New Patriot Transportation Holding, Inc. 10-12B/A 

 


Exhibit 10.4


 


Patriot Transportation Holding, Inc. 


 


Equity Incentive Plan


 


	1.	Purpose; Eligibility.





 


		1.1	General Purpose. The name of this plan is the Patriot Transportation Holding, Inc. 2014
Equity Incentive Plan (the “Plan”). The purposes of the Plan are to (a) enable Patriot Transportation Holding,
Inc., a Florida corporation (the “Company”), and any Affiliate to attract and retain the types of Employees 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 and
Directors of the Company and its Affiliates, and such other individuals designated by the Compensation Committee (the “Committee”)
who are reasonably expected to become Employees, Consultants 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) Stock Appreciation Rights (d) Restricted Stock Awards, and (e) Performance Share
Awards.



 


	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 Stock Appreciation Right, a Restricted Stock
Award, or a Performance Share Award.


 


“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.


 


“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.


 



    	 



    	 



    

 


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


 


“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 disinterred Board members that the Director has engaged in any of the following:


 


		(a)	malfeasance in the office;






		(b)	gross misconduct or neglect;






		(c)	false or fraudulent misrepresentation inducing the director’s appointment;






		(d)	willful 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”


 


		(a)	The direct or indirect sale, transfer, conveyance or other disposition (other than by way of merger
or consolidation), in one or a series of related transactions, of all or substantially all of the properties or assets of the Company
and its subsidiaries, taken as a whole, to any Person that is not a subsidiary of the Company;



 


		(b)	The Incumbent Directors cease for any reason to constitute at least a majority of the Board;



 



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		(c)	The date which is 10 business days prior to the consummation of a complete liquidation or dissolution
of the Company;



 


		(d)	The acquisition by any Person of Beneficial Ownership of 50% or more (on a fully diluted basis)
of either (i) the then outstanding shares of Common Stock of the Company, taking into account as outstanding for this purpose such
Common Stock issuable upon the exercise of options or warrants, the conversion of convertible stock or debt, and the exercise of
any similar right to acquire such Common Stock (the “Outstanding Company Common Stock”) or (ii) the combined voting
power of the then outstanding voting securities of the Company entitled to vote generally in the election of directors (the “Outstanding
Company Voting Securities”); provided, however, that for purposes of this Plan, the following acquisitions shall
not constitute a Change in Control: (A) any acquisition by the Company or any Affiliate, (B) any acquisition by any employee benefit
plan sponsored or maintained by the Company or any subsidiary, (C) any acquisition which complies with clauses, (i), (ii) and (iii)
of subsection (e) of this definition or (D) in respect of an Award held by a particular Participant, any acquisition by the Participant
or any group of persons including the Participant (or any entity controlled by the Participant or any group of persons including
the Participant); or



 


		(e)	The consummation of a reorganization, merger, consolidation, statutory share exchange or similar
form of corporate transaction involving the Company that requires the approval of the Company’s shareholders, whether for such
transaction or the issuance of securities in the transaction (a “Business Combination”), unless immediately following
such Business Combination: (i) more than 50% of the total voting power of (A) the entity resulting from such Business Combination
(the “Surviving Company”), or (B) if applicable, the ultimate parent entity that directly or indirectly has beneficial
ownership of sufficient voting securities eligible to elect a majority of the members of the board of directors (or the analogous
governing body) of the Surviving Company (the “Parent Company”), is represented by the Outstanding Company Voting
Securities that were outstanding immediately prior to such Business Combination (or, if applicable, is represented by shares into
which the Outstanding Company Voting Securities were converted pursuant to such Business Combination), and such voting power among
the holders thereof is in substantially the same proportion as the voting power of the Outstanding Company Voting Securities among
the holders thereof immediately prior to the Business Combination; (ii) no Person (other than any employee benefit plan sponsored
or maintained by the Surviving Company or the Parent Company) is or becomes the Beneficial Owner, directly or indirectly, of 50%
or more of the total voting power of the outstanding voting securities eligible to elect members of the board of directors of the
Parent Company (or the analogous governing body) (or, if there is no Parent Company, the Surviving Company); and (iii) at least
a majority of the members of the board of directors (or the analogous governing body) of the Parent Company (or, if there is no
Parent Company, the Surviving Company) following the consummation of the Business Combination were Board members at the time of
the Board’s approval of the execution of the initial agreement providing for such Business Combination.



