE OR SECURITIES LAWS OF ANY STATE. NEITHER THESE SECURITIES NOR ANY INTEREST THEREIN MAY BE SOLD, TRANSFERRED,
PLEDGED OR OTHERWISE DISPOSED OF IN THE ABSENCE OF REGISTRATION UNDER THE SECURITIES ACT OR ANY APPLICABLE SECURITIES LAWS OF
ANY STATE, UNLESS PURSUANT TO EXEMPTIONS THEREFROM.


 


THE
SHARES REPRESENTED BY THIS CERTIFICATE HAVE BEEN ISSUED PURSUANT TO THAT CERTAIN NONSTATUTORY STOCK OPTION AGREEMENT DATED ____________
BETWEEN THE COMPANY AND THE ISSUEE WHICH RESTRICTS THE TRANSFER OF THESE SHARES WHICH ARE SUBJECT TO REPURCHASE BY THE COMPANY
UNDER CERTAIN CONDITIONS.


 


and/or
such other legend or legends as the Company and its counsel deem necessary or appropriate. Appropriate stop transfer instructions
with respect to the Shares have been placed with the Company’s transfer agent.


 


14.       Stand-off
Agreement. Optionee agrees that, in connection with any registration of the Company’s securities under the Securities
Act, and upon the request of the Company or any underwriter managing an underwritten offering of the Company’s securities,
Optionee shall not sell, short any sale of, loan, grant an option for, or otherwise dispose of any of the Shares (other than Shares
included in the offering) without the prior written consent of the Company or such managing underwriter, as applicable, for a
period of at least one year following the effective date of registration of such offering.


 


15.       Restriction
Upon Transfer. The Shares may not be sold, transferred or otherwise disposed of and shall not be pledged or otherwise hypothecated
by the Optionee except as hereinafter provided.


 




     B-1-6


     


    

 


(a)          Repurchase
Right on Termination Other Than for Cause. For the purposes of this Section, a “Repurchase Event” shall mean
an occurrence of one of (i) termination of Optionee’s employment by the Company, voluntary or involuntary and with or without
cause; (ii) retirement or death of Optionee; (iii) bankruptcy of Optionee, which shall be deemed to have occurred as of the date
on which a voluntary or involuntary petition in bankruptcy is filed with a court of competent jurisdiction; (iv) dissolution of
the marriage of Optionee, to the extent that any of the Shares are allocated as the sole and separate property of Optionee’s
spouse pursuant thereto (in which case, this Section shall only apply to the Shares so affected); or (v) any attempted transfer
by the Optionee of Shares, or any interest therein, in violation of this Agreement. Upon the occurrence of a Repurchase Event,
the Company shall have the right (but not an obligation) to repurchase all or any portion of the Shares of Optionee at a price
equal to the fair value of the Shares as of the date of the Repurchase Event.


 


(b)         Repurchase
Right on Termination for Cause. In the event Optionee’s employment is terminated by the Company “for cause”,
then the Company shall have the right (but not an obligation) to repurchase Shares of Optionee at a price equal to the Exercise
Price. Such right of the Company to repurchase Shares shall apply to 100% of the Shares for one (1) year from the date of this
Agreement; and shall thereafter lapse at the rate of twenty percent (20%) of the Shares on each anniversary of the date of
this Agreement. In addition, the Company shall have the right, in the sole discretion of the Board and without obligation, to
repurchase upon termination for cause all or any portion of the Shares of Optionee, at a price equal to the fair value of the
Shares as of the date of termination, which right is not subject to the foregoing lapsing of rights. In the event the Company
elects to repurchase the Shares, the stock certificates representing the same shall forthwith be returned to the Company for cancellation.


 


(c)          Exercise
of Repurchase Right. Any Repurchase Right under Paragraphs 15(a) or 15(b) shall be exercised by giving notice of exercise as provided
herein to Optionee or the estate of Optionee, as applicable. Such right shall be exercised, and the repurchase price thereunder
shall be paid, by the Company within a ninety (90) day period beginning on the date of notice to the Company of the occurrence
of such Repurchase Event (except in the case of termination of employment or retirement, where such option period shall begin
upon the occurrence of the Repurchase Event). Such repurchase price shall be payable only in the form of cash (including a check
drafted on immediately available funds) or cancellation of purchase money indebtedness of the Optionee for the Shares. If the
Company can not purchase all such Shares because it is unable to meet the financial tests set forth in the Delaware corporation
law, the Company shall have the right to purchase as many Shares as it is permitted to purchase under such sections. Any Shares
not purchased by the Company hereunder shall no longer be subject to the provisions of this Section 15.


 




     B-1-7


     


    

 


(d)         Right
of First Refusal. In the event Optionee desires to transfer any Shares during his or her lifetime, Optionee shall first offer
to sell such Shares to the Company. Optionee shall deliver to the Company written notice of the intended sale, such notice to
specify the number of Shares to be sold, the proposed purchase price and terms of payment, and grant the Company an option for
a period of thirty days following receipt of such notice to purchase the offered Shares upon the same terms and conditions. To
exercise such option, the Company shall give notice of that fact to Optionee within the thirty (30) day notice period and agree
to pay the purchase price in the manner provided in the notice. If the Company does not purchase all of the Shares so offered
during foregoing option period, Optionee shall be under no obligation to sell any of the offered Shares to the Company, but may
dispose of such Shares in any lawful manner during a period of one hundred and eighty (180) days following the end of such notice
period, except that Optionee shall not sell any such Shares to any other person at a lower price or upon more favorable terms
than those offered to the Company.


 


(e)         Acceptance
of Restrictions. Acceptance of the Shares shall constitute the Optionee’s agreement to such restrictions and the legending
of his certificates with respect thereto. Notwithstanding such restrictions, however, so long as the Optionee is the holder of
the Shares, or any portion thereof, he shall be entitled to receive all dividends declared on and to vote the Shares and to all
other rights of a shareholder with respect thereto.


 


(f)
         Permitted Transfers. Notwithstanding any provisions in this Section 15
to the contrary, the Optionee may transfer Shares subject to this Agreement to his or her parents, spouse, children, or grandchildren,
or a trust for the benefit of the Optionee or any such transferee(s); provided, that such permitted transferee(s) shall hold the
Shares subject to all the provisions of this Agreement (all references to the Optionee herein shall in such cases refer mutatis
mutandis to the permitted transferee, except in the case of clause (iv) of Section 15(a) wherein the permitted transfer shall
be deemed to be rescinded); and provided further, that notwithstanding any other provisions in this Agreement, a permitted transferee
may not, in turn, make permitted transfers without the written consent of the Optionee and the Company.


 


(g)         Release
of Restrictions on Shares. All other restrictions under this Section 15 shall terminate five (5) years following the date
of this Agreement, or when the Company’s securities are publicly traded, whichever occurs earlier.


 


16.       Notices.
Any notice required to be given pursuant to this Option or the Plan shall be in writing and shall be deemed to be delivered
upon receipt or, in the case of notices by the Company, five (5) days after deposit in the U.S. mail, postage prepaid, addressed
to Optionee at the address last provided by Optionee for his or her employee records.


  




     B-1-8


     


    

 


17.       Agreement
Subject to Plan; Applicable Law. This Option is made pursuant to the Plan and shall be interpreted to comply therewith. A
copy of such Plan is available to Optionee, at no charge, at the principal office of the Company. Any provision of this Option
inconsistent with the Plan shall be considered void and replaced with the applicable provision of the Plan. This Option has been
granted, executed and delivered in the State of Delaware, and the interpretation and enforcement shall be governed by the laws
thereof and subject to the exclusive jurisdiction of the courts therein.


 


IN
WITNESS WHEREOF, the parties hereto have executed this Option as of the date first above written.  


	 	 	 	 
	 	COMPANY:	APPLIED ENERGETICS, INC.
	 	 	a Delaware corporation
	 	 	 	 
	 	 	By: 	 
	 	 	Name: 	 
	 	 	Title:	 
	 	 	 	 
	 	OPTIONEE:	 	 
	 	 	 	 
	 	 	By: 	 
	 	 	 	(signature)
	 	 	Name:	 


 




     B-1-9


     


    

 


Appendix A


 


NOTICE
OF EXERCISE


 


APPLIED
ENERGETICS, INC.


 


_________________


 


_________________


 


_________________


 


Re:
Nonstatutory Stock Option


 


1)         Notice
is hereby given pursuant to Section 6 of my Nonstatutory Stock Option Agreement that I elect to purchase the number of shares
set forth below at the exercise price set forth in my option agreement:


 


Nonstatutory
Stock Option Agreement dated: ____________


 


Number
of shares being purchased: ____________


 


Exercise
Price: $____________


 


A
check in the amount of the aggregate price of the shares being purchased is attached.


 


OR


 


2)       I
elect a cashless exercise pursuant to Section 6 of my Nonstatutory Stock Option Agreement. The Average Market Price as of
_______ was $_____.


 


I
hereby confirm that such shares are being acquired by me for my own account for investment purposes, and not with a view to, or
for resale in connection with, any distribution thereof. I will not sell or dispose of my Shares in violation of the Securities
Act of 1933, as amended, or any applicable federal or state securities laws. Further, I understand that the exemption from taxable
income at the time of exercise is dependent upon my holding such stock for a period of at least one year from the date of exercise
and two years from the date of grant of the Option.


 


I
understand that the certificate representing the Option Shares will bear a restrictive legend within the contemplation of the
Securities Act and as required by such other state or federal law or regulation applicable to the issuance or delivery of the
Option Shares.


 


I
agree to provide to the Company such additional documents or information as may be required pursuant to the Company’s 2018
Incentive Stock Plan.  


	 	 	 
	 	By: 	 
	 	 	(signature)
	 	Name: 	 


 




     B-1-10


     


    

 


EXHIBIT
B-2


 


APPLIED
ENERGETICS, INC. 


NONSTATUTORY
STOCK OPTION AGREEMENT 


	 	 	 


 


THIS
NONSTATUTORY STOCK OPTION AGREEMENT (“Agreement”) is made and entered into as of the date set forth below,
by and between APPLIED ENERGETICS, INC., a Delaware corporation (the “Company”), and the following Director
of the Company (“Optionee”):


 


In
consideration of the covenants herein set forth, the parties hereto agree as follows:


 


1.       Option
Information.




 


	 	(a)	Date
    of Option:	 	 
	 	(b)	Optionee:	 	 
	 	(c)	Number
    of Shares:	 	 
	 	(d)	Exercise
    Price:	 	 
	 	(e)	Vesting
    Schedule	 	 


 


2.       Acknowledgements.


 


(a)          Optionee
is a member of the Board of Directors of the Company.


