Exhibit 10.1



 


Exhibit
10.1


 


VAPORIN, INC. 2014 EQUITY
INCENTIVE PLAN


 


1. Purpose;
Eligibility.


 


1.1 General
Purpose. The name of this plan is the Vaporin, Inc. 2014 Equity Incentive Plan (the “Plan”).
The purposes of the Plan are to (a) enable Vaporin, Inc., a Delaware corporation (the “Company”),
and any Affiliate to attract and retain the types of Employees, Consultants, Officers and Directors who will contribute to the
Company’s long range success; (b) provide incentives that align the interests of Employees, Consultants and Directors with
those of the shareholders of the Company; and (c) promote the success of the Company’s business.


 


1.2 Eligible
Award Recipients. The persons eligible to receive Awards are the Employees, Consultants, Officers and Directors of the Company
and its Affiliates and such other individuals designated by the Committee who are reasonably expected to become Employees, Consultants,
Officers and Directors after the receipt of Awards.


 


1.3 Available
Awards. Awards that may be granted under the Plan include: (a) Incentive Stock Options, (b) Non-Qualified Stock Options, (c)
SARs, (d) Restricted Awards, and (e) Restricted Stock Units.


 


2. Definitions.


 


“Affiliate” means
a corporation or other entity that, directly or through one or more intermediaries, controls, is controlled by or is under common
control with, the Company.


 


“Applicable
Laws” means the requirements related to or implicated by the administration of the Plan under applicable state corporate
law, United States federal and state securities laws, the Code, any stock exchange or quotation system on which the shares of Common
Stock are listed or quoted, and the applicable laws of any foreign country or jurisdiction where Awards are granted under the Plan.


 


“Award” means
any right granted under the Plan, including an Incentive Stock Option, a Non-Qualified Stock Option, a SAR, a Restricted Award
or Restricted Stock Unit.


 


“Award
Agreement” means a written agreement, contract, certificate or other instrument or document evidencing the terms
and conditions of an individual Award granted under the Plan which may, in the discretion of the Company, be transmitted electronically
to any Participant. Each Award Agreement shall be subject to the terms and conditions of the Plan.


 


“Awardholder”
means any person to whom non-Qualified Options, Restricted Stock Units or SARs are granted pursuant to the Plan.


 


“Beneficial
Owner” has the meaning assigned to such term in Rule 13d-3 and Rule 13d-5 under the Exchange Act, except that
in calculating the beneficial ownership of any particular “person” (as that term is used in Section 13(d)(3) of the
Exchange Act), such “person” shall be deemed to have beneficial ownership of all securities that such “person”
has the right to acquire by conversion or exercise of other securities, whether such right is currently exercisable or is exercisable
only after the passage of time. The terms “Beneficially Owns” and “Beneficially Owned” have a corresponding
meaning.


 




    	 



    	 



    


 


“Board”
means the Board of Directors of the Company, as constituted at any time.


 


“Cashless Exercise”
shall have the meaning in Section 6.4(b)(ii).


 


“Cause”
means:


 


  With respect
to any Employee or Consultant: (a) If the Employee or Consultant is a party to an employment or service agreement with the Company
or its Affiliates and such agreement provides for a definition of Cause, the definition contained therein; or (b) If no such agreement
exists, or if such agreement does not define Cause: (i) the commission of, or plea of guilty or no contest to, a felony or a crime
involving moral turpitude or the commission of any other act involving willful malfeasance or material fiduciary breach with respect
to the Company or an Affiliate; (ii) conduct that results in or is reasonably likely to result in harm to the reputation or business
of the Company or any of its Affiliates; (iii) gross negligence or willful misconduct with respect to the Company or an Affiliate;
or (iv) material violation of state or federal securities laws.


 


  With respect
to any Director, a determination by a majority of the disinterested Board members that the Director has engaged in any of the following:
(a) malfeasance in office; (b) gross misconduct or neglect; (c) false or fraudulent misrepresentation inducing the Director’s
appointment; (d) wilful conversion of corporate funds; or (e) repeated failure to participate in Board meetings on a regular basis
despite having received proper notice of the meetings in advance.


 


  The Committee,
in its absolute discretion, shall determine the effect of all matters and questions relating to whether a Participant has been
discharged for Cause.


 


  “Change
in Control” means a change in the ownership or effective control of the Company, or in the ownership of a substantial
portion of the assets of the Company within the meaning of Treasury Regulation Section 1.409A-3(i)(5), as may be amended from time
to time.


 


  “Code” means
the Internal Revenue Code of 1986, as it may be amended from time to time. Any reference to a section of the Code shall be deemed
to include a reference to any regulations promulgated thereunder.


 


  “Committee” means
a committee of one or more members of the Board appointed by the Board to administer the Plan in accordance with Section 3.3 and
Section 3.4.


 


  “Common
Stock” means the common stock, $.00001 par value per share, of the Company, or such other securities of the Company
as may be designated by the Committee from time to time in substitution thereof.


 




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  “Company” means
Vaporin, Inc., a Delaware corporation, and any successor thereto.


 


  “Consultant” means
any individual who is engaged by the Company or any Affiliate to render consulting or advisory services.


 


  “Continuous
Service” means that the Participant’s service with the Company or an Affiliate, whether as an Employee,
Consultant or Director, is not interrupted or terminated. The Participant’s Continuous Service shall not be deemed to have
terminated merely because of a change in the capacity in which the Participant renders service to the Company or an Affiliate as
an Employee, Consultant or Director or a change in the entity for which the Participant renders such service, provided that
there is no interruption or termination of the Participant’s Continuous Service; provided further that if any
Award is subject to Section 409A of the Code, this sentence shall only be given effect to the extent consistent with Section 409A
of the Code. For example, a change in status from an Employee of the Company to a Director of an Affiliate will not constitute
an interruption of Continuous Service. The Committee or its delegate, in its sole discretion, may determine whether Continuous
Service shall be considered interrupted in the case of any leave of absence approved by that party, including sick leave, military
leave or any other personal or family leave of absence.


 


  “Covered
Employee” has the same meaning as set forth in Section 162(m)(3) of the Code, as interpreted by Internal Revenue
Service Notice 2007-49.


 


  “Director” means
a member of the Board.


 


  “Disability” means
that the Participant is unable to engage in any substantial gainful activity by reason of any medically determinable physical or
mental impairment; provided, however, for purposes of determining the term of an Incentive Stock Option pursuant to Section 6.10
hereof, the term Disability shall have the meaning ascribed to it under Section 22(e)(3) of the Code. The determination of whether
an individual has a Disability shall be determined under procedures established by the Committee. Except in situations where the
Committee is determining Disability for purposes of the term of an Incentive Stock Option pursuant to Section 6.10 hereof within
the meaning of Section 22(e) (3) of the Code, the Committee may rely on any determination that a Participant is disabled for purposes
of benefits under any long-term disability plan maintained by the Company or any Affiliate in which a Participant participates.


 


  “Disqualifying
Disposition” has the meaning set forth in Section 14.12.


 


  “Effective
Date” shall mean the date as of which this Plan is adopted by the Board.


 


  “Employee” means
any person, including an Officer or Director, employed by the Company or an Affiliate; provided that, for purposes
of determining eligibility to receive Incentive Stock Options, an Employee shall mean an employee of the Company or a parent or
subsidiary corporation within the meaning of Code Section 424. Mere service as a Director or payment of a Director’s fee
by the Company or an Affiliate shall not be sufficient to constitute “employment” by the Company or an Affiliate.


