ampliphi
biosciences corporation


 


2013 stock
INCENTIVE PLAN


 


1.          Purposes
of the Plan. The purposes of this Plan are to attract and retain the best available personnel, to provide additional incentives
to Employees, Directors and Consultants and to promote the success of the Company’s business.


 


2.          Definitions.
The following definitions shall apply as used herein and in the individual Award Agreements except as defined otherwise in an individual
Award Agreement. In the event a term is separately defined in an individual Award Agreement, such definition shall supersede the
definition contained in this Section 2.


 


(a)          “Administrator”
means the Board or any of the Committees appointed to administer the Plan.


 


(b)          “Affiliate”
and “Associate” shall have the respective meanings ascribed to such terms in Rule 12b-2 promulgated under
the Exchange Act.


 


(c)          “Applicable
Laws” means the legal requirements relating to the Plan and the Awards under applicable provisions of federal securities
laws, state corporate and securities laws, the Code, the rules of any applicable stock exchange or national market system, and
the rules of any non-U.S. jurisdiction applicable to Awards granted to residents therein.


 


(d)          “Assumed”
means that pursuant to a Corporate Transaction either (i) the Award is expressly affirmed by the Company or (ii) the
contractual obligations represented by the Award are expressly assumed (and not simply by operation of law) by the successor entity
or its Parent in connection with the Corporate Transaction with appropriate adjustments to the number and type of securities of
the successor entity or its Parent subject to the Award and the exercise or purchase price thereof which at least preserves the
compensation element of the Award existing at the time of the Corporate Transaction as determined in accordance with the instruments
evidencing the agreement to assume the Award.


 


(e)          “Award”
means the grant of an Option, SAR, Dividend Equivalent Right, Restricted Stock, Restricted Stock Unit, Cash-Based Award or other
right or benefit under the Plan.


 


(f)          “Award
Agreement” means the written agreement evidencing the grant of an Award executed by the Company and the Grantee, including
any amendments thereto.


 


(g)          “Board”
means the Board of Directors of the Company.


 


(h)          “Cash-Based
Award” means an award denominated in cash that may be settled in cash and/or Shares, which may be subject to restrictions,
as established by the Administrator.


 


(i)          “Change
in Control” means a change in ownership or control of the Company after the Registration Date effected through
either of the following transactions:


 




    	 



    	 



    

  


(i)          the
direct or indirect acquisition by any person or related group of persons (other than an acquisition from or by the Company or by
a Company-sponsored employee benefit plan or by a person that directly or indirectly controls, is controlled by, or is under common
control with, the Company) of beneficial ownership (within the meaning of Rule 13d-3 of the Exchange Act) of securities possessing
more than fifty percent (50%) of the total combined voting power of the Company’s outstanding securities pursuant to a tender
or exchange offer made directly to the Company’s stockholders which a majority of the Continuing Directors who are not Affiliates
or Associates of the offeror do not recommend such stockholders accept, or


 


(ii)         a
change in the composition of the Board over a period of twelve (12) months or less such that a majority of the Board members (rounded
up to the next whole number) ceases, by reason of one or more contested elections for Board membership, to be comprised of individuals
who are Continuing Directors.


 


(j)          “Code”
means the Internal Revenue Code of 1986, as amended.


 


(k)          “Committee”
means any committee composed of members of the Board appointed by the Board to administer the Plan.


 


(l)          “Common
Stock” means the common stock of the Company.


 


(m)          “Company”
means AmpliPhi Biosciences Corporation, a Washington corporation, or any successor entity that adopts the Plan in connection with
a Corporate Transaction.


 


(n)          “Consultant”
means any person (other than an Employee or a Director, solely with respect to rendering services in such person’s capacity
as a Director) who is engaged by the Company or any Related Entity to render consulting or advisory services to the Company or
such Related Entity.


 


(o)          “Continuing
Directors” means members of the Board who either (i) have been Board members continuously for a period of at least
twelve (12) months or (ii) have been Board members for less than twelve (12) months and were elected or nominated for election
as Board members by at least a majority of the Board members described in clause (i) who were still in office at the time
such election or nomination was approved by the Board.


 


(p)          “Continuous
Service” means that the provision of services to the Company or a Related Entity in any capacity of Employee, Director
or Consultant is not interrupted or terminated. In jurisdictions requiring notice in advance of an effective termination as an
Employee, Director or Consultant, Continuous Service shall be deemed terminated upon the actual cessation of providing services
to the Company or a Related Entity notwithstanding any required notice period that must be fulfilled before a termination as an
Employee, Director or Consultant can be effective under Applicable Laws. A Grantee’s Continuous Service shall be deemed to
have terminated either upon an actual termination of Continuous Service or upon the entity for which the Grantee provides services
ceasing to be a Related Entity. Continuous Service shall not be considered interrupted in the case of (i) any approved leave
of absence, (ii) transfers among the Company, any Related Entity, or any successor, in any capacity of Employee, Director
or Consultant, or (iii) any change in status as long as the individual remains in the service of the Company or a Related
Entity in any capacity of Employee, Director or Consultant (except as otherwise provided in the Award Agreement). Notwithstanding
the foregoing, except as otherwise determined by the Administrator, in the event of any spin-off of a Related Entity, service as
an Employee, Director or Consultant for such Related Entity following such spin-off shall be deemed to be Continuous Service for
purposes of the Plan and any Award under the Plan. An approved leave of absence shall include sick leave, military leave, or any
other authorized personal leave. For purposes of each Incentive Stock Option granted under the Plan, if such leave exceeds three
(3) months, and reemployment upon expiration of such leave is not guaranteed by statute or contract, then the Incentive Stock Option
shall be treated as a Non-Qualified Stock Option on the day three (3) months and one (1) day following the expiration of such three
(3) month period.