 



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“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 together.


 


“Committee” means the Compensation
Committee.


 


“Common Stock” means the common
stock $.10 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.


 


“Company” means Patriot Transportation
Holding, Inc., a Florida Corporation, and any successor thereto.


 


“Consultant” means any individual
who is engaged b 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 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.


 



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“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 IRC 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.


 


“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 Common Stock is listed on any established stock exchange
or a national market system, including without limitation, the New York Stock Exchange or the NASDAQ Stock Market, 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 system 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)	If an Employee or Consultant is party to an employment or service agreement with the Company or
its Affiliates and such agreement provides for a definition of Good Reason, the definition contained therein; or



 


		(b)	If no such agreement exists or if such agreement does not define Good Reason, the occurrence of
one or more of the following without the Participant’s express written consent, which circumstances are not remedied by the Company
within thirty (30) days of its receipt of a written notice from the Participant describing the applicable circumstances (which
notice must be provided by the Participant within ninety (90) days of the Participant’s knowledge of the applicable circumstances):
(i) any material, adverse change in the Participant’s duties, responsibilities or authority; (ii) a material reduction in the Participant’s
base salary or bonus opportunity; or (iii) a geographical relocation of the Participant’s principal office location by more than
one hundred (100) miles.



 



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“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.


 


“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.


 


“Negative Discretion” means
the discretion authorized by the Plan to be applied by the Committee to eliminate or reduce the size of a Performance Compensation
Award in accordance with Section 7.4(d)(iv) of the Plan; provided, that, the exercise of such discretion would not
cause the Performance Compensation Award to fail to qualify as “performance-based compensation” under Section 162(m)
of the Code.


 


“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.


 


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


 


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


 


“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.


 


“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.


 



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“Performance Compensation Award”
means any Award designated by the Committee as a Performance Compensation Award pursuant to Section 7.4 of the Plan.


 


“Performance Criteria” means
the criterion or criteria that the Committee shall select for purposes of establishing the Performance Goal(s) for a Performance
Period with respect to any Performance Compensation Award under the Plan. The Performance Criteria that will be used to establish
the Performance Goal(s) shall be based on the attainment of specific levels of performance of the Company (or Affiliate, division,
business unit or operational unit of the Company) and shall be limited to the following:


 


		(a)	net earnings or net income (before or after taxes);






		(b)	basic or diluted earnings per share (before or after taxes);






		(c)	net revenue or net revenue growth






		(d)	gross revenue






		(e)	gross profit or gross profit growth;






		(f)	net operating profit (before or after taxes);






		(g)	return on assets, capital, invested capital, equity, or sales;






		(h)	cash flow (including, but not limited to, operating cash flow, free cash flow, and cash flow return
on capital);






		(i)	earnings before or after taxes, interest, depreciation and/or amortization;






		(j)	gross or operating margins;






		(k)	improvements in capital structure;






		(l)	budget and expense management;






		(m)	productivity ratios;






		(n)	economic value-added or other value-added measurements;






		(o)	share price (including, but not limited to, growth measures and total shareholder return);






		(p)	expense targets;






		(q)	margins;






		(r)	operating efficiency;






		(s)	working capital targets;






		(t)	enterprise value;






		(u)	safety record; and






		(v)	completion of acquisitions or business expansion.



 


Any one or more of the Performance Criteria
may be used on an absolute or relative basis to measure the performance of the Company and/or an Affiliate as a whole or any division,
business unit or operational unit of the Company and/or an Affiliate or any combination thereof, as the Committee may deem appropriate,
or as compared to the performance of a group of comparable companies, or published or special index that the Committee, in its
sole discretion, deems appropriate, or the Committee may select Performance Criterion (o) above as compared to various stock market
indices. The Committee also has the authority to provide for accelerated vesting of any Award based on the achievement of Performance
Goals pursuant to the Performance Criteria specified in this paragraph. To the extent required under Section 162(m) of the Code,
the Committee shall, within the first 90 days of a Performance Period (or, if longer or shorter, within the maximum period allowed
under Section 162(m) of the Code), define in an objective fashion the manner of calculating the Performance Criteria it selects
to use for such Performance Period. In the event that applicable tax and/or securities laws change to permit the Committee discretion
to alter the governing Performance Criteria without obtaining shareholder approval of such changes, the Committee shall have sole
discretion to make such changes without obtaining shareholder approval.