 




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


 


  “Fair
Market Value” means, as of any date, the value of the Common Stock as determined below. If the principal market
for the Common Stock is any national securities exchange, or the Over-the-Counter Bulletin Board, the OTC Markets or a similar
system, the Fair Market Value shall be the closing price of a share of Common Stock (or if no sales were reported the closing price
on the date immediately preceding such date) as quoted on such exchange or market on the day of determination, as reported in the
Wall Street Journal or such other source as the Committee deems reliable. In the absence of an established market for the Common
Stock, the Fair Market Value shall be determined in good faith by the Committee and such determination shall be conclusive and
binding on all persons.


 


  “Free
Standing Rights” has the meaning set forth in Section 7.1(a).


 


  “Good
Reason” means a Separation From Service for good reason within the meaning of Treasury Regulation Section 1.409A-1(n)(2),
as may be amended from time to time.


 


  “Grant
Date” means the date on which the Committee adopts a resolution, or takes other appropriate action, expressly
granting an Award to a Participant that specifies the key terms and conditions of the Award or, if a later date is set forth in
such resolution, then such date as is set forth in such resolution.


 


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


 


  “Incumbent
Directors” means individuals who, on the Effective Date, constitute the Board, provided that any
individual becoming a Director subsequent to the Effective Date whose election or nomination for election to the Board was approved
by a vote of at least two-thirds of the Incumbent Directors then on the Board (either by a specific vote or by approval of the
proxy statement of the Company in which such person is named as a nominee for Director without objection to such nomination) shall
be an Incumbent Director. No individual initially elected or nominated as a Director of the Company as a result of an actual or
threatened election contest with respect to Directors or as a result of any other actual or threatened solicitation of proxies
by or on behalf of any person other than the Board shall be an Incumbent Director.


 


  “Non-Employee
Director” means a Director who is a “non-employee director” within the meaning of Rule 16b-3.


 


  “Non-Qualified
Stock Option” means an Option that by its terms does not qualify or is not intended to qualify as an Incentive
Stock Option.


 


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


 




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  “Option” means
an Incentive Stock Option or a Non-Qualified Stock Option granted pursuant to the Plan.


 


  “Optionholder”
means a person to whom an option is granted pursuant to the Plan or, if applicable, such other person who holds an outstanding
Option.


 


   “Option
Exercise Price” means the price at which a share of Common Stock may be purchased upon the exercise of an Option.


 


  “Outside
Director” means a Director who is an “outside director” within the meaning of Section 162(m) of the
Code and Treasury Regulations Section 1.162-27(e)(3) or any successor to such statute and regulation.


 


  “Participant” means
an eligible person to whom an Award is granted pursuant to the Plan or, if applicable, such other person who holds an outstanding
Award.


 


  “Permitted
Transferee” means: (a) a member of the Awardholder’s immediate family (child, stepchild, grandchild, parent,
stepparent, grandparent, spouse, former spouse, sibling, niece, nephew, mother-in-law, father-in-law, son-in-law, daughter-in-law,
brother-in-law, or sister-in-law, including adoptive relationships), any person sharing the Awardholder’s household (other
than a tenant or employee), a trust in which these persons have more than 50% of the beneficial interest, a foundation in which
these persons (or the Awardholder) control the management of assets, and any other entity in which these persons (or the Awardholder)
own more than 50% of the voting interests; (b) third parties designated by the Committee in connection with a program established
and approved by the Committee pursuant to which Participants may receive a cash payment or other consideration in consideration
for the transfer of an Award; and (c) such other transferees as may be permitted by the Committee in its sole discretion.


 


  “Plan” means
this Vaporin, Inc. 2014 Equity Incentive Plan, as amended and/or amended and restated from time to time.


 


  “Related
Rights” has the meaning set forth in Section 7.1(a).


 


  “Restricted
Award” means any Award granted pursuant to Section 7.2(a).


 


  “Restricted
Period” has the meaning set forth in Section 7.2(a).


 


  “Rule
16b-3” means Rule 16b-3 promulgated under the Exchange Act or any successor to Rule 16b-3, as in effect from
time to time.


 


  “SAR” means
the right pursuant to an Award granted under Section 7.1 to receive, upon exercise, an amount payable in cash or shares equal to
the number of shares subject to the SAR that is being exercised multiplied by the excess of (a) the Fair Market Value of a share
of Common Stock on the date the Award is exercised, over (b) the exercise price specified in the SAR Award Agreement.


 




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  “Securities
Act” means the Securities Act of 1933, as amended.


 


  “Separation
From Service” shall carry the meaning of that phrase as interpreted under Treasury Regulation Section 1.409A-1(h), as may
be amended from time, for all purposes of this Plan.


 


  “Without
Cause” means an involuntary Separation From Service within the meaning of Treasury Regulation Section 1.409A-1(n), as may
be amended from time to time. 


 


“10
Percent Shareholder” means a person who owns (or is deemed to own pursuant to Section 424(d) of the Code) stock
possessing more than 10% of the total combined voting power of all classes of stock of the Company or of any of its Affiliates.


 


3. Administration.


 


3.1 Authority
of Committee. The Plan shall be administered by the Committee or, in the Board’s sole discretion, by the Board. Subject
to the terms of the Plan, the Committee’s charter and Applicable Laws, and in addition to other express powers and authorization
conferred by the Plan, the Committee shall have the authority:


 


(a) to construe
and interpret the Plan and apply its provisions;


 


(b) to promulgate,
amend, and rescind rules and regulations relating to the administration of the Plan;


 


(c) to authorize
any person to execute, on behalf of the Company, any instrument required to carry out the purposes of the Plan;


 


(d) to delegate
its authority to one or more Officers of the Company with respect to Awards that do not involve Covered Employees or “insiders”
within the meaning of Section 16 of the Exchange Act;


 


(e) to determine
when Awards are to be granted under the Plan and the applicable Grant Date;


 


(f) from time
to time to select, subject to the limitations set forth in this Plan, those Participants to whom Awards shall be granted;


 


(g) to determine
the number of shares of Common Stock to be made subject to each Award;


 


(h) to determine
whether each Option is to be an Incentive Stock Option or a Non-Qualified Stock Option;


 




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(i) to prescribe
the terms and conditions of each Award, including, without limitation, the exercise price and medium of payment and vesting provisions,
and to specify the provisions of the Award Agreement relating to such grant;


 


(j) to amend
any outstanding Awards, including for the purpose of modifying the time or manner of vesting, or the term of any outstanding Award;
provided, however, that if any such amendment impairs a Participant’s rights or increases a Participant’s obligations
under his or her Award or creates or increases a Participant’s federal income tax liability with respect to an Award, such
amendment shall also be subject to the Participant’s consent;


 


(k) to determine
the duration and purpose of leaves of absences which may be granted to a Participant without constituting termination of their
employment for purposes of the Plan, which periods shall be no shorter than the periods generally applicable to Employees under
the Company’s employment policies;


 


(l) to make decisions
with respect to outstanding Awards that may become necessary upon a change in corporate control or an event that triggers anti-dilution
adjustments;


 


(m) to interpret,
administer, reconcile any inconsistency in, correct any defect in and/or supply any omission in the Plan and any instrument or
agreement relating to, or Award granted under, the Plan; and


 


(n) to exercise
discretion to make any and all other determinations which it determines to be necessary or advisable for the administration of
the Plan.