 




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(q)          “Corporate
Transaction” means any of the following transactions, provided, however, that the Administrator shall determine under
parts (iv) and (v) whether multiple transactions are related, and its determination shall be final, binding and conclusive:


 


(i)          a
merger or consolidation in which the Company is not the surviving entity, except for a transaction the principal purpose of which
is to change the state in which the Company is incorporated;


 


(ii)         the
sale, transfer or other disposition of all or substantially all of the assets of the Company;


 


(iii)        the
complete liquidation or dissolution of the Company;


 


(iv)        any
reverse merger or series of related transactions culminating in a reverse merger (including, but not limited to, a tender offer
followed by a reverse merger) in which the Company is the surviving entity but (A) the shares of Common Stock outstanding
immediately prior to such merger are converted or exchanged by virtue of the merger into other property, whether in the form of
securities, cash or otherwise, or (B) in which securities possessing more than forty percent (40%) of the total combined voting
power of the Company’s outstanding securities are transferred to a person or persons different from those who held such securities
immediately prior to such merger or the initial transaction culminating in such merger, but excluding any such transaction or series
of related transactions that the Administrator determines shall not be a Corporate Transaction; or


 


(v)         acquisition
in a single or series of related transactions by any person or related group of persons (other than the Company or by a Company-sponsored
employee benefit plan) of beneficial ownership (within the meaning of Rule 13d-3 of the Exchange Act) of securities possessing
more than fifty percent (50%) of the total combined voting power of the Company’s outstanding securities but excluding any
such transaction or series of related transactions that the Administrator determines shall not be a Corporate Transaction.


 


(r)          “Covered
Employee” means an Employee who is a “covered employee” under Section 162(m)(3) of the Code.


 




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(s)          “Director”
means a member of the Board or the board of directors of any Related Entity.


 


(t)          “Disability”
means as defined under the long-term disability policy of the Company or the Related Entity to which the Grantee provides services
regardless of whether the Grantee is covered by such policy. If the Company or the Related Entity to which the Grantee provides
service does not have a long-term disability plan in place, “Disability” means that a Grantee is unable to carry out
the responsibilities and functions of the position held by the Grantee by reason of any medically determinable physical or mental
impairment for a period of not less than ninety (90) consecutive days. A Grantee will not be considered to have incurred a Disability
unless he or she furnishes proof of such impairment sufficient to satisfy the Administrator in its discretion.


 


(u)          “Dividend
Equivalent Right” means a right entitling the Grantee to compensation measured by dividends paid with respect to Common
Stock.


 


(v)         “Employee”
means any person, including an Officer or Director, who is in the employ of the Company or any Related Entity, subject to the control
and direction of the Company or any Related Entity as to both the work to be performed and the manner and method of performance.
The payment of a director’s fee by the Company or a Related Entity shall not be sufficient to constitute “employment”
by the Company.


 


(w)          “Exchange
Act” means the Securities Exchange Act of 1934, as amended.


 


(x)          “Fair
Market Value” means, as of any date, the value of Common Stock determined as follows:


 


(i)          If
the Common Stock is listed on one or more established stock exchanges or national market systems, including without limitation
the New York Stock Exchange, its Fair Market Value shall be the closing sales price for such stock (or the closing bid, if no sales
were reported) as quoted on the principal exchange or system on which the Common Stock is listed (as determined by the Administrator)
on the date of determination (or, if no closing sales price or closing bid was reported on that date, as applicable, on the last
trading date such closing sales price or closing bid was reported), as reported in The Wall Street Journal or such other source
as the Administrator deems reliable;


 


(ii)         If
the Common Stock is regularly quoted on an automated quotation system (including the OTC Bulletin Board) or by a recognized securities
dealer, its Fair Market Value shall be the closing sales price for such stock as quoted on such system or by such securities dealer
on the date of determination, but if selling prices are not reported, the Fair Market Value of a share of Common Stock shall be
the mean between the high bid and low asked prices for the Common Stock on the date of determination (or, if no such prices were
reported on that date, on the last date such prices were reported), as reported in The Wall Street Journal or such other source
as the Administrator deems reliable; or


 


(iii)        In
the absence of an established market for the Common Stock of the type described in (i) and (ii), above, the Fair Market Value thereof
shall be determined by the Administrator in good faith.


 




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(y)          “Grantee”
means an Employee, Director or Consultant who receives an Award under the Plan.


 


(z)          “Incentive
Stock Option” means an Option intended to qualify as an incentive stock option within the meaning of Section 422
of the Code.


 


(aa)         “Non-Qualified
Stock Option” means an Option not intended to qualify as an Incentive Stock Option.


 


(bb)         “Officer”
means a person who is an officer of the Company or a Related Entity within the meaning of Section 16 of the Exchange Act and
the rules and regulations promulgated thereunder.


 


(cc)         “Option”
means an option to purchase Shares pursuant to an Award Agreement granted under the Plan.


 


(dd)         “Parent”
means a “parent corporation”, whether now or hereafter existing, as defined in Section 424(e) of the Code.


 


(ee)         “Performance-Based
Compensation” means compensation qualifying as “performance-based compensation” under Section 162(m)
of the Code.


 


(ff)         “Performance
Period” means the period of time during which the performance goals must be met in order to determine the degree of payout
and/or vesting with respect to, or the amount or entitlement to, an Award.


 


(gg)         “Plan”
means this 2013 Stock Incentive Plan.


 


(hh)         “Registration
Date” means the first to occur of (i) the closing of the first sale to the general public pursuant to a registration
statement filed with and declared effective by the Securities and Exchange Commission under the Securities Act of 1933, as amended,
of (A) the Common Stock or (B) the same class of securities of a successor corporation (or its Parent) issued pursuant
to a Corporate Transaction in exchange for or in substitution of the Common Stock; and (ii) in the event of a Corporate Transaction,
the date of the consummation of the Corporate Transaction if the same class of securities of the successor corporation (or its
Parent) issuable in such Corporate Transaction shall have been sold to the general public pursuant to a registration statement
filed with and declared effective by the Securities and Exchange Commission under the Securities Act of 1933, as amended, on or
prior to the date of consummation of such Corporate Transaction.


