Document:

Exhibit 10.1

 

Agreement and Plan of Voluntary Supervisory
Merger Conversion

 

by and between

 

Peoples
Bank SB

 

and

 

First
Federal Savings & Loan Association of Hammond

 

    	 

    	 

    

 

TABLE
OF CONTENTS

 

	ARTICLE I THE VOLUNTARY SUPERVISORY MERGER CONVERSION	1
	 	 
	Section 1.1	Plan of Voluntary Supervisory Merger Conversion.	1
	 	 	 
	Section 1.2	Manner of Converting and Exchanging Stock.	1
	 	 	 
	Section 1.3	Approval by the Association and Peoples	2
	 	 	 
	Section 1.4	Effective Date.	2
	 	 	 
	Section 1.5	Closing.	2
	 	 	 
	Section 1.6	Effects of the Merger.	3
	 	 	 
	Section 1.7	Further Assurances.	3
	 	 	 
	Section 1.8	Board of Directors and Officers.	4
	 	 	 
	Section 1.9	Offices.	4
	 	 	 
	Section 1.10	Articles of Conversion and Bylaws of Peoples.	4
	 	 	 
	Section 1.11	Voting Rights.	4
	 	 	 
	ARTICLE II REPRESENTATIONS AND WARRANTIES OF THE ASSOCIATION	4
	 	 
	Section 2.1	Organization and Standing.	4
	 	 	 
	Section 2.2	Authority for Agreement.	5
	 	 	 
	Section 2.3	Financial Information.	5
	 	 	 
	Section 2.4	Absence of Changes.	5
	 	 	 
	Section 2.5	Properties.	5
	 	 	 
	Section 2.6	Loans.	6
	 	 	 
	Section 2.7	Residential and Commercial Mortgage Loans and Certain Business Loans.	7
	 	 	 
	Section 2.8	Allowance and Reserves.	8
	 	 	 
	Section 2.9	Real Estate Held for Sale.	8
	 	 	 
	Section 2.10	Investments.	8
	 	 	 
	Section 2.11	Deposits.	8
	 	 	 
	Section 2.12	Contracts.	9
	 	 	 
	Section 2.13	Tax Matters.	9
	 	 	 
	Section 2.14	Employee Matters.	10

 

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	Section 2.15	Employee Benefit Plans.	10
	 	 	 
	Section 2.16	Environmental Matters.	11
	 	 	 
	Section 2.17	No Undisclosed Liabilities.	11
	 	 	 
	Section 2.18	Litigation.	11
	 	 	 
	Section 2.19	Brokerage.	12
	 	 	 
	Section 2.20	Insurance.	12
	 	 	 
	Section 2.21	Representations Regarding Financial Condition.	12
	 	 	 
	Section 2.22	Compliance with Laws; Governmental Authorizations.	12
	 	 	 
	ARTICLE III REPRESENTATIONS AND WARRANTIES OF PEOPLES	13
	 	 
	Section 3.1	Organization and Standing.	13
	 	 	 
	Section 3.2	Authority for Agreement.	13
	 	 	 
	ARTICLE IV COVENANTS	13
	 	 
	Section 4.1	Conduct of Business.	13
	 	 	 
	Section 4.2	Access to Information.	14
	 	 	 
	Section 4.3	Cooperation in Application Process.	14
	 	 	 
	Section 4.4	Management Pending Effective Date.	14
	 	 	 
	Section 4.5	Acquisition Proposals.	14
	 	 	 
	Section 4.6	Title Insurance and Surveys.	15
	 	 	 
	Section 4.7	Environmental Reports.	15
	 	 	 
	Section 4.8	Employees.	15
	 	 	 
	Section 4.9	Association’s 401(k) Plan.	17
	 	 	 
	Section 4.10	Health Plans.	17
	 	 	 
	Section 4.11	Indemnification.	18
	 	 	 
	Section 4.12	Core Data Processing Systems Integration.	18
	 	 	 
	Section 4.13	Internal Controls.	19
	 	 	 
	ARTICLE V CONDITIONS PRECEDENT TO OBLIGATIONS OF ALL PARTIES	19
	 	 
	Section 5.1	Approvals and Consents.	19
	 	 	 
	Section 5.2	Qualification as Voluntary Supervisory Conversion.	20
	 	 	 
	Section 5.3	Absence of Proceedings and Litigation.	20

 

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	ARTICLE VI CONDITIONS PRECEDENT TO THE OBLIGATIONS OF THE ASSOCIATION	20
	 	 
	Section 6.1	Opinion of Counsel.	20
	 	 	 
	Section 6.2	Representations, Warranties and Covenants; Performance by Peoples.	20
	 	 	 
	Section 6.3	Officers’ Certificates.	20
	 	 	 
	ARTICLE VII CONDITIONS PRECEDENT TO THE OBLIGATIONS OF PEOPLES	21
	 	 
	Section 7.1	Regulatory Approvals.	21
	 	 	 
	Section 7.2	Representations, Warranties and Covenants; Performance by the Association.	21
	 	 	 
	Section 7.3	Officers’ Certificates.	21
	 	 	 
	Section 7.4	Opinion of Counsel.	21
	 	 	 
	Section 7.5	Absence of Material Adverse Effect.	22
	 	 	 
	Section 7.6	Termination of Supervisory Agreement.	22
	 	 	 
	Section 7.7	Closing Book Value.	22
	 	 	 
	Section 7.8	The Association’s REO.	22
	 	 	 
	Section 7.9	Delinquent Loans.	22
	 	 	 
	Section 7.10	Maximum Processing Agreement Penalty.	22
	 	 	 
	Section 7.11	Loan Values.	22
	 	 	 
	ARTICLE VIII TERMINATION, AMENDMENT AND WAIVER	22
	 	 
	Section 8.1	Termination.	22
	 	 	 
	Section 8.2	Effect of Termination.	23
	 	 	 
	Section 8.3	Amendment.	23
	 	 	 
	Section 8.4	Extension; Waiver.	23
	 	 	 
	ARTICLE IX MISCELLANEOUS	24
	 	 
	Section 9.1	Confidentiality.	24
	 	 	 
	Section 9.2	Expenses.	24
	 	 	 
	Section 9.3	Modification of Structure.	24
	 	 	 
	Section 9.4	Notices.	24
	 	 	 
	Section 9.5	No Third Party Beneficiaries.	25
	 	 	 
	Section 9.6	Survival.	25

 

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	Section 9.7	Specific Performance.	25
	 	 	 
	Section 9.8	Headings, Entire Agreement.	25
	 	 	 
	Section 9.9	Counterparts.	25
	 	 	 
	Section 9.10	Binding Effect.	26
	 	 	 
	Section 9.11	Governing Law.	26

 

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Agreement
and Plan of

Voluntary Supervisory Merger Conversion

 

This AGREEMENT AND
PLAN OF VOLUNTARY SUPERVISORY MERGER CONVERSION (the “Agreement”) is made and entered into as of this 20th day
of December, 2013, between Peoples Bank SB, an Indiana stock savings bank based in
Munster, Indiana (“Peoples”), and First Federal Savings and Loan Association
of Hammond, a federal savings association based in Hammond, Indiana (“Association”).

 

WHEREAS, the respective
Boards of Directors of the Association and Peoples deem it advisable and in the best interests of each entity that the Association
be converted to stock form and simultaneously merged into Peoples pursuant to the terms, conditions, plan and procedures set forth
in this Agreement; and

 

WHEREAS, the Board
of Directors of the Association further believes it is in the best interests of its depositors and borrower members that the Association
enter into this Agreement.

 

THEREFORE, in consideration
of the mutual covenants and agreements herein set forth and for the purpose of prescribing plans for, and the terms and conditions
of, the voluntary supervisory conversion (the “Conversion”) of the Association and the merger of the Association
into Peoples (the “Merger”), the parties agree as follows:

 

Article
I

 

THE VOLUNTARY SUPERVISORY MERGER CONVERSION

 

Section
1.1            Plan
of Voluntary Supervisory Merger Conversion. Subject to the provisions and conditions herein specified, on the Effective
Date (as hereinafter defined), the Association shall convert to a federal stock savings and loan association and simultaneously
shall merge with and into Peoples in a transaction that will qualify as a voluntary supervisory conversion and merger (the “Merger
Conversion”) under applicable law. The Merger Conversion shall be accomplished in accordance with this Agreement and
with applicable statutes and regulations of the Office of the Comptroller of the Currency (the “OCC”), the
Federal Deposit Insurance Corporation (“FDIC”), and the Indiana Department of Financial Institutions (“DFI”).

 

Section
1.2            Manner
of Converting and Exchanging Stock. The manner of converting and exchanging the shares of the constituent corporations’
stock at the Effective Date of the Merger Conversion shall be as follows:

 

(a)               
each of the 1,000 shares of common stock, without par value, of Peoples outstanding immediately prior to the Effective
Date of the Merger Conversion shall remain outstanding immediately after the Effective Date of the Merger Conversion.

 

(b)              
upon receipt of approval of the Merger Conversion, the Association shall issue 100 shares of common stock, $.01 par
value per share, to Peoples for $100 in the aggregate, or $1.00 per share, and immediately thereafter each of the 100 shares of
the common stock, $.01 par value per share, of the Association outstanding immediately prior to the Effective Date of the Merger
Conversion shall be cancelled without consideration therefor.

 

    	 

    	 

    

 

Section
1.3            Approval
by the Association and Peoples. This Agreement has been approved by at least a majority of the directors of the Association
and at least a majority of the directors of Peoples.

 

Section
1.4            Effective
Date. Following the closing of the Merger Conversion, the transactions provided for herein shall become effective (the
“Effective Date”) on the date prescribed in the Articles of Merger (“Articles of Merger”)
as filed with the DFI and the Indiana Secretary of State (the “Secretary”); provided that the Merger Conversion
shall not be effective unless and until approved by the OCC, the DFI, and the FDIC, and all applicable waiting periods have expired.
The Plan of Merger attached hereto as Exhibit 1.4 shall be attached to the Articles of Merger when they are so filed.