 


  The
Committee also may modify the purchase price or the exercise price of any outstanding Award, provided that if the
modification effects a repricing, shareholder approval shall be required before the repricing is effective.


 


3.2 Committee
Decisions Final. All decisions made by the Committee pursuant to the provisions of the Plan shall be final and binding on the
Company and the Participants, unless such decisions are determined by a court having jurisdiction to be arbitrary and capricious.


 


3.3 Delegation.
The Committee, or if no Committee has been appointed, the Board, may delegate administration of the Plan to a committee or committees
of one or more members of the Board, and the term “Committee” shall apply
to any person or persons to whom such authority has been delegated. The Committee shall have the power to delegate to a subcommittee
any of the administrative powers the Committee is authorized to exercise (and references in this Plan to the Board or the Committee
shall thereafter be to the committee or subcommittee), subject, however, to such resolutions, not inconsistent with the provisions
of the Plan, as may be adopted from time to time by the Board. The Board may abolish the Committee at any time and revest in the
Board the administration of the Plan. The members of the Committee shall be appointed by and serve at the pleasure of the Board.
From time to time, the Board may increase or decrease the size of the Committee, add additional members to, remove members (with
or without cause) from, appoint new members in substitution therefor, and fill vacancies, however caused, in the Committee. The
Committee shall act pursuant to a vote of the majority of its members or, in the case of a Committee comprised of only two members,
the unanimous consent of its members, whether present or not, or by the written consent of the majority of its members and minutes
shall be kept of all of its meetings and copies thereof shall be provided to the Board. Subject to the limitations prescribed by
the Plan and the Board, the Committee may establish and follow such rules and regulations for the conduct of its business as it
may determine to be advisable.


 




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3.4 Committee
Composition. Except as otherwise determined by the Board, the Committee shall consist solely of two or more Non-Employee Directors
who are also Outside Directors. The Board shall have discretion to determine whether or not it intends to comply with the exemption
requirements of Rule 16b-3 and/or Section 162(m) of the Code. However, if the Board intends to satisfy such exemption requirements,
with respect to Awards to any Covered Employee and with respect to any insider subject to Section 16 of the Exchange Act, the Committee
shall be a compensation committee of the Board that at all times consists solely of two or more Non-Employee Directors who are
also Outside Directors. Within the scope of such authority, the Board or the Committee may (a) delegate to a committee of one or
more members of the Board who are not Outside Directors the authority to grant Awards to eligible persons who are either (i) not
then Covered Employees and are not expected to be Covered Employees at the time of recognition of income resulting from such Award
or (ii) not persons with respect to whom the Company wishes to comply with Section 162(m) of the Code or (b) delegate to a committee
of one or more members of the Board who are not Non-Employee Directors the authority to grant Awards to eligible persons who are
not then subject to Section 16 of the Exchange Act. Nothing herein shall create an inference that an Award is not validly granted
under the Plan in the event Awards are granted under the Plan by a compensation committee of the Board that does not at all times
consist solely of two or more Non-Employee Directors who are also Outside Directors.


 


3.5 Indemnification.
In addition to such other rights of indemnification as they may have as Directors or members of the Committee, and to the extent
allowed by Applicable Laws, the Committee members and other Directors shall be indemnified by the Company against the reasonable
expenses, including attorneys’ fees, actually incurred in connection with pre-suit disputes arising from claims or allegations
made by or on behalf of an Award recipient and any action, suit or proceeding or in connection with any appeal therein, to which
the Company and/or Directors 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 under the Plan, and against all amounts paid by such parties in settlement thereof (provided, however, that
the settlement has been approved by the Company, which approval shall not be unreasonably withheld) or paid by the Committee in
satisfaction of a judgment in any such action, suit or proceeding, except in relation to matters as to which it shall be adjudged
in such action, suit or proceeding that such parties did not act in good faith and in a manner which such person reasonably believed
to be in the best interests of the Company, or in the case of a criminal proceeding, had no reason to believe that the conduct
complained of was unlawful; provided, however, that within 60 days after institution of any such action, suit or proceeding, such
persons shall, in writing, offer the Company the opportunity at its own expense to handle and defend such action, suit or proceeding.


 




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4. Shares
Subject to the Plan.


 


4.1 Subject to
adjustment in accordance with Section 11, a total of 25,000,000 shares of Common Stock shall be available for the grant of Awards
under the Plan. During the term of the Awards, the Company shall keep available at all times the number of shares of Common Stock
required to satisfy such Awards.


 


4.2 Shares of Common
Stock available for distribution under the Plan may consist, in whole or in part, of authorized and unissued shares, treasury shares
or shares reacquired by the Company in any manner.


 


4.3 Subject to
adjustment in accordance with Section 11, no Participant shall be granted, during any one year period, Options to purchase Common
Stock and SARs with respect to more than 2,500,000 shares of Common Stock in the aggregate or any other Awards with respect to
more than 5,000,000 shares of Common Stock in the aggregate. If an Award is to be settled in cash, the number of shares of Common
Stock on which the Award is based shall count toward the individual share limit set forth in this Section 4.


 


4.4 Any shares
of Common Stock subject to an Award that is canceled, forfeited or expires prior to exercise or realization, either in full or
in part, shall again become available for issuance under the Plan. Notwithstanding anything to the contrary contained herein: shares
subject to an Award under the Plan shall not again be made available for issuance or delivery under the Plan if such shares are
(a) shares tendered in payment of an Option, (b) shares delivered or withheld by the Company to satisfy any tax withholding obligation,
or (c) shares covered by a stock-settled SAR or other Awards that were not issued upon the settlement of the Award.


 


5. Eligibility.


 


5.1 Eligibility
for Specific Awards. Incentive Stock Options may be granted only to Employees. Awards other than Incentive Stock Options may
be granted to Employees, Consultants, Officers and Directors and those individuals whom the Committee determines are reasonably
expected to become Employees, Consultants, Officers and Directors following the Grant Date.


 


5.2 10 Percent
Shareholders. A 10 Percent Shareholder shall not be granted an Incentive Stock Option unless the Option Exercise Price is at
least 110% of the Fair Market Value of the Common Stock at the Grant Date and the Option is not exercisable after the expiration
of five years from the Grant Date.


 


6. Option
Provisions. Each Option granted under the Plan shall be evidenced by an Award Agreement. Each Option so granted shall be subject
to the conditions set forth in this Section 6, and to such other conditions not inconsistent with the Plan as may be reflected
in the applicable Award Agreement. All Options shall be separately designated Incentive Stock Options or Non-Qualified Stock Options
at the time of grant, and, if certificates are issued, a separate certificate or certificates will be issued for shares of Common
Stock purchased on exercise of each type of Option. Notwithstanding the foregoing, the Company shall have no liability to any Participant
or any other person if an Option designated as an Incentive Stock Option fails to qualify as such at any time or if an Option is
determined to constitute “nonqualified deferred compensation” within the meaning of Section 409A of the Code and the
terms of such Option do not satisfy the requirements of Section 409A of the Code. The provisions of separate Options need not be
identical, but each Option shall include (through incorporation of provisions hereof by reference in the Option or otherwise) the
substance of each of the following provisions:


 




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6.1 Term.
Subject to the provisions of Section 5.2 regarding 10 Percent Shareholders, no Incentive Stock Option shall be exercisable after
the expiration of 10 years from the Grant Date. The term of a Non-Qualified Stock Option granted under the Plan shall be determined
by the Committee; provided, however, no Non-Qualified Stock Option shall be exercisable after the expiration of 10 years from the
Grant Date.