 


(b)          The
Board of Directors (the “Board” which term shall include an authorized committee of the Board of Directors)
and shareholders of the Company have heretofore adopted a 2018 Incentive Stock Plan (the “Plan”), pursuant
to which this Option is being granted; and


 


(c)          The
Board has authorized the granting to Optionee of a nonstatutory stock option (“Option”) to purchase shares
of common stock of the Company (“Stock”) upon the terms and conditions hereinafter stated and pursuant to a
registration statement filed under and in compliance with the Securities Act of 1933, as amended (the “Securities Act”),
or an exemption therefrom.


 


3.       Shares;
Price. Company hereby grants to Optionee the right to purchase, upon and subject to the terms and conditions herein stated,
the number of shares of Stock set forth in Section 1(c) above (the “Shares”) for cash or on a cashless
basis (or other consideration as is acceptable to the Board of Directors of the Company, in their sole and absolute discretion)
at the price per Share set forth in Section 1(d) above (the “Exercise Price”).


 




    B-2-1


     


    

 


4.       Term
of Option; Continuation of Service. This Option shall expire, and all rights hereunder to purchase the Shares shall terminate,
ten (10) years from the date hereof. This Option shall earlier terminate subject to Sections 7 and 8 hereof upon, and as of the
date of, the termination of Optionee’s employment if such termination occurs prior to the end of such ten (10) year period.
Nothing contained herein shall confer upon Optionee the right to the continuation of his or her employment by the Company or to
interfere with the right of the Company to terminate such employment or to increase or decrease the compensation of Optionee from
the rate in existence at the date hereof.


 


5.       Vesting
of Option. Subject to the provisions of Sections 7 and 8 hereof, this Option shall become exercisable during the term that
Optionee serves as a Director of the Company according to terms deemed acceptable to the Board of Directors of the Company in
their sole and absolute discretion according to the schedule set forth in Section 1(e) above (the “Vesting Schedule”).


 


6.       Exercise.
This Option shall be exercised by delivery to the Company of (a) written notice of exercise stating the number of Shares being
purchased (in whole shares only) and such other information set forth on the form of Notice of Exercise attached hereto as Appendix A,
(b) a check or cash in the amount of the Exercise Price of the Shares covered by the notice (or such other consideration as has
been approved by the Board of Directors consistent with the Plan) and (c) a written investment representation as provided for
in Section 13 hereof. Notwithstanding anything to the contrary contained in this Option, this Option may be exercised by
presentation and surrender of this Option to the Company at its principal executive offices with a written notice of the holder’s
intention to effect a cashless exercise, including a calculation of the number of shares of Common Stock to be issued upon such
exercise in accordance with the terms hereof (a “Cashless Exercise”). In the event of a Cashless Exercise,
in lieu of paying the Exercise Price in cash, the holder shall surrender this Option for that number of shares of Common Stock
determined by multiplying the number of Shares to which it would otherwise be entitled by a fraction, the numerator of which shall
be the difference between the then current Market Price per share of the Common Stock and the Exercise Price, and the denominator
of which shall be the then current Market Price per share of Common Stock. For example, if the holder is exercising 100,000 Options
at an exercise price of $0.75 per share through a cashless exercise when the Common Stock’s current Market Price per share
is $2.00 per share, then upon such Cashless Exercise the holder will receive 62,500 shares of Common Stock. Market Price is defined
as the average of the last reported sale prices on the principal trading market for the Common Stock during the five (5) trading
days immediately preceding such date. This Option shall not be assignable or transferable, except by will or by the laws of descent
and distribution, and shall be exercisable only by Optionee during his or her lifetime, except as provided in Section 8 hereof.


 




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7.       Termination
of Service. If Optionee shall cease to serve as a Director of the Company for any reason, no further installments shall vest
pursuant to Section 5, and the maximum number of Shares that Optionee may purchase pursuant hereto shall be limited to the
number of Shares that were vested as of the date Optionee ceases to be a Director (to the nearest whole Share). Thereupon, Optionee
shall have the right to exercise this Option, at any time during the remaining term hereof, to the extent, but only to the extent,
that this Option was exercisable as of the date Optionee ceases to be a Director; provided, however, if Optionee is removed as
a Director pursuant to the Delaware corporation law, the foregoing right to exercise shall automatically terminate on the date
Optionee ceases to be a Director as to all Shares covered by this Option not exercised prior to termination. Unless earlier terminated,
all rights under this Option shall terminate in any event on the expiration date of this Option as defined in Section 4 hereof.


 


8.       Death
of Optionee. If the Optionee shall die while in the employ of the Company, Optionee’s personal representative or the
person entitled to Optionee’s rights hereunder may at any time within six (6) months after the date of Optionee’s
death, or during the remaining term of this Option, whichever is the lesser, exercise this Option and purchase Shares to the extent,
but only to the extent, that Optionee could have exercised this Option as of the date of Optionee’s death; provided, in
any case, that this Option may be so exercised only to the extent that this Option has not previously been exercised by Optionee.


 


9.        No
Rights as Shareholder. Optionee shall have no rights as a shareholder with respect to the Shares covered by any installment
of this Option until the effective date of issuance of the Shares following exercise of this Option, and no adjustment will be
made for dividends or other rights for which the record date is prior to the date such stock certificate or certificates are issued
except as provided in Section 10 hereof.


 


10.       Recapitalization.
Subject to any required action by the shareholders of the Company, the number of Shares covered by this Option, and the Exercise
Price thereof, shall be proportionately adjusted for any increase or decrease in the number of issued shares resulting from a
subdivision or consolidation of shares or the payment of a stock dividend, or any other increase or decrease in the number of
such shares effected without receipt of consideration by the Company; provided however that the conversion of any convertible
securities of the Company shall not be deemed having been “effected without receipt of consideration by the Company”.


 




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In
the event of a proposed dissolution or liquidation of the Company, a merger or consolidation in which the Company is not the surviving
entity, or a sale of all or substantially all of the assets or capital stock of the Company (collectively, a “Reorganization”),
unless otherwise provided by the Board, this Option shall terminate immediately prior to such date as is determined by the Board,
which date shall be no later than the consummation of such Reorganization. In such event, if the entity which shall be the surviving
entity does not tender to Optionee an offer, for which it has no obligation to do so, to substitute for any unexercised Option
a stock option or capital stock of such surviving of such surviving entity, as applicable, which on an equitable basis shall provide
the Optionee with substantially the same economic benefit as such unexercised Option, then the Board may grant to such Optionee,
in its sole and absolute discretion and without obligation, the right for a period commencing thirty (30) days prior to and ending
immediately prior to the date determined by the Board pursuant hereto for termination of the Option or during the remaining term
of the Option, whichever is the lesser, to exercise any unexpired Option or Options without regard to the installment provisions
of Section 5; provided, however, that such exercise shall be subject to the consummation of such Reorganization.


 


Subject
to any required action by the shareholders of the Company, if the Company shall be the surviving entity in any merger or consolidation,
this Option thereafter shall pertain to and apply to the securities to which a holder of Shares equal to the Shares subject to
this Option would have been entitled by reason of such merger or consolidation, and the installment provisions of Section 5
shall continue to apply.


 


In
the event of a change in the shares of the Company as presently constituted, which is limited to a change of all of its authorized
Stock without par value into the same number of shares of Stock with a par value, the shares resulting from any such change shall
be deemed to be the Shares within the meaning of this Option.


 


To
the extent that the foregoing adjustments relate to shares or securities of the Company, such adjustments shall be made by the
Board, whose determination in that respect shall be final, binding and conclusive. Except as hereinbefore expressly provided,
Optionee shall have no rights by reason of any subdivision or consolidation of shares of Stock of any class or the payment of
any stock dividend or any other increase or decrease in the number of shares of stock of any class, and the number and price of
Shares subject to this Option shall not be affected by, and no adjustments shall be made by reason of, any dissolution, liquidation,
merger, consolidation or sale of assets or capital stock, or any issue by the Company of shares of stock of any class or securities
convertible into shares of stock of any class.


 


The
grant of this Option shall not affect in any way the right or power of the Company to make adjustments, reclassifications, reorganizations
or changes in its capital or business structure or to merge, consolidate, dissolve or liquidate or to sell or transfer all or
any part of its business or assets.


 




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11.       Taxation
upon Exercise of Option. Optionee understands that, upon exercise of this Option, Optionee will recognize income, for Federal
and state income tax purposes, in an amount equal to the amount by which the fair market value of the Shares, determined as of
the date of exercise, exceeds the Exercise Price. The acceptance of the Shares by Optionee shall constitute an agreement by Optionee
to report such income in accordance with then applicable law and to cooperate with Company in establishing the amount of such
income and corresponding deduction to the Company for its income tax purposes. Withholding for federal or state income and employment
tax purposes will be made, if and as required by law, from Optionee’s then current compensation, or, if such current compensation
is insufficient to satisfy withholding tax liability, the Company may require Optionee to make a cash payment to cover such liability
as a condition of the exercise of this Option.


 


12       Modification,
Extension and Renewal of Options. The Board or Committee, as described in the Plan, may modify, extend or renew this Option
or accept the surrender thereof (to the extent not theretofore exercised) and authorize the granting of a new option in substitution
therefore (to the extent not theretofore exercised), subject at all times to the Plan and the Code. Notwithstanding the foregoing
provisions of this Section 12, no modification shall, without the consent of the Optionee, alter to the Optionee’s
detriment or impair any rights of Optionee hereunder.


 


13.       Investment
Intent; Restrictions on Transfer.


 


(a)       Optionee
represents and agrees that if Optionee exercises this Option in whole or in part, Optionee will in each case acquire the Shares
upon such exercise for the purpose of investment and not with a view to, or for resale in connection with, any distribution thereof;
and that upon such exercise of this Option in whole or in part, Optionee (or any person or persons entitled to exercise this Option
under the provisions of Sections 7 and 8 hereof) shall furnish to the Company a written statement to such effect, satisfactory
to the Company in form and substance. If the Shares represented by this Option are registered under the Securities Act, either
before or after the exercise of this Option in whole or in part, the Optionee shall be relieved of the foregoing investment representation
and agreement and shall not be required to furnish the Company with the foregoing written statement.


