AMENDED
AND RESTATED


2011
EQUITY INCENTIVE PLAN OF


MANDALAY
DIGITAL GROUP, INC.


(Effective
May 26, 2011)


 


Mandalay Digital Group,
Inc. (formerly known as NeuMedia, Inc.) hereby adopts in its entirety the Amended and Restated Mandalay Digital Group. Inc. 2011
Equity Incentive (“Plan”), on ________________2011, which amends and restates the NeuMedia, Inc. 2011 Equity Incentive
Plan originally adopted on May 26, 2011 (“Plan Adoption Date”). The Plan remains effective as of May 26, 2011 (“Plan
Effective Date”). Unless otherwise defined, terms with initial capital letters are defined in Section 2 below.


 


SECTION 1

BACKGROUND AND PURPOSE


 


1.1           Background
The Plan permits the grant of Nonqualified Stock Options, Incentive Stock Options, Stock Appreciation Rights (SARs), Restricted
Stock, and Restricted Stock Units.


 


1.2           Purpose of the Plan The Plan is intended to attract, motivate and retain the following individuals: (a) employees
of the Company or its Affiliates; (b) directors of the Company or any of its Affiliates who are employees of neither the Company
nor any Affiliate and (c) consultants who provide significant services to the Company or its Affiliates. The Plan is also designed
to encourage stock ownership by such individuals, thereby aligning their interests with those of the Company’s shareholders.


 


SECTION 2

DEFINITIONS


 


The following words
and phrases shall have the following meanings unless a different meaning is plainly required by the context:


 


2.1           “1934 Act” means the Securities Exchange Act of 1934, as amended. Reference to a specific section of
the Act shall include such section, any valid rules or regulations promulgated under such section, and any comparable provisions
of any future legislation, rules or regulations amending, supplementing or superseding any such section, rule or regulation.


 


2.2           “Administrator” means, collectively the Board, and/or one or more Committees, and/or one or more executive
officers of the Company designated by the Board to administer the Plan or specific portions thereof.


 


2.3           “Affiliate” means any corporation or any other entity (including, but not limited to, Subsidiaries, partnerships
and joint ventures) controlling, controlled by, or under common control with the Company.


 


2.4           “Applicable Law” means the legal requirements relating to the administration of Options, SARs, Restricted
Stock, Restricted Stock Units and similar incentive plans under any applicable laws, including but not limited to federal and state
employment, labor, privacy and securities laws, the Code, and applicable rules and regulations promulgated by the NASDAQ, New York
Stock Exchange, American Stock Exchange or the requirements of any other stock exchange or quotation system upon which the Shares
may then be listed or quoted.


 



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2.5           “Award” means, individually or collectively, a grant under the Plan of Nonqualified Stock Options, Incentive
Stock Options, SARs, Restricted Stock, and Restricted Stock Units.


 


2.6           “Award Agreement” means the written agreement setting forth the terms and provisions applicable to each
Award granted under the Plan, including the Grant Date.


 


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


 


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


 


(a)Any “person”
(as such term is used in Sections 13(d) and 14(d) of the Exchange Act), other than SB Acquisition Company LLC or its affiliates,
becomes the “beneficial owner” (as defined in Rule 13d-3 of the Exchange Act), directly or indirectly, of securities
of the Company representing fifty percent (50%) or more of the total voting power represented by the Company’s then outstanding
voting securities; or


 


(b)The sale, lease,
transfer, conveyance or other disposition, in one or a series of related transactions, of all or substantially all of the assets
of the Company to any “person” or “group” (as such terms are used in Sections 13(d)(3) and 14(d)(2)
of the Exchange Act).


 


2.9           “Code” means the Internal Revenue Code of 1986, as amended. Reference to a specific section of the Code
or regulation thereunder shall include such section or regulation, any valid regulation promulgated under such section, and any
comparable provision of any future legislation or regulation amending, supplementing or superseding such section or regulation.


 


2.10         “Committee” means any committee appointed by the Board of Directors to administer the Plan.


 


2.11         “Company” means Mandalay Digital Group, Inc., formerly known as NeuMedia, Inc., or any successor thereto.


 


2.12         “Consultant” means any consultant, independent contractor or other person who provides significant services
to the Company or its Affiliates or any employee or affiliate of any of the foregoing, but who is neither an Employee nor a Director.


 


2.13         “Continuous Status” as an Employee, Consultant or Director means that a Participant’s employment
or service relationship with the Company or any Affiliate is not interrupted or terminated. “Continuous Status”
shall not be considered interrupted in the following cases: (i) any leave of absence approved by the Company or (ii) transfers
between locations of the Company or between the Company and any Subsidiary or successor. A leave of absence approved by the Company
shall include sick leave, military leave or any other personal leave approved by an authorized representative of the Company. For
purposes of Incentive Stock Options, no leave of absence may exceed ninety (90) days, unless reemployment upon expiration of such
leave is guaranteed by statute or contract. If such reemployment is approved by the Company but not guaranteed by statute or contract,
then such employment will be considered terminated on the ninety-first (91st) day of such leave and on such date any Incentive
Stock Option held by the Participant shall cease to be treated as an Incentive Stock Option and shall be treated for tax purposes
as a Nonqualified Stock Option. In the event a Participant’s status changes among the positions of Employee, Director and
Consultant, the Participant's Continuous Status as an Employee, Director or Consultant shall not be considered terminated solely
as a result of any such changes in status.


 



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2.14         
“Director” means any individual who is a member of the Board of Directors of the Company or an Affiliate
of the Company.


 


2.15         
“Disability” means a permanent and total disability within the meaning of Section 22(e)(3) of the Code,
provided that in the case of Awards other than Incentive Stock Options, the Administrator in its discretion may determine whether
a permanent and total disability exists in accordance with uniform and non-discriminatory standards adopted by the Administrator
from time to time.