 

Section
1.5            Closing.
Subject to the provisions of Articles V - VII hereof, the closing of the Merger Conversion contemplated by this Agreement
(the “Closing”), shall take place at the offices of Peoples, 9204 Columbia Avenue, Munster, IN 46321, as soon
as practicable after satisfaction of all of the conditions to Closing. The date and time of the Closing shall be mutually agreed
to by the Association and Peoples. If no such agreement is made, the Closing shall take place on the next business day following
the date of the satisfaction of all of the conditions to Closing, effective as of the close of business on such date.

 

(a)               
At the Closing of the Merger Conversion, Peoples shall deliver to the Association the following:

 

(i)                
an opinion of their counsel dated as of the Effective Date contemplated by Section 6.1 hereof;

 

(ii)              
the officers’ certificate contemplated by Section 6.3 hereof;

 

(iii)            
copies of the resolutions of the Board of Directors of Peoples, certified by the Secretary of Peoples, relating to
the approval of this Agreement and the Merger Conversion;

 

(iv)            
the Articles of Merger signed by Peoples; and;

 

(v)              
such other documents as the Association or its legal counsel may reasonably request.

 

(b)              
At the Closing of the Merger Conversion, the Association shall deliver to Peoples the following:

 

(i)                
an opinion of its counsel dated as of the Effective Date contemplated by Section 7.4 hereof;

 

(ii)              
the officers’ certificate contemplated by Section 7.3 hereof;

 

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(iii)            
the stock certificate representing all of the shares of the common stock, $.01 par value per share, of the Association;

 

(iv)            
copies of the resolutions adopted by the Board of Directors of the Association, certified by the Secretary of the
Association, relating to the approval of this Agreement and the Merger Conversion;

 

(v)              
the Articles of Merger signed by the Association; and

 

(vi)            
such other documents as Peoples or its legal counsel may reasonably request.

 

Section
1.6            Effects
of the Merger. At the Effective Date:

 

(a)               
the separate existence of the Association shall cease, and the corporate existence of Peoples (the “Resulting
Association”) shall be continued under the name Peoples Bank SB.

 

(b)              
the Resulting Association shall, without further transfer, succeed to and thereafter possess and enjoy all of the
public and private rights, privileges, immunities, powers and franchises, and be subject to all of the public and private restrictions,
liabilities and duties, of each of Peoples and the Association; all property (real, personal and mixed) of, all debts (on whatever
account) due to, and all choses in action and each and every other interest of or belonging or due to, each of Peoples and the
Association shall be taken by and deemed to be transferred to and vested in the Resulting Association without further act, deed
or other instrument; and the title to any real estate or any interest therein, vested by deed or otherwise in either of Peoples
or the Association, shall not revert or be in any way impaired by reason of the Merger Conversion;

 

(c)               
all rights of creditors and all liens (if any) upon the property of either of Peoples or the Association shall be
preserved unimpaired by the Merger Conversion; and all debts, liabilities, obligations and duties (collectively, “Obligations”)
of either of Peoples or the Association shall become the responsibility and liability of the Resulting Association, and may be
enforced against it to the same extent as if such Obligations had been incurred or contracted by it; and

 

(d)              
each Deposit Account in the Association at the time of the consummation of the Merger Conversion shall become, without
further action by the holder, a Deposit Account in Peoples equivalent in withdrawable amount to the withdrawable value, and subject
to the same terms and conditions (except as to voting and liquidation rights) as such Deposit Account in the Association immediately
preceding consummation of the Merger Conversion. Holders of Deposit Accounts in the Resulting Association shall not, as such holders,
have any voting rights. For purposes of the foregoing, the Deposit Accounts of the Association shall mean all withdrawable deposit
accounts, including all savings accounts, certificate accounts, and demand accounts, of the Association.

 

Section
1.7            Further
Assurances. If at any time the Resulting Association shall consider or be advised that any further assignment, assurance
or other action is necessary or desirable to vest in the Resulting Association the title to any property or right of the Association
or otherwise to carry out the purposes of the Merger Conversion or of this Agreement, the proper officers and directors of the
Association shall execute and make all such proper assignments or assurances and take such other actions; and the Board of Directors
and the proper officers of the Resulting Association are hereby authorized, in the name and on behalf of the Association or otherwise,
to do any of the foregoing.

 

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Section
1.8            Board
of Directors and Officers. The Board of Directors of the Resulting Association shall be comprised of those persons serving
as directors of Peoples immediately prior to the Effective Date. The officers of the Resulting Association shall be comprised
of those persons serving as officers of Peoples immediately prior to the Effective Date and Sheldon Cutler who shall become a
Vice President of the Surviving Corporation.

 

Section
1.9            Offices.
The home office of Peoples at 9204 Columbia Avenue, Munster, Indiana shall remain the home office of the Resulting Association.
The Resulting Association will operate branch offices at the locations of Peoples’ branch offices immediately prior to the
Effective Date and at the home office and branch office of the Association immediately prior to Effective Date.

 

Section
1.10        Articles of Conversion and
Bylaws of Peoples. The Articles of Conversion and By-Laws of Peoples in effect immediately prior to the Effective Date
shall be the articles and bylaws of the Resulting Association.

 

Section
1.11        Voting Rights. As
of the Effective Date, all voting rights in the Association, which are currently held by the members of the Association, will
be held exclusively by NorthWest Indiana Bancorp, as sole shareholder of Peoples.

 

Article
II

 

REPRESENTATIONS AND WARRANTIES OF THE ASSOCIATION

 

On or prior to the
date hereof, the Association has delivered to Peoples a schedule (“Disclosure Schedule”) setting forth, among
other things, items the disclosure of which is necessary or appropriate either (i) in response to an express disclosure requirement
contained in a provision hereof or (ii) as an exception to one or more representations or warranties contained in this Article
II or to one or more covenants contained in Article IV.

 

The Association represents and
warrants to Peoples as follows:

 

Section
2.1            Organization
and Standing. The Association is a mutual savings association duly organized, validly existing and in good standing under
federal law with full power and authority to carry on its business as now conducted and to own or lease or operate its properties
in the places where such business is now conducted and such properties are now owned, leased or operated. The Association is subject
to the terms and conditions of the Supervisory Agreement referenced in Section 4.1(a) of this Agreement. The Association is duly
authorized to conduct its business, all subject to the supervision of the OCC and the FDIC. The Association does not own any corporation,
partnership, joint venture or other entity in which the Association has, directly or indirectly, an equity interest representing
50% or more of any class of the capital stock thereof or other equity interests therein (a “Subsidiary”).

 

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Section
2.2            Authority
for Agreement. The execution and delivery of this Agreement and the consummation of the transactions contemplated by this
Agreement, have been duly authorized by the Board of Directors of the Association, and, subject to the requisite approval of federal
and state regulatory authorities, this Agreement constitutes a valid and legally binding obligation of the Association enforceable
in accordance with its terms, subject to applicable bankruptcy, insolvency and similar laws affecting creditors’ rights
and remedies generally and to general principles of equity, whether applied in a court of law or court of equity. The approval,
execution and delivery of this Agreement and the consummation of the transactions contemplated by this Agreement will not result
in the breach of any term or provision of or constitute a default under any indenture, mortgage, deed of trust or other material
agreement or instrument to which the Association is bound.

 

Section
2.3            Financial
Information. Except as set forth in the Disclosure Schedule, the audited balance sheet of the Association as of December
31, 2012, and related audited income statement for the years ended December 31, 2011, and December 31, 2012, together with the
notes thereto, and the unaudited periodic financial statements of the Association for the nine months ended September 30, 2013,
together with notes thereto (if any) (collectively, “Association Financial Statements”), copies of which have
been provided to Peoples, have been prepared in accordance with generally accepted accounting principles (“GAAP”)
(except as may be disclosed therein, and in the case of interim statements, for the absence of footnotes and normal year-end adjustments)
and fairly present, in all material respects, the consolidated financial position and the consolidated results of operations,
and cash flows of the Association as of the dates and for the periods indicated.

 

Section
2.4            Absence
of Changes. Except as set forth in the Disclosure Schedule, since September 30, 2013, no events or transactions have occurred
which have resulted in a Material Adverse Effect as to the Association. For purposes of this Agreement, “Material Adverse
Effect” means any change, event or effect that is both material and adverse to (1) the financial position or condition,
results of operation, future prospects, the assets or business of the Association, or (2) the ability of the Association to perform
its respective obligations under this Agreement, other than (A) the effects of any change attributable to or resulting from changes
in economic conditions, laws, regulations or accounting guidelines applicable to depository institutions generally or in general
levels of interest rates, or (B) employee terminations after announcement of this Agreement.

 

Section
2.5            Properties.

 

(a)               
A list and description of all real property owned or leased by the Association (including any property acquired in
a judicial foreclosure proceeding or by way of a deed in lieu of foreclosure or similar transfer (“OREO”)) (collectively,
the “Real Property”), is set forth in the Disclosure Schedule. The Association has good and marketable title
to all Real Property owned by it, in each case free and clear of any charges, mortgages, pledges, security interests, claims, liens
or encumbrances (“Liens”) except (i) liens for taxes not yet due and payable, (ii) such easements, restrictions,
encumbrances and imperfections of title, if any, as are not material in character, amount or extent, and do not materially detract
from the value, or materially interfere with the present use of the properties subject thereto or affected thereby, and (iii) liens
arising as a matter of law in the ordinary course of business as to which there is no known default. All Real Property owned by
the Association is in a good state of maintenance and repair (normal wear and tear excepted) as reflected by its appraised value
and to the best knowledge of the Association conforms in all material respects with all applicable ordinances, regulations and
zoning laws. To the knowledge of the Association, none of the buildings, structures or other improvements located on any Real Property
owned by the Association encroaches upon or over any adjoining parcel or real estate or any easement or right-of-way.

 

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(b)              
The Association has good and marketable title to all tangible personal property owned by it, free and clear of all
Liens, except such Liens, if any, as are not material in character, amount or extent, and do not materially detract from the value,
or materially interfere with the present use of the properties subject thereto or affected thereby. With respect to personal property
used in the business of the Association that is leased rather than owned, the Association is not in default under the terms of
any such lease.