 


(b)       Optionee
further represents that Optionee has had access to the financial statements or books and records of the Company, has had the opportunity
to ask questions of the Company concerning its business, operations and financial condition, and to obtain additional information
reasonably necessary to verify the accuracy of such information.


 




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(c)       Unless
and until the Shares represented by this Option are registered under the Securities Act, all certificates representing the Shares
and any certificates subsequently issued in substitution therefor and any certificate for any securities issued pursuant to any
stock split, share reclassification, stock dividend or other similar capital event shall bear legends in substantially the following
form:


 


THESE
SECURITIES HAVE NOT BEEN REGISTERED OR OTHERWISE QUALIFIED UNDER THE SECURITIES ACT OF 1933 (THE ’SECURITIES ACT’)
OR UNDER THE APPLICABLE OR SECURITIES LAWS OF ANY STATE. NEITHER THESE SECURITIES NOR ANY INTEREST THEREIN MAY BE SOLD, TRANSFERRED,
PLEDGED OR OTHERWISE DISPOSED OF IN THE ABSENCE OF REGISTRATION UNDER THE SECURITIES ACT OR ANY APPLICABLE SECURITIES LAWS OF
ANY STATE, UNLESS PURSUANT TO EXEMPTIONS THEREFROM.


 


THE
SHARES REPRESENTED BY THIS CERTIFICATE HAVE BEEN ISSUED PURSUANT TO THAT CERTAIN NONSTATUTORY STOCK OPTION AGREEMENT DATED ____________
BETWEEN THE COMPANY AND THE ISSUEE WHICH RESTRICTS THE TRANSFER OF THESE SHARES WHICH ARE SUBJECT TO REPURCHASE BY THE COMPANY
UNDER CERTAIN CONDITIONS.


 


and/or
such other legend or legends as the Company and its counsel deem necessary or appropriate. Appropriate stop transfer instructions
with respect to the Shares have been placed with the Company’s transfer agent.


 


14.       Stand-off
Agreement. Optionee agrees that, in connection with any registration of the Company’s securities under the Securities
Act, and upon the request of the Company or any underwriter managing an underwritten offering of the Company’s securities,
Optionee shall not sell, short any sale of, loan, grant an option for, or otherwise dispose of any of the Shares (other than Shares
included in the offering) without the prior written consent of the Company or such managing underwriter, as applicable, for a
period of at least one year following the effective date of registration of such offering.


 


15.       Restriction
Upon Transfer. The Shares may not be sold, transferred or otherwise disposed of and shall not be pledged or otherwise hypothecated
by the Optionee except as hereinafter provided.


 


(a)          Repurchase
Right on Termination Other Than by Removal. For the purposes of this Section, a “Repurchase Event” shall
mean an occurrence of one of (i) termination of Optionee’s service as a director; (ii) death of Optionee; (iii) bankruptcy
of Optionee, which shall be deemed to have occurred as of the date on which a voluntary or involuntary petition in bankruptcy
is filed with a court of competent jurisdiction; (iv) dissolution of the marriage of Optionee, to the extent that any of the Shares
are allocated as the sole and separate property of Optionee’s spouse pursuant thereto (in which case, this Section shall
only apply to the Shares so affected); or (v) any attempted transfer by the Optionee of Shares, or any interest therein, in violation
of this Agreement. Upon the occurrence of a Repurchase Event, and upon mutual agreement of the Company and Optionee, the Company
may repurchase all or any portion of the Shares of Optionee at a price equal to the fair value of the Shares as of the date of
the Repurchase Event.


 


(b)         Repurchase
Right on Removal. In the event Optionee is removed as a director pursuant to the Delaware Revised Statutes Code, or Optionee
voluntarily resigns as a director prior to the date upon which the last installment of Shares becomes exercisable pursuant to
Section 5, then the Company shall have the right (but not an obligation) to repurchase Shares of Optionee at a price equal
to the Exercise Price. Such right of the Company to repurchase


 




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Shares
shall apply to 100% of the Shares for one (1) year from the date of this Agreement; and shall thereafter lapse ratably in equal
annual increments on each anniversary of the date of this Agreement over the term of this Option specified in Section 4.
In addition, the Company shall have the right, in the sole discretion of the Board and without obligation, to repurchase upon
removal or resignation all or any portion of the Shares of Optionee, at a price equal to the fair value of the Shares as of the
date of such removal or resignation, which right is not subject to the foregoing lapsing of rights. In the event the Company elects
to repurchase the Shares, the stock certificates representing the same shall forthwith be returned to the Company for cancellation.


 


(c)       Exercise
of Repurchase Right. Any Repurchase Right under Paragraphs 15(a) or 15(b) shall be exercised by giving notice of exercise
as provided herein to Optionee or the estate of Optionee, as applicable. Such right shall be exercised, and the repurchase price
thereunder shall be paid, by the Company within a ninety (90) day period beginning on the date of notice to the Company of the
occurrence of such Repurchase Event (except in the case of termination or cessation of services as director, where such option
period shall begin upon the occurrence of the Repurchase Event). Such repurchase price shall be payable only in the form of cash
(including a check drafted on immediately available funds) or cancellation of purchase money indebtedness of the Optionee for
the Shares. If the Company can not purchase all such Shares because it is unable to meet the financial tests set forth in the
Delaware corporation law, the Company shall have the right to purchase as many Shares as it is permitted to purchase under such
sections. Any Shares not purchased by the Company hereunder shall no longer be subject to the provisions of this Section 15.


 


(d)       Right
of First Refusal. In the event Optionee desires to transfer any Shares during his or her lifetime, Optionee shall first offer
to sell such Shares to the Company. Optionee shall deliver to the Company written notice of the intended sale, such notice to
specify the number of Shares to be sold, the proposed purchase price and terms of payment, and grant the Company an option for
a period of thirty days following receipt of such notice to purchase the offered Shares upon the same terms and conditions. To
exercise such option, the Company shall give notice of that fact to Optionee within the thirty (30) day notice period and agree
to pay the purchase price in the manner provided in the notice. If the Company does not purchase all of the Shares so offered
during foregoing option period, Optionee shall be under no obligation to sell any of the offered Shares to the Company, but may
dispose of such Shares in any lawful manner during a period of one hundred and eighty (180) days following the end of such notice
period, except that Optionee shall not sell any such Shares to any other person at a lower price or upon more favorable terms
than those offered to the Company.


 


(e)       Acceptance
of Restrictions. Acceptance of the Shares shall constitute the Optionee’s agreement to such restrictions and the legending
of his certificates with respect thereto. Notwithstanding such restrictions, however, so long as the Optionee is the holder of
the Shares, or any portion thereof, he shall be entitled to receive all dividends declared on and to vote the Shares and to all
other rights of a shareholder with respect thereto.


 




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(f)          Permitted
Transfers. Notwithstanding any provisions in this Section 15 to the contrary, the Optionee may transfer Shares subject to
this Agreement to his or her parents, spouse, children, or grandchildren, or a trust for the benefit of the Optionee or any such
transferee(s); provided, that such permitted transferee(s) shall hold the Shares subject to all the provisions of this Agreement
(all references to the Optionee herein shall in such cases refer mutatis mutandis to the permitted transferee, except in the case
of clause (iv) of Section 15(a) wherein the permitted transfer shall be deemed to be rescinded); and provided further, that
notwithstanding any other provisions in this Agreement, a permitted transferee may not, in turn, make permitted transfers without
the written consent of the Optionee and the Company.


 


(g)         Release
of Restrictions on Shares. All other restrictions under this Section 15 shall terminate five (5) years following the date
of this Agreement, or when the Company’s securities are publicly traded, whichever occurs earlier.


 


16.       Notices.
Any notice required to be given pursuant to this Option or the Plan shall be in writing and shall be deemed to be delivered
upon receipt or, in the case of notices by the Company, five (5) days after deposit in the U.S. mail, postage prepaid, addressed
to Optionee at the address last provided by Optionee for use in Company records related to Optionee.


 


17.       Agreement
Subject to Plan; Applicable Law. This Option is made pursuant to the Plan and shall be interpreted to comply therewith. A
copy of such Plan is available to Optionee, at no charge, at the principal office of the Company. Any provision of this Option
inconsistent with the Plan shall be considered void and replaced with the applicable provision of the Plan. This Option has been
granted, executed and delivered in the State of Delaware, and the interpretation and enforcement shall be governed by the laws
thereof and subject to the exclusive jurisdiction of the courts therein.


 


IN
WITNESS WHEREOF, the parties hereto have executed this Option as of the date first above written. 


 


	 	 	 	 
	 	COMPANY:	APPLIED ENERGETICS, INC.
	 	 	a Delaware corporation
	 	 	 	 
	 	 	By: 	 
	 	 	Name:	 
	 	 	Title:	 
	 	OPTIONEE:	 	 
	 	 	 	 
	 	 	By: 	 
	 	 	 	(signature)
	 	 	Name:	 


  




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Appendix A


 


NOTICE
OF EXERCISE


 


APPLIED
ENERGETICS, INC. 


_________________





_________________





_________________


 


Re:
Nonstatutory Stock Option


 


1)       Notice
is hereby given pursuant to Section 6 of my Nonstatutory Stock Option Agreement that I elect to purchase the number of shares
set forth below at the exercise price set forth in my option agreement: 


 


Nonstatutory
Stock Option Agreement dated: ____________


 


Number
of shares being purchased: ____________


 


Exercise
Price: $____________


 


A
check in the amount of the aggregate price of the shares being purchased is attached.


 


OR


 


2)       I
elect a cashless exercise pursuant to Section 6 of my Nonstatutory Stock Option Agreement. The Average Market Price as of
_______ was $_____.


 


I
hereby confirm that such shares are being acquired by me for my own account for investment purposes, and not with a view to, or
for resale in connection with, any distribution thereof. I will not sell or dispose of my Shares in violation of the Securities
Act of 1933, as amended, or any applicable federal or state securities laws. Further, I understand that the exemption from taxable
income at the time of exercise is dependent upon my holding such stock for a period of at least one year from the date of exercise
and two years from the date of grant of the Option.