 


2.16         
“Employee” means any individual who is a common-law employee of the Company or of an Affiliate.


 


2.17         
“Exercise Price” means the price at which a Share may be purchased by a Participant pursuant to the exercise
of an Option, and the price used to determine the number of Shares payable to a Participant upon the exercise of a SAR.


 


2.18         
“Fair Market Value” means, as of any date, provided the Common Stock is listed on an established
stock exchange or a national market system, including without limitation the Nasdaq National Market of the National Association
of Securities Dealers, Inc. Automated Quotation ("NASDAQ") System, the Fair Market Value of a share of Common Stock shall
be the closing sales price for such stock on the Grant Date of the Award. If no sales were reported on such Grant Date of the Award,
the Fair Market Value of a share of Common Stock shall be the closing price for such stock as quoted on the NASDAQ (or the exchange
with the greatest volume of trading in the Common Stock) on the last market trading day with reported sales prior to the date of
determination. In the case where the Company is not listed on an established stock exchange or national market system, Fair Market
Value shall be determined by the Board in good faith in accordance with Code Section 409A and the applicable Treasury regulations.


 


2.19         
 “Fiscal Year” means a fiscal year of the Company.


 


2.20         
 “Grant Date” means the date the Administrator approves the Award.


 


2.21         
“Incentive Stock Option” means an Option to purchase Shares, which is designated as an Incentive Stock
Option and is intended to meet the requirements of Section 422 of the Code.


 


2.22         
“Independent Director” means a Nonemployee Director who is (i) a “nonemployee director” within
the meaning of Section 16b-3 of the 1934 Act, (ii) “independent” as determined under the applicable rules of the NASDAQ,
and (iii) an “outside director” under Treasury Regulation Section 1.162-27(e)(3), as any of these definitions may be
modified or supplemented from time to time.


 



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2.23         
 “Misconduct” shall include commission of any act contrary or harmful to the interests of the Company
(or any Affiliate) and shall include, without limitation: (a) conviction of a felony or crime involving moral turpitude or dishonesty,
(b) violation of Company (or any Affiliate) policies, with or acting against the interests of the Company (or any Affiliate), including
employing or recruiting any present, former or future employee of the Company (or any Affiliate), (c) misuse of any confidential,
secret, privileged or non-public information relating to the Company’s (or any Affiliate’s) business, or (e) participating
in a hostile takeover attempt of the Company or an Affiliate. The foregoing definition shall not be deemed to be inclusive of all
acts or omissions that the Company (or any Affiliate) may consider as Misconduct for purposes of the Plan.


 


2.24         
“NASDAQ” means The NASDAQ Stock Market, Inc.


 


2.25         
“Nonemployee Director” means a Director who is not employed by the Company or an Affiliate.


 


2.26         
“Nonqualified Stock Option” means an option to purchase Shares that is not intended to be an Incentive
Stock Option.


 


2.27         
“Option” means an Incentive Stock Option or a Nonqualified Stock Option.


 


2.28         
“Participant” means an Employee, Nonemployee Director or Consultant who has an outstanding Award.


 


2.29         
“Period of Restriction” means the period during which the transfer of Shares of Restricted Stock are
subject to restrictions that subject the Shares to a substantial risk of forfeiture. As provided in Section 7, such restrictions
may be based on the passage of time, the achievement of Performance Goals, or the occurrence of other events as determined by the
Administrator, in its discretion.


 


2.30         
“Plan” means this Amended and Restated Mandalay Digital Group, Inc. Amended and Restated 2011 Equity
Incentive Plan, as set forth in this instrument and as hereafter amended from time to time.


 


2.31         
“Restricted Stock” means an Award granted to a Participant pursuant to Section 7. An Award of Restricted
Stock constitutes a transfer of ownership of Shares to a Participant from the Company subject to restrictions against transferability,
assignment, and hypothecation. Under the terms of the Award, the restrictions against transferability are removed when the Participant
has met the specified vesting requirement. Vesting can be based on continued employment or service over a stated service period,
or on the attainment of specified Performance Goals. If employment or service is terminated prior to vesting, the unvested restricted
stock revert back to the Company.


 


2.32         
“Restricted Stock Units” means an Award granted to a Participant pursuant to Section 8. An Award of Restricted
Stock Units constitutes a promise to deliver to a Participant a specified number of Shares, or the equivalent value in cash, upon
satisfaction of the vesting requirements set forth in the Award Agreement. Each Restricted Stock Unit represents the right to receive
one Share or the equivalent value in cash.


 



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2.33          “Rule
16b-3” means a person promulgated under the 1934 Act, and any future regulation amending, supplementing or
superseding such regulation.


 


2.34         
“SEC” means the U.S. Securities and Exchange Commission.


 


2.35         
“Section 16 Person” means a person who, with respect to the Shares, is subject to Section 16 of the 1934
Act.


 


2.36         
“Shares” means shares of common stock of the Company.


 


2.37         
“Stock Appreciation Right” or “SAR” means an Award granted to a Participant pursuant
to Section 6. Upon exercise, a SAR gives a Participant a right to receive a payment in cash, or the equivalent value in Shares,
equal to the difference between the Fair Market Value of the Shares on the exercise date and the Exercise Price. Both the number
of SARs and the Exercise Price are determined on the Grant Date. For example, assume a Participant is granted 100 SARs at an Exercise
Price of $10 and the award agreement specifies that the net gain will be settled in Shares. Also assume that the SARs are exercised
when the underlying Shares have a Fair Market Value of $20 per Share. Upon exercise of the SAR, the Participant is entitled to
receive 50 Shares [(($20-$10)*100)/$20].