 


6.2 Exercise
Price of An Incentive Stock Option. Subject to the provisions of Section 5.2 regarding 10 Percent Shareholders, the Option
Exercise Price of each Incentive Stock Option shall be not less than 100% of the Fair Market Value of the Common Stock subject
to the Option on the Grant Date. Notwithstanding the foregoing, an Incentive Stock Option may be granted with an Option Exercise
Price lower than that set forth in the preceding sentence if such Option is granted pursuant to an assumption or substitution for
another option in a manner satisfying the provisions of Section 424(a) of the Code.


 


6.3 Exercise
Price of a Non-Qualified Stock Option. The Option Exercise Price of each Non-Qualified Stock Option shall be not less than
100% of the Fair Market Value of the Common Stock subject to the Option on the Grant Date. Notwithstanding the foregoing, a Non-Qualified
Stock Option may be granted with an Option Exercise Price lower than that set forth in the preceding sentence if such Option is
granted pursuant to an assumption or substitution for another option in a manner satisfying the provisions of Section 409A of the
Code.


 


6.4 Consideration.
The Option Exercise Price of Common Stock acquired pursuant to an Option shall be paid, to the extent permitted by applicable statutes
and regulations, either (a) by wire transfer or by certified or bank check at the time the Option is exercised or (b) in the discretion
of the Committee, upon such terms as the Committee shall approve, the Option Exercise Price may be paid: (i) by delivery to the
Company of other Common Stock, duly endorsed for transfer to the Company, with a Fair Market Value on the date of delivery equal
to the Option Exercise Price (or portion thereof) due for the number of shares being acquired; (ii) by means of attestation whereby
the Participant identifies for delivery specific shares of Common Stock that have an aggregate Fair Market Value on the date of
attestation equal to the Option Exercise Price (or portion thereof) and receives a number of shares of Common Stock equal to the
difference between the number of shares thereby purchased and the number of identified attestation shares of Common Stock (a “Cashless
Exercise”); (iii) a “cashless” exercise program established with a broker; (iv) by reduction in the number
of shares of Common Stock otherwise deliverable upon exercise of such Option with a Fair Market Value equal to the aggregate Option
Exercise Price at the time of exercise; (v) any combination of the foregoing methods; or (vi) in any other form of legal consideration
that may be acceptable to the Committee. Unless otherwise specifically provided in the Option, the exercise price of Common Stock
acquired pursuant to an Option that is paid by delivery (or through a Cashless Exercise) to the Company of other Common Stock acquired,
directly or indirectly from the Company, shall be paid only by shares of the Common Stock of the Company that have been held for
more than six months (or such longer or shorter period of time required to avoid a charge to earnings for financial accounting
purposes). Notwithstanding the foregoing, during any period for which the Common Stock is publicly traded an exercise by a Director
or Officer that involves or may involve a direct or indirect extension of credit or arrangement of an extension of credit by the
Company, directly or indirectly, in violation of Section 402(a) of the Sarbanes-Oxley Act of 2002 shall be prohibited with respect
to any Award under this Plan.


 




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6.5 Transferability
of An Incentive Stock Option. An Incentive Stock Option shall not be transferable except by will or by the laws of descent
and distribution and shall be exercisable during the lifetime of the Optionholder only by the Optionholder. Notwithstanding the
foregoing, the Optionholder may, by delivering written notice to the Company, in a form satisfactory to the Company, designate
a third party who, in the event of the death of the Optionholder, shall thereafter be entitled to exercise the Option.


 


6.6 Transferability
of a Non-Qualified Stock Option. A Non-Qualified Stock Option may, in the sole discretion of the Committee, be transferable
to a Permitted Transferee, upon written approval by the Committee to the extent provided in the Award Agreement. If the Non-Qualified
Stock Option does not provide for transferability, then the Non-Qualified Stock Option shall not be transferable except by will
or by the laws of descent and distribution and shall be exercisable during the lifetime of the Optionholder only by the Optionholder.
Notwithstanding the foregoing, the Optionholder may, by delivering written notice to the Company, in a form satisfactory to the
Company, designate a third party who, in the event of the death of the Optionholder, shall thereafter be entitled to exercise the
Option.


 


6.7 Vesting
of Options. The Committee (or an Officer if given authority to grant Options by resolution of the Board) at the time of granting
an Award may provide for vesting terms based upon time of service to the Company and/or other criteria. Awards which do not vest
shall be forfeited and the underlying Common Stock shall be available for future grant. The Committee may, but shall not be required
to, provide for an acceleration of vesting and exercisability in the terms of any Award Agreement upon the occurrence of a specified
event.


 


6.8 Termination
of Continuous Service. Unless otherwise provided in an Award Agreement or in an employment agreement the terms of which have
been approved by the Committee, in the event an Optionholder’s Continuous Service terminates (other than upon the Optionholder’s
death or Disability), the Optionholder may exercise his or her Option (to the extent that the Optionholder was entitled to exercise
such Option as of the date of termination) but only within such period of time ending on the earlier of (a) the date 12 months
following the termination of the Optionholder’s Continuous Service or (b) the expiration of the term of the Option as set
forth in the Award Agreement; provided that, if the termination of Continuous Service is by the Company for Cause, all outstanding
Options (whether or not vested) shall immediately terminate and cease to be exercisable. If, after termination, the Optionholder
does not exercise his or her Option within the time specified in the Award Agreement, the Option shall terminate.


 




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6.9 Extension
of Termination Date. An Optionholder’s Award Agreement may also provide that if the exercise of the Option following
the termination of the Optionholder’s Continuous Service for any reason would be prohibited at any time because the issuance
of shares of Common Stock would violate the registration requirements under the Securities Act or any other state or federal securities
law or the rules of any securities exchange or interdealer quotation system, then the Option shall terminate on the earlier of
(a) the expiration of the term of the Option in accordance with Section 6.1 or (b) the expiration of a period after termination
of the Participant’s Continuous Service that is 12 months after the end of the period during which the exercise of the Option
would be in violation of such registration or other securities law requirements.


 


6.10 Disability
of Optionholder. Unless otherwise provided in an Award Agreement, in the event that an Optionholder’s Continuous Service
terminates as a result of the Optionholder’s Disability, the Optionholder may exercise his or her Option (to the extent that
the Optionholder was entitled to exercise such Option as of the date of termination), but only within such period of time ending
on the earlier of (a) the date 12 months following such termination or (b) the expiration of the term of the Option as set forth
in the Award Agreement. If, after termination, the Optionholder does not exercise his or her Option within the time specified herein
or in the Award Agreement, the Option shall terminate.


 


6.11 Death of
Optionholder. Unless otherwise provided in an Award Agreement, in the event an Optionholder’s Continuous Service terminates
as a result of the Optionholder’s death, then the Option may be exercised (to the extent the Optionholder was entitled to
exercise such Option as of the date of death) by the Optionholder’s estate, by a person who acquired the right to exercise
the Option by bequest or inheritance or by a person designated to exercise the Option upon the Optionholder’s death, but
only within the period ending on the earlier of (a) the date 12 months following the date of death or (b) the expiration of the
term of such Option as set forth in the Award Agreement. If, after the Optionholder’s death, the Option is not exercised
within the time specified herein or in the Award Agreement, the Option shall terminate.


