Exhibit 4.1



 


THE PAWS PET COMPANY, INC.


2012STOCK INCENTIVE PLAN


	 


 


This
THE PAWS PET COMPANY, Inc. 2012 Stock Incentive Plan (the
“Plan”) is designed to retain directors, executives and selected employees and consultants and reward them
for making 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)	“Change in Control” - Means, and shall
be deemed to have occurred upon the occurrence of, any one of the following events: 



 


		(i)	The acquisition in one transaction by any individual, entity
or group (within the meaning of Section 13(d)(3) or 14(d)(2) of the Exchange Act) (a “Person”) of beneficial
ownership (within the meaning of Rule l3d-3 promulgated under the Exchange Act) of shares or other securities (as defined in Section
3(a)(10) of the Exchange Act) representing 51% or more of outstanding Stock of the Company; provided, however, that a Change in
Control as defined in this clause (1) shall not be deemed to occur in connection with any acquisition by the Company, an employee
benefit plan of the Company or any Person who immediately prior to the effective date of this Plan is a holder of Stock (a “Current
Stockholder”) so long as such acquisition does not result in any Person other than the Company, such employee benefit
plan or such Current Stockholder beneficially owning shares or securities representing 51% or more of the outstanding; or



 


		(ii)	Any election has occurred of persons as directors of the
Company that causes two-thirds or more of the Board to consist of persons other than (i) persons who, were members of the Board
on the effective date of this Plan and (ii) persons who were nominated by the Board for election as members of the Board at a time
when at least two-thirds of the Board consisted of persons who were members of the Board on the effective date of this Plan; provided,
however, that any person nominated for election by the Board when at least two-thirds of the members of the Board are persons described
in sub clause (i) or (ii) and persons who were themselves previously nominated in accordance with this clause (2) shall, for this
purpose, be deemed to have been nominated by a Board composed of persons described in sub clause (ii); or 



 


		(iii)	Approval by the stockholders of the Company of a reorganization,
merger, consolidation or similar transaction (a “Reorganization Transaction”), in each case, unless, immediately
following such Reorganization Transaction, more than 50% of, respectively, the outstanding shares of common stock (or similar equity
security) of the corporation or other entity resulting from or surviving such Reorganization Transaction and the combined voting
power of the securities of such corporation or other entity entitled to vote generally in the election of directors, is then beneficially
owned, directly or indirectly, by the individuals and entities who were the respective beneficial owners of the outstanding Stock
immediately prior to such Reorganization Transaction in substantially the same proportions as their ownership of the outstanding
Stock immediately prior to such Reorganization Transaction; or 



 


		(iv)	Approval by the stockholders of the Company of (i) a complete
liquidation or dissolution of the Company or (ii) the sale or other disposition of all or substantially all of the assets of the
Company to a corporation or other entity, unless, with respect to such corporation or other entity, immediately following such
sale or other disposition more than 50% of, respectively, the outstanding shares of common stock (or similar equity security) of
such corporation or other entity and the combined voting power of the securities of such corporation or other entity entitled to
vote generally in the election of directors, is then beneficially owned, directly or indirectly, by the individuals and entities
who were the respective beneficial owners of the outstanding Stock immediately prior to such sale or disposition in substantially
the same proportions as their ownership of the outstanding Stock immediately prior to such sale or disposition.



 



    	 



    	 



    

  


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



 


		(d)	“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 who 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”).



 


		(e)	“Company” – The Paws Pet Company,
Inc. and its subsidiaries including subsidiaries of subsidiaries.



 


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



 


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



 


		(h)	“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.



 


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



 


		(j)	“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.”



 


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



 


		(l)	“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.



 


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



 


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



 


		(o)	“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.



 



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		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.
	 	 	 
	 	 	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 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 ten million (10,000,000). 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.



 



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		(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.



 


		(d)	Application of Funds: The proceeds received by the Company from the sale of Stock pursuant
to the exercise of Options or rights 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. 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 Incentive Stock 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 Global Market or NASDAQ
Capital 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. 
	 	 	 
	 	The exercise price of each Nonstatutory Stock Option shall be determined at the discretion of the Board of Directors of the Corporation. 



 


		(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



 



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		(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 Illinois Business Corporation Act of 1983
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 ten (10) years. 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 ten (10) 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, within 90 days after such termination (or, in the event of “termination for good cause”
as that term is defined in Illinois 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).



 


			With respect to Nonstatutory Options granted to employees,
directors or consultants, the Board may specify such period for exercise, not less than 90 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 ninety(90) day 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.



 



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		(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.
	 	 	 
	 	 	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 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. 



  


			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, 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.



 



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			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.



 


		(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 laws. 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 laws, the corporate law of the state of Illinois, 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.



 


		(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 the applicable state securities laws; 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.



 



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		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.



 


		(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.



 


		(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.



 


		(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:



 



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		(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 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.



 


		(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.



 



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		(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.



 


		(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.	Change in Control.Unless
otherwise provided in the applicable Grant Agreement, in the event of a Change in Control, 50% of the vesting restrictions applicable
to each Participant’s Grant(s) shall terminate fully and the Participant shall immediately have the right to the delivery
of share certificates or exercise of Options, i.e. to the extent that a Participant’s Option(s) are unvested, 50% of such
unvested portion shall vest.



 



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		8.	Investment Intent. All Grants under the Plan are intended to be exempt from registration
under the Securities Act provided by Rule 701 thereunder. 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 (A) 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 (B) 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.



 


		9.	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. 



  


		10.	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.



			



		11.	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 -



    	 



    

  


		12.	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.



 


		13.	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
shall 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.



			



		14.	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 New York and construed accordingly.



 


		15.	Termination Dates. The Plan shall terminate ten years later, subject to earlier termination
by the Board pursuant to Section 9.



 


The
foregoing 2012 Stock Incentive Plan (consisting of 12 pages, including this page) was duly adopted and approved by the Board
of Directors on February 9, 2012.


 


	 	THE PAWS PET COMPANY, INC.
	 	 	 
	 	By:	/s/ Dan Wiesel
	 	 	Name:  Dan Wiesel
	 	 	Title:     Chief Executive Officer


 



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