 


I
understand that the certificate representing the Option Shares will bear a restrictive legend within the contemplation of the
Securities Act and as required by such other state or federal law or regulation applicable to the issuance or delivery of the
Option Shares.


 


I
agree to provide to the Company such additional documents or information as may be required pursuant to the Company’s 2018
Incentive Stock Plan. 


 


	 	 	 
	 	By: 	 
	 	 	(signature)
	 	Name:	 
	 	 	 


 




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EXHIBIT
B-3


 


APPLIED
ENERGETICS, INC. 


CONSULTANT
NONSTATUTORY STOCK OPTION AGREEMENT


 


	 	 	 


 


THIS
CONSULTANT NONSTATUTORY STOCK OPTION AGREEMENT (“Agreement”) is made and entered into as of the date set
forth below, by and between APPLIED ENERGETICS, INC., a Delaware corporation (the “Company”), and the following
consultant to the Company (herein, the “Optionee”):


 


In
consideration of the covenants herein set forth, the parties hereto agree as follows:


 


1.       Option
Information.- 


 


	 	(a)	Date
    of Option:	 	 
	 	(b)	Optionee:	 	 
	 	(c)	Number
    of Shares:	 	 
	 	(d)	Exercise
    Price:	 	 
	 	(e)	Vesting
    Schedule	 	 


 


2.       Acknowledgements.


 


(a)          Optionee
is an independent consultant to the Company, not an employee;


 


(b)          The
Board of Directors (the “Board” which term shall include an authorized committee of the Board of Directors)
and shareholders of the Company have heretofore adopted a 2018 Incentive Stock Plan (the “Plan”), pursuant
to which this Option is being granted; and


 


(c)          The
Board has authorized the granting to Optionee of a nonstatutory stock option (“Option”) to purchase shares
of common stock of the Company (“Stock”) upon the terms and conditions hereinafter stated and pursuant to a
registration statement filed under and in compliance with the Securities Act of 1933, as amended (the “Securities Act”),
or an exemption therefrom.


 


3.       Shares;
Price. The Company hereby grants to Optionee the right to purchase, upon and subject to the terms and conditions herein stated,
the number of shares of Stock set forth in Section 1(c) above (the “Shares”) for cash or on a cashless
basis (or other consideration as is acceptable to the Board, in their sole and absolute discretion) at the price per Share set
forth in Section 1(d) above (the “Exercise Price”).


 




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4.       Term
of Option. This Option shall expire, and all rights hereunder to purchase the Shares, shall terminate five (5) years from
the date hereof. Nothing contained herein shall be construed to interfere in any way with the right of the Company to terminate
Optionee as a consultant to the Company, or to increase or decrease the compensation paid to Optionee from the rate in effect
as of the date hereof.


 


5.       Vesting
of Option. Subject to the provisions of Sections 7 and 8 hereof, this Option shall become exercisable during the period that
Optionee serves as a consultant of the Company according to terms deemed acceptable to the Board of Directors of the Company in
their sole and absolute discretion according to the schedule set forth in Section 1(e) above (the “Vesting Schedule”).


 


6.       Exercise.
This Option shall be exercised by delivery to the Company of (a) written notice of exercise stating the number of Shares being
purchased (in whole shares only) and such other information set forth on the form of Notice of Exercise attached hereto as Appendix A,
(b) a check or cash in the amount of the Exercise Price of the Shares covered by the notice (or such other consideration as has
been approved by the Board of Directors consistent with the Plan) and (c) a written investment representation as provided for
in Section 13 hereof. Notwithstanding anything to the contrary contained in this Option, this Option may be exercised by
presentation and surrender of this Option to the Company at its principal executive offices with a written notice of the holder’s
intention to effect a cashless exercise, including a calculation of the number of shares of Common Stock to be issued upon such
exercise in accordance with the terms hereof (a “Cashless Exercise”). In the event of a Cashless Exercise,
in lieu of paying the Exercise Price in cash, the holder shall surrender this Option for that number of shares of Common Stock
determined by multiplying the number of Shares to which it would otherwise be entitled by a fraction, the numerator of which shall
be the difference between the then current Market Price per share of the Common Stock and the Exercise Price, and the denominator
of which shall be the then current Market Price per share of Common Stock. For example, if the holder is exercising 100,000 Options
at an exercise price of $0.75 per share through a cashless exercise when the Common Stock’s current Market Price per share
is $2.00 per share, then upon such Cashless Exercise the holder will receive 62,500 shares of Common Stock. Market Price is defined
as the average of the last reported sale prices on the principal trading market for the Common Stock during the five (5) trading
days immediately preceding such date. This Option shall not be assignable or transferable, except by will or by the laws of descent
and distribution, and shall be exercisable only by Optionee during his or her lifetime.


 




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7.       Termination
of Service. If Optionee’s service as a consultant to the Company terminates for any reason, no further installments
shall vest pursuant to Section 5, and Optionee shall have the right at any time within thirty (30) days following such termination
of services or the remaining term of this Option, whichever is the lesser, to exercise in whole or in part this Option to the
extent, but only to the extent, that this Option was exercisable as of the date Optionee ceased to be a consultant to the Company;
provided, however, if Optionee is terminated for reasons that would justify a termination of employment “for cause”,
the foregoing right to exercise shall automatically terminate on the date Optionee ceases to be a consultant to the Company as
to all Shares covered by this Option not exercised prior to termination. Unless earlier terminated, all rights under this Option
shall terminate in any event on the expiration date of this Option as defined in Section 4 hereof.


 


8.       Death
of Optionee. If the Optionee shall die while serving as a consultant to the Company, Optionee’s personal representative
or the person entitled to Optionee’s rights hereunder may at any time within ninety (90) days after the date of Optionee’s
death, or during the remaining term of this Option, whichever is the lesser, exercise this Option and purchase Shares to the extent,
but only to the extent, that Optionee could have exercised this Option as of the date of Optionee’s death; provided, in
any case, that this Option may be so exercised only to the extent that this Option has not previously been exercised by Optionee.


 


9.       No
Rights as Shareholder. Optionee shall have no rights as a shareholder with respect to the Shares covered by any installment
of this Option until the effective date of the issuance of shares following exercise of this to Option, and no adjustment will
be made for dividends or other rights for which the record date is prior to the date such stock certificate or certificates are
issued except as provided in Section 10 hereof.


 


10.       Recapitalization.
Subject to any required action by the shareholders of the Company, the number of Shares covered by this Option, and the Exercise
Price thereof, shall be proportionately adjusted for any increase or decrease in the number of issued shares resulting from a
subdivision or consolidation of shares or the payment of a stock dividend, or any other increase or decrease in the number of
such shares effected without receipt of consideration by the Company; provided however that the conversion of any convertible
securities of the Company shall not be deemed having been “effected without receipt of consideration by the Company.” 





 




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In
the event of a proposed dissolution or liquidation of the Company, a merger or consolidation in which the Company is not the surviving
entity, or a sale of all or substantially all of the assets or capital stock of the Company (collectively, a “Reorganization”),
this Option shall terminate immediately prior to the consummation of such proposed action, unless otherwise provided by the Board;
provided, however, if Optionee shall be a consultant at the time such Reorganization is approved by the stockholders, Optionee
shall have the right to exercise this Option as to all or any part of the Shares, without regard to the installment provisions
of Section 5, for a period beginning 30 days prior to the consummation of such Reorganization and ending as of the Reorganization
or the expiration of this Option, whichever is earlier, subject to the consummation of the Reorganization. In any event, the Company
shall notify Optionee, at least 30 days prior to the consummation of such Reorganization, of his exercise rights, if any, and
that the Option shall terminate upon the consummation of the Reorganization.


 


Subject
to any required action by the shareholders of the Company, if the Company shall be the surviving entity in any merger or consolidation,
this Option thereafter shall pertain to and apply to the securities to which a holder of Shares equal to the Shares subject to
this Option would have been entitled by reason of such merger or consolidation, and the installment provisions of Section 5
shall continue to apply.


 


In
the event of a change in the shares of the Company as presently constituted, which is limited to a change of all of its authorized
Stock without par value into the same number of shares of Stock with a par value, the shares resulting from any such change shall
be deemed to be the Shares within the meaning of this Option.


 


To
the extent that the foregoing adjustments relate to shares or securities of the Company, such adjustments shall be made by the
Board, whose determination in that respect shall be final, binding and conclusive. Except as hereinbefore expressly provided,
Optionee shall have no rights by reason of any subdivision or consolidation of shares of Stock of any class or the payment of
any stock dividend or any other increase or decrease in the number of shares of stock of any class, and the number and price of
Shares subject to this Option shall not be affected by, and no adjustments shall be made by reason of, any dissolution, liquidation,
merger, consolidation or sale of assets or capital stock, or any issue by the Company of shares of stock of any class or securities
convertible into shares of stock of any class.


 


The
grant of this Option shall not affect in any way the right or power of the Company to make adjustments, reclassifications, reorganizations
or changes in its capital or business structure or to merge, consolidate, dissolve or liquidate or to sell or transfer all or
any part of its business or assets.


 




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11.       Taxation
upon Exercise of Option. Optionee understands that, upon exercise of this Option, Optionee will recognize income, for Federal
and state income tax purposes, in an amount equal to the amount by which the fair market value of the Shares, determined as of
the date of exercise, exceeds the Exercise Price. The acceptance of the Shares by Optionee shall constitute an agreement by Optionee
to report such income in accordance with then applicable law and to cooperate with Company in establishing the amount of such
income and corresponding deduction to the Company for its income tax purposes. Withholding for federal or state income and employment
tax purposes will be made, if and as required by law, from Optionee’s then current compensation, or, if such current compensation
is insufficient to satisfy withholding tax liability, the Company may require Optionee to make a cash payment to cover such liability
as a condition of the exercise of this Option.


 


12.       Modification,
Extension and Renewal of Options. The Board or Committee, as described in the Plan, may modify, extend or renew this Option
or accept the surrender thereof (to the extent not theretofore exercised) and authorize the granting of a new option in substitution
therefore (to the extent not theretofore exercised), subject at all times to the Plan, the Code. Notwithstanding the foregoing
provisions of this Section 12, no modification shall, without the consent of the Optionee, alter to the Optionee’s
detriment or impair any rights of Optionee hereunder.