 


(ii)         “Related
Entity” means any Parent or Subsidiary of the Company.


 


(jj)         “Replaced”
means that pursuant to a Corporate Transaction the Award is replaced with a comparable stock award or a cash incentive award
or program of the Company, the successor entity (if applicable) or Parent of either of them which preserves the compensation element
of such Award existing at the time of the Corporate Transaction and provides for subsequent payout in accordance with the same
(or a more favorable) vesting schedule applicable to such Award. The determination of Award comparability shall be made by the
Administrator and its determination shall be final, binding and conclusive.


 




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(kk)         “Restricted
Stock” means Shares issued under the Plan to the Grantee for such consideration, if any, and subject to such restrictions
on transfer, forfeiture provisions, and other terms and conditions as established by the Administrator.


 


(ll)           “Restricted
Stock Units” means an Award which may be earned in whole or in part upon the passage of time or the attainment of performance
criteria established by the Administrator and which may be settled for cash, Shares or other securities or a combination of cash,
Shares or other securities as established by the Administrator.


 


(mm)       “Rule 16b-3”
means Rule 16b-3 promulgated under the Exchange Act or any successor thereto.


 


(nn)         “SAR”
means a stock appreciation right entitling the Grantee to Shares or cash compensation, as established by the Administrator, measured
by appreciation in the value of Common Stock.


 


(oo)         “Share”
means a share of the Common Stock.


 


(pp)         “Subsidiary”
means a “subsidiary corporation”, whether now or hereafter existing, as defined in Section 424(f) of the Code.


 


3.          Stock
and Cash Subject to the Plan.


 


(a)          Subject
to the provisions of Section 10, below, the maximum aggregate number of Shares which may be issued pursuant to Awards initially
shall be 40,000,000 Shares. SARs payable in Shares shall reduce the maximum aggregate number of Shares which may be issued under
the Plan only by the net number of actual Shares issued to the Grantee upon exercise of the SAR. The Shares to be issued pursuant
to Awards may be authorized, but unissued, or reacquired Common Stock.


 


(b)          Any
Shares covered by an Award (or portion of an Award) which is forfeited, canceled or expires (whether voluntarily or involuntarily)
shall be deemed not to have been issued for purposes of determining the maximum aggregate number of Shares which may be issued
under the Plan. Shares that actually have been issued under the Plan pursuant to an Award shall not be returned to the Plan and
shall not become available for future issuance under the Plan, except that if unvested Shares are forfeited, such Shares shall
become available for future grant under the Plan. To the extent not prohibited by the listing requirements of the New York
Stock Exchange (or other established stock exchange or national market system on which the Common Stock is traded) or Applicable
Law, any Shares covered by an Award which are surrendered (i) in payment of the Award exercise or purchase price (including
pursuant to the “net exercise” of an option pursuant to Section 7(b)(v)) or (ii) in satisfaction of tax withholding
obligations incident to the exercise of an Award shall be deemed not to have been issued for purposes of determining the maximum
number of Shares which may be issued pursuant to all Awards under the Plan, unless otherwise determined by the Administrator.


 




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(c)          The
maximum aggregate amount of cash which may be paid pursuant to Awards granted to Covered Employees and eligible for the exemption
from application of Section 162(m) of the Code described in Section 18 (or any exemption having similar effect) is $10,000,000.


 


4.          Administration
of the Plan.


 


(a)          Plan
Administrator.


 


(i)          Administration
with Respect to Directors and Officers. With respect to grants of Awards to Directors or Employees who are also Officers or
Directors of the Company, the Plan shall be administered by (A) the Board or (B) a Committee designated by the Board,
which Committee shall be constituted in such a manner as to satisfy the Applicable Laws and to permit such grants and related transactions
under the Plan to be exempt from Section 16(b) of the Exchange Act in accordance with Rule 16b-3. Once appointed, such
Committee shall continue to serve in its designated capacity until otherwise directed by the Board.


 


(ii)         Administration
With Respect to Consultants and Other Employees. With respect to grants of Awards to Employees or Consultants who are neither
Directors nor Officers of the Company, the Plan shall be administered by (A) the Board or (B) a Committee designated by the Board,
which Committee shall be constituted in such a manner as to satisfy the Applicable Laws. Once appointed, such Committee shall continue
to serve in its designated capacity until otherwise directed by the Board. The Board may authorize one or more Officers to grant
such Awards and may limit such authority as the Board determines from time to time.


 


(iii)        Administration
With Respect to Covered Employees. Notwithstanding the foregoing, as of and after the date that the exemption for the Plan
under Section 162(m) of the Code expires, as set forth in Section 18 below, grants of Awards to any Covered Employee
intended to qualify as Performance-Based Compensation shall be made only by a Committee (or subcommittee of a Committee) which
is comprised solely of two or more Directors eligible to serve on a committee making Awards qualifying as Performance-Based Compensation.
In the case of such Awards granted to Covered Employees, references to the “Administrator” or to a “Committee”
shall be deemed to be references to such Committee or subcommittee.


 


(iv)        Administration
Errors. In the event an Award is granted in a manner inconsistent with the provisions of this subsection (a), such Award
shall be presumptively valid as of its grant date to the extent permitted by the Applicable Laws.