 

Section
2.6            Loans.
The Association represents and warrants as to each of its loans to loan debtors that, except as may be set forth in the
Disclosure Schedule:

 

(a)               
the Association is the sole owner and holder of the loan and all servicing rights relating thereto. The loan is not
assigned or pledged (other than to the Federal Home Loan Bank of Indianapolis) (the “FHLB”), and the Association
has good and marketable title thereto;

 

(b)              
except for any unfunded commitment, the full principal amount of the loan has been advanced to the loan debtor, either
by payment direct to such debtor, or by payment made on the debtor’s approval, and there is no requirement for future advances
thereunder. The unpaid principal balance of each loan and the amount of any unfunded commitment in each case as of September 30,
2013, is as stated in the Disclosure Schedule;

 

(c)               
each of the Association’s loan documents is genuine, and each is the legal, valid and binding obligation of
the maker thereof. All parties to the loan documents had legal capacity to enter into the loan documents, and the loan documents
have been duly and properly executed by such parties;

 

(d)              
all federal, state and local laws and regulations affecting the origination, administration and servicing of the
loans prior to the Effective Date, including without limitation, truth-in-lending, real estate settlement procedures, consumer
credit protection, equal credit opportunity and disclosure laws, have been complied with in all respects. Without limiting the
generality of the foregoing, the Association has timely provided all disclosures, notices, estimates, statements and other documents
required to be provided to the loan debtor under applicable law and has documented receipt of such disclosures, estimates, statements
and other documents as required by law and prudent loan origination policies and procedures;

 

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(e)               
the loan debtor has no rights of rescission, setoff, counterclaims, or defenses to the loan documents, except such
defenses arising by virtue of bankruptcy, creditors’ rights laws, and general principles of equity;

 

(f)               
the Association has not modified such loan or waived any material provision of or default under such loan or the
related loan documents, except in accordance with its customary loan administration policies and procedures. Any such modification
or waiver is in writing and is contained in the loan file to the best knowledge of the Association;

 

(g)              
the Association has taken all actions to cause each loan secured by personal property to be perfected by a security
interest having first priority or such other priority as is required by the relevant loan approval report for such loan; and the
collateral for each such loan is owned by the loan debtor, free and clear of any Lien except for the security interest in favor
of the Association and any other Lien expressly permitted under the relevant loan approval report; and

 

(h)              
the loan debtor is the owner of all collateral for such loan.

 

Section
2.7            Residential
and Commercial Mortgage Loans and Certain Business Loans. Except as set forth in the Disclosure Schedule, the Association
represents and warrants as to each of its residential mortgage loan, commercial mortgage loans and business loans that is secured
in whole or in part by a mortgage that:

 

(a)               
the mortgage is a valid first lien on the mortgaged property securing the related loan (or a subordinate lien if
expressly permitted under the relevant loan approval report), and the mortgaged property is free and clear of all Liens having
priority over the first lien of the mortgage, except for liens for real estate taxes and special assessments not yet due and payable,
easements and restrictions of record, and, in the case of a home equity loan or a mortgage securing a guarantee of a business loan,
the permitted lien of the senior mortgage or deed of trust;

 

(b)              
to the Association’s knowledge, all taxes, government assessments, insurance premiums, and municipal charges,
and leasehold payments which previously became due and owing have been paid, or an escrow payment has been established in an amount
sufficient to pay for every such item which remains unpaid, except as otherwise provided in the Disclosure Schedule;

 

(c)               
each loan for which private mortgage insurance was required by the Association under its underwriting guidelines
is insured by a reputable private mortgage insurance company; each such insurance policy is in full force and effect; and all premiums
due thereunder have been paid;

 

(d)              
there is in force a paid-up lender’s title insurance policy or attorney’s opinion respecting the mortgaged
property (other than with respect to home equity loans or second residential mortgage loans) issued by a reputable title insurance
company in an amount at least equal to the outstanding principal balance of the related loan. No claims have been made under such
lender’s title insurance policy, and the Association has not done, by act or omission, anything which would impair the coverage
of such lender’s title insurance policy;

 

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(e)               
all appraisals have been ordered, performed and rendered in accordance with the requirements of the underwriting
guidelines of the Association and in compliance, in all material respects, with all laws and regulations then in effect relating
and applicable to the origination of loans, (i) which requirements include, without limitation, requirements as to appraiser independence,
appraiser competency and training, appraiser licensing and certification, and the content and form of appraisals, and (ii) which
laws and regulations include, without limitation, regulations promulgated by the DFI and the FDIC; and

 

(f)               
to the Association’s knowledge, no mortgaged property is contaminated or in violation of any Environmental
Law (as hereinafter defined).

 

Section
2.8            Allowance
and Reserves. Except as set forth in the Disclosure Schedule, the loan loss allowance shown on the Association Financial
Statements as of September 30, 2013, is adequate as of such date under the requirements of GAAP to provide for possible losses
on items for which reserves were made. Except as set forth in the Disclosure Schedule, the aggregate loan balances outstanding
as of September 30, 2013, in excess of the allowance as of such date were, as of September 30, 2013, collectible in accordance
with their respective terms.

 

Section
2.9            Real
Estate Held for Sale. The Association’s OREO is recorded on the books of the Association at “as is”
fair value less estimated selling costs. When foreclosed assets were acquired by the Association, any adjustment was charged to
the allowance for loan losses. The adjustments for OREO made in the loan loss allowance are adequate and management has no reason
to believe that the OREO is not saleable for the amounts at which the OREO is recorded on the Association’s books.

 

Section
2.10        Investments. Except
as set forth in the Disclosure Schedule, none of the investments reflected in the Association Financial Statements as of September
30, 2013, and none of the investments made by the Association since September 30, 2013, are subject to any restriction, whether
contractual or statutory, which materially impairs the ability of the Association to dispose freely of such investment at any
time and each of such investments complies with regulatory requirements concerning such investments.

 

Section
2.11        Deposits.

 

(a)               
The Association has delivered to Peoples a true and complete copy of the account forms for all deposits offered by
the Association and a list of its deposits as of a recent date. Except as listed in the Disclosure Schedule, all the accounts related
to the deposits are in material compliance with all applicable laws, orders and regulations and were originated in material compliance
with all applicable laws, orders and regulations.

 

(b)              
The Association’s deposit accounts are insured up to applicable limits by the FDIC, and the Association has
paid all premiums required to be paid and is in compliance with the applicable insurance regulations of the FDIC.

 

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Section
2.12        Contracts. The Disclosure
Schedule lists or describes the following:

 

(a)               
each loan and credit agreement, conditional sales contract, indenture or other title retention agreement or security
agreement relating to money borrowed by the Association other than reverse repurchase agreements;

 

(b)              
each guaranty by the Association of any obligation for the borrowing of money or otherwise (excluding any endorsements
and guarantees in the ordinary course of business and letters of credit issued by the Association in the ordinary course of its
business) or any warranty or indemnification agreement;

 

(c)               
each lease or license with respect to personal property involving an annual amount in excess of $5,000;

 

(d)              
the name, annual salary and primary department assignment as of September 30, 2013, of each employee of the Association
and any employment or consulting agreement or arrangement with respect to each such person;

 

(e)               
any agreement to which the Association is bound or a party under which benefits will be increased, or the vesting
or payment of benefits will be accelerated, by the occurrence of any of the transactions contemplated by this Agreement;

 

(f)               
each agreement, loan, contract, lease, guaranty, letter of credit, line of credit or commitment of the Association
not referred to elsewhere in this Section which (i) involves payment by the Association (other than as disbursement of loan proceeds
to customers) of more than $5,000 annually or $25,000 in the aggregate over its remaining term unless, in the latter case, such
is terminable within one (1) year without premium or penalty; (ii) involves payments based on profits of the Association; (iii)
relates to the future purchase of goods or services in excess of the requirements of its respective business at current levels
or for normal operating purposes; or (iv) was not made in the ordinary course of business;

 

(g)              
each agreement which limits the ability of the Association to compete in any line of business or with any person,
or that involves any restriction on the geographic area in which, or method by which, the Association may carry on its business;

 

Final and complete
copies of each document, plan or contract listed and described in the Disclosure Schedule pursuant to this Section 2.12 (the “Contracts”)
have been provided to Peoples. The Association has performed in all material respects all obligations required to be performed
by it under the Contracts and the Association is not in material default under, and no event has occurred which, with the lapse
of time or action by a third party, could result in a material default under the Contracts.

 

Section
2.13        Tax Matters. Except
as set forth in the Disclosure Schedule, the Association has filed with the appropriate governmental agencies all federal, state
and local income, franchise, excise, sales, use, real and personal property and other tax returns and reports required to be filed
by it. The Association is not (a) delinquent in the payment of any taxes shown on such returns or reports or on any assessments
received by it for such taxes; (b) aware of any pending or threatened examination for income taxes for any year by the Internal
Revenue Service (the “IRS”) or any state tax agency; (c) subject to any agreement extending the period for
assessment or collection of any federal or state tax; or (d) a party to any action or proceeding with, nor has any claim been
asserted against it by, any governmental authority for assessment or collection of taxes. The Association is not the subject of
any threatened action or proceeding by any governmental authority for assessment or collection of taxes. The reserve for taxes
in the unaudited financial statements of the Association for the quarter ended September 30, 2013, is, in the opinion of management,
adequate to cover all of the tax liabilities of the Association (including, without limitation, income taxes and franchise fees)
as of such date in accordance with GAAP.

 

    	9

    	 

    

 

Section
2.14        Employee Matters.

 

(a)               
Except as may be disclosed in the Disclosure Schedule, the Association has not entered into any collective bargaining
agreement with any labor organization with respect to any group of employees of the Association, and to the knowledge of the Association,
there is no present effort nor existing proposal to attempt to unionize any group of employees of the Association.

 

(b)              
Except as may be disclosed in the Disclosure Schedule, (i) the Association is and has been in material compliance
with all applicable laws respecting employment and employment practices, terms and conditions of employment and wages and hours,
including, without limitation, any such laws respecting employment discrimination and occupational safety and health requirements.

 

Section
2.15        Employee Benefit Plans.