 


6.12 Incentive
Stock Option $100,000 Limitation. To the extent that the aggregate Fair Market Value (determined at the time of grant) of Common
Stock with respect to which Incentive Stock Options are exercisable for the first time by any Optionholder during any calendar
year (under all plans of the Company and its Affiliates) exceeds $100,000, the Options or portions thereof which exceed such limit
(according to the order in which they were granted) shall be treated as Non-Qualified Stock Options.


 




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7. Provisions
of Awards Other Than Options.


 


7.1 SARs.


 


(a) General.


 


 Each SAR
granted under the Plan shall be evidenced by an Award Agreement. Each SAR so granted shall be subject to the conditions set forth
in this Section 7.1, and to such other conditions not inconsistent with the Plan as may be reflected in the applicable Award Agreement.
SARs may be granted alone (“Free Standing Rights”) or in tandem with an Option
granted under the Plan (“Related Rights”).


 


(b) Grant
Requirements.


 


  Any Related
Right that relates to a Non-Qualified Stock Option may be granted at the same time the Option is granted or at any time thereafter
but before the exercise or expiration of the Option. Any Related Right that relates to an Incentive Stock Option must be granted
at the same time the Incentive Stock Option is granted.


 


(c) Term of
SARs.


 


   The term
of a SAR granted under the Plan shall be determined by the Committee; provided, however, no SAR shall be exercisable later than
the tenth anniversary of the Grant Date.


 


(d) Vesting
of SARs.


 


The Committee (or
an Officer if given authority to grant SARs by resolution of the Board) at the time of granting an Award may provide for vesting
terms based upon time of service to the Company and/or other criteria. Awards which do not vest shall be forfeited and the underlying
Common Stock shall be available for future grant. The Committee may, but shall not be required to provide for an acceleration of
vesting and exercisability in the terms of any Award Agreement upon the occurrence of a specified event.


 


(e) Exercise
and Payment.


 


  Upon exercise
of a SAR, if a stock settled SAR the holder shall be entitled to receive from the Company an amount equal to the number of shares
of Common Stock subject to the SAR that is being exercised multiplied by the excess of (i) the Fair Market Value of a share of
Common Stock on the date the Award is exercised, over (ii) the exercise price specified in the SAR or related Option. Otherwise,
if a cash settled SAR, the holder shall be paid cash using the same formula. Payment with respect to the exercise of a SAR shall
be made on the date of exercise. Payment shall be made in the form of shares of Common Stock (with or without restrictions as to
substantial risk of forfeiture and transferability, as determined by the Committee in its sole discretion), cash or a combination
thereof, as determined by the Committee.


 




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(f) Exercise
Price.


 


  The exercise
price of a Free Standing SAR shall be determined by the Committee, but shall not be less than 100% of the Fair Market Value of
one share of Common Stock on the Grant Date of such SAR. A Related Right granted simultaneously with or subsequent to the grant
of an Option and in conjunction therewith or in the alternative thereto shall have the same exercise price as the related Option,
shall be transferable only upon the same terms and conditions as the related Option, and shall be exercisable only to the same
extent as the related Option; provided, however, that a SAR, by its terms, shall be exercisable only when the Fair Market Value
per share of Common Stock subject to the SAR and related Option exceeds the exercise price per share thereof and no SARs may be
granted in tandem with an Option unless the Committee determines that the requirements of Section 0 are satisfied.


 


(g) Reduction
in the Underlying Option Shares.


 


  Upon any exercise
of a Related Right, the number of shares of Common Stock for which any related Option shall be exercisable shall be reduced by
the number of shares for which the SAR has been exercised. The number of shares of Common Stock for which a Related Right shall
be exercisable shall be reduced upon any exercise of any related Option by the number of shares of Common Stock for which such
Option has been exercised.


 


7.2 Restricted
Awards.


 


(a) General.


 


A Restricted Award
is an Award of actual shares of Common Stock (“Restricted Stock”) or hypothetical
Common Stock units (“Restricted Stock Units”) having a value equal to the
Fair Market Value of an identical number of shares of Common Stock, which may, but need not, provide that such Restricted Award
may not be sold, assigned, transferred or otherwise disposed of, pledged or hypothecated as collateral for a loan or as security
for the performance of any obligation or for any other purpose for such period (the “Restricted
Period”) as the Committee shall determine. Each Restricted Award granted under the Plan shall be evidenced by an Award
Agreement. Each Restricted Award so granted shall be subject to the conditions set forth in this Section 7.2, and to such other
conditions not inconsistent with the Plan as may be reflected in the applicable Award Agreement.


 


(b) Restricted
Stock and Restricted Stock Units.


 


(i) Each Participant
granted Restricted Stock shall execute and deliver to the Company an Award Agreement with respect to the Restricted Stock setting
forth the restrictions and other terms and conditions applicable to such Restricted Stock. If the Committee determines that the
Restricted Stock shall be held by the Company or in escrow rather than delivered to the Participant pending the release of the
applicable restrictions, the Committee may require the Participant to additionally execute and deliver to the Company (A) an escrow
agreement satisfactory to the Committee, if applicable and (B) the appropriate blank stock power with respect to the Restricted
Stock covered by such agreement. If a Participant fails to execute an agreement evidencing an Award of Restricted Stock and, if
applicable, an escrow agreement and stock power, the Award shall be null and void. Subject to the restrictions set forth in the
Award, the Participant generally shall have the rights and privileges of a shareholder as to such Restricted Stock, including the
right to vote such Restricted Stock and the right to receive dividends; provided that, any cash dividends and stock
dividends with respect to the Restricted Stock shall be withheld by the Company for the Participant’s account, and interest
may be credited on the amount of the cash dividends withheld at a rate and subject to such terms as determined by the Committee.
The cash dividends or stock dividends so withheld by the Committee and attributable to any particular share of Restricted Stock
(and earnings thereon, if applicable) shall be distributed to the Participant in cash or, at the discretion of the Committee, in
shares of Common Stock having a Fair Market Value equal to the amount of such dividends, if applicable, upon the release of restrictions
on such share and, if such share is forfeited, the Participant shall have no right to such dividends.


 




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(ii) The terms
and conditions of a grant of Restricted Stock Units shall be reflected in an Award Agreement. No shares of Common Stock shall be
issued at the time a Restricted Stock Unit is granted, and the Company will not be required to set aside a fund for the payment
of any such Award. A Participant shall have no voting rights with respect to any Restricted Stock Units granted hereunder. At the
discretion of the Committee, each Restricted Stock Unit (representing one share of Common Stock) may be credited with cash and
stock dividends paid by the Company in respect of one share of Common Stock (“Dividend
Equivalents”). Dividend Equivalents shall be withheld by the Company for the Participant’s account, and interest
may be credited on the amount of cash Dividend Equivalents withheld at a rate and subject to such terms as determined by the Committee.
Dividend Equivalents credited to a Participant’s account and attributable to any particular Restricted Stock Unit (and earnings
thereon, if applicable) shall be distributed in cash or, at the discretion of the Committee, in shares of Common Stock having a
Fair Market Value equal to the amount of such Dividend Equivalents and earnings, if applicable, to the Participant upon settlement
of such Restricted Stock Unit and, if such Restricted Stock Unit is forfeited, the Participant shall have no right to such Dividend
Equivalents.


 


(c) Restrictions.