 


(b)          Powers
of the Administrator. Subject to Applicable Laws and the provisions of the Plan (including any other powers given to the Administrator
hereunder), and except as otherwise provided by the Board, the Administrator shall have the authority, in its discretion:


 


(i)          to
select the Employees, Directors and Consultants to whom Awards may be granted from time to time hereunder;


 




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(ii)         to
determine whether and to what extent Awards are granted hereunder;


 


(iii)        to
determine the number of Shares or the amount of cash or other consideration to be covered by each Award granted hereunder;


 


(iv)        to
approve forms of Award Agreements for use under the Plan;


 


(v)         to
determine the terms and conditions of any Award granted hereunder;


 


(vi)        to
amend the terms of any outstanding Award granted under the Plan, provided that any amendment that would adversely affect the
Grantee’s rights under an outstanding Award shall not be made without the Grantee’s written consent, provided, however,
that an amendment or modification that may cause an Incentive Stock Option to become a Non-Qualified Stock Option shall not be
treated as adversely affecting the rights of the Grantee;


 


(vii)       to
reduce the exercise price of any Option awarded under the Plan or the base appreciation amount of any SAR awarded under the Plan
or to cancel an Option or SAR at a time when its exercise price or base appreciation amount (as applicable) exceeds the Fair Market
Value of the underlying Shares, in exchange for another Option, SAR, Restricted Stock, or other Award or for cash, in each case
without stockholder approval;


 


(viii)      to
prescribe, amend and rescind rules and regulations relating to the Plan and to define terms not otherwise defined herein;


 


(ix)         to
construe and interpret the terms of the Plan and Awards, including without limitation, any notice of award or Award Agreement,
granted pursuant to the Plan;


 


(x)          to
approve corrections in the documentation or administration of any Award;


 


(xi)         to
grant Awards to Employees, Directors and Consultants employed outside the United States or to otherwise adopt or administer such
procedures or subplans that the Administrator deems appropriate or necessary on such terms and conditions different from those
specified in the Plan as may, in the judgment of the Administrator, be necessary or desirable to further the purpose of the Plan;
and


 


(xii)        to
take such other action, not inconsistent with the terms of the Plan, as the Administrator deems appropriate.


 


The express grant in the Plan of any specific
power to the Administrator shall not be construed as limiting any power or authority of the Administrator; provided that the Administrator
may not exercise any right or power reserved to the Board. Any decision made, or action taken, by the Administrator or in connection
with the administration of this Plan shall be final, conclusive and binding on all persons having an interest in the Plan.


 




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(c)          Indemnification.
In addition to such other rights of indemnification as they may have as members of the Board or as Officers or Employees of the
Company or a Related Entity, members of the Board and any Officers or Employees of the Company or a Related Entity to whom authority
to act for the Board, the Administrator or the Company is delegated shall be defended and indemnified by the Company to the extent
permitted by law on an after-tax basis against all reasonable expenses, including attorneys’ fees, actually and necessarily
incurred in connection with the defense of any claim, investigation, action, suit or proceeding, or in connection with any appeal
therein, 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 Award granted hereunder, and against all amounts paid by them in settlement thereof (provided such settlement
is approved by the Company) or paid by them in satisfaction of a judgment in any such claim, investigation, action, suit or proceeding,
except in relation to matters as to which it shall be adjudged in such claim, investigation, action, suit or proceeding that such
person is liable for gross negligence, bad faith or intentional misconduct; provided, however, that within thirty (30) days after
the institution of such claim, investigation, action, suit or proceeding, such person shall offer to the Company, in writing, the
opportunity at the Company’s expense to defend the same.


 


5.          Eligibility.
Awards other than Incentive Stock Options may be granted to Employees, Directors and Consultants. Incentive Stock Options may be
granted only to Employees of the Company or a Parent or a Subsidiary of the Company. An Employee, Director or Consultant who has
been granted an Award may, if otherwise eligible, be granted additional Awards. Awards may be granted to such Employees, Directors
or Consultants who are residing in non-U.S. jurisdictions as the Administrator may determine from time to time.


 


6.          Terms
and Conditions of Awards.


 


(a)          Types
of Awards. The Administrator is authorized under the Plan to award any type of arrangement to an Employee, Director or Consultant
that is not inconsistent with the provisions of the Plan and that by its terms involves or might involve the issuance of (i) Shares,
(ii) cash or (iii) an Option, a SAR, or similar right with a fixed or variable price related to the Fair Market Value
of the Shares and with an exercise or conversion privilege related to the passage of time, the occurrence of one or more events,
or the satisfaction of performance criteria or other conditions. Such awards include, without limitation, Options, SARs, sales
or bonuses of Restricted Stock, Restricted Stock Units, Cash-Based Awards or Dividend Equivalent Rights, and an Award may consist
of one such security or benefit, or two (2) or more of them in any combination or alternative.


 


(b)          Designation
of Award. Each Award shall be designated in the Award Agreement. In the case of an Option, the Option shall be designated as
either an Incentive Stock Option or a Non-Qualified Stock Option. However, notwithstanding such designation, an Option will qualify
as an Incentive Stock Option under the Code only to the extent the $100,000 limitation of Section 422(d) of the Code is not
exceeded. The $100,000 limitation of Section 422(d) of the Code is calculated based on the aggregate Fair Market Value of
the Shares subject to Options designated as Incentive Stock Options which become exercisable for the first time by a Grantee during
any calendar year (under all plans of the Company or any Parent or Subsidiary of the Company). For purposes of this calculation,
Incentive Stock Options shall be taken into account in the order in which they were granted, and the Fair Market Value of the Shares
shall be determined as of the grant date of the relevant Option. In the event that the Code or the regulations promulgated thereunder
are amended after the date the Plan becomes effective to provide for a different limit on the Fair Market Value of Shares permitted
to be subject to Incentive Stock Options, then such different limit will be automatically incorporated herein and will apply to
any Options granted after the effective date of such amendment.