 


13.       Investment
Intent; Restrictions on Transfer.


 


(a)       Optionee
represents and agrees that if Optionee exercises this Option in whole or in part, Optionee will in each case acquire the Shares
upon such exercise for the purpose of investment and not with a view to, or for resale in connection with, any distribution thereof;
and that upon such exercise of this Option in whole or in part, Optionee (or any person or persons entitled to exercise this Option
under the provisions of Sections 7 and 8 hereof) shall furnish to the Company a written statement to such effect, satisfactory
to the Company in form and substance. If the Shares represented by this Option are registered under the Securities Act, either
before or after the exercise of this Option in whole or in part, the Optionee shall be relieved of the foregoing investment representation
and agreement and shall not be required to furnish the Company with the foregoing written statement.


 


(b)       Optionee
further represents that Optionee has had access to the financial statements or books and records of the Company, has had the opportunity
to ask questions of the Company concerning its business, operations and financial condition, and to obtain additional information
reasonably necessary to verify the accuracy of such information.


 




    B-3-5


     


    

 


(c)       Unless
and until the Shares represented by this Option are registered under the Securities Act, all certificates representing the Shares
and any certificates subsequently issued in substitution therefor and any certificate for any securities issued pursuant to any
stock split, share reclassification, stock dividend or other similar capital event shall bear legends in substantially the following
form:


 


THESE
SECURITIES HAVE NOT BEEN REGISTERED OR OTHERWISE QUALIFIED UNDER THE SECURITIES ACT OF 1933 (THE ’SECURITIES ACT’)
OR UNDER THE APPLICABLE OR SECURITIES LAWS OF ANY STATE. NEITHER THESE SECURITIES NOR ANY INTEREST THEREIN MAY BE SOLD, TRANSFERRED,
PLEDGED OR OTHERWISE DISPOSED OF IN THE ABSENCE OF REGISTRATION UNDER THE SECURITIES ACT OR ANY APPLICABLE SECURITIES LAWS OF
ANY STATE, UNLESS PURSUANT TO EXEMPTIONS THEREFROM.


 


THE
SHARES REPRESENTED BY THIS CERTIFICATE HAVE BEEN ISSUED PURSUANT TO THAT CERTAIN NONSTATUTORY STOCK OPTION AGREEMENT DATED ___________
BETWEEN THE COMPANY AND THE ISSUEE WHICH RESTRICTS THE TRANSFER OF THESE SHARES WHICH ARE SUBJECT TO REPURCHASE BY THE COMPANY
UNDER CERTAIN CONDITIONS.


 


and/or
such other legend or legends as the Company and its counsel deem necessary or appropriate. Appropriate stop transfer instructions
with respect to the Shares have been placed with the Company’s transfer agent.


 


14.       Stand-off
Agreement. Optionee agrees that, in connection with any registration of the Company’s securities under the Securities
Act, and upon the request of the Company or any underwriter managing an underwritten offering of the Company’s securities,
Optionee shall not sell, short any sale of, loan, grant an option for, or otherwise dispose of any of the Shares (other than Shares
included in the offering) without the prior written consent of the Company or such managing underwriter, as applicable, for a
period of up to one year following the effective date of registration of such offering.


 


15.       Restriction
Upon Transfer. The Shares may not be sold, transferred or otherwise disposed of and shall not be pledged or otherwise hypothecated
by the Optionee except as hereinafter provided.


 


(a)       Repurchase
Right on Termination Other Than for Cause. For the purposes of this Section, a “Repurchase Event” shall
mean an occurrence of one of (i) termination of Optionee’s service as a consultant, voluntary or involuntary and with or
without cause; (ii) retirement or death of Optionee; (iii) bankruptcy of Optionee, which shall be deemed to have occurred as of
the date on which a voluntary or involuntary petition in bankruptcy is filed with a court of competent jurisdiction; (iv) dissolution
of the marriage of Optionee, to the extent that any of the Shares are allocated as the sole and separate property of Optionee’s
spouse pursuant thereto (in which case, this Section shall only apply to the Shares so affected); or (v) any attempted transfer
by the Optionee of Shares, or any interest therein, in violation of this Agreement. Upon the occurrence of a Repurchase Event,
the Company shall have the right (but not an obligation) to repurchase all or any portion of the Shares of Optionee at a price
equal to the fair value of the Shares as of the date of the Repurchase Event.


 




    B-3-6


     


    

 


(b)       Repurchase
Right on Termination for Cause. In the event Optionee’s service as a consultant is terminated by the Company “for
cause” (as contemplated by Section 7), then the Company shall have the right (but not an obligation) to repurchase
Shares of Optionee at a price equal to the Exercise Price. Such right of the Company to repurchase Shares shall apply to 100%
of the Shares for one (1) year from the date of this Agreement; and shall thereafter lapse ratably in equal annual increments
on each anniversary of the date of this Agreement over the term of this Option specified in Section 4. In addition, the Company
shall have the right, in the sole discretion of the Board and without obligation, to repurchase upon any such termination of service
for cause all or any portion of the Shares of Optionee, at a price equal to the fair value of the Shares as of the date of termination,
which right is not subject to the foregoing lapsing of rights. In the event the Company elects to repurchase the Shares, the stock
certificates representing the same shall forthwith be returned to the Company for cancellation.


 


(c)       Exercise
of Repurchase Right. Any repurchase right under Paragraphs 15(a) or 15(b) shall be exercised by giving notice of exercise
as provided herein to Optionee or the estate of Optionee, as applicable. Such right shall be exercised, and the repurchase price
thereunder shall be paid, by the Company within a ninety (90) day period beginning on the date of notice to the Company of the
occurrence of such Repurchase Event (except in the case of termination of employment or retirement, where such option period shall
begin upon the occurrence of the Repurchase Event). Such repurchase price shall be payable only in the form of cash (including
a check drafted on immediately available funds) or cancellation of purchase money indebtedness of the Optionee for the Shares.
If the Company cannot purchase all such Shares because it is unable to meet the financial tests set forth in the Delaware corporation
law, the Company shall have the right to purchase as many Shares as it is permitted to purchase under such sections. Any Shares
not purchased by the Company hereunder shall no longer be subject to the provisions of this Section 15.


 


(d)       Right
of First Refusal. In the event Optionee desires to transfer any Shares during his or her lifetime, Optionee shall first offer
to sell such Shares to the Company. Optionee shall deliver to the Company written notice of the intended sale, such notice to
specify the number of Shares to be sold, the proposed purchase price and terms of payment, and grant the Company an option for
a period of thirty days following receipt of such notice to purchase the offered Shares upon the same terms and conditions. To
exercise such option, the Company shall give notice of that fact to Optionee within the thirty (30) day notice period and agree
to pay the purchase price in the manner provided in the notice. If the Company does not purchase all of the Shares so offered
during foregoing option period, Optionee shall be under no obligation to sell any of the offered Shares to the Company, but may
dispose of such Shares in any lawful manner during a period of one hundred and eighty (180) days following the end of such notice
period, except that Optionee shall not sell any such Shares to any other person at a lower price or upon more favorable terms
than those offered to the Company.





 




    B-3-7


     


    

 


(e)       Acceptance
of Restrictions. Acceptance of the Shares shall constitute the Optionee’s agreement to such restrictions and the legending
of his certificates with respect thereto. Notwithstanding such restrictions, however, so long as the Optionee is the holder of
the Shares, or any portion thereof, he shall be entitled to receive all dividends declared on and to vote the Shares and to all
other rights of a shareholder with respect thereto.


 


(f)
       Permitted Transfers. Notwithstanding any provisions in this Section 15 to
the contrary, the Optionee may transfer Shares subject to this Agreement to his or her parents, spouse, children, or grandchildren,
or a trust for the benefit of the Optionee or any such transferee(s); provided, that such permitted transferee(s) shall hold the
Shares subject to all the provisions of this Agreement (all references to the Optionee herein shall in such cases refer mutatis
mutandis to the permitted transferee, except in the case of clause (iv) of Section 15(a) wherein the permitted transfer shall
be deemed to be rescinded); and provided further, that notwithstanding any other provisions in this Agreement, a permitted transferee
may not, in turn, make permitted transfers without the written consent of the Optionee and the Company.


 


(g)       Release
of Restrictions on Shares. All rights and restrictions under this Section 15 shall terminate five (5) years following
the date of this Agreement, or when the Company’s securities are publicly traded, whichever occurs earlier.


 


16.       Notices.
Any notice required to be given pursuant to this Option or the Plan shall be in writing and shall be deemed to be delivered
upon receipt or, in the case of notices by the Company, five (5) days after deposit in the U.S. mail, postage prepaid, addressed
to Optionee at the address last provided by Optionee for use in Company records related to Optionee.


 


17.       Agreement
Subject to Plan; Applicable Law. This Option is made pursuant to the Plan and shall be interpreted to comply therewith. A
copy of such Plan is available to Optionee, at no charge, at the principal office of the Company. Any provision of this Option
inconsistent with the Plan shall be considered void and replaced with the applicable provision of the Plan. This Option has been
granted, executed and delivered in the State of Delaware, and the interpretation and enforcement shall be governed by the laws
thereof and subject to the exclusive jurisdiction of the courts therein.


 


IN
WITNESS WHEREOF, the parties hereto have executed this Option as of the date first above written.   





	 	 	 	 
	 	COMPANY:	APPLIED ENERGETICS, INC., a Delaware corporation
	 	 	By: 	 
	 	 	Name:	 
	 	 	Title:	 
	 	OPTIONEE:	 	 
	 	 	By: 	 
	 	 	 	(signature)
	 	 	Name:	 







  




    B-3-8


     


    

 


Appendix A


 


NOTICE
OF EXERCISE


 


APPLIED
ENERGETICS, INC. 


_________________





_________________





_________________


 


Re:
Nonstatutory Stock Option


 


1)       Notice
is hereby given pursuant to Section 6 of my Nonstatutory Stock Option Agreement that I elect to purchase the number of shares
set forth below at the exercise price set forth in my option agreement: 


 


Nonstatutory
Stock Option Agreement dated: ____________


 


Number
of shares being purchased: ____________


 


Exercise
Price: $____________


 


A
check in the amount of the aggregate price of the shares being purchased is attached.