 



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“Performance Formula” means,
for a Performance Period, the one or more objective formulas applied against the relevant Performance Goal to determine, with regard
to the Performance Compensation Award of a particular Participant, whether all, some portion but less than all, or none of the
Performance Compensation Award has been earned for the Performance Period.


 


“Performance Goals” means,
for a Performance Period, the one or more goals established by the Committee for the Performance Period based upon the Performance
Criteria. The Committee is authorized at any time during the first 90 days of a Performance Period (or, if longer or shorter, within
the maximum period allowed under Section 162(m) of the Code), or at any time thereafter (but only to the extent the exercise of
such authority after such period would not cause the Performance Compensation Awards granted to any Participant for the Performance
Period to fail to qualify as “performance-based compensation” under Section 162(m) of the Code), in its sole and absolute
discretion, to adjust or modify the calculation of a Performance Goal for such Performance Period to the extent permitted under
Section 162(m) of the Code in order to prevent the dilution or enlargement of the rights of Participants based on the following
events:


 


		(a)	asset write-downs;






		(b)	litigation or claim judgments or settlements;






		(c)	the effect of changes in tax laws, accounting principles, or other laws or regulatory rules affecting
reported results;






		(d)	any reorganization and restructuring programs;






		(e)	extraordinary nonrecurring items as described in Accounting Principles Board Opinion No. 30 (o
any successor or pronouncement thereto) and/or in management’s discretion and analysis of financial condition and results of operations
appearing in the Company’s annual report to shareholders for the applicable year;






		(f)	acquisitions or divestitures;






		(g)	any other specific unusual or nonrecurring events, or objectively determinable category thereof;






		(h)	foreign exchange gains and losses; and






		(i)	a change in the Company’s fiscal year.



 


“Performance Period” means
the one or more periods of time not less than one fiscal quarter in duration, as the Committee may select, over which the attainment
of one or more Performance Goals will be measured for the purpose of determining a Participant’s right to and the payment of a
Performance Compensation Award.


 






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“Performance Share” means
the grant of a right to receive a number of actual shares of Common Stock or share units based upon the performance of the Company
during a Performance Period, as determined by the Committee.


 


“Performance Share Award” means
any Award granted pursuant to Section 7.3 hereof.






 


“Permitted Transferee” (a)
a member of the Optionholder’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 Optionholder’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 Optionholder) control the management
of assets, and any other entity in which these persons (or the Optionholder) 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 a Non-qualified Stock Option; and (c) such
other transferees as may be permitted by the Committee in its sole discretion.


 


“Plan” means this Patriot
Transportation Holding, 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.


 


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


 


“Stock Appreciation Right” 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 Stock Appreciation Right 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 Stock Appreciation
Right Award Agreement.


 


“Stock for Stock Exchange” has
the meaning set forth in Section 6.4.


 


“Ten 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.


 



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	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;
		(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 determine the target number of Performance Shares to be granted pursuant to a Performance Share
Award, the performance measures that will be used to establish the performance goals, the performance period(s) and the number
of Performance Shares earned by a Participant;
		(k)	to designate an Award (including a cash bonus) as a Performance Compensation Award and to select
the Performance Criteria that will be used to establish the Performance Goals;
		(l)	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;
		(m)	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;
		(n)	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
		(o)	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



 



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		(p)	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 affects a repricing, shareholder
approval shall be required before the repricing is effective.



 


		3.2	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.



 


		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.



 



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		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 shall be indemnified by the
Company against the reasonable expenses, including attorney’s fees, actually incurred in connection with any action, suit or proceeding
or in connection with any appeal therein, to which the Committee may be 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 the Committee 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 Committee 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 Committee shall, in writing, offer the Company the opportunity at its own expense
to handle and defend such action, suit or proceeding.



 


	4.	Shares Subject to the Plan



 


		4.1	Subject to adjustment in accordance with
Section 11, a total of 300,000 shares of Common Stock shall be available for the grant of Awards under the Plan; provided that,
no more than 50,000 shares of Common Stock may be granted as Incentive Stock Options. Any shares of Common Stock granted in connection
with Options and Stock Appreciation Rights shall be counted against this limit as one (1) share for every one (1) Option or Stock
Appreciation Right awarded. Any shares of Common Stock granted in connection with Awards other than Options and Stock Appreciation
Rights shall be counted against this limit as two (2) shares of Common Stock for every one (1) share of Common Stock granted in
connection with such Award. During the terms 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.