 


2.38         
“Subsidiary” means any corporation in an unbroken chain of corporations beginning with the Company if
each of the corporations other than the last corporation in the unbroken chain then owns stock possessing fifty percent (50%) or
more of the total combined voting power of all classes of stock in one of the other corporations in such chain.


 


SECTION 3

ADMINISTRATION


 


3.1            The Administrator. The Administrator shall be appointed by the Board of Directors from time to time.


 


3.2            Authority of the Administrator. It shall be the duty of the Administrator to administer the Plan in accordance with
the Plan’s provisions and in accordance with Applicable Law. The Administrator shall have all powers and discretion necessary
or appropriate to administer the Plan and to control its operation, including, but not limited to, the power to determine the following:
(a) which Employees, Nonemployee Directors and Consultants shall be granted Awards; (b) the terms, conditions and the amendment
of Awards, including the express power to amend an Award to include a provision to reduce the Exercise Price of any outstanding
Option or other Award after the Grant Date, or to cancel an outstanding Option or other Award in exchange for the grant of a new
Option or other Award with an exercise price equal to the Fair Market Value on the Grant Date, (c) interpretation of the Plan,
(d) adoption of rules for the administration, interpretation and application of the Plan as are consistent therewith and (e) interpretation,
amendment or revocation of any such rules.


 



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3.3            Delegation by the Administrator. The Administrator, in its discretion and on such terms and conditions as it may
provide, may delegate all or any part of its authority and powers under the Plan to one or more Directors; provided, however, in
the case where the Company is listed on an established stock exchange or quotation system, the Administrator may not delegate its
authority and powers (a) with respect to Section 16 Persons, or (b) in any way which would jeopardize the Plan’s qualification
under Section 162(m) of the Code or Rule 16b-3.


 


3.4            Decisions Binding. All determinations and decisions made by the Administrator, the Board and any delegate of the
Administrator pursuant to the provisions of the Plan shall be final, conclusive and binding on all persons, and shall be given
the maximum deference permitted by Applicable Law.


 


SECTION 4

SHARES SUBJECT TO THE PLAN


 


4.1            Number of Shares. Subject to adjustment, as provided in Section 4.3, the total number of Shares initially available
for grant under the Plan shall be 4,000,000. Shares granted under the Plan may be authorized but unissued Shares or reacquired
Shares bought on the market or otherwise.


 


4.2            Lapsed Awards. If any Award made under the Plan expires, or is forfeited or cancelled, the Shares underlying such
Awards shall become available for future Awards under the Plan. In addition, any Shares underlying an Award that are not issued
upon the exercise of such Award shall become available for future Awards under the Plan (e.g., the exercise of a Stock Appreciation
Right with the net gain settled in Shares and the “net-Share issuance” of an Option).


 


4.3            Adjustments in Awards and Authorized Shares. The number of Shares covered by each outstanding Award, and the per
Share exercise price of each such Award, shall be proportionately adjusted for any increase or decrease in the number of issued
shares of common stock resulting from a stock split, reverse stock split, recapitalization, combination, reclassification, the
payment of a stock dividend on the common stock or any other increase or decrease in the number of such Shares of common stock
effected without receipt of consideration by the Company; provided, however, that conversion of any convertible securities of the
Company shall not be deemed to have been “effected without receipt of consideration.” Such adjustment shall be made
by the Board, whose determination in that respect shall be final, binding and conclusive. Except as expressly provided herein,
no issue by the Company of Shares of stock of any class, or securities convertible into Shares of stock of any class, shall affect,
and no adjustment by reason thereof shall be made with respect to, the number or price of shares of common stock subject to an
Option.


 


4.4            Legal Compliance. Shares shall not be issued pursuant to the making or exercise of an Award unless the exercise of
Options and rights and the issuance and delivery of Shares shall comply with the Securities Act of 1933, as amended, the 1934 Act
and other Applicable Law, and shall be further subject to the approval of counsel for the Company with respect to such compliance.
Any Award made in violation hereof shall be null and void.


 



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4.5            Investment
Representations.As a condition to the exercise of an Option or other right, the Company may require the person exercising
such Option or right to represent and warrant at the time of exercise that the Shares are being acquired only for investment and
without any present intention to sell or distribute such Shares if, in the opinion of counsel for the Company, such a representation
is required.


 


SECTION 5

STOCK OPTIONS


 


The provisions of this
Section 5 are applicable to Options granted to Employees, Nonemployee Directors and Consultants. Such Participants shall also be
eligible to receive other types of Awards as set forth in the Plan.


 


5.1           Grant of Options. Subject to the terms and provisions of the Plan, Options may be granted at any time and from time
to time as determined by the Administrator in its discretion. The Administrator may grant Incentive Stock Options, Nonqualified
Stock Options, or a combination thereof, and the Administrator, in its discretion and subject to Sections 4.1, shall determine
the number of Shares subject to each Option.


 


5.2           Award Agreement. Each Option shall be evidenced by an Award Agreement that shall specify the Exercise Price, the
expiration date of the Option, the number of Shares to which the Option pertains, any conditions to exercise the Option, and such
other terms and conditions as the Administrator, in its discretion, shall determine. The Award Agreement shall also specify whether
the Option is intended to be an Incentive Stock Option or a Nonqualified Stock Option.


 


5.3           Exercise Price. The Administrator shall determine the Exercise Price for each Option subject to the provisions of
this Section 5.3.


 


5.3.1        Nonqualified
Stock Options. Unless otherwise specified in the Award Agreement, in the case of a Nonqualified Stock Option, the per Share exercise
price shall not be less than one hundred percent (100%) of the Fair Market Value of a Share on the Grant Date, as determined by
the Administrator.


