APOLLO MEDICAL HOLDINGS, INC.


 


2013 EQUITY INCENTIVE PLAN


 


Date
of Adoption by the Board of Directors: April 30, 2013


 




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2013 EQUITY INCENTIVE PLAN


 


		1.	PURPOSES OF THE PLAN



 


The purposes of the 2013 Equity Incentive
Plan (the “Plan”) of Apollo Medical Holdings, Inc., a Delaware corporation (the “Company”),
are to:


 


1.1           Encourage
selected employees, directors, consultants and advisers to improve operations and increase the profitability of the Company;


 


1.2           Encourage
selected employees, directors, consultants and advisers to accept or continue employment or association with the Company or its
Affiliates (as defined below); and


 


1.3           Increase
the interest of selected employees, directors, consultants and advisers in the Company’s welfare through participation in
the growth in value of the common stock of the Company (the “Common Stock”). All references herein to stock
or shares, unless otherwise specified, shall mean the Common Stock.


 


		2.	TYPES OF AWARDS; ELIGIBLE PERSONS



 


2.1           The
Administrator (as defined below) may, from time to time, take the following action, separately or in combination, under the Plan:
(a) grant “incentive stock options” (“ISOs”) intended to satisfy the requirements of Section 422
of the Internal Revenue Code of 1986, as amended, and the regulations thereunder (the “Code”); (b) grant “non-qualified
options” (“NQOs,” and together with ISOs, “Options”); (c) issue or sell shares of Common
Stock (“Restricted Stock”) and (d) grant stock appreciation rights (any such right would permit the holder to
receive the excess of the fair market value of Common Stock on the exercise date over its fair market value (or a greater base
value) on the grant date (“SARs”)), either in tandem with Options or as separate and independent grants. Any
such awards may be made to employees, including employees who are officers or directors, and to individuals described in Section
1 of the Plan who the Administrator believes have made or will make a contribution to the Company or any Affiliate; provided,
however, that only a person who is an employee of the Company or any Affiliate at the date of the grant of an Option is
eligible to receive ISOs under the Plan.


 


2.2           For
purposes of the Plan: (a) the term “Affiliate” means a parent or subsidiary corporation as defined in the applicable
provisions (currently Section 424(e) and 424(f), respectively) of the Code; (b) the term “employee” includes
an officer or director who is an employee of the Company; (c) the term “consultant” includes persons employed
by, or otherwise affiliated with, a consultant; and (d) the term “adviser” includes persons employed by, or
otherwise affiliated with, an adviser.


 


2.3           Except
as otherwise expressly set forth in the Plan, no right or benefit under the Plan shall be subject in any manner to anticipation,
alienation, hypothecation, or charge, and any such attempted action shall be void. No right or benefit under the Plan shall in
any manner be liable for or subject to debts, contracts, liabilities, or torts of any optionee or any other person except as otherwise
may be expressly required by applicable law.


 




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		3.	STOCK SUBJECT TO THE PLAN; MAXIMUM NUMBER OF GRANTS



 


3.1           Subject
to the provisions of Section 3.2, the total number of shares of Common Stock that may be issued as Restricted Stock or on the exercise
of Options or SARs under the Plan shall not exceed Five Million (5,000,000) shares. The shares subject to an Option or SAR granted
under the Plan that expire, terminate or are cancelled unexercised shall become available again for grants under the Plan. If shares
of Restricted Stock awarded under the Plan are forfeited to the Company or repurchased by the Company, the number of shares forfeited
or repurchased shall again be available under the Plan. Where the exercise price of an Option is paid by means of the optionee’s
surrender of previously owned shares of Common Stock or the Company’s withholding of shares otherwise issuable upon exercise
of the Option as may be permitted in the Plan, only the net number of shares issued and which remain outstanding in connection
with such exercise shall be deemed “issued” and no longer available for issuance under the Plan. No eligible person
shall be granted Options or other awards during any twelve-month period covering more than One Million Two Hundred Thousand (1,200,000)
shares.


 


3.2           If
the Common Stock is changed by reason of a stock split, reverse stock split, stock dividend, recapitalization, combination or reclassification,
then the number and class of shares of stock subject to the Plan that may be issued under the Plan shall be proportionately adjusted
(provided that any fractional share resulting from such adjustment shall be disregarded).