 



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		4.3	Subject to adjustment in accordance with
Section 11, no Participant shall be granted, during any one (1) year period, Options to purchase Common Stock and Stock Appreciation
Rights with respect to more than 100,000 shares of Common Stock in the aggregate or any other Awards with respect to more than
100,000 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 not 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. Any shares of Common Stock that again become available for future grants pursuant to this
Section 4.4 shall be added back as one (1) share if such shares were subject to Options or Stock Appreciation Rights and as two
(2) shares if such shares were subject to other Awards. 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 Stock Appreciation Right 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 to Directors and Employees. Awards other than Incentive Stock Options may be granted to
Employees, Consultants and Directors and those individuals whom the Committee determines are reasonably expected to become Employees,
Consultants and Directors following the Grant Date. 
	 	 	 
		5.2	Ten Percent Shareholders. A Ten
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:



 


		6.1	Term. Subject to the provisions
of Section 5.2 regarding Ten 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.



 



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		6.2	Exercise Price of an Incentive Stock
Option. Subject to the provisions of Section 5.2 regarding Ten 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) in cash 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, or 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 “Stock for Stock Exchange”);
(ii) a “cashless” exercise program established with a broker; (iii) 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; (iv) any combination of the foregoing methods; or (v) 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 attestation) 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 (i.e., the Common Stock is listed on any established
stock exchange or a national market system) 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. Each Option
may, but need not, vest and therefore become exercisable in periodic installments that may, but need not, be equal. The Option
may be subject to such other terms and conditions on the time or times when it may be exercised (which may be based on performance
or other criteria) as the Committee may deem appropriate. The vesting provisions of individual Options may vary. No Option may
be exercised for a fraction of a share of Common Stock. 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 three 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 three 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. 



 


	7.	Provisions of Awards Other Than Options.



 


		7.1	Stock Appreciation Rights.



 


		(a)	General



 


Each Stock Appreciation Right granted
under the Plan shall be evidenced by an Award Agreement. Each Stock Appreciation Right 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. Stock Appreciation Rights 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)	Terms of Stock Appreciation Rights



 


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


 



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		(d)	Vesting of Stock Appreciation Rights



 


Each Stock Appreciation Right may,
but need not, vest and therefore become exercisable in periodic installments that may, but need not, be equal. The Stock Appreciation
Right may be subject to such other terms and conditions on the time or times when it may be exercised as the Committee may deem
appropriate. The vesting provisions of individual Stock Appreciation Rights may vary. No Stock Appreciation Right may be exercised
for a fraction of a share of Common Stock. The Committee may, but shall not be required to, provide for an acceleration of vesting
and exercisability in the terms of any Stock Appreciation Right upon the occurrence of a specified event.


 


		(e)	Exercise and Payment



 


Upon exercise of a Stock Appreciation
Right, the holder shall be entitled to receive from the Company an amount equal to the number of shares of Common Stock subject
to the Stock Appreciation Right 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 Stock Appreciation Right or related Option.
Payment with respect to the exercise of a Stock Appreciation Right 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.


 


		(f)	Exercise Price



 


The exercise price of a Free Standing
Stock Appreciation Right 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 Stock Appreciation Right. 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 Stock Appreciation Right, by its terms, shall be exercisable
only when the Fair Market Value per share of Common Stock subject to the Stock Appreciation Right and related Option exceeds the
exercise price per share thereof and no Stock Appreciation Rights may be granted in tandem with an Option unless the Committee
determines that the requirements of Section 7.1(b) 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 Stock Appreciation Right 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.


 



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		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.



 



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		(ii)	Restricted Stock Units awarded to any Participant shall be subject to (A) forfeiture until the
expiration of the Restricted Period, and satisfaction of any applicable Performance Goals during such 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.
	 	 	 
		(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)	Restricted Period



 


With respect to Restricted Awards,
the Restricted Period shall commence on the Grant Date and end at the time or times set forth on a schedule established by the
Committee in the applicable Award Agreement.


 


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(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.