 


5.3.2        Incentive
Stock Options. The grant of Incentive Stock Options shall be subject to the following limitations:


 


(a)               
The Exercise Price of an Incentive Stock Option shall be not less than one hundred percent (100%) of the Fair Market Value
of a Share on the Grant Date; provided, however, that if on the Grant Date, the Employee (together with persons whose stock ownership
is attributed to the Employee pursuant to Section 424(d) of the Code) owns stock possessing more than 10% of the total combined
voting power of all classes of stock of the Company or any of its Subsidiaries, the Exercise Price shall be not less than one hundred
and ten percent (110%) of the Fair Market Value of a Share on the Grant Date;


 


(b)              
Incentive Stock Options may be granted only to persons who are, as of the Grant Date, Employees of the Company or a Subsidiary,
and may not be granted to Consultants or Nonemployee Directors. In the event the Company fails to obtain shareholder approval of
the Plan within twelve (12) months from the Plan Adoption Date, all Options granted under this Plan designated as Incentive Stock
Options shall become Nonqualified Stock Options and shall be subject to the provisions of this Section 5 applicable to Nonqualified
Stock Options.






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(c)               
To the extent that the aggregate Fair Market Value of the Shares with respect to which Incentive Stock Options are exercisable
for the first time by the Participant during any calendar year (under all plans of the Company and any parent or Subsidiary) exceeds
$100,000, such Options shall be treated as Nonqualified Stock Options. For purposes of this Section 5.3.2(c), Incentive Stock Options
shall be taken into account in the order in which they were granted. The Fair Market Value of the Shares shall be determined as
of the time the Option with respect to such Shares is granted; and


 


(d)              
In the event of a Participant's change of status from Employee to Consultant or Director, an Incentive Stock Option held
by the Participant shall cease to be treated as an Incentive Stock Option and shall be treated for tax purposes as a Nonqualified
Stock Option three (3) months and one (1) day following such change of status.


 


5.3.3        Substitute
Options. Notwithstanding the provisions of Sections 5.3.1 and 5.3.2, in the event that the Company or an Affiliate consummates
a transaction described in Section 424(a) of the Code (e.g., the acquisition of property or stock from an unrelated corporation),
persons who become Employees, Nonemployee Directors or Consultants on account of such transaction may be granted Options in substitution
for options granted by their former employer, and such Options may be granted with an Exercise Price less than the Fair Market
Value of a Share on the Grant Date; provided, however, the grant of such substitute Option shall not constitute a “modification”
as defined in Code Section 424(h)(3) and the applicable Treasury regulations.


 


5.4           Expiration
of Options


 


5.4.1       Expiration Dates. Unless otherwise specified in an Award Agreement, each Option shall immediately terminate on the
date a Participant ceases his/her/its Continuous Status as an Employee, Director or Consultant with respect to the Shares that
have not “vested.” With respect to the “vested” Shares underlying a Participant’s Option, unless
otherwise specified in the Award Agreement, each Option shall terminate no later than the first to occur of the following events:


 


(a)               
Date in Award Agreement. The date for termination of the Option set forth in the written Award Agreement;


 


(b)              
Termination of Continuous Status as Employee, Nonemployee Director or Consultant. The last day of the three (3)-month
period following the date the Participant ceases his/her/its Continuous Status as an Employee, Nonemployee Director or Consultant
(other than termination for a reason described in subsections (c), (d), (e), or (f) below);


 


(c)               
Misconduct. In the event a Participant’s Continuous Status as an Employee, Director or Consultant terminates
because the Participant has performed an act of Misconduct as determined by the Administrator, all unexercised Options held by
such Participant shall expire five (5) business days following written notice from the Company to the Participant; provided, however,
that the Administrator may, in its sole discretion, prior to the expiration of such five (5) business day period, reinstate the
Options by giving written notice of such reinstatement to Participant. In the event of such reinstatement, the Participant may
exercise the Option only to such extent, for such time, and upon such terms and conditions as if the Participant had ceased to
be employed by or affiliated with the Company or a Subsidiary upon the date of such termination for a reason other than Misconduct,
disability or death;






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(d)              
Disability. In the event that a Participant's Continuous Status as an Employee, Director or Consultant terminates
as a result of the Participant's Disability, the Participant may exercise his or her Option at any time within twelve (12) months
from the date of such termination, but only to the extent that the Participant was entitled to exercise it at the date of such
termination (but in no event later than the expiration of the term of such Option as set forth in the Award Agreement). If, at
the date of termination, the Participant is not entitled to exercise his or her entire Option, the Shares covered by the unexercisable
portion of the Option shall revert to the Plan. If, after termination, the Participant does not exercise his or her Option within
the time specified herein, the Option shall terminate, and the Shares covered by such Option shall revert to the Plan;


 


(e)               
Death. In the event of the death of a Participant, the Participant’s Option may be exercised at any time within
twelve (12) months following the date of death (but in no event later than the expiration of the term of such Option as set forth
in the Award Agreement), by the Participant's estate or by a person who acquired the right to exercise the Option by bequest or
inheritance, but only to the extent that the Participant was entitled to exercise the Option at the date of death. If, at the time
of death, the Participant was not entitled to exercise his or her entire Option, the Shares covered by the unexercisable portion
of the Option shall immediately revert to the Plan. If, after death, the Participant's estate or a person who acquired the right
to exercise the Option by bequest or inheritance does not exercise the Option within the time specified herein, the Option shall
terminate, and the Shares covered by such Option shall revert to the Plan; or


 


(f)               
10 Years from Grant. An Option shall expire no more than ten (10) years from the Grant Date; provided, however, that
if an Incentive Stock Option is granted to an Employee who, together with persons whose stock ownership is attributed to the Employee
pursuant to Section 424(d) of the Code, owns stock possessing more than 10% of the total combined voting power of all classes of
the stock of the Company or any of its Subsidiaries, such Incentive Stock Option may not be exercised after the expiration of five
(5) years from the Grant Date.