 


OR


 


2)       I
elect a cashless exercise pursuant to Section 6 of my Nonstatutory Stock Option Agreement. The Average Market Price as of
_______ was $_____.


 


I
hereby confirm that such shares are being acquired by me for my own account for investment purposes, and not with a view to, or
for resale in connection with, any distribution thereof. I will not sell or dispose of my Shares in violation of the Securities
Act of 1933, as amended, or any applicable federal or state securities laws. Further, I understand that the exemption from taxable
income at the time of exercise is dependent upon my holding such stock for a period of at least one year from the date of exercise
and two years from the date of grant of the Option.


 


I
understand that the certificate representing the Option Shares will bear a restrictive legend within the contemplation of the
Securities Act and as required by such other state or federal law or regulation applicable to the issuance or delivery of the
Option Shares.


 


I
agree to provide to the Company such additional documents or information as may be required pursuant to the Company’s 2018
Incentive Stock Plan. 


 


	 	 	 
	 	By: 	 
	 	 	(signature)
	 	Name:	 


   




    B-3-9


     


    

 


EXHIBIT
C


 


APPLIED
ENERGETICS, INC. 


 


STOCK
AWARD AGREEMENT 


	 	 	 


 


THIS
STOCK AWARD AGREEMENT (“Agreement”) is made and entered into as of the date set forth below, by and between
APPLIED ENERGETICS, INC. , a Delaware corporation (the “Company”), and the employee, director or consultant
of the Company named in Section 1(b). (“Grantee”):


 


In
consideration of the covenants herein set forth, the parties hereto agree as follows:


 


1.       Stock
Award Information. 


 


	 	 	 	 	 
	 	(a)	Date
    of Award::	 	 
	 	(b)	Grantee:	 	 
	 	(c)	Number
    of Shares:	 	 
	 	(d)	Original
    Value	 	 


 


2.       Acknowledgements.


 


(a)          Grantee
is a [employee/director/consultant] of the Company.


 


(b)         The
Company has adopted a 2018 Incentive Stock Plan (the “Plan”) under which the Company’s common stock (“Stock”)
may be offered to directors, officers, employees and consultants pursuant to an exemption from registration under the Securities
Act of 1933, as amended (the “Securities Act”).


 


3.       Shares;
Value. The Company hereby grants to Grantee, upon and subject to the terms and conditions herein stated, the number of shares
of Stock set forth in Section 1(c) (the “Shares”), which Shares have a fair value per share (“Original
Value”) equal to the amount set forth in Section 1(d). For the purpose of this Agreement, the terms “Share”
or “Shares” shall include the original Shares plus any shares derived therefrom, regardless of the fact that
the number, attributes or par value of such Shares may have been altered by reason of any recapitalization, subdivision, consolidation,
stock dividend or amendment of the corporate charter of the Company. The number of Shares covered by this Agreement and the Original
Value thereof shall be proportionately adjusted for any increase or decrease in the number of issued shares resulting from a recapitalization,
subdivision or consolidation of shares or the payment of a stock dividend, or any other increase or decrease in the number of
such shares effected without receipt of consideration by the Company. 





 




    C-1


     


    

 


4.       Investment
Intent. Grantee represents and agrees that Grantee is accepting the Shares for the purpose of investment and not with a view
to, or for resale in connection with, any distribution thereof; and that, if requested, Grantee shall furnish to the Company a
written statement to such effect, satisfactory to the Company in form and substance. If the Shares are registered under the Securities
Act, Grantee shall be relieved of the foregoing investment representation and agreement and shall not be required to furnish the
Company with the foregoing written statement.


 


5.       Restriction
Upon Transfer. The Shares may not be sold, transferred or otherwise disposed of and shall not be pledged or otherwise hypothecated
by the Grantee except as hereinafter provided.


 


(a)          Repurchase
Right on Termination Other Than for Cause. For the purposes of this Section, a “Repurchase Event” shall
mean an occurrence of one of (i) termination of Grantee’s employment [or service as a director/consultant] by the
Company, voluntary or involuntary and with or without cause; (ii) retirement or death of Grantee; (iii) bankruptcy of Grantee,
which shall be deemed to have occurred as of the date on which a voluntary or involuntary petition in bankruptcy is filed with
a court of competent jurisdiction; (iv) dissolution of the marriage of Grantee, to the extent that any of the Shares are allocated
as the sole and separate property of Grantee’s spouse pursuant thereto (in which case, this


 


Section shall
only apply to the Shares so affected); or (v) any attempted transfer by the Grantee of Shares, or any interest therein, in violation
of this Agreement. Upon the occurrence of a Repurchase Event, the Company shall have the right (but not an obligation)
to purchase all or any portion of the Shares of Grantee, at a price equal to the fair value of the Shares as of the date of the
Repurchase Event.


 


(b)          Repurchase
Right on Termination for Cause. In the event Grantee’s employment [or service as a director/consultant] is terminated
by the Company “for cause” (as defined below), then the Company shall have the right (but not an obligation)
to purchase Shares of Grantee at a price equal to the Original Value. Such right of the Company to purchase Shares shall apply
to 100% of the Shares for one (1) year from the date of this Agreement; and shall thereafter lapse at the rate of twenty percent
(20%) of the Shares on each anniversary of the date of this Agreement. In addition, the Company shall have the right, in the sole
discretion of the Board and without obligation, to repurchase upon termination for cause all or any portion of the Shares of Grantee,
at a price equal to the fair value of the Shares as of the date of termination, which right is not subject to the foregoing lapsing
of rights. Termination of employment [or service as a director/consultant] “for cause” means (i) as
to employees or consultants, termination for cause, or as defined in the Plan, this Agreement or in any employment [or consulting]
agreement between the Company and Grantee, or (ii) as to directors, removal pursuant to the Delaware corporation law. In the event
the Company elects to purchase the Shares, the stock certificates representing the same shall forthwith be returned to the Company
for cancellation. 





 




    C-2


     


    

 


(c)          Exercise
of Repurchase Right. Any Repurchase Right under Paragraphs 4(a) or 4(b) shall be exercised by giving notice of exercise as
provided herein to Grantee or the estate of Grantee, as applicable. Such right shall be exercised, and the repurchase price thereunder
shall be paid, by the Company within a ninety (90) day period beginning on the date of notice to the Company of the occurrence
of such Repurchase Event (except in the case of termination or cessation of services as director, where such option period shall
begin upon the occurrence of the Repurchase Event). Such repurchase price shall be payable only in the form of cash (including
a check drafted on immediately available funds) or cancellation of purchase money indebtedness of the Grantee for the Shares.
If the Company cannot purchase all such Shares because it is unable to meet the financial tests set forth in the Delaware corporation
law, the Company shall have the right to purchase as many Shares as it is permitted to purchase under such sections. Any Shares
not purchased by the Company hereunder shall no longer be subject to the provisions of this Section 5.


 


(d)          Right
of First Refusal. In the event Grantee desires to transfer any Shares during his or her lifetime, Grantee shall first offer
to sell such Shares to the Company. Grantee shall deliver to the Company written notice of the intended sale, such notice to specify
the number of Shares to be sold, the proposed purchase price and terms of payment, and grant the Company an option for a period
of thirty days following receipt of such notice to purchase the offered Shares upon the same terms and conditions. To exercise
such option, the Company shall give notice of that fact to Grantee within the thirty (30) day notice period and agree to pay the
purchase price in the manner provided in the notice. If the Company does not purchase all of the Shares so offered during foregoing
option period, Grantee shall be under no obligation to sell any of the offered Shares to the Company, but may dispose of such
Shares in any lawful manner during a period of one hundred and eighty (180) days following the end of such notice period, except
that Grantee shall not sell any such Shares to any other person at a lower price or upon more favorable terms than those offered
to the Company.


 


(e)          Acceptance
of Restrictions. Acceptance of the Shares shall constitute the Grantee’s agreement to such restrictions and the legending
of his certificates with respect thereto. Notwithstanding such restrictions, however, so long as the Grantee is the holder of
the Shares, or any portion thereof, he shall be entitled to receive all dividends declared on and to vote the Shares and to all
other rights of a shareholder with respect thereto.


 


(f)                       
Permitted Transfers. Notwithstanding any provisions in this Section 5 to the contrary, the Grantee may transfer Shares
subject to this Agreement to his or her parents, spouse, children, or grandchildren, or a trust for the benefit of the Grantee
or any such transferee(s); provided, that such permitted transferee(s) shall hold the Shares subject to all the provisions of
this Agreement (all references to the Grantee herein shall in such cases refer mutatis mutandis to the permitted transferee, except
in the case of clause (iv) of Section 5(a) wherein the permitted transfer shall be deemed to be rescinded); and provided
further, that notwithstanding any other provisions in this Agreement, a permitted transferee may not, in turn, make permitted
transfers without the written consent of the Grantee and the Company. 





 




    C-3


     


    

 


(g)       Release
of Restrictions on Shares. All rights and restrictions under this Section 5 shall terminate five (5) years following
the date of this Agreement, or when the Company’s securities are publicly traded, whichever occurs earlier.


 


6.       Representations
and Warranties of the Grantee. This Agreement and the issuance and grant of the Shares hereunder is made by the Company in
reliance upon the express representations and warranties of the Grantee, which by acceptance hereof the Grantee confirms that:


 


(a)          The
Shares granted to him pursuant to this Agreement are being acquired by him for his own account, for investment purposes, and not
with a view to, or for sale in connection with, any distribution of the Shares. It is understood that the Shares have not been
registered under the Act by reason of a specific exemption from the registration provisions of the Act which depends, among other
things, upon the bona fide nature of his representations as expressed herein;


 


(b)         The
Shares must be held by him indefinitely unless they are subsequently registered under the Act and any applicable state securities
laws, or an exemption from such registration is available. The Company is under no obligation to register the Shares or to make
available any such exemption; and


 


(c)          Grantee
further represents that Grantee has had access to the financial statements or books and records of the Company, has had the opportunity
to ask questions of the Company concerning its business, operations and financial condition and to obtain additional information
reasonably necessary to verify the accuracy of such information,


 


(d)         Unless
and until the Shares represented by this Grant are registered under the Securities Act, all certificates representing the Shares
and any certificates subsequently issued in substitution therefor and any certificate for any securities issued pursuant to any
stock split, share reclassification, stock dividend or other similar capital event shall bear legends in substantially the following
form:


 


THESE
SECURITIES HAVE NOT BEEN REGISTERED OR OTHERWISE QUALIFIED UNDER THE SECURITIES ACT OF 1933 (THE ’SECURITIES ACT’)
OR UNDER THE APPLICABLE OR SECURITIES LAWS OF ANY STATE. NEITHER THESE SECURITIES NOR ANY INTEREST THEREIN MAY BE SOLD, TRANSFERRED,
PLEDGED OR OTHERWISE DISPOSED OF IN THE ABSENCE OF REGISTRATION UNDER THE SECURITIES ACT OR ANY APPLICABLE SECURITIES LAWS OF
ANY STATE, UNLESS PURSUANT TO EXEMPTIONS THEREFROM.