 




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(c)          Conditions
of Award. Subject to the terms of the Plan, the Administrator shall determine the provisions, terms, and conditions of each
Award including, but not limited to, the Award vesting schedule, forfeiture provisions, form of payment (cash, Shares, or other
consideration) upon settlement of the Award, payment contingencies, and satisfaction of any performance criteria. The performance
criteria established by the Administrator for any Awards intended to be Performance-Based Compensation shall be one of, or combination
of, the following: clinical trial status, clinical trial results, business development achievements, strategic licensing or collaboration
agreements, product development milestones, net earnings or net income (before or after taxes); earnings per share; revenues or
sales (including net sales or revenue growth); net operating profit; return measures (including return on assets, net assets, capital,
invested capital, equity, sales, or revenue); cash flow (including operating cash flow, free cash flow, cash flow return on equity,
and cash flow return on investment); earnings before or after taxes, interest, depreciation, and/or amortization; gross or operating
margins; productivity ratios; share price (including growth measures and total stockholder return); expense targets; margins; operating
efficiency; market share; working capital targets and change in working capital; economic value added or EVA® (net operating
profit after tax minus the sum of capital multiplied by the cost of capital); or net operating income. The performance criteria
established by the Administrator for any Awards not intended to be Performance-Based Compensation may be based on any one of, or
combination of, the foregoing or any other performance criteria established by the Administrator. The performance criteria may
be applicable to the Company, Related Entities and/or any individual business units of the Company or any Related Entity and may
be measured annually or cumulatively over a period of years, on an absolute basis or relative to a pre-established target, to previous
years’ results or to a designated comparison group, in each case as specified by the Administrator. Partial achievement of
the specified criteria may result in a payment or vesting corresponding to the degree of achievement as specified in the Award
Agreement. In addition, to the extent applicable, the performance criteria shall be calculated in accordance with generally accepted
accounting principles, but excluding the effect (whether positive or negative) of any change in accounting standards and any extraordinary,
unusual or nonrecurring item, as determined by the Administrator, occurring after the establishment of the performance criteria
applicable to the Award intended to be Performance-Based Compensation. Each such adjustment, if any, shall be made solely for the
purpose of providing a consistent basis from period to period for the calculation of performance criteria in order to prevent the
dilution or enlargement of the Grantee’s rights with respect to an Award intended to be Performance-Based Compensation.


 


(d)          Acquisitions
and Other Transactions. The Administrator may issue Awards under the Plan in settlement, assumption or substitution for, outstanding
awards or obligations to grant future awards in connection with the Company or a Related Entity acquiring another entity, an interest
in another entity or an additional interest in a Related Entity whether by merger, stock purchase, asset purchase or other form
of transaction.


 




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(e)          Deferral
of Award Payment. The Administrator may establish one or more programs under the Plan to permit selected Grantees the opportunity
to elect to defer receipt of consideration upon exercise of an Award, satisfaction of performance criteria, or other event that
absent the election would entitle the Grantee to payment or receipt of Shares or other consideration under an Award. The Administrator
may establish the election procedures, the timing of such elections, the mechanisms for payments of, and accrual of interest or
other earnings, if any, on amounts, Shares or other consideration so deferred, and such other terms, conditions, rules and procedures
that the Administrator deems advisable for the administration of any such deferral program.


 


(f)          Separate
Programs. The Administrator may establish one or more separate programs under the Plan for the purpose of issuing particular
forms of Awards to one or more classes of Grantees on such terms and conditions as determined by the Administrator from time to
time.


 


(g)          Individual
Limitations on Awards.


 


(i)          Individual
Limit for Options and SARs.  Following the date that the exemption from application of Section 162(m) of the Code
described in Section 18 (or any exemption having similar effect) ceases to apply to Awards, the maximum number of Shares with
respect to which Options and SARs may be granted to any Grantee in any calendar year shall be eighteen million (18,000,000) Shares.
In connection with a Grantee’s commencement of Continuous Service, a Grantee may be granted Options and SARs for up to an
additional five million (5,000,000) Shares which shall not count against the limit set forth in the previous sentence. The foregoing
limitations shall be adjusted proportionately in connection with any change in the Company’s capitalization pursuant to Section 10,
below. To the extent required by Section 162(m) of the Code or the regulations thereunder, in applying the foregoing limitations
with respect to a Grantee, if any Option or SAR is canceled, the canceled Option or SAR shall continue to count against the maximum
number of Shares with respect to which Options and SARs may be granted to the Grantee. For this purpose, the repricing of an Option
(or in the case of a SAR, the base amount on which the stock appreciation is calculated is reduced to reflect a reduction in the
Fair Market Value of the Common Stock) shall be treated as the cancellation of the existing Option or SAR and the grant of a new
Option or SAR.


 


(ii)         Individual
Limit for Restricted Stock and Restricted Stock Units. Following the date that the exemption from application of Section 162(m)
of the Code described in Section 18 (or any exemption having similar effect) ceases to apply to Awards, for awards of Restricted
Stock and Restricted Stock Units that are intended to be Performance-Based Compensation, the maximum number of Shares with respect
to which such Awards may be granted to any Grantee in any calendar year shall be ten million (10,000,000) Shares. The foregoing
limitation shall be adjusted proportionately in connection with any change in the Company’s capitalization pursuant to Section 10,
below.


 


(iii)        Individual
Limit for Cash-Based Awards. Following the date that the exemption from application of Section 162(m) of the Code described
in Section 18 (or any exemption having similar effect) ceases to apply to Awards, for Cash-Based Awards that are intended
to be Performance-Based Compensation, with respect to each twelve (12) month period that constitutes or is part of each Performance
Period, the maximum amount that may be paid to a Grantee pursuant to such Awards shall be two million $(2,000,000). In addition,
the foregoing limitation shall be prorated for any Performance Period consisting of fewer than twelve (12) months by multiplying
such limitation by a fraction, the numerator of which is the number of months in the Performance Period and the denominator of
which is twelve (12).


 




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(h)          Deferral.
If the vesting or receipt of Shares or cash under an Award is deferred to a later date, any amount (whether denominated in Shares
or cash) paid in addition to the original number of Shares or amount of cash subject to such Award will not be treated as an increase
in the number of Shares or amount of cash subject to the Award if the additional amount is based either on a reasonable rate of
interest or on one or more predetermined actual investments such that the amount payable by the Company at the later date will
be based on the actual rate of return of a specific investment (including any decrease as well as any increase in the value of
an investment).