 


5.4.2        Administrator
Discretion. Notwithstanding the foregoing the Administrator may, after an Option is granted, extend the exercise period that
an Option is exercisable following a Participant’s termination of employment (subject to limitations applicable to Incentive
Stock Options); provided, however that such extension does not exceed the maximum term of the Option.


 


5.5         
Exercisability of Options. Options granted under the Plan shall be exercisable at such times and be subject to
such restrictions as set forth in the Award Agreement and conditions as the Administrator shall determine in its discretion.
After an Option is granted, the Administrator, in its discretion, may accelerate the exercisability of the Option.


 



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5.6           Exercise
and Payment. Options shall be exercised by the Participant’s delivery of a written notice of exercise to the Secretary
of the Company (or its designee), setting forth the number of Shares with respect to which the Option is to be exercised, accompanied
by full payment for the Shares.


 


5.6.1        Form
of Consideration. Upon the exercise of any Option, the Exercise Price shall be payable to the Company in full in cash or its
equivalent. The Administrator, in its discretion, also may permit the exercise of Options and same-day sale of related Shares,
or exercise by tendering previously acquired Shares having an aggregate Fair Market Value at the time of exercise equal to the
total Exercise Price, or by any other means which the Administrator, in its discretion, determines to provide legal consideration
for the Shares, and to be consistent with the purposes of the Plan.


 


5.6.2        Delivery of Shares. As soon as practicable after receipt of a written notification of exercise and full payment for
the Shares purchased, the Company shall deliver to the Participant (or the Participant’s designated broker), Share certificates
(which may be in book entry form) representing such Shares.


 


SECTION 6

STOCK APPRECIATION RIGHTS


 


6.1           Grant of SARs. Subject to the terms of the Plan, a SAR may be granted to Employees, Nonemployee Directors and Consultants
at any time and from time to time as shall be determined by the Administrator.


 


6.1.1            
Number of Shares. The Administrator shall have complete discretion to determine the number of SARs granted to any
Participant.


 


6.1.2            
Exercise Price and Other Terms. The Administrator, subject to the provisions of the Plan, shall have discretion to
determine the terms and conditions of SARs granted under the Plan, including whether upon exercise the SARs will be settled in
Shares or cash. However, the Exercise Price of a SAR shall be not less than one hundred percent (100%) of the Fair Market Value
of a Share on the Grant Date.


 


6.2           Exercise
of SARs. SARs granted under the Plan shall be exercisable at such times and be subject to such restrictions as set forth in
the Award Agreement and conditions as the Administrator shall determine in its discretion. After an SAR is granted, the Administrator,
in its discretion, may accelerate the exercisability of the SAR.


 


6.3           SAR Agreement. Each SAR grant shall be evidenced by an Award Agreement that shall specify the Exercise Price, the
term of the SAR, the conditions of exercise and such other terms and conditions as the Administrator shall determine.


 


6.4           Expiration
of SARs. A SAR granted under the Plan shall expire upon the date determined by the Administrator in its discretion as set
forth in the Award Agreement, or otherwise pursuant to the provisions relating to the expiration of Options as set forth in Section
5.4.


 



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6.5           Payment of SAR Amount. Upon exercise of a SAR, a Participant shall be entitled to receive (whichever is specified
in the Award Agreement) from the Company either (a) a cash payment in an amount equal to (x) the difference between the Fair Market
Value of a Share on the date of exercise and the SAR Exercise Price, multiplied by (y) the number of Shares with respect to which
the SAR is exercised, or (b) a number of Shares by dividing such cash amount by the Fair Market Value of a Share on the exercise
date. If the Administrator designates in the Award Agreement that the SAR will be settled in cash, upon Participant’s exercise
of the SAR the Company shall make a cash payment to Participant as soon as reasonably practical.


 


SECTION 7

RESTRICTED STOCK


 


7.1           Grant of Restricted Stock. Subject to the terms and provisions of the Plan, the Administrator, at any time and from
time to time, may grant Shares of Restricted Stock to Employees, Nonemployee Directors and Consultants in such amounts as the Administrator,
in its discretion, shall determine. The Administrator shall determine the number of Shares to be granted to each Participant and
the purchase price, if any, to be paid by the Participant for such Shares. At the discretion of the Administrator, such purchase
price may be paid by Participant with cash or through services rendered.


 


7.2           Restricted Stock Agreement. Each Award of Restricted Stock shall be evidenced by an Award Agreement that shall specify
the Period of Restriction, the number of Shares granted, and such other terms and conditions as the Administrator, in its discretion,
shall determine. Unless the Administrator determines otherwise, Shares of Restricted Stock shall be held by the Company as escrow
agent until the restrictions on such Shares have lapsed.


 


7.3           Transferability. Except as provided in this Section 7, Shares of Restricted Stock may not be sold, transferred, pledged,
assigned, or otherwise alienated or hypothecated until expiration of the applicable Period of Restriction.


 


7.4           Other Restrictions. The Administrator, in its discretion, may impose such other restrictions on Shares of Restricted
Stock as it may deem advisable or appropriate, in accordance with this Section 7.4.


 


7.4.1            
General Restrictions. The Administrator may set restrictions based upon the achievement of specific Performance Goals
(Company-wide, business unit, or individual), or any other basis determined by the Administrator in its discretion.