 


(i) Restricted
Stock awarded to a Participant shall be subject to the following restrictions until the expiration of the Restricted Period, and
to such other terms and conditions as may be set forth in the applicable Award Agreement: (A) if an escrow arrangement is used,
the Participant shall not be entitled to delivery of the stock certificate; (B) the shares shall be subject to the restrictions
on transferability set forth in the Award Agreement; (C) the shares shall be subject to forfeiture to the extent provided in the
applicable Award Agreement; and (D) to the extent such shares are forfeited, the stock certificates shall be returned to the Company,
and all rights of the Participant to such shares and as a shareholder with respect to such shares shall terminate without further
obligation on the part of the Company.


 


(ii) Restricted
Stock Units awarded to any Participant shall be subject to (A) forfeiture until the expiration of the Restricted Period to the
extent provided in the applicable Award Agreement, and to the extent such Restricted Stock Units are forfeited, all rights of the
Participant to such Restricted Stock Units shall terminate without further obligation on the part of the Company and (B) such other
terms and conditions as may be set forth in the applicable Award Agreement.


 




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(iii) The Committee
shall have the authority to remove any or all of the restrictions on the Restricted Stock and Restricted Stock Units whenever it
may determine that, by reason of changes in Applicable Laws or other changes in circumstances arising after the date the Restricted
Stock or Restricted Stock Units are granted, such action is appropriate.


 


(d) Vesting
of Restricted Awards.


 


The Committee (or
an Officer if given authority to grant Options by resolution of the Board) at the time of granting an Award may provide for vesting
terms based upon time of service to the Company and/or other criteria. Awards which do not vest shall be forfeited and the underlying
Common Stock shall be available for future grant. The Committee may, but shall not be required to provide for an acceleration of
vesting and exercisability in the terms of any Award Agreement upon the occurrence of a specified event.


 


No Restricted Award
may be granted or settled for a fraction of a share of Common Stock. The Committee may, but shall not be required to, provide for
an acceleration of vesting in the terms of any Award Agreement upon the occurrence of a specified event.


 


(e) Delivery
of Restricted Stock and Settlement of Restricted Stock Units.


 


Upon the expiration
of the Restricted Period with respect to any shares of Restricted Stock, the restrictions set forth in Section 7.2(c) and the applicable
Award Agreement shall be of no further force or effect with respect to such shares, except as set forth in the applicable Award
Agreement. If an escrow arrangement is used, upon such expiration, the Company shall deliver to the Participant, or his or her
beneficiary, without charge, the stock certificate evidencing the shares of Restricted Stock which have not then been forfeited
and with respect to which the Restricted Period has expired (to the nearest full share) and any cash dividends or stock dividends
credited to the Participant’s account with respect to such Restricted Stock and the interest thereon, if any. Upon the expiration
of the Restricted Period with respect to any outstanding Restricted Stock Units, the Company shall deliver to the Participant,
or his or her beneficiary, without charge, one share of Common Stock for each such outstanding Restricted Stock Unit (“Vested
Unit”) and cash equal to any Dividend Equivalents credited with respect to each such Vested Unit in accordance with
Section 7.2(b)(ii) hereof and the interest thereon or, at the discretion of the Committee, in shares of Common Stock having a Fair
Market Value equal to such Dividend Equivalents and the interest thereon, if any; provided, however, that, if explicitly
provided in the applicable Award Agreement, the Committee may, in its sole discretion, elect to pay cash or part cash and part
Common Stock in lieu of delivering only shares of Common Stock for Vested Units. If a cash payment is made in lieu of delivering
shares of Common Stock, the amount of such payment shall be equal to the Fair Market Value of the Common Stock as of the date on
which the Restricted Period lapsed with respect to each Vested Unit.


 




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(f) Stock Restrictions.


 


Each certificate
representing Restricted Stock awarded under the Plan shall bear a legend in such form as the Company deems appropriate.


 


8. Securities
Law Compliance. Each Award Agreement shall provide that no shares of Common Stock shall be purchased or sold thereunder unless
and until (a) any then applicable requirements of state or federal laws and regulatory agencies have been fully complied with to
the satisfaction of the Company and its counsel and (b) if required to do so by the Company, the Participant has executed and delivered
to the Company a letter of investment intent in such form and containing such provisions as the Committee may require. The Company
shall use reasonable efforts to seek to obtain from each regulatory commission or agency having jurisdiction over the Plan such
authority as may be required to grant Awards and to issue and sell shares of Common Stock upon exercise of the Awards; provided,
however, that this undertaking shall not require the Company to register under the Securities Act the Plan, any Award or
any Common Stock issued or issuable pursuant to any such Award. If, after reasonable efforts, the Company is unable to obtain from
any such regulatory commission or agency the authority which counsel for the Company deems necessary for the lawful issuance and
sale of Common Stock under the Plan, the Company shall be relieved from any liability for failure to issue and sell Common Stock
upon exercise of such Awards unless and until such authority is obtained.


 


9. Use
of Proceeds from Stock. Proceeds from the sale of Common Stock pursuant to Awards, or upon exercise thereof, shall constitute
general funds of the Company.


 


10. Miscellaneous.


 


10.1 Acceleration
of Exercisability and Vesting. The Committee shall have the power to accelerate the time at which an Award may first be exercised
or the time during which an Award or any part thereof will vest in accordance with the Plan, notwithstanding the provisions in
the Award stating the time at which it may first be exercised or the time during which it will vest.


 


10.2 Shareholder
Rights. Except as provided in the Plan or an Award Agreement, no Participant shall be deemed to be the holder of, or to have
any of the rights of a holder with respect to, any shares of Common Stock subject to such Award unless and until such Participant
has satisfied all requirements for exercise of the Award pursuant to its terms and no adjustment shall be made for dividends (ordinary
or extraordinary, whether in cash, securities or other property) or distributions of other rights for which the record date is
prior to the date such Common Stock certificate is issued, except as provided in Section 11 hereof.


 


10.3 No Employment
or Other Service Rights. Nothing in the Plan or any instrument executed or Award granted pursuant thereto shall confer upon
any Participant any right to continue to serve the Company or an Affiliate in the capacity in effect at the time the Award was
granted or shall affect the right of the Company or an Affiliate to terminate (a) the employment of an Employee with or without
notice and with or without Cause or (b) the service of a Director pursuant to the By-laws of the Company or an Affiliate, and any
applicable provisions of the corporate law of the state in which the Company or the Affiliate is incorporated, as the case may
be.


 




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10.4 Transfer;
Approved Leave of Absence. For purposes of the Plan, no termination of employment by an Employee shall be deemed to result
from either (a) a transfer to the employment of the Company from an Affiliate or from the Company to an Affiliate, or from one
Affiliate to another, or (b) an approved leave of absence for military service or sickness, or for any other purpose approved by
the Company, if the Employee’s right to reemployment is guaranteed either by a statute or by contract or under the policy
pursuant to which the leave of absence was granted or if the Committee otherwise so provides in writing, in either case, except
to the extent inconsistent with Section 409A of the Code if the applicable Award is subject thereto.