 


THE
SHARES REPRESENTED BY THIS CERTIFICATE HAVE BEEN ISSUED PURSUANT TO THAT CERTAIN STOCK AWARD AGREEMENT DATED ____________ BETWEEN
THE COMPANY AND THE ISSUEE WHICH RESTRICTS THE TRANSFER OF THESE SHARES WHICH ARE SUBJECT TO REPURCHASE BY THE COMPANY UNDER CERTAIN
CONDITIONS. 





 




    C-4


     


    

 


and/or
such other legend or legends as the Company and its counsel deem necessary or appropriate. Appropriate stop transfer instructions
with respect to the Shares have been placed with the Company’s transfer agent.


 


(e)          Grantee
understands that he or she will recognize income, for Federal and state income tax purposes, in an amount equal to the amount
by which the fair market value of the Shares, as of the date of grant, exceeds the price paid by Grantee, if any. The acceptance
of the Shares by Grantee shall constitute an agreement by Grantee to report such income in accordance with then applicable law.
Withholding for federal or state income and employment tax purposes will be made, if and as required by law, from Grantee’s
then current compensation, or, if such current compensation is insufficient to satisfy withholding tax liability, the Company
may require Grantee to make a cash payment to cover such liability.


 


7.       Stand-off
Agreement. Grantee agrees that, in connection with any registration of the Company’s securities under the Securities
Act, and upon the request of the Company or any underwriter managing an underwritten offering of the Company’s securities,
Grantee shall not sell, short any sale of, loan, grant an option for, or otherwise dispose of any of the Shares (other than Shares
included in the offering) without the prior written consent of the Company or such managing underwriter, as applicable, for a
period of at least one year following the effective date of registration of such offering. This Section 8 shall survive any
termination of this Agreement.


 


8.        Termination
of Agreement. This Agreement shall terminate on the occurrence of any one of the following events: (a) written agreement of
all parties to that effect; (b) a proposed dissolution or liquidation of the Company, a merger or consolidation in which the Company
is not the surviving entity, or a sale of all or substantially all of the assets of the Company; (c) the closing of any public
offering of common stock of the Company pursuant to an effective registration statement under the Securities Act; or (d) dissolution,
bankruptcy, or insolvency of the Company.


 


9.       Agreement
Subject to Plan; Applicable Law. This Grant is made pursuant to the Plan and shall be interpreted to comply therewith. A copy
of such Plan is available to Grantee, at no charge, at the principal office of the Company. Any provision of this Agreement inconsistent
with the Plan shall be considered void and replaced with the applicable provision of the Plan. This Grant shall be governed by
the laws of the State of Delaware and subject to the exclusive jurisdiction of the courts therein.


 


10.       Miscellaneous.


 


(a)          Notices.
Any notice required to be given pursuant to this Agreement or the Plan shall be in writing and shall be deemed to have been
duly delivered upon receipt or, in the case of notices by the Company, five (5) days after deposit in the U.S. mail, postage prepaid,
addressed to Grantee at the last address provided by Grantee for use in the Company’s records.





 




    C-5


     


    

 


(b)          Entire
Agreement. This instrument constitutes the sole agreement of the parties hereto with respect to the Shares. Any prior agreements,
promises or representations concerning the Shares not included or reference herein shall be of no force or effect. This Agreement
shall be binding on, and shall inure to the benefit of, the Parties hereto and their respective transferees, heirs, legal representatives,
successors, and assigns.


 


(c)          Enforcement.
This Agreement shall be construed in accordance with, and governed by, the laws of the State of Delaware and subject to the
exclusive jurisdiction of the courts located in the State of Delaware. If Grantee attempts to transfer any of the Shares subject
to this Agreement, or any interest in them in violation of the terms of this Agreement, the Company may apply to any court for
an injunctive order prohibiting such proposed transaction, and the Company may institute and maintain proceedings against Grantee
to compel specific performance of this Agreement without the necessity of proving the existence or extent of any damages to the
Company. Any such attempted transaction shares in violation of this Agreement shall be null and void.


 


(d)          Validity
of Agreement. The provisions of this Agreement may be waived, altered, amended, or repealed, in whole or in part, only on
the written consent of all parties hereto. It is intended that each Section of this Agreement shall be viewed as separate
and divisible, and in the event that any Section shall be held to be invalid, the remaining Sections shall continue to be
in full force and effect.


 


IN
WITNESS WHEREOF, the parties have executed this Agreement as of the date first above written. 


 


	 	 	 	 
	 	COMPANY:	APPLIED ENERGETICS, INC.
	 	 	a Delaware corporation
	 	 	By: 	 
	 	 	Name:	 
	 	 	Title:	 
	 	 	 	 
	 	OPTIONEE:	 	 
	 	 	 	 
	 	 	By: 	 
	 	 	 	(signature)
	 	 	Name:	 


  




    C-6


     


    

 


EXHIBIT
D


 


APPLIED
ENERGETICS, INC.  


RESTRICTED
STOCK PURCHASE AGREEMENT


	 	 	 


 


THIS
RESTRICTED STOCK PURCHASE AGREEMENT (“Agreement”) is made and entered into as of the date set forth below,
by and between APPLIED ENERGETICS, INC. , a Delaware corporation (the “Company”), and the employee, director
or consultant of the Company named in Section 1(b). (“Grantee”):


 


In
consideration of the covenants herein set forth, the parties hereto agree as follows:


 


1.       Stock
Purchase Information. 


	 	 	 	 	 
	 	(a)	Date
    of Agreement:	 	 
	 	(b)	Grantee:	 	 
	 	(c)	Number
    of Shares:	 	 
	 	(d)	Purchase
    Price:	 	 


 


2.       Acknowledgements.


 


(a)       Grantee
is a [employee/director/consultant] of the Company.


 


(b)       The
Company has adopted a 2018 Incentive Stock Plan (the “Plan”) under which the Company’s common stock (“Stock”)
may be offered to officers, employees, directors and consultants pursuant to a registration statement filed under and in compliance
with the Securities Act of 1933, as amended (the “Securities Act”), or an exemption therefrom.


 


(c)       The
Grantee desires to purchase shares of the Company’s common stock on the terms and conditions set forth herein.


 


3.       Purchase
of Shares. The Company hereby agrees to sell and Grantee hereby agrees to purchase, upon and subject to the terms and conditions
herein stated, the number of shares of Stock set forth in Section 1(c) (the “Shares”), at the price per
Share set forth in Section 1(d) (the “Price”). For the purpose of this Agreement, the terms “Share”
or “Shares” shall include the original Shares plus any shares derived therefrom, regardless of the fact that
the number, attributes or par value of such Shares may have been altered by reason of any recapitalization, subdivision, consolidation,
stock dividend or amendment of the corporate charter of the Company. The number of Shares covered by this Agreement shall be proportionately
adjusted for any increase or decrease in the number of issued shares resulting from a recapitalization, subdivision or consolidation
of shares or the payment of a stock dividend, or any other increase or decrease in the number of such shares effected without
receipt of consideration by the Company.


 




    D-1


     


    

 


4.       Investment
Intent. Grantee represents and agrees that Grantee is accepting the Shares for the purpose of investment and not with a view
to, or for resale in connection with, any distribution thereof; and that, if requested, Grantee shall furnish to the Company a
written statement to such effect, satisfactory to the Company in form and substance. If the Shares are registered under the Securities
Act, Grantee shall be relieved of the foregoing investment representation and agreement and shall not be required to furnish the
Company with the foregoing written statement.


 


5.       Restriction
Upon Transfer. The Shares may not be sold, transferred or otherwise disposed of and shall not be pledged or otherwise hypothecated
by the Grantee except as hereinafter provided.


 


(a)          Repurchase
Right on Termination Other Than for Cause. For the purposes of this Section, a “Repurchase Event” shall mean
an occurrence of one of (i) termination of Grantee’s employment [or service as a director/consultant] by the Company,
voluntary or involuntary and with or without cause; (ii) retirement or death of Grantee; (iii) bankruptcy of Grantee, which shall
be deemed to have occurred as of the date on which a voluntary or involuntary petition in bankruptcy is filed with a court of
competent jurisdiction; (iv) dissolution of the marriage of Grantee, to the extent that any of the Shares are allocated as the
sole and separate property of Grantee’s spouse pursuant thereto (in which case, this Section shall only apply to the
Shares so affected); or (v) any attempted transfer by the Grantee of Shares, or any interest therein, in violation of this Agreement.
Upon the occurrence of a Repurchase Event, the Company shall have the right (but not an obligation) to repurchase all or any portion
of the Shares of Grantee at a price equal to the fair value of the Shares as of the date of the Repurchase Event.


 


(b)          Repurchase
Right on Termination for Cause. In the event Grantee’s employment [or service as a director/consultant] is terminated
by the Company “for cause” (as defined below), then the Company shall have the right (but not an obligation)
to repurchase Shares of Grantee at a price equal to the Price. Such right of the Company to repurchase Shares shall apply to 100%
of the Shares for one (1) year from the date of this Agreement; and shall thereafter lapse at the rate of twenty percent
(20%) of the Shares on each anniversary of the date of this Agreement. In addition, the Company shall have the right, in the sole
discretion of the Board and without obligation, to repurchase upon termination for cause all or any portion of the Shares of Grantee,
at a price equal to the fair value of the Shares as of the date of termination, which right is not subject to the foregoing lapsing
of rights. Termination of employment [or service as a director/consultant] “for cause” means (i) as
to employees and consultants, termination for cause, or as defined in the Plan, this Agreement or in any employment [or consulting]
agreement between the Company and Grantee, or (ii) as to directors, removal pursuant to the Delaware corporation law. In the event
the Company elects to repurchase the Shares, the stock certificates representing the same shall forthwith be returned to the Company
for cancellation.