 

(a)               
Each (i) nonqualified deferred compensation or retirement plan or arrangement that is an employee pension benefit
plan (“Employee Pension Benefit Plan”) as defined in § 3(2) of the Employee Retirement Income Security
Act of 1974, as amended (“ERISA”), (ii) qualified defined contribution retirement plan or arrangement that is
an Employee Pension Benefit Plan, (iii) qualified defined benefit retirement plan or arrangement that is an Employee Pension Benefit
Plan (including any multiemployer plan as defined in § 3(37) of ERISA), or (iv) employee welfare benefit plan (as defined
in § 3(1) of ERISA) or material fringe benefit program or plan of the Association (each plan described in (i), (ii), (iii)
and (iv), an “Employee Benefit Plan”) (and each related trust, insurance contract, or fund) complies in form
and in operation in all material respects with the applicable requirements of ERISA, the Internal Revenue Code of 1986, as amended
(the “Code”), and other applicable legal requirements. No such Employee Benefit Plan is under audit by the IRS
or the U.S. Department of Labor.

 

(b)              
All contributions (including all employer contributions and employee salary reduction contributions) that are due
have been paid to each Employee Benefit Plan that is an Employee Pension Benefit Plan, and all contributions for any period ending
on or before the Effective Date that are not yet due have been paid to each Employee Pension Benefit Plan or accrued in accordance
with the past custom and practice of the Association and will be paid when due to such plan. All premiums or other payments for
all periods ending on or before the Effective Date have been paid with respect to each Employee Benefit Plan that is an Employee
Welfare Benefit Plan.

 

    	10

    	 

    

 

(c)               
The Association has provided to Peoples copies of its Employee Benefit Plans.

 

Section
2.16        Environmental Matters.

 

(a)               
As used in this Agreement, “Environmental Laws” means all local, state and federal environmental, health
and safety laws and regulations in all jurisdictions in which the Association has done business or owned, leased or operated property,
including, without limitation, the Federal Resource Conservation and Recovery Act, the Federal Comprehensive Environmental Response,
Compensation and Liability Act, the Federal Clean Water Act, the Federal Clean Air Act, and the Federal Occupational Safety and
Health Act.

 

(b)              
Except as may be disclosed in the Disclosure Schedule, no activity or condition exists at or upon the Real Property
that violates any Environmental Law, and no condition has existed or event has occurred with respect to the Real Property that,
with notice or the passage of time, or both, would constitute a violation of any Environmental Law or obligate (or potentially
obligate) the Association to remedy, stabilize, neutralize or otherwise alter the environmental condition of any of the Real Property,
where the aggregate cost of such actions would be material to the Association. Except as may be disclosed in the Disclosure Schedule,
and to the knowledge of the Association, after reasonable investigation, the Association has not received any notice from any person
or entity that the Association is or was in violation of any Environmental Law or that the Association is responsible (or potentially
responsible) for the cleanup or other remediation of any pollutants, contaminants, or hazardous or toxic wastes, substances or
materials at, on or beneath any such property.

 

Section
2.17        No Undisclosed Liabilities.
The Association does not have any material liability, whether asserted or unasserted, whether absolute or contingent,
whether accrued or unaccrued, whether liquidated or unliquidated, and whether due or to become due (and there is no past or present
fact, situation, circumstance, condition or other basis for any present or future action, suit or proceeding, hearing, charge,
complaint, claim or demand against the Association giving rise to any such liability) required in accordance with GAAP to be reflected
in an audited consolidated balance sheet of the Association or the notes thereto, except (i) for liabilities set forth or reserved
against in the Association Financial Statements as of September 30, 2013, (ii) for liabilities occurring in the ordinary course
of business of the Association since September 30, 2013 , (iii) liabilities relating to transactions contemplated by this Agreement,
and (iv) as may be disclosed in the Disclosure Schedule.

 

Section
2.18        Litigation. Except
as set forth in the Disclosure Schedule, there is no action, suit, proceeding or investigation pending against the Association
or to the best knowledge of the Association threatened against or affecting the Association, before any court or arbitrator or
any governmental body, agency, or official involving a monetary claim for $10,000 or more or equitable relief (i.e., specific
performance or injunctive relief). The Association is not aware of any facts that would reasonably afford a basis for any such
action, suit, proceeding or investigation.

 

    	11

    	 

    

 

Section
2.19        Brokerage. There
are no existing claims or agreements for brokerage commissions, finders’ fees, or similar compensation in connection with
the transactions contemplated by this Agreement payable by the Association.

 

Section
2.20        Insurance. All material
insurable properties owned or held by the Association are adequately insured by financially sound and reputable insurers in such
amounts and against fire and other risks insured against by extended coverage and public liability insurance, as is customary
with banks of similar size. The Disclosure Schedule sets forth, for each material policy of insurance maintained by the Association
the amount and type of insurance, the name of the insurer and the amount of the annual premium. All amounts due and payable under
such insurance policies are fully paid, and all such insurance policies are in full force and effect.

 

Section
2.21        Representations Regarding Financial
Condition.

 

(a)               
The Association is not entering into this Agreement in an effort to hinder, delay or defraud their creditors.

 

(b)              
The Association is not insolvent and will not be rendered insolvent as a result of the transactions contemplated
by this Agreement.

 

(c)               
The assumption of the Association’s liabilities in connection with the Merger Conversion represents fair and
reasonable equivalent value for the assets to be transferred and liabilities to be assumed hereunder.

 

(d)              
The Association has no intention to file proceedings for bankruptcy or insolvency or for the appointment of a receiver,
conservator, trustee, or guardian with respect to its business or assets prior to the Effective Date.

 

Section
2.22        Compliance with Laws; Governmental
Authorizations. The Association is in material compliance with all statutes, laws, ordinances, rules, regulations, judgments,
orders, and decrees, which apply to its business or properties. All permits, concessions, grants, franchises, licenses and other
governmental authorizations and approvals necessary for the conduct of its business have been duly obtained and are in full force
and effect, and there are no proceedings pending or, to the Association’s knowledge, threatened which may result in the
revocation, cancellation or suspension, or any materially adverse modification, of any thereof. The consummation of the Merger
Conversion and the other transactions contemplated hereby will not result in any such revocation, cancellation, suspension or
modification. The Real Property complies with all applicable requirements of the Americans with Disabilities Act.

 

    	12

    	 

    

 

Article
III

 

REPRESENTATIONS AND WARRANTIES OF PEOPLES

 

Peoples hereby represents
and warrants to the Association as follows:

 

Section
3.1            Organization
and Standing. Peoples is a stock savings bank duly organized and validly existing under Indiana law with full power and
authority to carry on its business as now conducted and to own or lease or operate its properties in the places where such business
is now conducted and such properties are now owned, leased or operated. Peoples is duly authorized to conduct its business, all
subject to the supervision of the DFI and the FDIC.

 

Section
3.2            Authority
for Agreement. The execution and delivery of this Agreement and the consummation of the transactions contemplated by this
Agreement, have been duly authorized by the Board of Directors of Peoples, and, subject to the requisite approval of federal and
state regulatory authorities, this Agreement constitutes a valid and legally binding obligation of Peoples enforceable in accordance
with its terms, subject to applicable bankruptcy, insolvency and similar laws affecting creditors’ rights and remedies generally
and to general principles of equity, whether applied in a court of law or court of equity. The approval, execution and delivery
of this Agreement and the consummation of the transactions contemplated by this Agreement will not result in the breach of any
term or provision of or constitute a default under any indenture, mortgage, deed of trust or other material agreement or instrument
to which Peoples is bound.

 

Article
IV

 

COVENANTS 

 

Section
4.1            Conduct
of Business. From the date hereof until the Effective Date, the Association covenants that it shall:

 

(a)               
comply in all respects with the Supervisory Agreement entered into with the Office of Thrift Supervision dated as
of January 12, 2011, any related PCA orders, and any requirements of regulatory examinations of the Association (the “Supervisory
Agreement”);

 

(b)              
use its best efforts to maintain all its material structures, buildings, equipment and other tangible personal property
in good repair, order and condition, except for ordinary wear and tear and damage by unavoidable casualties; provided that any
capital expenditures with respect to such property that will cost in excess of $5,000 must be approved in advance by Peoples;

 

(c)               
perform in all material respects all of its obligations under agreements, contracts and instruments relating to or
affecting its properties, assets and business;

 

(d)              
comply in all material respects with all statutes, laws, ordinances, rules and regulations applicable to its operations
and properties and to the conduct of its business;

 

    	13

    	 

    

 

(e)               
promptly advise Peoples or its designee in writing of any correspondence or communication with any governmental authority
having jurisdiction over the Association relating to any examination, report, inquiry or investigation of the Association;

 

(f)               
not take any voluntary action which would result in a violation or breach of this Agreement or any provision hereof;

 

(g)              
promptly advise Peoples in writing of any materially adverse change in the condition (financial or otherwise), operations,
business or prospects of the Association; and

 

(h)              
notify Peoples in writing of the commencement of or any threat of any material claim, litigation or proceeding against
the Association.

 

Section
4.2            Access
to Information. The Association shall give to Peoples or its representatives, full and free access, during normal business
hours and upon reasonable notice, to its properties, books, records, contracts and commitments, and will furnish promptly to Peoples
or its representatives all such information and documents relating to its properties and business as Peoples shall reasonably
request, including all interim financial statements and reports as they are prepared and become available. Such right of access
and examination in and of itself, however, shall not diminish or in any manner affect the representations, warranties and covenants
of the Association hereunder or constitute a waiver or relinquishment on the part of Peoples of any of its rights to rely upon
the representations, warranties and covenants of the Association hereunder.

 

Section
4.3            Cooperation
in Application Process. Peoples shall be responsible for preparing and filing of all applications required in connection
with the contemplated transaction, including the Form AC to be filed with the OCC by the Association; although the Association
shall be responsible for obtaining the tax opinion required for the Form AC. The Association and its officers shall use their
best efforts to cooperate in the application process and shall provide Peoples with the various forms and documents required for
the applications that call for preparation or execution by the Association or its officers or directors. Copies of the applications
will be provided to the Association and its counsel for their comments before the applications are filed. Peoples and the Association
shall use their best efforts to secure all necessary approvals of regulatory authorities that shall be required in order to effect
the transactions contemplated hereby as soon as possible after the date hereof.