 


		4.	ADMINISTRATION



 


4.1           The
Plan shall be administered by the Board of Directors of the Company (the “Board”) or by a committee (the “Committee”)
to which the Board has delegated administration of the Plan (or of part thereof) (in either case, the “Administrator”).
The Board shall appoint and remove members of the Committee in its discretion in accordance with applicable laws. At the Board’s
discretion, or if necessary in order to comply with Rule 16b-3 under the Securities Exchange Act of 1934, as amended (the “Exchange
Act”), or Section 162(m) of the Code, the Committee shall, in the Board’s discretion, be comprised solely of “non-employee
directors” within the meaning of said Rule 16b-3 or “outside directors” within the meaning of Section 162(m)
of the Code. The foregoing notwithstanding, the Administrator may delegate non-discretionary administrative duties to such employees
of the Company as it deems proper and the Board, in its absolute discretion, may at any time and from time to time exercise any
and all rights and duties of the Administrator under this Plan.


 




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4.2           Subject
to the other provisions of the Plan, the Administrator shall have the authority, in its discretion: (a) to grant Options and SARs
and grant or sell Restricted Stock; (b) to determine the fair market value of the shares of Common Stock subject to Options or
other awards; (c) to determine the exercise price of Options granted, which shall be no less than the fair market value of the
Common Stock on the date of grant, the economic terms of SARs granted, which shall provide for a benefit of the appreciation on
Common Stock over not less than the value of the Common Stock on the date of grant, or the offering price of Restricted Stock;
(d) to determine the persons to whom, and the time or times at which, Options or SARs shall be granted or Restricted Stock granted
or sold, and the number of shares subject to each Option or SAR or the number of shares of Restricted Stock granted or sold; (e)
to construe and interpret the terms and provisions of the Plan, of any applicable agreement and all Options and SARs granted under
the Plan, and of any Restricted Stock award under the Plan; (f) to prescribe, amend, and rescind rules and regulations relating
to the Plan; (g) to determine the terms and provisions of each Option and SAR granted and award of Restricted Stock (which need
not be identical), including but not limited to, the time or times at which Options and SARs shall be exercisable or the time at
which the restrictions on Restricted Stock shall lapse; (h) with the consent of the Grantee, to rescind any award or exercise of
an Option or SAR; (i) to modify or amend the terms of any Option, SAR or Restricted Stock (with the consent of the Grantee or holder
of the Restricted Stock if the modification or amendment is adverse to the Grantee or holder); (j) to reduce the purchase price
of Restricted Stock or exercise price of any Option or base price of any SAR; (k) to accelerate or defer (with the consent of the
Grantee) the exercise date of any Option or SAR or the date on which the restrictions on Restricted Stock lapse; (l) to issue shares
of Restricted Stock to an optionee in connection with the accelerated exercise of an Option by such optionee; (m) to authorize
any person to execute on behalf of the Company any instrument evidencing the grant of an Option, SAR or award of Restricted Stock;
(n) to determine the duration and purposes of leaves of absence which may be granted to participants without constituting a termination
of their employment for the purposes of the Plan; and (o) to make all other determinations deemed necessary or advisable for the
administration of the Plan, any applicable agreement, Option, SAR or award of Restricted Stock.


 


4.3           All
questions of interpretation, implementation, and application of the Plan or any agreement or Option, SAR or award of Restricted
Stock shall be determined by the Administrator, which determination shall be final and binding on all persons.


 


		5.	GRANTING OF OPTIONS AND SARS; AGREEMENTS



 


5.1           No
Options or SARs shall be granted under the Plan after 10 years from the date of adoption of the Plan by the Board.


 


5.2           Each
Option and SAR shall be evidenced by a written agreement, in form satisfactory to the Administrator, executed by the Company and
the person to whom such grant is made (“Grantee,” which term shall include the permitted successors and assigns
of the Grantee with respect to the Option or SAR). In the event of a conflict between the terms or conditions of an agreement and
the terms and conditions of the Plan, the terms and conditions of the Plan shall govern.


 


5.3           Each
Option agreement shall specify whether the Option it evidences is an NQO or an ISO, provided, however, all Options
granted under the Plan to non-employee directors, consultants and advisers of the Company are intended to be NQOs.