 


7.4.2            
Section 162(m) Performance Restrictions. For purposes of qualifying grants of Restricted Stock as “performance-based
compensation” under Section 162(m) of the Code, the Administrator, in its discretion, may set restrictions based upon the
achievement of Performance Goals. The Performance Goals shall be set by the Administrator on or before the latest date permissible
to enable the Restricted Stock to qualify as “performance-based compensation” under Section 162(m) of the Code. In
granting Restricted Stock which is intended to qualify under Section 162(m) of the Code, the Administrator shall follow any procedures
determined by it from time to time to be necessary or appropriate to ensure qualification of the Restricted Stock under Section
162(m) of the Code (e.g., in determining the Performance Goals).


 



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7.4.3            
Legend on Certificates. The Administrator, in its discretion, may place a legend or legends on the certificates representing
Restricted Stock to give appropriate notice of such restrictions.


 


7.5           Removal
of Restrictions. Except as otherwise provided in this Section 7, Shares of Restricted Stock covered by each Restricted Stock
grant made under the Plan shall be released from escrow as soon as practicable after expiration of the Period of Restriction.
After the restrictions have lapsed, the Participant shall be entitled to have any legend or legends under Section 7.4.3 removed
from his or her Share certificate, and the Shares shall be freely transferable by the Participant, subject to Applicable Law.


 


7.6           Voting
Rights. During the Period of Restriction, Participants holding Shares of Restricted Stock granted hereunder may exercise full
voting rights with respect to those Shares, unless otherwise provided in the Award Agreement.


 


7.7           Dividends and Other Distributions. During the Period of Restriction, Participants holding Shares of Restricted Stock
shall be entitled to receive all dividends and other distributions paid with respect to such Shares unless otherwise provided in
the Award Agreement. If any such dividends or distributions are paid in Shares, the Shares shall be subject to the same restrictions
on transferability and forfeitability as the Shares of Restricted Stock with respect to which they were paid.


 


7.8           Return of Restricted Stock to Company. On the date that any forfeiture event set forth in the Award Agreement occurs,
the Restricted Stock for which restrictions have not lapsed shall revert to the Company and again shall become available for grant
under the Plan.


 


SECTION 8

RESTRICTED STOCK UNITS


 


8.1           Grant of Restricted Stock Units. Subject to the terms and conditions of the Plan, Restricted Stock Units may be granted
to Employees, Nonemployee Directors and Consultants at any time and from time to time, as shall be determined by the Administrator
in its sole and absolute discretion.


 


8.1.1            
Number of Restricted Stock Units. The Administrator will have complete discretion in determining the number of Restricted
Stock Units granted to any Participant under an Award Agreement, subject to the limitations in Sections 4.1.


 


8.1.2            
Value of a Restricted Stock Unit. Each Restricted Stock Unit granted under an Award Agreement represents the right
to receive one Share, or the equivalent value in cash, upon satisfaction of the vesting conditions specified in the Award Agreement.


 


8.2           Vesting Conditions. In its sole and absolute discretion, the Administrator will set the vesting provisions, which
may include any combination of time-based or performance-based vesting conditions. The Administrator, in its discretion, may at
any time accelerate the vesting of a Participant’s Restricted Stock Units and provide for immediate payment in accordance
with Section 8.3.


 



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8.3           Form and Timing of Payment. The Administrator shall specify in the Award Agreement whether the Restricted Stock Units
shall be settled in Shares or cash. In either case, upon vesting payment will be made as soon as reasonably practical upon satisfaction
of the vesting conditions.


 


8.4           Cancellation of Restricted Stock Units. On the earlier of the cancellation date set forth in the Award Agreement
or upon the termination of Participant’s Continuous Status as an Employee, Nonemployee Director or Consultant, all unvested
Restricted Stock Units will be forfeited to the Company, and again will be available for grant under the Plan.


 


SECTION 9

MISCELLANEOUS


 


9.1           Change In Control. Unless otherwise provided in the Award Agreement, in the event of a Change in Control, unless
an Award is assumed or substituted by the successor corporation, then (i) such Awards shall become fully exercisable as of the
date of the Change in Control, whether or not otherwise then exercisable and (ii) all restrictions and conditions on any Award
then outstanding shall lapse as of the date of the Change in Control.


 


9.2           Dissolution or Liquidation. In the event of the proposed dissolution or liquidation of the Company, the Administrator
shall notify each Participant as soon as practicable prior to the effective date of such proposed transaction. Notwithstanding
anything to the contrary contained in this Plan or in any Award Agreement, the Participant shall have the right to exercise his
or her Award for a period not less than ten (10) days immediately prior to such dissolution or transaction as to all of the Shares
covered thereby, including Shares as to which the Award would not otherwise be exercisable.


 


9.3           No
Effect on Employment or Service. Nothing in the Plan shall interfere with or limit in any way the right of the Company or
an Affiliate to terminate any Participant’s employment or service at any time, with or without cause. Unless otherwise provided
by written contract, employment or service with the Company or any of its Affiliates is on an at-will basis only. Additionally,
the Plan shall not confer upon any Director any right with respect to continuation of service as a Director or nomination to serve
as a Director, nor shall it interfere in any way with any rights which such Director or the Company may have to terminate his
or her directorship at any time.


 


9.4           Participation. No Employee, Consultant or Nonemployee Director shall have the right to be selected to receive an
Award under this Plan, or, having been so selected, to be selected to receive a future Award.


 


9.5           Limitations on Awards. No Participant shall be granted an Award or Awards in any Fiscal Year in which the combined
number of Shares underlying such Award(s) exceeds 500,000 Shares; provided, however, that such limitation shall be adjusted proportionately
in connection with any change in the Company’s capitalization as described in Section 4.3.