 

Section
4.4            Management
Pending Effective Date. During the interim period after approval of this Agreement by the Board of Directors of the Association
and the Board of Directors of Peoples and until the Effective Date, the day-to-day management of the business of the Association
shall continue to be conducted by the Association in its regular and ordinary course. Prior to consummation of the transactions
contemplated hereby, Peoples shall not control or attempt to exercise control of the business or affairs of the Association.

 

Section
4.5            Acquisition
Proposals. The Association agrees that it shall not, and it shall cause its officers, directors, agents, advisors and
affiliates not to, solicit or encourage inquiries or proposals with respect to, or engage in any negotiations concerning, or provide
any confidential information to, or have any discussions with, any person relating to, any tender or exchange offer, proposal
for a merger, consolidation, sale of assets and assumption of liabilities, or other business combination involving the Association
or any proposal or offer to acquire in any manner a substantial equity interest in, or a substantial portion of the assets or
deposits of the Association, other than the transactions contemplated by this Agreement (any of the foregoing, an “Acquisition
Proposal”).

 

    	14

    	 

    

 

Section
4.6            Title
Insurance and Surveys. The Association shall deliver to Peoples prior to the Effective Date copies of its most recent
owner’s closing title insurance binder or abstract and surveys on each parcel of the Real Property (other than the OREO),
or such other evidence of title reasonably acceptable to Peoples. Association shall also provide to Peoples updated title reports,
abstracts or surveys on such Real Property (other than the OREO) at the Closing, as Peoples shall reasonably request. Peoples
shall pay the costs of any such updated reports, abstracts or surveys.

 

Section
4.7            Environmental
Reports. Association shall provide Peoples copies of any environmental reports it has obtained or received with respect
to the Real Property within five business days after the date hereof. Peoples, in its discretion, within 20 days after the date
hereof, shall order a phase one and/or phase two environmental report with respect to any real estate of the Association; provided,
however, that no such reports may be requested with respect to single family non-agricultural property of one acre or less unless
Peoples has reason to believe that such property might contain any waste materials or otherwise might be contaminated. Peoples
shall have 15 business days from the receipt of any such environmental reports to notify the Association of any dissatisfaction
with the contents of such reports. Should the cost of taking all remedial or other corrective actions and measures with respect
to all of such real estate, (i) required by applicable law, or (ii) recommended or suggested by such report or reports or prudent
in light of serious life, health or safety concerns, in the aggregate, exceed the sum of $10,000 as reasonably estimated by an
environmental expert retained for such purpose by Peoples and reasonably acceptable to the Association, or if the cost of such
actions and measures cannot be so reasonably estimated by such expert to be such amount or less with any reasonable degree of
certainty such circumstances shall be deemed an “Environmental Problem.” Upon the occurrence of an Environmental Problem,
Peoples shall have the right to terminate this Agreement. All costs of any phase one investigation and any phase two investigation
or environmental report requested pursuant to this Section which does not recommend or suggest the taking of any remedial or corrective
actions shall be at Peoples’ sole cost and expense. Association agrees to pay the costs of any phase two investigation prepared
or conducted at Peoples’ request pursuant to this Section which recommends or suggests the taking of remedial or corrective
action. Peoples does hereby agree to restore at its cost any property for which it has undertaken an environmental investigation
to the condition existing immediately prior to such investigation if the investigation does not recommend or suggest the taking
of remedial or corrective action.

 

Section
4.8            Employees.

 

(a)               
Peoples shall offer substantially similar salaries, duties and benefits as are available to similarly situated employees
of Peoples, to those employees of the Association whom Peoples elects to hire and who satisfy Peoples’ customary employment
requirements, including pre-employment interviews, investigations and employment conditions, uniformly applied by Peoples and Peoples’
employment needs. Peoples and the Association will establish a mutually acceptable process for the orderly interviewing of employees
for employment by Peoples; the Association will give Peoples a reasonable opportunity to interview the employees.

 

    	15

    	 

    

 

(b)              
Peoples shall give notices to the Association's employees terminated by it on or after the Effective Date as are
required for it to comply with the Consolidated Omnibus Reconciliation Act of 1985 (“COBRA”) or any applicable
state law with respect to continuation of healthcare coverage following the Effective Date. The Association shall provide such
continuation and/or conversion notices to the employees as are required under federal or state law as a result of the employee’s
termination of employment prior to the Effective Date. Peoples shall be responsible for providing such health continuation coverage
and performing such related responsibilities as required by law following the Effective Date.

 

(c)               
This Section 4.8 shall not confer any rights or benefits on any person other than Peoples and the Association, or
their respective successors and assigns, either as a third party beneficiary or otherwise.

 

(d)              
Peoples agrees that those employees of the Association who become employees of Peoples on the Effective Date (“Former
Association Employees”), while they remain employees of Peoples after the Effective Date will be provided with benefits
under employee benefit plans during their period of employment that are no less favorable in the aggregate than those provided
by Peoples to similarly situated employees of Peoples except as otherwise provided herein. Unused vacation time that has been accrued
as of the Effective Date by any Former Association Employees shall be paid to such employees at current rate of pay with applicable
taxes withheld by the Association on or before the Effective Date. Except as hereinafter provided, at the Effective Date, Peoples
will amend or cause to be amended each employee benefit and welfare plan of Peoples in which Former Association Employees are eligible
to participate, to the extent necessary and allowable under applicable law, so that as of the Effective Date:

 

(i)                
such plans take into account for purposes of eligibility, participation, vesting, and benefit accrual (except that
there shall not be any benefit accrual for past service under any qualified defined benefit pension plan), the service of such
employees with the Association as if such service were with Peoples;

 

(ii)              
Former Association Employees are not subject to any waiting periods or pre-existing condition limitations under the
medical, dental and health plans of Peoples in which they are eligible to participate and may commence participation in such plans
on the Effective Date unless (and only during periods) Peoples elects to continue any such employee welfare benefit plans of the
Association;

 

(iii)            
for purposes of determining the entitlement of Former Association Employees to sick leave and vacation pay following
the Effective Date, the service of such employees with the Association shall be treated as if such service were with Peoples provided
that vacation time awarded under Section 4.8(d) shall be considered in determining those days under Peoples’ vacation pay
policy; and

 

    	16

    	 

    

 

(iv)            
Former Association Employees are first eligible to participate and will commence participating in Peoples’
qualified retirement plans on the first entry date coinciding with or following the Effective Date.

 

(e)               
 On the Effective Date, Peoples agrees to appoint John Freyek, President and CEO of the Association, to the Board
of Directors of Peoples as a Director Emeritus upon the same terms and conditions as are enjoyed by other Directors Emeritus of
Peoples to serve until John Freyek reaches the age of 76 and to pay him an annual fee of $12,248.50 for such service. In addition,
on the Effective Date, John Freyek and Peoples shall enter into a two-year consulting contract pursuant to which Mr. Freyek would
be paid $12,248.50 per year in consideration for his services as a consultant to Peoples to assist with the business and operations
of the Resulting Association.

 

(f)               
Subject to the terms and conditions of Section 4.8, Peoples agrees to retain Sheldon Cutler to serve as a Vice President
of Peoples following the Effective Date, on such terms and conditions as Peoples, the Association, and Cutler shall agree.

 

(g)              
Peoples agrees to honor the Association’s obligation to pay the health insurance premiums of Irene Rybarczyk,
who is currently 102 years of age, until her death. All other agreements to pay health insurance premiums of directors or executive
officers of the Association shall terminate as of the Effective Date.

 

Section
4.9            Association’s
401(k) Plan. Prior to the Effective Date, the Association:

 

(a)               
by resolution of its directors, shall terminate the First Federal Savings and Loan Association of Hammond 401(k)
Profit Sharing Plan (the “401(k) Plan”) as of the day before the Effective Date. The account balances of the
401(k) Plan participants, including any alternate payees or beneficiaries of deceased participants, including any accrued but unpaid
contributions, as determined by the 401(k) Plan administrator, shall thereafter be distributed or otherwise transferred in accordance
with the applicable plan termination provisions of the 401(k) Plan, as soon as administratively feasible following the plan termination
date; and

 

(b)              
shall continue to make all non-discretionary employer contributions which it is required to make to the 401(k) Plan,
including elective deferral contributions of those 401(k) Plan participants who are employed by the Association. In addition, the
Association shall continue in full force and effect, until the Effective Date: (i) the fidelity bond, if any, issued to the Association
as described in ERISA Sec. 4.12; and (ii) the ERISA fiduciary liability insurance policy currently in effect, if any, for the benefit
of the covered fiduciaries of the 401(k) Plan.

 

Section
4.10        Health Plans. After
the Effective Date, Peoples shall continue to maintain fully insured employee welfare benefit plans of the Association at the
Effective Date, until such time as Peoples determines, in its sole discretion, to modify or terminate any or all of those plans.
Claims incurred under the employee welfare benefit plans prior to plan termination shall be paid in accordance with the applicable
plan’s claim submission procedures and deadlines.

 

    	17

    	 

    

 

Section
4.11        Indemnification.

 

(a)               
For a period that will last as long as tail coverage is obtained under Section 4.11(c) of this Agreement, as provided
therein, Peoples agrees to indemnify and hold harmless each present and former director and officer of the Association (each, an
“Indemnified Party”), against any costs or expenses (including reasonable attorneys’ fees), judgments,
fines, amounts paid in settlement, losses, claims, damages or liabilities incurred in connection with any claim, action, suit,
proceeding or investigation, whether civil, criminal, administrative or investigative, arising out of matters existing or occurring
at or before the Effective Date (including the transactions contemplated by this Agreement), whether asserted or claimed before,
at or after the Effective Date, as they are from time to time incurred, in each case to the fullest extent such person would have
been indemnified or have the right to advancement of expenses pursuant to 12 CFR § 145.121.

 

(b)              
Any Indemnified Party wishing to claim indemnification under Section 4.11(a), upon learning of any such claim, action,
suit, proceeding or investigation, shall promptly notify Peoples thereof, but the failure to so notify shall not relieve Peoples
of any liability it may have hereunder to such Indemnified Party if such failure does not materially and substantially prejudice
Peoples.