 


5.4           Subject
to Section 6.3.3 with respect to ISOs, the Administrator may approve the grant of Options or SARs under the Plan to persons who
are expected to become employees, directors, consultants or advisers of the Company, but are not employees, directors, consultants
or advisers at the date of approval, and the date of approval shall be deemed to be the date of grant unless otherwise specified
by the Administrator.


 


5.5           For
purposes of the Plan, the term “employment” shall be deemed to include service as an employee, director, consultant
or adviser. For avoidance of any doubt, a person who is in the employment of the Company is not necessarily an “employee”
for purposes of ISOs.


 




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		6.	TERMS AND CONDITIONS OF OPTIONS AND SARS



 


Each Option and SAR granted under the Plan
shall be subject to the terms and conditions set forth in Section 6.1. NQOs and SARs shall also be subject to the terms and conditions
set forth in Section 6.2, but not those set forth in Section 6.3. ISOs shall also be subject to the terms and conditions set forth
in Section 6.3, but not those set forth in Section 6.2. SARs shall be subject to the terms and conditions of Section 6.4.


 


6.1         Terms
and Conditions to Which All Options and SARs Are Subject. All Options and SARs granted under the Plan shall be subject to the
following terms and conditions:


 


6.1.1           Changes
in Capital Structure. Subject to Section 6.1.2, if the Common Stock is changed by reason of a stock split, reverse stock split,
stock dividend, recapitalization, combination or reclassification, then the number and class of shares of stock subject to each
Option and SAR outstanding under the Plan, and the exercise price of each outstanding Option and the base value of SAR, shall be
automatically and proportionately adjusted; provided, that the Company shall not be required to issue fractional shares
as a result of any such adjustments. Such adjustment, however, in any outstanding Option or SAR shall be made without change in
the total price applicable to the unexercised portion of the Option or SAR but with a corresponding adjustment in the price for
each share covered by the unexercised portion of the Option or SAR. Any determination by the Administrator in connection with these
adjustments shall be final, binding, and conclusive. If an adjustment under this Section 6.1.1 would result in a fractional share
interest under an option or any installment, the Administrator’s decision as to inclusion or exclusion of that fractional
share interest shall be final, but no fractional shares of stock shall be issued under the Plan on account of any such adjustment.


 


6.1.2           Corporate
Transactions. The provisions of this Section 6.1.2 shall apply to all Options and SARs granted under this Plan unless otherwise
provided for in the stock option agreement or in a separate employment or other agreement between the Grantee and the Company.
To the extent not previously exercised, all Options and SARs shall terminate immediately prior to the consummation of a Corporate
Transaction (as defined below) unless the Administrator determines otherwise in its sole discretion, provided, however,
that the Administrator, in its sole discretion, may (i) permit exercise of any Options and/or SARs prior to their termination,
even if such Options and/or SARs would not otherwise have been exercisable (provided that the Option or SAR has not expired by
its terms and that the Grantee takes all steps necessary to exercise the Option or SAR prior to the Corporate Transaction as required
by the agreement evidencing the Option or SAR), and/or (ii) provide that all or certain of the outstanding Options or SARs shall
be assumed or an equivalent option substituted by an applicable successor corporation or any Affiliate of the successor corporation
in the event of a Corporate Transaction. A “Corporate Transaction” means (i) a liquidation or dissolution of
the Company; (ii) a merger or consolidation of the Company with or into another corporation or entity (other than a merger with
a wholly-owned subsidiary); or (iii) a sale of all or substantially all of the assets of the Company in a single transaction or
a series of related transactions.


 




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6.1.3         Time
of Option or SAR Exercise. Subject to Section 5 and 6.3.4, an Option or SAR granted under the Plan shall be exercisable (a)
immediately as of the effective date of the applicable agreement granting the Option or SAR or (b) in accordance with a schedule
or performance criteria as may be set by the Administrator and specified in the applicable agreement. However, in no case may an
Option or SAR be exercisable until the Company and the Grantee execute a written agreement in form and substance satisfactory to
the Company.


 


6.1.4         Grant
Date. The date of grant of an Option or SAR under the Plan shall, for all purposes, be no earlier than the date on which the
Board or Administrator makes the determination granting such option, or any date thereafter specified by the Board or Administrator
in such approval and reflected as the effective date of the applicable agreement.