 


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


 



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9.7           Beneficiary
Designations. If permitted by the Administrator, a Participant under the Plan may name a beneficiary or beneficiaries to whom
any vested but unpaid Award shall be paid in the event of the Participant’s death. Each such designation shall revoke all
prior designations by the Participant and shall be effective only if given in a form and manner acceptable to the Administrator.
In the absence of any such designation, any vested benefits remaining unpaid at the Participant’s death shall be paid to
the Participant’s estate and, subject to the terms of the Plan and of the applicable Award Agreement, any unexercised vested
Award may be exercised by the administrator or executor of the Participant’s estate.


 


9.8           Limited
Transferability of Awards. No Award granted under the Plan may be sold, transferred, pledged, assigned, or otherwise alienated
or hypothecated, other than by will or by the laws of descent and distribution. All rights with respect to an Award granted to
a Participant shall be available during his or her lifetime only to the Participant. Notwithstanding the foregoing, the Participant
may, in a manner specified by the Administrator, (a) transfer a Nonqualified Stock Option to a Participant’s spouse, former
spouse or dependent pursuant to a court-approved domestic relations order which relates to the provision of child support, alimony
payments or marital property rights and (b) transfer a Nonqualified Stock Option by bona fide gift and not for any consideration
to (i) a member or members of the Participant’s immediate family, (ii) a trust established for the exclusive benefit of
the Participant and/or member(s) of the Participant’s immediate family, (iii) a partnership, limited liability company of
other entity whose only partners or members are the Participant and/or member(s) of the Participant’s immediate family or
(iv) a foundation in which the Participant an/or member(s) of the Participant’s immediate family control the management
of the foundation’s assets.


 


9.9           Restrictions
on Share Transferability. The Administrator may impose such restrictions on any Shares acquired pursuant to the exercise of
an Award as it may deem advisable, including, but not limited to, restrictions related to applicable federal securities laws,
the requirements of any national securities exchange or system upon which Shares are then listed or traded or any blue sky or
state securities laws.


 


9.10         Transfers
Upon a Change in Control. In the sole and absolute discretion of the Administrator, an Award Agreement may provide that in
the event of certain Change in Control events, which may include any or all of the Change in Control events described in Section
2.8, Shares obtained pursuant to this Plan shall be subject to certain rights and obligations, which include but are not limited
to the following: (i) the obligation to vote all such Shares in favor of such Change in Control transaction, whether by vote at
a meeting of the Company’s shareholders or by written consent of such shareholders; (ii) the obligation to sell or exchange
all such Shares and all rights to acquire Shares, under this Plan pursuant to the terms and conditions of such Change in Control
transaction; (iii) the right to transfer less than all but not all of such Shares pursuant to the terms and conditions of such
Change in Control transaction, and (iv) the obligation to execute all documents and take any other action reasonably requested
by the Company to facilitate the consummation of such Change in Control transaction.


 



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9.11         Performance-Based Awards. Each agreement for the grant of performance-based awards shall specify the number of Shares
underlying the Award, the Performance Period and the Performance Goals (each as defined below). As used herein, “Performance
Goals” means performance goals specified in the agreement for any Award which the Administrators determine to make subject
to Performance Goals, upon which the vesting or settlement of such award is conditioned and “Performance Period” means
the period of time specified in an agreement over which the Award which the Administrators determine to make subject to a Performance
Goal, are to be earned. Each agreement for a performance-based Award shall specify in respect of a Performance Goal the minimum
level of performance below which no payment will be made, shall describe the method of determining the amount of any payment to
be made if performance is at or above the minimum acceptable level, but falls short of full achievement of the Performance Goal,
and shall specify the maximum percentage payout under the agreement.


 


9.11.1        
Performance Goals for Covered Employees. The Performance Goals for any performance-based Award granted to a Covered
Employee, if deemed appropriate by the Administrators, shall be objective and shall otherwise meet the requirements of Section
162(m)(4)(C) of the Code, and shall be based upon one or more of the following performance-based business criteria, either on a
Company, subsidiary, division, business unit or line of business basis or in comparison with peer group performance or to an index:
net sales; gross sales; net revenue; gross revenue; growth in number of customers, households or assets; cash generation; cash
flow; unit volume; market share; cost reduction; costs and expenses (including expense efficiency ratios and other expense measures);
strategic plan development and implementation; return on net assets; return on actual or proforma assets; return on equity; return
on capital; return on investment; return on working capital; return on net capital employed; working capital; asset turnover; economic
value added; total stockholder return; stock price; net income; net income before tax; operating income; operating profit margin;
net income margin; net interest margin; sales margin; market share; inventory turnover; days sales outstanding; sales growth; capacity
utilization; increase in customer base; cash flow; book value; earnings per share; stock price earnings ratio; earnings before
interest; taxes; depreciation and amortization expenses (“EBITDA”); earnings before interest and taxes (“EBIT”);
earnings before interest (“EBI”); or EBITDA, EBIT, EBI or earnings before taxes and unusual or nonrecurring items as
measured either against the annual budget or as a ratio to revenue. Achievement of any such Performance Goal shall be measured
over a period of years not to exceed ten (10) as specified by the Administrators in the agreement for the performance-based Award.
No business criterion other than those named above in this Section 9.11.1 may be used in establishing the Performance Goal for
an award to a Covered Employee under this Section 9.11. For each such award relating to a Covered Employee, the Administrators
shall establish the targeted level or levels of performance for each such business criterion. The Administrators may, in their
discretion, reduce the amount of a payout otherwise to be made in connection with an award under this Section 9.11, but may not
exercise discretion to increase such amount, and the Administrators may consider other performance criteria in exercising such
discretion. All determinations by the Administrators as to the achievement of Performance Goals under this Section 9.11 shall be
made in writing. The Administrators may not delegate any responsibility under this Section 9.11. As used herein, “Covered
Employee” shall mean, with respect to any grant of an award, an executive of the Company or any subsidiary who is a member
of the executive compensation group under the Company’s compensation practices (not necessarily an executive officer) whom
the Administrators deem may be or become a covered employee as defined in Section 162(m)(3) of the Code for any year that such
award may result in remuneration over $1 million which would not be deductible under Section 162(m) of the Code but for the provisions
of the Plan and any other “qualified performance-based compensation” plan (as defined under Section 162(m) of the Code)
of the Company; provided, however, that the Administrators may determine that a Plan Participant has ceased to be a Covered Employee
prior to the settlement of any award.