 


		7.3	Performance Share Awards.



 


		(a)	Grant of Performance Share Awards



 


Each Performance Share Award granted
under the Plan shall be evidenced by an Award Agreement. Each Performance Share Award so granted shall be subject to the conditions
set forth in this Section 7.3, and to such other conditions not inconsistent with the Plan as may be reflected in the applicable
Award Agreement. The Committee shall have the discretion to determine: (i) the number of shares of Common Stock or stock-denominated
units subject to a Performance Share Award granted to any Participant; (ii) the performance period applicable to any Award; (iii)
the conditions that must be satisfied for a Participant to earn an Award; and (iv) the other terms, conditions and restrictions
of the Award.


 


		(b)	Earning Performance Share Awards



 


The number of Performance Shares
earned by a Participant will depend on the extent to which the performance goals established by the Committee are attained within
the applicable Performance Period, as determined by the Committee. No payout shall be made with respect to any Performance Share
Award except upon written certification by the Committee that the minimum threshold performance goal(s) have been achieved.


 


		7.4	Performance Compensation Awards.



 


		(a)	General



 


The Committee shall have the authority,
at the time of grant of any Award described in this Plan (other than Options and Stock Appreciation Rights granted with an exercise
price equal to or greater than the Fair Market Value per share of Common Stock on the Grant Date), to designate such Award as a
Performance Compensation Award in order to qualify such Award as “performance-based compensation” under Section 162(m)
of the Code. In addition, the Committee shall have the authority to make an Award of a cash bonus to any Participant and designate
such Award as a Performance Compensation Award in order to qualify such Award as “performance-based compensation” under
Section 162(m) of the Code.


 



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		(b)	Eligibility



 


The Committee will, in its sole discretion,
designate within the first 90 days of a Performance Period (or, if longer or shorter, within the maximum period allowed under Section
162(m) of the Code) which Participants will be eligible to receive Performance Compensation Awards in respect of such Performance
Period. However, designation of a Participant eligible to receive an Award hereunder for a Performance Period shall not in any
manner entitle the Participant to receive payment in respect of any Performance Compensation Award for such Performance Period.
The determination as to whether or not such Participant becomes entitled to payment in respect of any Performance Compensation
Award shall be decided solely in accordance with the provisions of this Section 7.4. Moreover, designation of a Participant eligible
to receive an Award hereunder for a particular Performance Period shall not require designation of such Participant eligible to
receive an Award hereunder in any subsequent Performance Period and designation of one person as a Participant eligible to receive
an Award hereunder shall not require designation of any other person as a Participant eligible to receive an Award hereunder in
such period or in any other period.


 


		(c)	Discretion of Committee with Respect to Performance Compensation Awards



 


With regard to a particular Performance
Period, the Committee shall have full discretion to select the length of such Performance Period (provided any such Performance
Period shall be not less than one fiscal quarter in duration), the type(s) of Performance Compensation Awards to be issued, the
Performance Criteria that will be used to establish the Performance Goal(s), the kind(s) and/or level(s) of the Performance Goal(s)
that is (are) to apply to the Company and the Performance Formula. Within the first 90 days of a Performance Period (or, if longer
or shorter, within the maximum period allowed under Section 162(m) of the Code), the Committee shall, with regard to the Performance
Compensation Awards to be issued for such Performance Period, exercise its discretion with respect to each of the matters enumerated
in the immediately preceding sentence of this Section 7.4(c) and record the same in writing.


 


		(d)	Payment of Performance Compensation Awards



 


		(i)	Condition to Receipt of Payment



 


Unless otherwise provided in the
applicable Award Agreement, a Participant must be employed by the Company on the last day of a Performance Period to be eligible
for payment in respect of a Performance Compensation Award for such Performance Period.


 



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		(ii)	Limitation



 


A Participant shall be eligible to
receive payment in respect of a Performance Compensation Award only to the extent that: (A) the Performance Goals for such period
are achieved; and (B) the Performance Formula as applied against such Performance Goals determines that all or some portion of
such Participant’s Performance Compensation Award has been earned for the Performance Period.


 


		(iii)	Certification



 


Following the completion of a Performance
Period, the Committee shall review and certify in writing whether, and to what extent, the Performance Goals for the Performance
Period have been achieved and, if so, calculate and certify in writing the amount of the Performance Compensation Awards earned
for the period based upon the Performance Formula. The Committee shall then determine the actual size of each Participant’s Performance
Compensation Award for the Performance Period and, in so doing, may apply Negative Discretion in accordance with Section 7.4(d)(iv)
hereof, if and when it deems appropriate.