 


6.1.5         Non-Transferability
of Rights. Except with the express written approval of the Administrator, which approval the Administrator is authorized to
give only with respect to NQOs and SARs, no Option or SAR granted under the Plan shall be assignable or otherwise transferable
by the Grantee except by will or by the laws of descent and distribution. During the life of the Grantee, an Option or SAR shall
be exercisable only by the Grantee or permitted transferee.


 


6.1.6         Payment.
Except as provided below, payment in full, in cash, shall be made for all Common Stock purchased at the time written notice of
exercise of an Option is given to the Company and the proceeds of any payment shall be considered general funds of the Company.
The Administrator in its sole discretion may include in any Option agreement, or separately approve in connection with the exercise
of any Option, any one or more of the following additional methods of payment (provided such payment does not violate applicable
law or regulations or the rules of any securities exchange on which the Company’s securities may be listed):


 



  (a)          Acceptance of the Grantee’s full recourse
promissory note for all or part of the Option price, payable on such terms and bearing such interest rate as determined by
the Administrator (but in no event less than the minimum interest rate specified under the Code at which no additional
interest or original issue discount would be imputed), which promissory note may be either secured or unsecured in such
manner as the Administrator shall approve (including, without limitation, by a security interest in the shares of the
Company);


 


  (b)          Delivery
by the optionee of shares of Common Stock already owned by the optionee for all or part of the Option price, provided the fair
market value (determined as set forth in Section 6.1.10) of such shares of Common Stock is equal on the date of exercise to the
Option price, or such portion thereof as the optionee is authorized to pay by delivery of such stock;


 


  (c)          Through
the surrender of shares of Common Stock then issuable upon exercise of the Option, provided the fair market value (determined as
set forth in Section 6.1.10) of such shares of Common Stock is equal on the date of exercise to the Option price, or such portion
thereof as the optionee is authorized to pay by surrender of such stock; and


 


  (d)          By
means of so-called cashless exercises through a securities broker as permitted under applicable rules and regulations of the Securities
and Exchange Commission and the Federal Reserve Board.


 




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6.1.7         Termination
of Employment. Unless otherwise provided in the applicable agreement, if for any reason a Grantee ceases to be employed by
at least the Company or one of its Affiliates, each Option and SAR held by the Grantee at the date of termination of employment
(to the extent then exercisable) may be exercised in whole or in part at any time (but in no event after the Expiration Date and
or the termination of the Option or SAR pursuant to Section 6.1.2) within one year of the date of termination in the case of termination
by reason of death or disability; at the commencement of business on the date of a termination for “cause” (as defined
in the applicable agreement or in any agreement with the Company pertaining to employment); and, in all other cases, within 90
days of the date of termination. For purposes of this Section 6.1.7, a Grantee’s employment shall not be deemed to terminate
by reason of the Grantee’s transfer from the Company to an Affiliate, or vice versa, or sick leave, military leave or other
leave of absence approved by the Administrator, if the period of any such leave does not exceed 90 days or, if longer, if the Grantee’s
right to reemployment by the Company or any Affiliate is guaranteed either contractually or by statute.


 


6.1.8         Withholding
and Employment Taxes. At the time of exercise and as a condition thereto, or at such other time as the amount of such obligation
becomes determinable, the Grantee of an Option or SAR shall remit to the Company in cash all applicable federal and state withholding
and employment taxes. Such obligation to remit may be satisfied, if authorized by the Administrator in its sole discretion, after
considering any tax, accounting and financial consequences, by the Grantee’s (a) delivery of a promissory note in the required
amount on such terms as the Administrator deems appropriate, (b) tendering to the Company previously owned shares of Common Stock
or other securities of the Company with a fair market value equal to the required amount, or (c) agreeing to have shares of Common
Stock (with a fair market value equal to the required amount), which are acquired upon exercise of the Option or SAR, withheld
by the Company.


 


6.1.9         Other
Provisions. Each Option and SAR granted under the Plan may contain such other terms, provisions, and conditions not inconsistent
with the Plan as may be determined by the Administrator, and each ISO granted under the Plan shall include such provisions and
conditions as are necessary to qualify the Option as an “incentive stock option” within the meaning of Section 422
of the Code.