 

(c)               
Peoples shall use its reasonable best efforts to maintain the Association’s existing directors’ and officers’
liability insurance policy covering persons who are currently covered by such insurance for the tail coverage period permitted
under such policy; provided, however, that in no event shall Peoples be obligated to expend, in order to maintain or provide insurance
coverage pursuant to this Section 4.11(c), an amount per annum in excess of 100% of the amount of the annual premiums paid by the
Association as of the date hereof for such insurance.

 

(d)              
If Peoples or any of its successors or assigns (i) consolidates with or merges into any other person or entity and
shall not be the continuing or surviving corporation or entity of such consolidation or merger, or (ii) transfers or conveys all
or substantially all of its properties and assets to any person or entity, then, and in each such case, to the extent necessary,
proper provision shall be made so that the successors and assigns of Peoples assume the obligations set forth in this Section 4.11.

 

(e)               
The provisions of this Section 4.11 are intended to be for the benefit of, and shall be enforceable by, each Indemnified
Party and his or her representatives.

 

Section
4.12        Core Data Processing Systems
Integration. From and after the date of this Agreement, the Association and Peoples agree to fully cooperate with and
assist one another in connection with the transition and conversion of the Association’s data processing files to the data
processing platform of Peoples. The Association and Peoples shall, and shall cause their respective data processing vendors to,
cooperate in such transition and conversion. In connection with such transition and conversion, the Association will take all
necessary actions to terminate the Master Agreement between Harland Financial Solutions, Inc. (“Harland”) and
the Association, dated September 15, 2009, and its related Exhibits and orders pertaining to the Association’s data processing
services and the Master Agreement between the Association and Fiserv Solutions, Inc. (“Fiserv”) dated January
31, 2010, and its related Exhibits and orders pertaining to the Association’s check processing services (collectively, the
“Processing Agreements”).

 

    	18

    	 

    

 

Section
4.13        Internal Controls.

 

(a)               
Between the date of this Agreement and the Effective Date, the Association shall maintain controls and procedures
that are effective to ensure that material information relating to the Association is made known to the President and Chief Executive
Officer and Chief Financial Officer of the Association to permit the Association to record, process, summarize and report financial
data in a timely and accurate matter; (ii) such officers shall promptly disclose to the Association’s auditors and audit
committee any significant deficiencies in the design or operation of internal controls which could adversely affect the Association’s
ability to record, process, summarize and report financial data, any material weaknesses identified in internal controls, and any
fraud, whether or not material, that involves management or other employees who have a significant role in the Association’s
internal controls; and (iii) the Association shall take appropriate corrective actions to address any such significant deficiencies
or material weaknesses identified in the internal controls.

 

(b)              
Between the date of this Agreement and the Effective Date, the Association shall, upon reasonable notice during normal
business hours, permit representatives of Peoples to meet with officers of the Association to discuss the integration, as of the
Effective Date, of appropriate disclosure controls and procedures and internal control over financial reporting relating to the
Association’s operations with the controls and procedures and internal control over financial reporting of Peoples for purposes
of assisting Peoples in compliance with the applicable provisions of the Sarbanes-Oxley Act of 2002 following the Effective Date.
The Association shall cause its employees and accountants to fully cooperate with Peoples, at Peoples’ sole expense, in the
preparation, documentation, review, testing and all other actions Peoples deems reasonably necessary to satisfy the Sarbanes-Oxley
Act of 2002.

 

Article
V

 

CONDITIONS precedent TO OBLIGATIONS OF ALL PARTIES

 

The obligations of
Peoples and the Association to cause the transactions contemplated hereby to be consummated shall be subject to the satisfaction
on or before the Effective Date of all of the following conditions, except as such parties may waive such conditions in writing:

 

Section
5.1            Approvals
and Consents. All orders, consents, approvals, agreements, forbearances and waivers necessary for the lawful consummation
of the transactions contemplated hereby have been received from each regulatory authority having jurisdiction over the Merger
Conversion, including the OCC, the FDIC, and the DFI in form and substance reasonably satisfactory to Peoples and its counsel.
All applicable statutory waiting periods shall have expired, and all necessary approvals and consents hereof shall have been provided
by third parties.

 

    	19

    	 

    

 

Section
5.2            Qualification
as Voluntary Supervisory Conversion. The application submitted to the OCC has been processed as a voluntary supervisory
conversion transaction, and the OCC shall not require the establishment of a liquidation account in connection with the Merger
Conversion or require a vote of the members of the Association on the Merger Conversion.

 

Section
5.3            Absence
of Proceedings and Litigation. No order shall have been entered that remains in force at the Effective Date restraining
or prohibiting the Merger Conversion in any legal, administrative or other proceeding, and no action or proceeding shall have
been instituted or threatened on or before the Effective Date seeking to restrain or prohibit the Merger Conversion.

 

Article
VI

 

CONDITIONS PRECEDENT TO THE OBLIGATIONS OF THE ASSOCIATION

 

The obligations of
the Association under this Agreement shall be subject to the fulfilment, at or prior to the Effective Date, of each of the following
conditions (unless waived in writing by the Association in the manner provided in Section 8.4 hereof):

 

Section
6.1            Opinion
of Counsel. The Association shall have received an opinion, addressed to the Association and dated the Effective Date,
of Barnes & Thornburg LLP in form and substance satisfactory to the Association to the following effect: (a) Peoples is duly
organized and validly existing under the laws of Indiana, and has full power and authority to carry on its business as now conducted
and to own or lease or operate its properties; (b) this Agreement has been duly authorized by all necessary corporate action on
the part of Peoples and constitutes a valid and binding obligation of Peoples enforceable in accordance with its terms subject
to applicable bankruptcy, insolvency and similar laws affecting creditor rights and remedies generally and to general principles
of equity, whether applied in a court of law or court of equity; and (c) no consent, approval, order or authorization of any governmental
authority is required in connection with the execution and delivery of this Agreement by Peoples or the consummation on the part
of Peoples of the transactions contemplated by this Agreement, except for such consents, approvals, orders or authorizations as
shall have been obtained prior to the Effective Date.

 

Section
6.2            Representations,
Warranties and Covenants; Performance by Peoples. The representations and warranties of Peoples contained in Article III
of this Agreement shall be true, complete and correct in all material respects as of the Effective Date, with the same force and
effect as though made as of the Effective Date, and the covenants of the Peoples in Article IV of this Agreement shall have been
complied with in all material respects.

 

Section
6.3            Officers’
Certificates. Peoples shall have furnished to the Association a certificate, dated the Effective Date, signed by the President
and the chief financial officer of Peoples, to the effect that all conditions set forth in Section 6.2, have been satisfied to
the best of their knowledge and belief.

 

    	20

    	 

    

 

Article
VII

 

CONDITIONS PRECEDENT TO THE OBLIGATIONS OF PEOPLES

 

The obligations of
Peoples under this Agreement shall be subject to the fulfilment, at or prior to the Effective Date, of each of the following conditions
(unless waived in writing by Peoples in the manner provided in Section 8.4 hereof).

 

Section
7.1            Regulatory
Approvals. None of the licenses, approvals and consents of any relevant federal, state or other regulatory agency required
for the Merger Conversion shall have imposed any conditions upon Peoples or the Merger Conversion that Peoples, in its sole discretion,
concludes are unduly burdensome.

 

Section
7.2            Representations,
Warranties and Covenants; Performance by the Association. The representations and warranties of the Association contained
in Article II of this Agreement shall be true, complete and correct in all material respects as of the Effective Date, with the
same force and effect as though made as of the Effective Date, and the covenants of the Association in Article IV of this Agreement
shall have been complied with in all material respects.

 

Section
7.3            Officers’
Certificates. The Association shall have furnished to Peoples a certificate, dated the Effective Date, signed by the President
and the chief financial officer of the Association, to the effect that all conditions set forth in Section 7.2, have been satisfied
to the best of their knowledge and belief.

 

Section
7.4            Opinion
of Counsel. Peoples shall have received an opinion of Enslen, Enslen & Matthews addressed to it and dated the Effective
Date, in the form and substance satisfactory to Peoples, to the following effect: (a) the Association is a mutual savings association,
and the Association is duly organized, validly existing and in good standing under federal law, and has full power and authority
to carry on its business as now conducted and to own or lease or operate its properties, (b) this Agreement has been duly authorized
by all necessary corporate action on the part of the Association and constitutes a valid and binding obligation of the Association
enforceable in accordance with its terms subject to applicable bankruptcy, insolvency and similar laws affecting creditor rights
and remedies generally and to general principles of equity, whether applied in a court of law or court of equity, (c) the execution
and delivery of this Agreement and the consummation of the transactions contemplated hereby will not conflict with or result in
a violation of, or constitute a default under any provision of the Charter or Bylaws of the Association, any order, statute or
regulation of the FDIC or the OCC applicable to the Association, or, to the best of its knowledge, any mortgage, indenture, lease,
agreement or other instrument, permit, concession, grant, franchise, license, judgment, decree, or ordinance to which the Association
is subject, and (d) no consent, approval, order or authorization of any governmental authority is required in connection with
the execution and delivery of this Agreement by the Association or the consummation on the part of the Association of the transactions
contemplated by this Agreement, except for such consents, approvals, orders or authorizations as shall have been obtained prior
to the Effective Date.

 

    	21

    	 

    

 

Section
7.5            Absence
of Material Adverse Effect. The Association shall not have experienced a Material Adverse Effect between the date of this
Agreement and the Effective Date.

 

Section
7.6            Termination
of Supervisory Agreement. The OCC shall terminate the Supervisory Agreement in its entirety on or before the Effective
Date.

 

Section
7.7            Closing
Book Value. The Closing Book Value of the Association at the end of the month prior to the Effective Date (excluding any
reduction which might occur as a result of reasonable expenses relating to the Merger Conversion) shall not be less than $800,000.
As used in the preceding sentence, the term “Closing Book Value” shall mean the amount of the members’
equity of the Association as of the end of the month immediately preceding the Effective Date, determined in accordance with GAAP.