 


10.5 Withholding
Obligations. To the extent provided by the terms of an Award Agreement and subject to the discretion of the Committee, the
Participant may satisfy any federal, state or local tax withholding obligation relating to the exercise or acquisition of Common
Stock under an Award by any of the following means (in addition to the Company’s right to withhold from any compensation
paid to the Participant by the Company) or by a combination of such means: (a) tendering a cash payment; (b) authorizing the Company
to withhold shares of Common Stock from the shares of Common Stock otherwise issuable to the Participant as a result of the exercise
or acquisition of Common Stock under the Award, provided, however, that no shares of Common Stock are withheld with
a value exceeding the minimum amount of tax required to be withheld by law; or (c) delivering to the Company previously owned and
unencumbered shares of Common Stock of the Company.


 


11. Adjustments
Upon Changes in Stock. In the event of changes in the outstanding Common Stock or in the capital structure of the Company by
reason of any stock or extraordinary cash dividend, stock split, reverse stock split, an extraordinary corporate transaction such
as any recapitalization, reorganization, merger, consolidation, combination, exchange, or other relevant change in capitalization
occurring after the Grant Date of any Award, Awards granted under the Plan and any Award Agreements, the exercise price of Options
and SARs, the maximum number of shares of Common Stock subject to all Awards stated in Section 4 and the maximum number of shares
of Common Stock with respect to which any one person may be granted Awards during any period stated in Section 4 and Section 7.2
will be equitably adjusted or substituted, as to the number, price or kind of a share of Common Stock or other consideration subject
to such Awards to the extent necessary to preserve the economic intent of such Award. In the case of adjustments made pursuant
to this Section 11, unless the Committee specifically determines that such adjustment is in the best interests of the Company or
its Affiliates, the Committee shall, in the case of Incentive Stock Options, ensure that any adjustments under this Section 11
will not constitute a modification, extension or renewal of the Incentive Stock Options within the meaning of Section 424(h)(3)
of the Code and in the case of Non-Qualified Stock Options, ensure that any adjustments under this Section 11 will not constitute
a modification of such Non-Qualified Stock Options within the meaning of Section 409A of the Code. Any adjustments made under this
Section 11 shall be made in a manner which does not adversely affect the exemption provided pursuant to Rule 16b-3 under the Exchange
Act. Further, with respect to Awards intended to qualify as “performance-based compensation” under Section 162(m) of
the Code, any adjustments or substitutions will not cause the Company to be denied a tax deduction on account of Section 162(m)
of the Code. The Company shall give each Participant notice of an adjustment hereunder and, upon notice, such adjustment shall
be conclusive and binding for all purposes.


 




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12. Effect
of Change in Control.


 


12.1 Unless otherwise
provided in an Award Agreement, notwithstanding any provision of the Plan to the contrary:


 


In the event of
a Participant’s termination of Continuous Service without Cause or for Good Reason during the 12-month period following a
Change in Control, notwithstanding any provision of the Plan or any applicable Award Agreement to the contrary, all Options and
SARs shall become immediately exercisable with respect to 100% of the shares subject to such Options or SARs, and/or the Restricted
Period shall expire immediately with respect to 100% of the shares of Restricted Stock or Restricted Stock Units as of the date
of the Participant’s termination of Continuous Service.


 


To the extent practicable,
any actions taken by the Committee under the immediately preceding clause shall occur in a manner and at a time which allows affected
Participants the ability to participate in the Change in Control with respect to the shares of Common Stock subject to their Awards.


 


12.2 In addition,
in the event of a Change in Control, the Committee may in its discretion and upon at least 10 days’ advance notice to the
affected persons, cancel any outstanding Awards and pay to the holders thereof, in cash or stock, or any combination thereof, the
value of such Awards based upon the price per share of Common Stock received or to be received by other shareholders of the Company
in the event. In the case of any Option or SAR with an exercise price (or SAR Exercise Price in the case of a SAR) that equals
or exceeds the price paid for a share of Common Stock in connection with the Change in Control, the Committee may cancel the Option
or SAR without the payment of consideration therefor.


 


12.3 The obligations
of the Company under the Plan shall be binding upon any successor corporation or organization resulting from the merger, consolidation
or other reorganization of the Company, or upon any successor corporation or organization succeeding to all or substantially all
of the assets and business of the Company and its Affiliates, taken as a whole.


 


13. Amendment
of the Plan and Awards.


 


13.1 Amendment
of Plan. The Board at any time, and from time to time, may amend or terminate the Plan. However, except as provided in Section
11 relating to adjustments upon changes in Common Stock and Section 13.3, no amendment shall be effective unless approved by the
shareholders of the Company to the extent shareholder approval is necessary to satisfy any Applicable Laws. At the time of such
amendment, the Board shall determine, upon advice from counsel, whether such amendment will be contingent on shareholder approval.


 




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13.2 Shareholder
Approval. The Board may, in its sole discretion, submit any other amendment to the Plan for shareholder approval, including,
but not limited to, amendments to the Plan intended to satisfy the requirements of Section 162(m) of the Code and the regulations
thereunder regarding the exclusion of performance-based compensation from the limit on corporate deductibility of compensation
paid to certain executive officers.


 


13.3 Contemplated
Amendments. It is expressly contemplated that the Board may amend the Plan in any respect the Board deems necessary or advisable
to provide eligible Employees, Consultants and Directors with the maximum benefits provided or to be provided under the provisions
of the Code and the regulations promulgated thereunder relating to Incentive Stock Options or to the nonqualified deferred compensation
provisions of Section 409A of the Code and/or to bring the Plan and/or Awards granted under it into compliance therewith.


 


13.4 No Impairment
of Rights. Rights under any Award granted before amendment of the Plan shall not be impaired by any amendment of the Plan unless
(a) the Company requests the consent of the Participant and (b) the Participant consents in writing.


 


13.5 Amendment
of Awards. The Committee at any time, and from time to time, may amend the terms of any one or more Awards; provided, however,
that the Committee may not affect any amendment which would otherwise constitute an impairment of the rights under any Award unless
(a) the Company requests the consent of the Participant and (b) the Participant consents in writing.


 


14. General
Provisions.


 


14.1 Forfeiture
Events. The Committee may specify in an Award Agreement that the Participant’s rights, payments and benefits with respect
to an Award shall be subject to reduction, cancellation, forfeiture or recoupment upon the occurrence of certain events, in addition
to applicable vesting conditions of an Award. Such events may include, without limitation, breach of non-competition, non-solicitation,
confidentiality, or other restrictive covenants that are contained in the Award Agreement or otherwise applicable to the Participant,
a termination of the Participant’s Continuous Service for Cause, or other conduct by the Participant that is detrimental
to the business or reputation of the Company and/or its Affiliates.


 


14.2 Clawback.
Except as provided in a written agreement with the Participant, all Awards shall be subject to possible clawback as provided below.
Any clawback as may be required to be made pursuant to any law, government regulation or stock exchange listing requirement (or
any policy adopted by the Company pursuant to any such law, government regulation or stock exchange listing requirement) shall
be automatic without further action by the Board or Committee and be incorporated in this Plan and all Award Agreements. The following
clawback provisions shall be deemed to be incorporated in any Award Agreement, unless otherwise specified to the contrary.