 




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(c)          Exercise
of Repurchase Right. Any Repurchase Right under Paragraphs 4(a) or 4(b) shall be exercised by giving notice of exercise as
provided herein to Grantee or the estate of Grantee, as applicable. Such right shall be exercised, and the repurchase price thereunder
shall be paid, by the Company within a ninety (90) day period beginning on the date of notice to the Company of the occurrence
of such Repurchase Event (except in the case of termination of employment or retirement, where such option period shall begin
upon the occurrence of the Repurchase Event). Such repurchase price shall be payable only in the form of cash (including a check
drafted on immediately available funds) or cancellation of purchase money indebtedness of the Grantee for the Shares. If the Company
cannot purchase all such Shares because it is unable to meet the financial tests set forth in the Delaware corporation law, the
Company shall have the right to purchase as many Shares as it is permitted to purchase under such sections. Any Shares not purchased
by the Company hereunder shall no longer be subject to the provisions of this Section 5.


 


(d)          Right
of First Refusal. In the event Grantee desires to transfer any Shares during his or her lifetime, Grantee shall first offer
to sell such Shares to the Company. Grantee shall deliver to the Company written notice of the intended sale, such notice to specify
the number of Shares to be sold, the proposed purchase price and terms of payment, and grant the Company an option for a period
of thirty days following receipt of such notice to purchase the offered Shares upon the same terms and conditions. To exercise
such option, the Company shall give notice of that fact to Grantee within the thirty (30) day notice period and agree to pay the
purchase price in the manner provided in the notice. If the Company does not purchase all of the Shares so offered during foregoing
option period, Grantee shall be under no obligation to sell any of the offered Shares to the Company, but may dispose of such
Shares in any lawful manner during a period of one hundred and eighty (180) days following the end of such notice period, except
that Grantee shall not sell any such Shares to any other person at a lower price or upon more favorable terms than those offered
to the Company.


 


(e)          Acceptance
of Restrictions. Acceptance of the Shares shall constitute the Grantee’s agreement to such restrictions and the legending
of his certificates with respect thereto. Notwithstanding such restrictions, however, so long as the Grantee is the holder of
the Shares, or any portion thereof, he shall be entitled to receive all dividends declared on and to vote the Shares and to all
other rights of a shareholder with respect thereto.


 




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(f)           Permitted
Transfers. Notwithstanding any provisions in this Section 5 to the contrary, the Grantee may transfer Shares subject
to this Agreement to his or her parents, spouse, children, or grandchildren, or a trust for the benefit of the Grantee or any
such transferee(s); provided, that such permitted transferee(s) shall hold the Shares subject to all the provisions of this Agreement
(all references to the Grantee herein shall in such cases refer mutatis mutandis to the permitted transferee, except in the case
of clause (iv) of Section 5(a) wherein the permitted transfer shall be deemed to be rescinded); and provided further, that
notwithstanding any other provisions in this Agreement, a permitted transferee may not, in turn, make permitted transfers without
the written consent of the Grantee and the Company.


 


(g)          Release
of Restrictions on Shares. All rights and restrictions under this Section 5 shall terminate five (5) years following
the date upon which the Company receives the full Price as set forth in Section 3, or when the Company’s securities
are publicly traded, whichever occurs earlier.


 


5.       Representations
and Warranties of the Grantee. This Agreement and the issuance and grant of the Shares hereunder is made by the Company in
reliance upon the express representations and warranties of the Grantee, which by acceptance hereof the Grantee confirms that:


 


(a)          The
Shares granted to him pursuant to this Agreement are being acquired by him for his own account, for investment purposes, and not
with a view to, or for sale in connection with, any distribution of the Shares. It is understood that the Shares have not been
registered under the Act by reason of a specific exemption from the registration provisions of the Act which depends, among other
things, upon the bona fide nature of his representations as expressed herein;


 


(b)          The
Shares must be held by him indefinitely unless they are subsequently registered under the Act and any applicable state securities
laws, or an exemption from such registration is available. The Company is under no obligation to register the Shares or to make
available any such exemption; and


 


(c)          Grantee
further represents that Grantee has had access to the financial statements or books and records of the Company, has had the opportunity
to ask questions of the Company concerning its business, operations and financial condition and to obtain additional information
reasonably necessary to verify the accuracy of such information;


 




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(d)         Unless
and until the Shares represented by this Grant are registered under the Securities Act, all certificates representing the Shares
and any certificates subsequently issued in substitution therefor and any certificate for any securities issued pursuant to any
stock split, share reclassification, stock dividend or other similar capital event shall bear legends in substantially the following
form:


 


THESE
SECURITIES HAVE NOT BEEN REGISTERED OR OTHERWISE QUALIFIED UNDER THE SECURITIES ACT OF 1933 (THE ’SECURITIES ACT’)
OR UNDER THE APPLICABLE OR SECURITIES LAWS OF ANY STATE. NEITHER THESE SECURITIES NOR ANY INTEREST THEREIN MAY BE SOLD, TRANSFERRED,
PLEDGED OR OTHERWISE DISPOSED OF IN THE ABSENCE OF REGISTRATION UNDER THE SECURITIES ACT OR ANY APPLICABLE SECURITIES LAWS OF
ANY STATE, UNLESS PURSUANT TO EXEMPTIONS THEREFROM.


 


THE
SHARES REPRESENTED BY THIS CERTIFICATE HAVE BEEN ISSUED PURSUANT TO THAT CERTAIN RESTRICTED STOCK PURCHASE AGREEMENT DATED ____________
BETWEEN THE COMPANY AND THE ISSUEE WHICH RESTRICTS THE TRANSFER OF THESE SHARES WHICH ARE SUBJECT TO REPURCHASE BY THE COMPANY
UNDER CERTAIN CONDITIONS.


 


and/or
such other legend or legends as the Company and its counsel deem necessary or appropriate. Appropriate stop transfer instructions
with respect to the Shares have been placed with the Company’s transfer agent.


 


(e)          Grantee
understands that he or she will recognize income, for Federal and state income tax purposes, in an amount equal to the amount
by which the fair market value of the Shares, as of the date of Grant, exceeds the price paid by Grantee. The acceptance of the
Shares by Grantee shall constitute an agreement by Grantee to report such income in accordance with then applicable law. Withholding
for federal or state income and employment tax purposes will be made, if and as required by law, from Grantee’s then current
compensation, or, if such current compensation is insufficient to satisfy withholding tax liability, the Company may require Grantee
to make a cash payment to cover such liability.


 


7.       Stand-off
Agreement. Grantee agrees that, in connection with any registration of the Company’s securities under the Securities
Act, and upon the request of the Company or any underwriter managing an underwritten offering of the Company’s securities,
Grantee shall not sell, short any sale of, loan, grant an option for, or otherwise dispose of any of the Shares (other than Shares
included in the offering) without the prior written consent of the Company or such managing underwriter, as applicable, for a
period of at least one year following the effective date of registration of such offering. This Section 8 shall survive any
termination of this Agreement.


 


8.       Termination
of Agreement. This Agreement shall terminate on the occurrence of any one of the following events: (a) written agreement of
all parties to that effect; (b) a proposed dissolution or liquidation of the Company, a merger or consolidation in which the Company
is not the surviving entity, or a sale of all or substantially all of the assets of the Company; (c) the closing of any public
offering of common stock of the Company pursuant to an effective registration statement under the Act; or (d) dissolution, bankruptcy,
or insolvency of the Company.


 


9.       Agreement
Subject to Plan; Applicable Law. This Grant is made pursuant to the Plan and shall be interpreted to comply therewith. A copy
of such Plan is available to Grantee, at no charge, at the principal office of the Company. Any provision of this Agreement inconsistent
with the Plan shall be considered void and replaced with the applicable provision of the Plan. This Grant shall be governed by
the laws of the State of Delaware and subject to the exclusive jurisdiction of the courts therein.


 




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10.       Miscellaneous.


 


(a)          Notices.
Any notice required to be given pursuant to this Agreement or the Plan shall be in writing and shall be deemed to have been
duly delivered upon receipt or, in the case of notices by the Company, five (5) days after deposit in the U.S. mail, postage prepaid,
addressed to Grantee at the last address provided by Grantee for use in the Company’s records.


 


(b)          Entire
Agreement. This instrument constitutes the sole agreement of the parties hereto with respect to the Shares. Any prior agreements,
promises or representations concerning the Shares not included or reference herein shall be of no force or effect. This Agreement
shall be binding on, and shall inure to the benefit of, the Parties hereto and their respective transferees, heirs, legal representatives,
successors, and assigns.


 


(c)          Enforcement.
This Agreement shall be construed in accordance with, and governed by, the laws of the State of Delaware and subject to the
exclusive jurisdiction of the courts located in the State of Delaware. If Grantee attempts to transfer any of the Shares subject
to this Agreement, or any interest in them in violation of the terms of this Agreement, the Company may apply to any court for
an injunctive order prohibiting such proposed transaction, and the Company may institute and maintain proceedings against Grantee
to compel specific performance of this Agreement without the necessity of proving the existence or extent of any damages to the
Company. Any such attempted transaction shares in violation of this Agreement shall be null and void.


 


(d)         Validity
of Agreement. The provisions of this Agreement may be waived, altered, amended, or repealed, in whole or in part, only on
the written consent of all parties hereto. It is intended that each Section of this Agreement shall be viewed as separate
and divisible, and in the event that any Section shall be held to be invalid, the remaining Sections shall continue to be
in full force and effect.


 


IN
WITNESS WHEREOF, the parties have executed this Agreement as of the date first above written. 


	 	 	 	 
	 	COMPANY:	APPLIED ENERGETICS, INC., a Delaware
    corporation
	 	 	By: 	 
	 	 	Name:	 
	 	 	Title:	 
	 	OPTIONEE:	 	 
	 	 	By: 	 
	 	 	 	(signature)
	 	 	Name:	 


 





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