 


(i)          Term
of Award. The term of each Award shall be the term stated in the Award Agreement, provided, however, that the term of an Incentive
Stock Option shall be no more than ten (10) years from the date of grant thereof. However, in the case of an Incentive Stock
Option granted to a Grantee who, at the time the Option is granted, owns stock representing more than ten percent (10%) of
the voting power of all classes of stock of the Company or any Parent or Subsidiary of the Company, the term of the Incentive Stock
Option shall be five (5) years from the date of grant thereof or such shorter term as may be provided in the Award Agreement.
Notwithstanding the foregoing, the specified term of any Award shall not include any period for which the Grantee has elected to
defer the receipt of the Shares or cash issuable pursuant to the Award.


 


(j)          Transferability
of Awards. Incentive Stock Options may not be sold, pledged, assigned, hypothecated, transferred, or disposed of in any manner
other than by will or by the laws of descent or distribution and may be exercised, during the lifetime of the Grantee, only by
the Grantee. Other Awards shall be transferable (i) by will and by the laws of descent and distribution and (ii) during
the lifetime of the Grantee, to the extent and in the manner authorized by the Administrator but only to the extent such transfers
are made to family members, to family trusts, to family controlled entities, to charitable organizations, and pursuant to domestic
relations orders or agreements, in all cases without payment for such transfers to the Grantee. Notwithstanding the foregoing,
the Grantee may designate one or more beneficiaries of the Grantee’s Award in the event of the Grantee’s death on a
beneficiary designation form provided by the Administrator.


 


(k)          Time
of Granting Awards. The date of grant of an Award shall for all purposes be the date on which the Administrator makes the determination
to grant such Award, or such other later date as is determined by the Administrator.


 


7.          Award
Exercise or Purchase Price, Consideration and Taxes.


 


(a)          Exercise
or Purchase Price. The exercise or purchase price, if any, for an Award shall be as follows:


 




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(i)          In
the case of an Incentive Stock Option:


 


(1)         granted
to an Employee who, at the time of the grant of such Incentive Stock Option owns stock representing more than ten percent (10%)
of the voting power of all classes of stock of the Company or any Parent or Subsidiary of the Company, the per Share exercise price
shall be not less than one hundred ten percent (110%) of the Fair Market Value per Share on the date of grant; or


 


(2)         granted
to any Employee other than an Employee described in the preceding paragraph, the per Share exercise price shall be not less than
one hundred percent (100%) of the Fair Market Value per Share on the date of grant.


 


(ii)         In
the case of a Non-Qualified Stock Option, the per Share exercise price shall be not less than one hundred percent (100%) of the
Fair Market Value per Share on the date of grant.


 


(iii)        In
the case of Awards intended to qualify as Performance-Based Compensation, the exercise or purchase price, if any, shall be not
less than one hundred percent (100%) of the Fair Market Value per Share on the date of grant.


 


(iv)        In
the case of SARs, the base appreciation amount shall not be less than one hundred percent (100%) of the Fair Market Value per Share
on the date of grant.


 


(v)         In
the case of other Awards, such price as is determined by the Administrator.


 


(vi)        Notwithstanding
the foregoing provisions of this Section 7(a), in the case of an Award issued pursuant to Section 6(d), above, the exercise
or purchase price for the Award shall be determined in accordance with the provisions of the relevant instrument evidencing the
agreement to issue such Award.


 


(b)          Consideration.
Subject to Applicable Laws, the consideration to be paid for the Shares to be issued upon exercise or purchase of an Award including
the method of payment, shall be determined by the Administrator. In addition to any other types of consideration the Administrator
may determine, the Administrator is authorized to accept as consideration for Shares issued under the Plan the following, provided
that the portion of the consideration equal to the par value of the Shares must be paid in cash or other legal consideration permitted
by the Delaware General Corporation Law:


 


(i)          cash;


 


(ii)         check;


 


(iii)        surrender
of Shares or delivery of a properly executed form of attestation of ownership of Shares as the Administrator may require which
have a Fair Market Value on the date of surrender or attestation equal to the aggregate exercise price of the Shares as to which
said Award shall be exercised;


 




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(iv)        with
respect to Options, if the exercise occurs on or after the Registration Date, payment through a broker-dealer sale and remittance
procedure pursuant to which the Grantee (A) shall provide written instructions to a Company designated brokerage firm to effect
the immediate sale of some or all of the purchased Shares and remit to the Company sufficient funds to cover the aggregate exercise
price payable for the purchased Shares and (B) shall provide written directives to the Company to deliver the certificates for
the purchased Shares directly to such brokerage firm in order to complete the sale transaction;


 


(v)         with
respect to Options, payment through a “net exercise” such that, without the payment of any funds, the Grantee may exercise
the Option and receive the net number of Shares equal to (i) the number of Shares as to which the Option is being exercised,
multiplied by (ii) a fraction, the numerator of which is the Fair Market Value per Share (on such date as is determined by
the Administrator) less the exercise price per Share, and the denominator of which is such Fair Market Value per Share (the number
of net Shares to be received shall be rounded down to the nearest whole number of Shares); or


 


(vi)        any
combination of the foregoing methods of payment.


 


The Administrator may at any time or from
time to time, by adoption of or by amendment to the standard forms of Award Agreement described in Section 4(b)(iv), or by
other means, grant Awards which do not permit all of the foregoing forms of consideration to be used in payment for the Shares
or which otherwise restrict one or more forms of consideration.


 


(c)          Taxes.
No Shares or cash shall be delivered under the Plan to any Grantee or other person until such Grantee or other person has made
arrangements acceptable to the Administrator for the satisfaction of any non-U.S., federal, state, or local income and employment
tax withholding obligations, including, without limitation, obligations incident to the receipt of Shares or cash. Upon exercise
or vesting of an Award the Company shall withhold or collect from the Grantee an amount sufficient to satisfy such tax obligations,
including, but not limited to, by surrender of the whole number of Shares covered by the Award, if applicable, sufficient to satisfy
the minimum applicable tax withholding obligations incident to the exercise or vesting of an Award (reduced to the lowest whole
number of Shares if such number of Shares withheld would result in withholding a fractional Share with any remaining tax withholding
settled in cash).