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9.11.2        
Mandatory Deferral of Income. The Administrators, in their sole discretion, may require that one or more award agreements
contain provisions which provide that, in the event Section 162(m) of the Code, or any successor provision relating to excessive
employee remuneration, would operate to disallow a deduction by the Company with respect to all or part of any award under the
Plan, a Plan Participant’s receipt of the benefit relating to such award that would not be deductible by the Company shall
be deferred until the next succeeding year or years in which the Plan Participant’s remuneration does not exceed the limit
set forth in such provisions of the Code; provided, however, that such deferral does not violate Code Section 409A.


 


SECTION 10

AMENDMENT, SUSPENSION, AND TERMINATION


 


10.1         
Amendment, Suspension, or Termination. Except as provided in Section 10.2, the Board, in its sole discretion, may
amend, suspend or terminate the Plan, or any part thereof, at any time and for any reason. The amendment, suspension or termination
of the Plan shall not, without the consent of the Participant, alter or impair any rights or obligations under any Award theretofore
granted to such Participant. No Award may be granted during any period of suspension or after termination of the Plan.


 


10.2         
No Amendment without Shareholder Approval. The Company shall obtain shareholder approval of any material Plan amendment
to the extent necessary or desirable to comply with the rules of the NASDAQ, the Exchange Act, Section 422 of the Code, or other
Applicable Law.


 


10.3         
Plan Effective Date and Duration of Awards . The Plan shall be effective as of the Plan Effective Date subject to
the shareholders of the Company approving the Plan by the required vote), subject to Sections 10.1 and 10.2 (regarding the Board’s
right to amend or terminate the Plan), and shall remain in effect thereafter. However, without further shareholder approval, no
Award may be granted under the Plan more than ten (10) years after the Plan Adoption Date.


 


SECTION 11

TAX WITHHOLDING


 


11.1         
Withholding Requirements. Prior to the delivery of any Shares or cash pursuant to an Award (or exercise thereof),
the Company shall have the power and the right to deduct or withhold, or require a Participant to remit to the Company, an amount
sufficient to satisfy federal, state, and local taxes (including the Participant’s FICA obligation) required to be withheld
with respect to such Award (or exercise thereof).


 


11.2         
Withholding Arrangements. The Administrator, in its discretion and pursuant to such procedures as it may specify
from time to time, may permit a Participant to satisfy such tax withholding obligation, in whole or in part by (a) electing to
have the Company withhold otherwise deliverable Shares or (b) delivering to the Company already-owned Shares having a Fair Market
Value equal to the minimum amount required to be withheld. The amount of the withholding requirement shall be deemed to include
any amount which the Administrator agrees may be withheld at the time the election is made; provided, however, in the case Shares
are withheld by the Company to satisfy the tax withholding that would otherwise by issued to the Participant, the amount of such
tax withholding shall be determined by applying the statutory minimum federal, state or local income tax rates applicable to the
Participant with respect to the Award on the date that the amount of tax to be withheld is to be determined. The Fair Market Value
of the Shares to be withheld or delivered shall be determined as of the date taxes are required to be withheld.


 



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SECTION 12

LEGAL CONSTRUCTION


 


12.1         
Liability of Company. The inability of the Company to obtain authority from any regulatory body having jurisdiction,
which authority is deemed by the Company's counsel to be necessary to the lawful grant or any Award or the issuance and sale of
any Shares hereunder, shall relieve the Company, its officers, Directors and Employees of any liability in respect of the failure
to grant such Award or to issue or sell such Shares as to which such requisite authority shall not have been obtained.


 


12.2         
Grants Exceeding Allotted Shares. If the Shares covered by an Award exceed, as of the date of grant, the number of
Shares, which may be issued under the Plan without additional shareholder approval, such Award shall be void with respect to such
excess Shares, unless shareholder approval of an amendment sufficiently increasing the number of Shares subject to the Plan is
timely obtained.


 


12.3         
Gender and Number. Except where otherwise indicated by the context, any masculine term used herein also shall include
the feminine; the plural shall include the singular and the singular shall include the plural.


 


12.4         
Severability. In the event any provision of the Plan shall be held illegal or invalid for any reason, the illegality
or invalidity shall not affect the remaining parts of the Plan, and the Plan shall be construed and enforced as if the illegal
or invalid provision had not been included.


 


12.5         
Requirements of Law. The granting of Awards and the issuance of Shares under the Plan shall be subject to all applicable
laws, rules, and regulations, and to such approvals by any governmental agencies or national securities exchanges as may be required.


 


12.6         
Governing Law. The Plan and all Award Agreements shall be construed in accordance with and governed by the laws of
the State of Delaware.


 


12.7         
Captions. Captions are provided herein for convenience only, and shall not serve as a basis for interpretation or
construction of the Plan.


 


SECTION 13

EXECUTION


 


IN WITNESS WHEREOF,
the Company, by its duly authorized officer, has executed this Plan on the date indicated below.


 



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	 	MANDALAY DIGITAL GROUP, INC.
	 Executed on ______, 2012;	 
	 Effective May 26, 2011	By: 	
	 	 	Its Secretary



 






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