 


6.1.10       Determination
of Fair Market Value. For purposes of the Plan, Board of Directors shall determine the fair market value of Common Stock of
the Company on the date of grant as follows:


 


  (a)          “Fair
Market Value” on any given date means the value of one share of Common Stock, determined by the Board of Directors under
Treasury Regulation Section 1.409A, using the volume weighted-average closing stock price of the Company’s Common Stock for
the trailing 30-day period. If there is no trading volume on a given day, the mean of the high bid and low ask price will be used
as the day’s closing stock price, and the mean of the high bid and low ask volumes will be used as the day’s volume.


 


  (b)          In
the absence of an established market for the stock, the fair market value thereof shall be determined in good faith by the Board
of Directors, with reference to the Company’s net worth, prospective earning power, dividend-paying capacity, and other relevant
factors, including the goodwill of the Company, the economic outlook in the Company’s industry, the Company’s position
in the industry, the Company’s management, and the values of stock of other corporations in the same or a similar line of
business.


 




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6.1.11       Option
and SAR Term. Subject to Section 6.3.4, no Option or SAR shall be exercisable more than 10 years after the date of grant, or
such lesser period of time as is set forth in the applicable agreement (the end of the maximum exercise period stated in the agreement
is referred to in the Plan as the “Expiration Date”).


 


6.2         Terms
and Conditions to Which Only NQOs and SARs Are Subject. Options granted under the Plan which are designated as NQOs and SARs
shall be subject to the following terms and conditions:


 


6.2.1         Exercise
Price. The exercise price of an NQO and the base value of an SAR shall be the amount determined by the Administrator as specified
in the option or SAR agreement, but shall not be less than the fair market value of the Common Stock on the date of grant (determined
under Section 6.1.10).


 


6.3         Terms
and Conditions to Which Only ISOs Are Subject. Options granted under the Plan which are designated as ISOs shall be subject
to the following terms and conditions:


 


6.3.1         Exercise
Price. The exercise price of an ISO shall not be less than the fair market value (determined in accordance with Section 6.1.10)
of the stock covered by the Option at the time the Option is granted. The exercise price of an ISO granted to any person who owns,
directly or by attribution under the Code (currently Section 424(d)), stock possessing more than 10% of the total combined voting
power of all classes of stock of the Company or of any Affiliate (a “10% Stockholder”) shall in no event be
less than 110% of the fair market value (determined in accordance with Section 6.1.10) of the stock covered by the Option at the
time the Option is granted.


 


6.3.2           Disqualifying
Dispositions. If stock acquired by exercise of an ISO granted pursuant to the Plan is disposed of in a “disqualifying
disposition” within the meaning of Section 422 of the Code (a disposition within two years from the date of grant of the
Option or within one year after the issuance of such stock on exercise of the Option), the holder of the stock immediately before
the disposition shall promptly notify the Company in writing of the date and terms of the disposition and shall provide such other
information regarding the Option as the Company may reasonably require.


 


6.3.3           Grant
Date. If an ISO is granted in anticipation of employment as provided in Section 5.4, the Option shall be deemed granted, without
further approval, on the date the Grantee assumes the employment relationship forming the basis for such grant, and, in addition,
satisfies all requirements of the Plan for Options granted on that date.


 


6.3.4           Term.
Notwithstanding Section 6.1.11, no ISO granted to any 10% Stockholder shall be exercisable more than five years after the date
of grant.


 


6.4         Terms
and Conditions Applicable Solely to SARs. In addition to the other terms and conditions applicable to SARs in this Section
6, the holder shall be entitled to receive on exercise of an SAR only Common Stock at a fair market value equal to the benefit
to be received by the exercise.


 




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6.5         Manner
of Exercise. A Grantee wishing to exercise an Option or SAR shall give written notice to the Company at its principal executive
office, to the attention of the officer of the Company designated by the Administrator, accompanied by payment of the exercise
price and/or withholding taxes as provided in Sections 6.1.6 and 6.1.8. The date the Company receives written notice of an exercise
hereunder accompanied by the applicable payment will be considered as the date such Option or SAR was exercised. Promptly after
receipt of written notice of exercise and the applicable payments called for by this Section 6.5, the Company shall, without stock
issue or transfer taxes to the holder or other person entitled to exercise the Option or SAR, deliver to the holder or such other
person a certificate or certificates for the requisite number of shares of Common Stock. A holder or permitted transferee of an
Option or SAR shall not have any privileges as a stockholder with respect to any shares of Common Stock to be issued until the
date of issuance (as evidenced by the appropriate entry on the books of the Company or a duly authorized transfer agent) of such
shares.