 


8.          Exercise
of Award.


 


(a)          Procedure
for Exercise; Rights as a Stockholder.


 


(i)          Any
Award granted hereunder shall be exercisable at such times and under such conditions as determined by the Administrator under the
terms of the Plan and specified in the Award Agreement.


 


(ii)         An
Award shall be deemed to be exercised when written notice of such exercise has been given to the Company in accordance with the
terms of the Award by the person entitled to exercise the Award and full payment for the Shares with respect to which the Award
is exercised has been made, including, to the extent selected, use of the broker-dealer sale and remittance procedure to pay the
purchase price as provided in Section 7(b)(iv).


 




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(b)          Exercise
of Award Following Termination of Continuous Service.


 


(i)          An
Award may not be exercised after the termination date of such Award set forth in the Award Agreement and may be exercised following
the termination of a Grantee’s Continuous Service only to the extent provided in the Award Agreement.


 


(ii)         Where
the Award Agreement permits a Grantee to exercise an Award following the termination of the Grantee’s Continuous Service
for a specified period, the Award shall terminate to the extent not exercised on the last day of the specified period or the last
day of the original term of the Award, whichever occurs first.


 


(iii)        Any
Award designated as an Incentive Stock Option to the extent not exercised within the time permitted by law for the exercise of
Incentive Stock Options following the termination of a Grantee’s Continuous Service shall convert automatically to a Non-Qualified
Stock Option and thereafter shall be exercisable as such to the extent exercisable by its terms for the period specified in the
Award Agreement.


 


9.          Conditions
Upon Issuance of Shares.


 


(a)          If
at any time the Administrator determines that the delivery of Shares pursuant to the exercise, vesting or any other provision of
an Award is or may be unlawful under Applicable Laws, the vesting or right to exercise an Award or to otherwise receive Shares
pursuant to the terms of an Award shall be suspended until the Administrator determines that such delivery is lawful and shall
be further subject to the approval of counsel for the Company with respect to such compliance. The Company shall have no obligation
to effect any registration or qualification of the Shares under federal or state laws.


 


(b)          As
a condition to the exercise of an Award, the Company may require the person exercising such Award to represent and warrant at the
time of any such exercise that the Shares are being purchased 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 by any Applicable Laws.


 


10.         Adjustments
Upon Changes in Capitalization. Subject to any required action by the stockholders of the Company and Section 11 hereof,
the number of Shares covered by each outstanding Award, and the number of Shares which have been authorized for issuance under
the Plan but as to which no Awards have yet been granted or which have been returned to the Plan, the exercise or purchase price
of each such outstanding Award, the numerical limits set forth in Section 6(g), as well as any other terms that the Administrator
determines require adjustment shall be proportionately adjusted for (i) any increase or decrease in the number of issued Shares
resulting from a stock split, reverse stock split, stock dividend, recapitalization, combination or reclassification of the Shares,
or similar transaction affecting the Shares, (ii) any other increase or decrease in the number of issued Shares effected without
receipt of consideration by the Company, or (iii)  any other transaction with respect to Common Stock including a corporate
merger, consolidation, acquisition of property or stock, separation (including a spin-off or other distribution of stock or property),
reorganization, liquidation (whether partial or complete) or any similar transaction; provided, however that conversion of any
convertible securities of the Company shall not be deemed to have been “effected without receipt of consideration.”
In the event of any distribution of cash or other assets to stockholders other than a normal cash dividend, the Administrator shall
also make such adjustments as provided in this Section 10 or substitute, exchange or grant Awards to effect such adjustments
(collectively “adjustments”). Any such adjustments to outstanding Awards will be effected in a manner that precludes
the enlargement of rights and benefits under such Awards. In connection with the foregoing adjustments, the Administrator may,
in its discretion, prohibit the exercise of Awards or other issuance of Shares, cash or other consideration pursuant to Awards
during certain periods of time. Except as the Administrator determines, no issuance by the Company of shares of any class, or securities
convertible into shares of any class, shall affect, and no adjustment by reason hereof shall be made with respect to, the number
or price of Shares subject to an Award.


 




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11.         Corporate
Transactions and Changes in Control.


 


(a)          Termination
of Award to Extent Not Assumed in Corporate Transaction. Effective upon the consummation of a Corporate Transaction, all outstanding
Awards under the Plan shall terminate. However, all such Awards shall not terminate to the extent they are Assumed in connection
with the Corporate Transaction.


 


(b)          Acceleration
of Award Upon Corporate Transaction or Change in Control. The Administrator shall have the authority, exercisable either in
advance of any actual or anticipated Corporate Transaction or Change in Control or at the time of an actual Corporate Transaction
or Change in Control and exercisable at the time of the grant of an Award under the Plan or any time while an Award remains outstanding,
to provide for the full or partial automatic vesting and exercisability of one or more outstanding unvested Awards under the Plan
and the release from restrictions on transfer or forfeiture rights of such Awards in connection with a Corporate Transaction or
Change in Control, on such terms and conditions as the Administrator may specify. The Administrator also shall have the authority
to condition any such Award vesting and exercisability or release from such limitations upon the subsequent termination of the
Continuous Service of the Grantee within a specified period following the effective date of the Corporate Transaction or Change
in Control. The Administrator may provide that any Awards so vested or released from such limitations in connection with a Change
in Control, shall remain fully exercisable until the expiration or sooner termination of the Award.


 


(c)          Effect
of Acceleration on Incentive Stock Options. Any Incentive Stock Option accelerated under this Section 11 in connection
with a Corporate Transaction or Change in Control shall remain exercisable as an Incentive Stock Option under the Code only to
the extent the $100,000 dollar limitation of Section 422(d) of the Code is not exceeded.