 

Section
7.8            The
Association’s REO.  The value of the Association’s OREO calculated as at the end of the month prior to the
Effective Date, determined in accordance with GAAP and all applicable bank regulatory laws, rules, and regulations shall be no
greater than $2.2 million. As of the end of the month prior to the Effective Date, liquidation values of the Association’s
OREO shall not be less than 50% of the carry value on such date.

 

Section
7.9            Delinquent
Loans. The aggregate amount of the Association’s Delinquent Loans as of the end of the month prior to the Effective
Date (the “Computation Date”) does not exceed 7.0% of total loans. The Association’s Delinquent Loans
shall mean the total of (i) all loans with principal or interest that are 30 days or more past due; (ii) all loans with principal
or interest that are nonaccruing; and (iii) restructured and impaired loans.

 

Section
7.10        Maximum Processing Agreement
Penalty. The total fees required to terminate the Processing Agreements, including deconversion fees, shall not exceed
$265,000 and Harland and Fiserve shall have signed releases indicating they have been paid in full upon the termination of the
Processing Agreements for an aggregate amount not exceeding such amount.

 

Section
7.11        Loan Values. The
aggregate market value of the Association’s loans as at the end of the month prior to the Effective Date shall not be less
than 90% of the value recorded on the Association’s books for such loans on such date.

 

Article
VIII

 

TERMINATION, AMENDMENT AND WAIVER

 

Section
8.1            Termination.
This Agreement may be terminated and abandoned at any time prior to the Effective Date:

 

(a)               
by mutual consent of the respective Boards of Directors of the Association and Peoples evidenced by appropriate resolutions;
or

 

(b)              
by Peoples if (i) any representation or warranty of the Association set forth in Article II shall be found to be
or to have become untrue, incomplete or misleading in any material respect and such breach has not been cured within 15 days following
receipt by the Association of notice of such discovery, (ii) if any of the covenants of the Association contained in Article IV
have not been substantially performed in all material respects and such failure has not been cured within 15 days of receipt of
notice Peoples of such failure, or (iii) if any of the conditions provided in Articles V or VII of this Agreement shall not have
been fulfilled and shall not have been waived by June 30, 2014; or

 

    	22

    	 

    

 

(c)               
by the Association if (i) any representation or warranty of Peoples set forth in Article III shall be found to be
or to have become untrue, incomplete or misleading in any material respect and such breach has not been cured within 15 days following
receipt by the Association of notice of such discovery, (ii) if any of the covenants of Peoples contained in Article IV have not
been substantially performed in all material respects and such failure has not been cured within 15 days of receipt of notice from
the Association of such failure, or (iii) if any of the conditions provided in Articles V or VI of this Agreement shall not have
been fulfilled and shall not have been waived by June 30, 2014; or

 

(d)              
by either the Association or Peoples in the event the transactions contemplated by this Agreement are not consummated
on or prior to June 30, 2014.

 

Section
8.2            Effect
of Termination. If this Agreement is terminated as provided for in Section 8.1 hereinabove, (a) this Agreement shall forthwith
become wholly void, of no effect and without liability to any party to this Agreement, except with respect to Section 9.1 hereof,
and (b) each party hereto shall pay its or his own fees and expenses incident to the negotiation, preparation and execution of
this Agreement and the obtaining of the necessary approvals thereof, including fees and expenses of its counsel, accountants,
financial advisors and other experts. Notwithstanding the foregoing, termination of this Agreement shall not relieve a beaching
party from liability for any willful breach of this Agreement giving rise to such termination.

 

Section
8.3            Amendment.
The parties hereto may amend, modify or supplement this Agreement only by an agreement in writing executed and delivered
by the Association and Peoples.

 

Section
8.4            Extension;
Waiver. At any time prior to the Effective Date, Peoples or the Association may (a) extend the time for the performance
of any of the obligations or acts of the other, (b) waive any inaccuracies in the representations and warranties of the other
party contained herein or in any document or instrument pursuant hereto, and (c) waive compliance with any of the agreements,
covenants or conditions contained herein. Any agreement on the part of a party hereto to any such extension or waiver shall be
valid only if set forth in an instrument in writing duly executed and delivered on behalf of such party.

 

    	23

    	 

    

 

Article
IX

 

MISCELLANEOUS

 

Section
9.1            Confidentiality.
All information about the Association obtained by Peoples and its agents and all information about Peoples obtained by
the Association, will be held in strict confidence by the parties, except to the extent that such information (i) was already
known to them, (ii) hereafter becomes lawfully obtainable from other sources, or (iii) is required to be disclosed by the party
obtaining the information in any documents to be filed with any governmental agency or authority, but only in connection with
such filing, and all copies thereof will be returned promptly to the party supplying the information at its request in the event
the transactions contemplated hereby are not consummated. Neither party shall publicly disclose any information concerning the
transactions contemplated hereby without coordinating its disclosure with the other party.

 

Section
9.2            Expenses.
Each of the parties hereto shall assume and bear all expenses, costs and fees incurred or assumed by such party in the
preparation and execution of this Agreement and in complying with the covenants and conditions herein. The Association acknowledges
and agrees that the fees payable to Crowe Horwath LLP for the preparation of the tax opinion required for the Form AC and the
legal fees of its counsel in reviewing and revising the regulatory applications required for the Merger Conversion shall be a
cost of the Association. Peoples acknowledges and agrees that the costs of any examination of the Association by the DFI in connection
with the transactions contemplated by this Agreement shall be a cost of Peoples.

 

Section
9.3            Modification
of Structure. Peoples shall have the right, at its option to cause the transaction to be structured in a manner other
than as set forth in this Agreement, provided that such change of structure shall be no less acceptable to the regulatory authorities
required to approve the transaction than the structure set forth in this Agreement. If such a change of structure is adopted,
the terminology of this Agreement shall be deemed modified to the terminology that would correctly denote the revised structure
of the transaction.

 

Section
9.4            Notices.  All
notices and other communications pursuant to this Agreement shall be deemed to have been duly given if in writing and
delivered personally or if mailed, first class, postage prepaid, as follows:

 

If to the Association, to:

 

First Federal Savings & Loan Association of Hammond

130 Rimbach Street

Hammond, Indiana 46320

		Attn:	John A. Freyek
	 	 	President and CEO

 

with a copy to:

 

William T. Enslen, Esq.

Enslen, Enslen & Matthews

142 Rimbach Street

Hammond, Indiana 46320

 

    	24

    	 

    

 

If to Peoples, to:

 

Peoples Bank SB

9204 Columbia Avenue

Munster, Indiana 46321

		Attn:	David A. Bochnowski
	 	 	President and CEO

 

with a copy to:

 

Claudia V. Swhier, Esq.

Barnes & Thornburg LLP

11 South Meridian Street

Indianapolis, Indiana 46204

 

Section
9.5            No
Third Party Beneficiaries. Except as provided in Section 4.11(e) hereof, this Agreement is not intended nor shall it be
construed to create any express or implied rights in any third parties.

 

Section
9.6            Survival.
None of the representations, warranties, covenants and other agreements in this Agreement or in any instrument delivered
pursuant to this Agreement, other than those contained in Sections 8.2 and 9.1 and in Section 9.6 of this Agreement, shall survive
the termination of this Agreement if this Agreement is terminated prior to the Effective Date. None of the representations, warranties,
covenants and other agreements in this Agreement or in any instrument delivered pursuant to this Agreement, including any rights
arising out of any breach of such representations, warranties, covenants and other agreements, shall survive the Effective Date,
except for those covenants and agreements, which by their terms apply or are to be performed in whole or in part after the Effective
Date.

 

Section
9.7            Specific
Performance. The parties hereto agree that irreparable damage would occur in the event any covenants in this Agreement
were not performed in accordance with their specific terms or otherwise were materially breached. It is accordingly agreed that,
without the necessity of proving actual damages or posting bond or other security, the parties shall be entitled to temporary
and/or permanent injunction or injunctions to prevent breaches of such performance and to specific enforcement of the terms and
provisions in addition to any other remedy to which they may be entitled, at law or in equity.

 

Section
9.8            Headings,
Entire Agreement. The headings contained in this Agreement are for reference purposes only and shall not affect in any
way the meaning or interpretation of this Agreement. This Agreement constitutes the entire agreement between the parties hereto
and supersedes and replaces any prior written or oral agreements or understandings between them relating to the subject matter
hereof.

 

Section
9.9            Counterparts.
This Agreement may be executed in multiple counterparts, each of which shall be deemed an original, and all of which shall
constitute one and the same instrument. A telecopy, facsimile, or email transmission of a signed counterpart of this Agreement
will be sufficient to bind the party or parties whose signature(s) appear thereon.

 

    	25

    	 

    

 

Section
9.10        Binding Effect. Except
as otherwise provided in Section 9.3 hereof, this Agreement shall not be assignable by either Peoples or the Association.

 

Section
9.11        Governing Law. This
Agreement and the legal relationships between the parties shall be governed by and construed in accordance with the laws of the
State of Indiana, without taking into account provisions regarding the choice of law, except to the extent that certain matters
may be governed as a matter of law by federal law.

 

    	26

    	 

    

 

SIGNATURES

 

IN WITNESS WHEREOF,
the parties hereto have duly executed this Agreement as of the date first above written.

 

	 	Peoples Bank SB
	Date:  December 20, 2013	 	 
	 	By:	/s/ David A. Bochnowski
	Attest:	 	 
	 	Its:	Chairman and Chief Executive Officer
	/s/ Leane English Cerven	 	 
	Leane English Cerven, Secretary	 
	 	First Federal Savings & Loan Association of Hammond
	Date:  December 16, 2013	 	 
	 	By:	/s/ John A. Freyek
	Attest:	 	 
	 	Its:	President and Chief Executive Officer
	/s/ John Tokarz	 	 
	John Tokarz, Secretary	 	 

 

    	27

    	 

    

  

Exhibit 1.4

 

Plan of Merger

of

Peoples Bank SB,

an Indiana savings bank,

and

First Federal Savings and Loan Association
of Hammond,

a federal savings association

 

1.The names of the corporations proposing
to merge (the “Merger”) are First Federal Savings and Loan Association of Hammond, a federal savings association (the
“Association” or “Merging Corporation”) and Peoples Bank SB, an Indiana savings bank (“Peoples”
or the “Surviving Corporation”), pursuant to an Agreement and Plan of Voluntary Supervisory Merger Conversion dated
December 20, 2013.