 


		7.	RESTRICTED STOCK



 


7.1         Grant
or Sale of Restricted Stock.


 


7.1.1           No
grants or sales of Restricted Stock shall be made under the Plan after 10 years from the date of adoption of the Plan by the Board.


 


7.1.2           The
Administrator may issue Restricted Stock under the Plan for such consideration (including past or future services, any benefit
to the Company, and, subject to applicable law, recourse promissory notes) and such other terms, conditions and restrictions as
determined by the Administrator. The restrictions may include restrictions concerning transferability, repurchase by the Company
and forfeiture of the shares issued, together with such other restrictions as may be determined by the Administrator. If shares
are subject to forfeiture or repurchase by the Company, all dividends or other distributions paid by the Company with respect to
the shares may be retained by the Company until the shares are no longer subject to forfeiture or repurchase, at which time all
accumulated amounts shall be paid to the recipient.


 


7.1.3           All
Common Stock issued pursuant to this Section 7.1 shall be subject to an agreement, which shall be executed by the Company and the
prospective recipient of the Common Stock prior to the delivery of certificates representing such stock to the recipient. The agreement
may contain any terms, conditions, restrictions, representations and warranties required by the Administrator. The certificates
representing the shares shall bear any legends required by the Administrator.


 


7.1.4           The
Administrator may require any purchaser or grantee of Restricted Stock to pay to the Company in cash, upon demand, amounts necessary
to satisfy any applicable federal, state or local tax withholding requirements. If the purchaser or grantee fails to pay the amount
demanded, the Administrator may withhold that amount from other amounts payable by the Company to the purchaser or grantee, including
salary, subject to applicable law. With the consent of the Administrator in its sole discretion, a purchaser may deliver Common
Stock to the Company to satisfy this withholding obligation.


 




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7.2           Corporate
Transactions. All restricted stock subject to forfeiture as of the occurrence of any Corporate Transaction shall be forfeited
immediately prior to the consummation of such Corporate Transaction unless the Administrator determines otherwise in its sole discretion.
The Administrator, in its sole discretion, may remove any restrictions as to any outstanding restricted stock. The Administrator
may, in its sole discretion, provide that all outstanding restricted stock participate in the Corporate Transaction with an equivalent
stock substituted by an applicable successor corporation subject to the restriction.


 


		8.	EMPLOYMENT OR CONSULTING RELATIONSHIP



 


Nothing in the Plan, any Option or SAR granted
under the Plan, or any Restricted Stock granted or sold under the Plan, shall interfere with or limit in any way the right of the
Company or of any of its Affiliates to terminate the employment of any Grantee or holder of Restricted Stock or an SAR at any time,
nor confer upon any Grantee or holder of Restricted Stock or an SAR any right to continue in the employ of, or consult with, or
advise, the Company or any of its Affiliates.


 


		9.	CONDITIONS UPON ISSUANCE OF SHARES



 


Notwithstanding the provisions of any Option,
SAR or offer of Restricted Stock, the Company shall have no obligation to issue shares under the Plan unless such issuance shall
be either registered or qualified under applicable securities laws, including, without limitation, the Securities Act, or exempt
from such registration or qualification. The Company shall have no obligation to register or qualify such issuance under the Securities
Act or other securities laws.


 


		10.	NON-EXCLUSIVITY OF THE PLAN



 


The adoption of the Plan shall not be construed
as creating any limitations on the power of the Company to adopt such other incentive arrangements as it may deem desirable, including,
without limitation, the granting of stock options other than under the Plan.


 


		11.	MARKET STAND-OFF



 


Each Grantee and recipient of Restricted
Stock, if so requested by the Company or any representative of the underwriters in connection with any registration of any securities
of the Company under the Securities Act, shall not sell or otherwise transfer any shares of Common Stock acquired upon exercise
of Options or SARs, or such Restricted Stock or receipt of Restricted Stock during a period of up to 180 days following the effective
date of a registration statement of the Company filed under the Securities Act; provided, however, that such restriction
is applicable to all directors and officers of the Company.