 


(a) The
Awardholder is dismissed as an employee based upon fraud, theft, or dishonesty, which is reflected in a written or electronic notice
given to the employee;


 




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(b) The
Awardholder purchases or sells securities of the Company in violation of the Company’s insider trading guidelines then in
effect;


 


(c) The
Awardholder breaches any duty of confidentiality including that required by the Company’s insider trading guidelines then
in effect;


 


(d) The
Awardholder competes with the Company by soliciting customers located within or otherwise where the Company is doing business within
any state, or where the Company expects to do business within three months following ceasing to perform the Services and, in this
later event, the Awardholder has actual knowledge of such plans; 


 


(e) The
Awardholder is unavailable for consultation after termination of the Awardholder if such availability is a condition of any agreement
between the Company and the Awardholder;


 


(f) The
Awardholder recruits Company personnel for another entity or business; within 24 months following termination of employment;


 


(g) The
Awardholder fails to assign any invention, technology, or related intellectual property rights to the Company if such assignment
is a condition of any agreement between the Company and the Awardholder;


 


 (h) The
Awardholder acts in a disloyal manner to the Company; or


 


(i) A
finding by the Board that the Awardholder has acted against the interests of the Company.


 


14.3 Other Compensation
Arrangements. Nothing contained in this Plan shall prevent the Board from adopting other or additional compensation arrangements,
subject to shareholder approval if such approval is required; and such arrangements may be either generally applicable or applicable
only in specific cases.


 


14.4 Sub-plans.
The Committee may from time to time establish sub-plans under the Plan for purposes of satisfying blue sky, securities, tax or
other laws of various jurisdictions in which the Company intends to grant Awards. Any sub-plans shall contain such limitations
and other terms and conditions as the Committee determines are necessary or desirable. All sub-plans shall be deemed a part of
the Plan, but each sub-plan shall apply only to the Participants in the jurisdiction for which the sub-plan was designed.


 


14.5 Deferral
of Awards. The Committee may establish one or more programs under the Plan to permit selected Participants 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 Participant to payment or receipt of shares of Common Stock or other consideration under
an Award. The Committee 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 Committee deems advisable for the administration of any such deferral program.


 




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14.6 Unfunded
Plan. The Plan shall be unfunded. Neither the Company, the Board nor the Committee shall be required to establish any special
or separate fund or to segregate any assets to assure the performance of its obligations under the Plan.


 


14.7 Recapitalizations.
Each Award Agreement shall contain provisions required to reflect the provisions of Section 11.


 


14.8 Delivery.
Upon exercise of a right granted under this Plan, the Company shall issue Common Stock or pay any amounts due within a reasonable
period of time thereafter. Subject to any statutory or regulatory obligations the Company may otherwise have, for purposes of this
Plan, 30 days shall be considered a reasonable period of time.


 


14.9 No Fractional
Shares. No fractional shares of Common Stock shall be issued or delivered pursuant to the Plan. The Committee shall determine
whether cash, additional Awards or other securities or property shall be issued or paid in lieu of fractional shares of Common
Stock or whether any fractional shares should be rounded, forfeited or otherwise eliminated.


 


14.10 Other
Provisions. The Award Agreements authorized under the Plan may contain such other provisions not inconsistent with this Plan,
including, without limitation, restrictions upon the exercise of the Awards, as the Committee may deem advisable.


 


14.11 Section
409A. The Plan is intended to comply with Section 409A of the Code to the extent subject thereto, and, accordingly, to the
maximum extent permitted, the Plan shall be interpreted and administered to be in compliance therewith. Any payments described
in the Plan that are due within the “short-term deferral period” as defined in Section 409A of the Code shall not be
treated as deferred compensation unless Applicable Laws require otherwise. Notwithstanding anything to the contrary in the Plan,
to the extent required to avoid accelerated taxation and tax penalties under Section 409A of the Code, amounts that would otherwise
be payable and benefits that would otherwise be provided pursuant to the Plan during the six month period immediately following
the Participant’s termination of Continuous Service shall instead be paid on the first payroll date after the six-month anniversary
of the Participant’s separation from service (or the Participant’s death, if earlier). Notwithstanding the foregoing,
neither the Company nor the Committee shall have any obligation to take any action to prevent the assessment of any excise tax
or penalty on any Participant under Section 409A of the Code and neither the Company nor the Committee will have any liability
to any Participant for such tax or penalty.


 


14.12 Disqualifying
Dispositions. Any Participant who shall make a “disposition” (as defined in Section 424 of the Code) of all or
any portion of shares of Common Stock acquired upon exercise of an Incentive Stock Option within two years from the Grant Date
of such Incentive Stock Option or within one year after the issuance of the shares of Common Stock acquired upon exercise of such
Incentive Stock Option (a “Disqualifying Disposition”) shall be required to
immediately advise the Company in writing as to the occurrence of the sale and the price realized upon the sale of such shares
of Common Stock.


 




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14.13 Section
16. If the Company has a class of Common Stock registered under Section 12(b) or (g) of the Exchange Act, it is the intent
of the Company that the Plan satisfy, and be interpreted in a manner that satisfies, the applicable requirements of Rule 16b-3
as promulgated under Section 16 of the Exchange Act so that Participants will be entitled to the benefit of Rule 16b-3, or any
other rule promulgated under Section 16 of the Exchange Act, and will not be subject to short-swing liability under Section 16
of the Exchange Act. Accordingly, if the operation of any provision of the Plan would conflict with the intent expressed in this
Section 14.13, such provision to the extent possible shall be interpreted and/or deemed amended so as to avoid such conflict.


 


14.14 Section
162(m). To the extent the Committee issues any Award that is intended to be exempt from the deduction limitation of Section
162(m) of the Code, the Committee may, without shareholder or grantee approval, amend the Plan or the relevant Award Agreement
retroactively or prospectively to the extent it determines necessary in order to comply with any subsequent clarification of Section
162(m) of the Code required to preserve the Company’s federal income tax deduction for compensation paid pursuant to any
such Award.


 


14.15 Beneficiary
Designation. Each Participant under the Plan may from time to time name any beneficiary or beneficiaries by whom any right
under the Plan is to be exercised in case of such Participant’s death. Each designation will revoke all prior designations
by the same Participant, shall be in a form reasonably prescribed by the Committee and shall be effective only when filed by the
Participant in writing with the Company during the Participant’s lifetime.


 


14.16 Expenses.
The costs of administering the Plan shall be paid by the Company.


 


14.17 Severability.
If any of the provisions of the Plan or any Award Agreement is held to be invalid, illegal or unenforceable, whether in whole or
in part, such provision shall be deemed modified to the extent, but only to the extent, of such invalidity, illegality or unenforceability
and the remaining provisions shall not be affected thereby.


 


14.18 Section
Headings. The Section headings in the Plan are for purposes of convenience only and are not intended to define or limit the
construction of the provisions hereof.


 


14.19 Non-Uniform
Treatment. The Committee’s determinations under the Plan need not be uniform and may be made by it selectively among
persons who are eligible to receive, or actually receive, Awards. Without limiting the generality of the foregoing, the Committee
shall be entitled to make non-uniform and selective determinations, amendments and adjustments, and to enter into non-uniform and
selective Award Agreements.


 




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15. Effective
Date of Plan. The Plan shall become effective as of the Effective Date.


 


16. Termination
or Suspension of the Plan. The Plan shall terminate automatically on March 31, 2024. No Award shall be granted pursuant to
the Plan after such date, but Awards theretofore granted may extend beyond that date. The Board may suspend or terminate the Plan
at any earlier date pursuant to Section 13.1 hereof. No Awards may be granted under the Plan while the Plan is suspended or after
it is terminated.


 


17. Choice
of Law. The law of the State of Delaware shall govern all questions concerning the construction, validity and interpretation
of this Plan, without regard to such state’s conflict of law rules.


 


As adopted by the
Board of Directors of Vaporin, Inc. on March 31, 2014.


 



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