 


12.         Effective
Date and Term of Plan. The Plan shall become effective upon the earlier to occur of its adoption by the Board or its approval
by the stockholders of the Company. It shall continue in effect for a term of ten (10) years unless sooner terminated. Subject
to Section 17, below, and Applicable Laws, Awards may be granted under the Plan upon its becoming effective.


 




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13.         Amendment,
Suspension or Termination of the Plan.


 


(a)          The
Board may at any time amend, suspend or terminate the Plan; provided, however, that no such amendment shall be made without the
approval of the Company’s stockholders to the extent such approval is required by Applicable Laws.


 


(b)          No
Award may be granted during any suspension of the Plan or after termination of the Plan.


 


(c)          No
suspension or termination of the Plan (including termination of the Plan under Section 11, above) shall adversely affect any
rights under Awards already granted to a Grantee.


 


14.         Reservation
of Shares.


 


(a)          The
Company, during the term of the Plan, will at all times reserve and keep available such number of Shares as shall be sufficient
to satisfy the requirements of the Plan.


 


(b)          The
inability of the Company to obtain authority from any regulatory body having jurisdiction, which authority is deemed by the Company’s
counsel to be necessary to the lawful issuance and sale of any Shares hereunder, shall relieve the Company of any liability in
respect of the failure to issue or sell such Shares as to which such requisite authority shall not have been obtained.


 


15.         No
Effect on Terms of Employment/Consulting Relationship. The Plan shall not confer upon any Grantee any right with respect to
the Grantee’s Continuous Service, nor shall it interfere in any way with his or her right or the right of the Company or
any Related Entity to terminate the Grantee’s Continuous Service at any time, with or without cause, and with or without
notice.


 


16.         No
Effect on Retirement and Other Benefit Plans. Except as specifically provided in a retirement or other benefit plan of the
Company or a Related Entity, Awards shall not be deemed compensation for purposes of computing benefits or contributions under
any retirement plan of the Company or a Related Entity, and shall not affect any benefits under any other benefit plan of any kind
or any benefit plan subsequently instituted under which the availability or amount of benefits is related to level of compensation.
The Plan is not a “Pension Plan” or “Welfare Plan” under the Employee Retirement Income Security Act of
1974, as amended.


 


17.         Stockholder
Approval. The grant of Incentive Stock Options under the Plan shall be subject to approval by the stockholders of the Company
within twelve (12) months before or after the date the Plan is adopted excluding Incentive Stock Options issued in substitution
for outstanding Incentive Stock Options pursuant to Section 424(a) of the Code. Such stockholder approval shall be obtained
in the degree and manner required under Applicable Laws. The Administrator may grant Incentive Stock Options under the Plan prior
to approval by the stockholders, but until such approval is obtained, no such Incentive Stock Option shall be exercisable. In the
event that stockholder approval is not obtained within the twelve (12) month period provided above, all Incentive Stock Options
previously granted under the Plan shall be exercisable as Non-Qualified Stock Options.


 




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18.         Effect
of Section 162(m) of the Code. Section 162(m) of the Code will not apply to the Plan and the numerical limits set forth
in Section 6(g) of the Plan shall not be applicable until the expiration of the transition period set forth in Treasury Regulation
Section 1.162-27(f). Under such Treasury Regulation, this exemption is available to the Plan for the duration of the period that
lasts until the earlier of (i) the expiration of the Plan, (ii) the material modification of the Plan, (iii) the exhaustion of
the maximum number of shares of Common Stock and other compensation available for Awards under the Plan, as set forth in Section 3,
(iv) the first meeting of stockholders at which directors are to be elected that occurs after the close of the third calendar year
following the calendar year in which the Company first becomes subject to the reporting obligations of Section 12 of the Exchange
Act, or (v) such other date required by Section 162(m) of the Code and the rules and regulations promulgated thereunder. Notwithstanding
anything herein to the contrary, the Administrator may, in its sole discretion, grant Awards at any time, including after the expiration
of the transition period set forth in Treasury Regulation Section 1.162-27(f), that are not intended to (or otherwise do not) qualify
as Performance-Based Compensation.


 


19.         Unfunded
Obligation. Grantees shall have the status of general unsecured creditors of the Company. Any amounts payable to Grantees pursuant
to the Plan shall be unfunded and unsecured obligations for all purposes, including, without limitation, Title I of the Employee
Retirement Income Security Act of 1974, as amended. Neither the Company nor any Related Entity shall be required to segregate any
monies from its general funds, or to create any trusts, or establish any special accounts with respect to such obligations. The
Company shall retain at all times beneficial ownership of any investments, including trust investments, which the Company may make
to fulfill its payment obligations hereunder. Any investments or the creation or maintenance of any trust or any Grantee account
shall not create or constitute a trust or fiduciary relationship between the Administrator, the Company or any Related Entity and
a Grantee, or otherwise create any vested or beneficial interest in any Grantee or the Grantee’s creditors in any assets
of the Company or a Related Entity. The Grantees shall have no claim against the Company or any Related Entity for any changes
in the value of any assets that may be invested or reinvested by the Company with respect to the Plan.


 


20.         Construction.
Captions and titles contained herein are for convenience only and shall not affect the meaning or interpretation of any provision
of the Plan. Except when otherwise indicated by the context, the singular shall include the plural and the plural shall include
the singular. Use of the term “or” is not intended to be exclusive, unless the context clearly requires otherwise.


 


21.         Nonexclusivity
of the Plan. Neither the adoption of the Plan by the Board, the submission of the Plan to the stockholders of the Company for
approval, nor any provision of the Plan will be construed as creating any limitations on the power of the Board to adopt such additional
compensation arrangements as it may deem desirable, including, without limitation, the granting of Awards otherwise than under
the Plan, and such arrangements may be either generally applicable or applicable only in specific cases.


 




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