 




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		12.	AMENDMENTS TO PLAN



 


The Board may at any time amend, alter,
suspend or discontinue the Plan. Without the consent of a Grantee or holder of Restricted Stock, no amendment, alteration, suspension
or discontinuance may adversely affect such person’s outstanding Option(s), SAR(s) or the terms applicable to Restricted
Stock except to conform the Plan and ISOs granted under the Plan to the requirements of federal or other tax laws relating to ISOs.
No amendment, alteration, suspension or discontinuance to the Plan shall require stockholder approval unless (a) stockholder approval
is required to preserve incentive stock option treatment for federal income tax purposes; (b) the Board otherwise concludes that
stockholder approval is advisable; or (c) such approval is required under the rules of any securities exchange on which securities
of the Company are registered.


 


		13.	COMPLIANCE WITH CALIFORNIA CODE OF REGULATIONS.



 


13.1       Except
during any period in which the grant of Options and grant or sale of Restricted Stock under this Plan is exempt from qualification
under the California Corporate Securities Law of 1968 pursuant to any exemption other than Section 25102(o) of such Law, the Plan,
all Options granted and all Restricted Stock granted or sold under the Plan shall comply with Sections 260.140.41, 260.140.42,
260.140.45 and 260.140.46 of Title 10 of the California Code of Regulations, as in effect and as from time to time amended (“Title
10”), including the following (which shall be deemed modified or amended by any corresponding change in the applicable regulations):


 


13.1.1           At
no time shall the total number of securities issuable upon exercise of all outstanding options (excluding options, warrants and
rights excluded by Section 260.140.45) and the total number of shares provided for under any stock bonus or similar plan or agreement
of the Company exceed the 30% limitation set forth in Section 260.140.45 of Title 10 based on the securities of the Company which
are outstanding at the time the calculation is made.


 


13.1.2           The
exercise price of the Option, and the purchase price of Restricted Stock, shall not be less than 85% (100% in the case of any person
who owns securities possessing more than 10% of the total combined voting power of all classes of securities of the Company) of
the fair market value of the stock covered by the Option at the time the Option is granted (with fair value and total combined
voting power determined in accordance with Section 260.140.41(b) and 260.140.42(b), as applicable, of Title 10).  


 


13.1.3           No
Option shall be transferable except by will, the laws of descent and distribution, or as permitted by Rule 701 under the Securities
Act of 1933, as amended.


 


13.1.4           If
the Option is granted to an employee other than an officer, director, manager or consultant, it shall be exercisable at the rate
of at least 20% per year over five years.


 


13.1.5           If
the Restricted Stock is sold to an employee other than an officer, director, manager or consultant, any right to repurchase at
the original purchase price must lapse at the rate of at least 20% per year over five years and the right to repurchase must be
exercised for cash or cancellation of purchase money indebtedness for the stock within 90 days of termination of employment.


 




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13.1.6           If
the Option gives the Company the right to repurchase shares acquired upon exercise of the Option upon termination of employment,
it must comply with Section 260.140.41 of Title 10.


 


13.1.7           The
Option shall remain exercisable (to the extent the optionee is entitled to exercise on the date of termination of employment) for
at least: (i) six months after the date of termination of employment where termination occurs by reason of an optionee’s
death or disability; or (ii) 30 days after the date of termination of employment if termination was for any reason other than death,
disability or termination by the Company for cause (as defined in the applicable agreement or in any agreement with the Company
pertaining to employment) (provided that in each case that the Option shall not be exercisable after the Expiration Date).


 


13.2       Annual
Financial Statements. The Company shall provide to each Grantee financial statements of the Company at least annually.


 


		14.	EFFECTIVE DATE OF PLAN; DISCONTINUANCE OR TERMINATION
OF PLAN



 


The Plan became effective on April 30, 2013,
the date of adoption by the Board; provided, however, that no shares of Common Stock shall be issued, and no Option
or SAR shall be exercisable, unless and until the Plan is approved by the holders of a majority of the stockholders of the Company
entitled to vote within 12 months after adoption by the Board. If any Options or SARs are so granted and stockholder approval shall
not have been obtained within 12 months of the date of adoption of the Plan by the Board, such Options and SARs shall terminate
retroactively as of the date they were granted. The Board may at any time adopt a resolution stating the no more awards will be
granted under the Plan. The Plan shall terminate upon the first date at which there shall not be any outstanding Options or SARS
or any outstanding Restricted Stock subject to vesting and/or repurchase conditions following the first to occur of: (a) ten years
after the Effective Date, or (b) the date the Board adopts a resolution discontinuing the grant of awards under the Plan.


 




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