 


		(iv)	Use of Discretion



 


In determining the actual size of
an individual Performance Compensation Award for a Performance Period, the Committee may reduce or eliminate the amount of the
Performance Compensation Award earned under the Performance Formula in the Performance Period through the use of Negative Discretion
if, in its sole judgment, such reduction or elimination is appropriate. The Committee shall not have the discretion to (A) grant
or provide payment in respect of Performance Compensation Awards for a Performance Period if the Performance Goals for such Performance
Period have not been attained or (B) increase a Performance Compensation Award above the maximum amount payable under Section 7.4(d)(vi)
of the Plan.


 


		(v)	Timing of Award Payments



 


Performance Compensation Awards granted
for a Performance Period shall be paid to Participants as soon as administratively practicable following completion of the certifications
required by this Section 7.4 but in no event later than 2 1/2 months following the end of the fiscal year during which the Performance
Period is completed.


 



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		(vi)	Maximum Awards Payable



 


Notwithstanding any provision contained
in this Plan to the contrary, the maximum Performance Compensation Award payable to any one Participant under the Plan for a Performance
Period (excluding any Options and Stock Appreciation Rights) is 100,000 shares of Common Stock or, in the event such Performance
Compensation Award is paid in cash, the equivalent cash value thereof on the first or last day of the Performance Period to which
such Award relates, as determined by the Committee. The maximum amount that can be paid in any calendar year to any Participant
pursuant to a cash bonus Award described in the last sentence of Section 7.4(a) shall be $500,000. Furthermore, any Performance
Compensation Award that has been deferred shall not (between the date as of which the Award is deferred and the payment date) increase
(A) with respect to a Performance Compensation Award that is payable in cash, by a measuring factor for each fiscal year greater
than a reasonable rate of interest set by the Committee or (B) with respect to a Performance Compensation Award that is payable
in shares of Common Stock, by an amount greater than the appreciation of a share of Common Stock from the date such Award is deferred
to the payment date.


 


	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.



 



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		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.
	 	 	 
		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.



 



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	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 Stock Appreciation Rights, 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 7.4(d)(vi) 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.



 


	12.	Effect of Change in Control.



 


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



 


		(a)	In the event of a Change in Control, all Options and Stock Appreciation Rights shall become immediately
exercisable with respect to 100% of the shares subject to such Options or Stock Appreciation Rights, and/or the Restricted Period
shall expire immediately with respect to 100% of the shares of Restricted Stock or Restricted Stock Units.
	 	 	 
		(b)	With respect to Performance Compensation Awards, in the event of a Change in Control, all Performance
Goals or other vesting criteria will be deemed achieved at 100% of target levels and all other terms and conditions will be deemed
met.



 


To the extent practicable, any actions
taken by the Committee under the immediately preceding clauses (a) and (b) 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.


 



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		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 Stock Appreciation Right with an exercise
price (or SAR Exercise Price in the case of a Stock Appreciation Right) 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 Stock Appreciation Right 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.
	 	 	 
		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.



 



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		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. Notwithstanding any other
provisions in this Plan, any Award which is subject to recovery under any law, government regulation or stock exchange listing
requirement, will be subject to such deductions and clawback as may be required to be made pursuant to such 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).
	 	 	 
		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
	 	 	 
		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 (6) 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. 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	Plan Headings. The 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, but no
Award shall be exercised (or, in the case of a stock Award, shall be granted) unless and until the Plan has been approved by the
shareholders of the Company, which approval shall be within twelve (12) months before or after the date the Plan is adopted by
the Board.



 


	16.	Termination or Suspension of the Plan. The Plan shall terminate automatically on October
1, 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. Unless the Company determines to submit Section 7.4 of the
Plan and the definition of “Performance Goal” and “Performance Criteria” to the Company’s shareholders at the
first shareholder meeting that occurs in the fifth year following the year in which the Plan was last approved by shareholders
(or any earlier meeting designated by the Board), in accordance with the requirements of Section 162(m) of the Code, and such shareholder
approval is obtained, then no further Performance Compensation Awards shall be made to Covered Employees under Section 7.4 after
the date of such annual meeting, but the Plan may continue in effect for Awards to Participants not in accordance with Section
162(m) of the Code.



 


	17.	Choice of Law. The law of the State of Florida 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 Patriot Transportation Holding,
Inc. on ____________.



 


	 	As approved by the shareholders of Patriot Transportation Holding,
Inc. on ____________.



 


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