 

2.The Surviving Corporation has 1,000
authorized shares of common stock of no par value, of which 1,000 shares of common stock are presently issued and outstanding.

 

3.The Merging Corporation has 1,000
authorized shares of common stock, $.01 par value per share, of which 100 shares of common stock are presently issued and outstanding.

 

4.The effective date of the Merger shall
mean the date and time specified in the Articles of Merger relating to the Merger that are filed with the Indiana Secretary of
State (the "Effective Date").

 

5.Upon the Effective Date, the Association
shall merge into and with into Peoples. Peoples shall be the surviving corporation in the Merger (the “Surviving Corporation”)
and the separate existence of the Association (the “Merging Corporation”) shall thereupon cease.

 

6.Upon the Effective Date:

 

		(a)	each of the 1,000 shares of common stock, without par value, of Peoples outstanding immediately prior to the Effective Date
of the Merger shall remain outstanding immediately after the Effective Date of the Merger.

 

		(b)	each of the 100 shares of the common stock, $.01 par value per share, of the Association outstanding immediately prior to the
Effective Date of the Merger shall be cancelled without consideration therefor.

 

7.The Surviving Corporation shall, without
further transfer, succeed to and thereafter possess and enjoy all of the public and private rights, privileges, immunities, powers
and franchises, and be subject to all of the public and private restrictions, liabilities and duties, of each of the Association
and Peoples; all property (real, personal and mixed) of, all debts (on whatever account) due to, and all choses in action and each
and every other interest of or belonging or due to, each of the Association and Peoples shall be taken by and deemed to be transferred
to and vested in the Surviving Corporation without further act, deed or other instrument; and the title to any real estate or any
interest therein, vested by deed or otherwise in either of the Association or Peoples, shall not revert or be in any way impaired
by reason of the Merger.

 

    	 

    	 

    

 

8.All rights of creditors and all liens
(if any) upon the property of either of Peoples or the Association shall be preserved unimpaired by the Merger; and all debts,
liabilities, obligations and duties (collectively, “Obligations”) of either of Peoples or the Association shall become
the responsibility and liability of the Surviving Corporation, and may be enforced against it to the same extent as if such Obligations
had been incurred or contracted by it.

 

9.Each Deposit Account in the Association
at the time of the consummation of the Merger shall become, without further action by the holder, a Deposit Account in the Surviving
Corporation equivalent in withdrawable amount to the withdrawable value, and subject to the same terms and conditions (except as
to voting and liquidation rights) as such Deposit Account in the Association immediately preceding consummation of the Merger.
Holders of Deposit Accounts in the Surviving Corporation shall not, as such holders, have any voting rights. For purposes of the
foregoing, the Deposit Accounts of the Association shall mean all withdrawable deposit accounts, including all savings accounts,
certificate accounts, and demand accounts, of the Association.

 

10.The Articles of Conversion of Peoples
shall continue to be the Articles of Conversion of the Surviving Corporation upon and after the Effective Date until changed or
amended in accordance with the terms thereof.

 

11.The By-Laws of Peoples shall continue
to be the By-Laws of the Surviving Corporation upon and after the Effective Date until changed or amended in accordance with the
terms thereof.

 

12.The directors of the Surviving Corporation
immediately prior to the Effective Date shall continue to hold such positions following the Merger, and such directors shall hold
office until such time as their successors shall be duly elected and qualified. The officers of the Surviving Corporation shall
be comprised of those persons serving as officers of Peoples immediately prior to the Effective Date and Sheldon Cutler who shall
become a Vice President of the Surviving Corporation.

 

13.The home office of Peoples at 9204
Columbia Avenue, Munster, Indiana, shall remain the home office of the Surviving Corporation. The Surviving Corporation will operate
branch offices at the locations of Peoples’ branch offices immediately prior to the Effective Date and at the home office
and branch office of the Association immediately prior to the Effective Date.

 

    	2INSPIREMD, INC.

 

2013 LONG-TERM INCENTIVE PLAN

 

The InspireMD, Inc.
2013 Long-Term Incentive Plan (the “Plan”) was adopted by the Board of Directors of InspireMD, Inc.,
a Delaware corporation (the “Company”), effective as of October 25, 2013, subject to approval by the
Company’s stockholders.

 

Article
1

PURPOSE

 

The purpose of the
Plan is to attract and retain the services of key Employees, key Contractors, and Outside Directors of the Company and its Subsidiaries
(together, the “Group”) and to provide such persons with a proprietary interest in the Company through
the granting of Incentive Stock Options, Nonqualified Stock Options, Stock Appreciation Rights, Restricted Stock, Restricted Stock
Units, Performance Awards, Dividend Equivalent Rights, and Other Awards, whether granted singly, or in combination, or in tandem,
that will:

 

(a)          increase
the interest of such persons in the Group’s welfare;

 

(b)          furnish
an incentive to such persons to continue their services for the Company or its Subsidiaries; and

 

(c)          provide
a means through which the Group may attract able persons as Employees, Contractors, and Outside Directors.

 

This Plan is intended
serve as an “umbrella” plan for the Company and the entire Group worldwide. Therefore, if so required, appendices may
be added to the Plan for the various international Subsidiaries in order to accommodate local regulations that do not correspond
to the scope of the Plan, at the discretion of the Board. Any such appendices that the Company approves for purposes of using this
Plan for an international Subsidiary will not affect the terms of this Plan for any other country.

 

Attached hereto as
Appendix A is the InspireMD, Inc. 2013 Employee Stock Incentive Plan (the “Israeli Plan”), designated
for the purpose of making grants pursuant to Sections 102 and 3(i) of the Israeli Income Tax Ordinance (New Version), 1961 to Israeli
employees and officers of the Group and any other service providers or control holders of the Company who are subject to Israeli
Income Tax.

 

With respect to Reporting
Participants, the Plan and all transactions under the Plan are intended to comply with all applicable conditions of Rule 16b-3
promulgated under the Exchange Act. To the extent any provision of the Plan or action by the Committee fails to so comply, such
provision or action shall be deemed null and void ab initio, to the extent permitted by law and deemed advisable by the
Committee.

 

Article
2

DEFINITIONS

 

For the purpose of
the Plan, unless the context requires otherwise, the following terms shall have the meanings indicated:

 

    	 

    	 

    

 

2.1          “Applicable
Law” means all legal requirements relating to the administration of equity incentive plans and the issuance and distribution
of shares of Common Stock, if any, under applicable corporate laws, applicable securities laws, the rules of any exchange or inter-dealer
quotation system upon which the Company’s securities are listed or quoted, the rules of any foreign jurisdiction applicable
to Incentives granted to residents therein, and any other applicable law, rule or restriction.

 

2.2          “Award”
means the grant of any Incentive Stock Option, Nonqualified Stock Option, Restricted Stock, SAR, Restricted Stock Units, Performance
Award, Dividend Equivalent Right or Other Award, whether granted singly or in combination or in tandem (each individually referred
to herein as an “Incentive”).

 

2.3          “Award
Agreement” means a written agreement between a Participant and the Company which sets out the terms of the grant
of an Award.

 

2.4          “Award
Period” means the period set forth in the Award Agreement during which one or more Incentives granted under an Award
may be exercised.

 

2.5          “Board”
means the board of directors of the Company.

 

2.6          “Change
in Control” means any of the following, except as otherwise provided herein: (i) any consolidation, merger or share
exchange of the Company in which the Company is not the continuing or surviving corporation or pursuant to which shares of the
Company’s Common Stock would be converted into cash, securities or other property, other than a consolidation, merger or
share exchange of the Company in which the holders of the Company’s Common Stock immediately prior to such transaction have
the same proportionate ownership of Common Stock of the surviving corporation immediately after such transaction; (ii) any sale,
lease, exchange or other transfer (excluding transfer by way of pledge or hypothecation) in one transaction or a series of related
transactions, of all or substantially all of the assets of the Company; (iii) the stockholders of the Company approve any plan
or proposal for the liquidation or dissolution of the Company; (iv) the cessation of control (by virtue of their not constituting
a majority of directors) of the Board by the individuals (the “Continuing Directors”) who (x) at the
date of this Plan were directors or (y) become directors after the date of this Plan and whose election or nomination for election
by the Company’s stockholders was approved by a vote of at least two-thirds (2/3rds) of the directors then in
office who were directors at the date of this Plan or whose election or nomination for election was previously so approved; (v)
the acquisition of beneficial ownership (within the meaning of Rule 13d-3 under the Exchange Act) of an aggregate of fifty percent
(50%) or more of the voting power of the Company’s outstanding voting securities by any person or group (as such term is
used in Rule 13d-5 under the Exchange Act) who beneficially owned less than fifty percent (50%) of the voting power of the Company’s
outstanding voting securities on the date of this Plan; provided, however, that notwithstanding the foregoing, an
acquisition shall not constitute a Change in Control hereunder if the acquirer is (x) a trustee or other fiduciary holding securities
under an employee benefit plan of the Company and acting in such capacity, (y) a Subsidiary of the Company or a corporation owned,
directly or indirectly, by the stockholders of the Company in substantially the same proportions as their ownership of voting securities
of the Company or (z) any other person whose acquisition of shares of voting securities is approved in advance by a majority of
the Continuing Directors; or (vi) in a Title 11 bankruptcy proceeding, the appointment of a trustee or the conversion of a case
involving the Company to a case under Chapter 7.

 

Notwithstanding the
foregoing provisions of this Section 2.6, if an Award issued under the Plan is subject to Section 409A of the Code, then
an event shall not constitute a Change in Control for purposes of such Award under the Plan unless such event also constitutes
a change in the Company’s ownership, its effective control or the ownership of a substantial portion of its assets within
the meaning of Section 409A of the Code.

 

    	- 2 -

    	 

    

 

2.7           “Code”
means the United States Internal Revenue Code of 1986, as amended.

 

2.8          “Committee”
means the committee appointed or designated by the Board to administer the Plan in accordance with Article 3 of this Plan.

 

2.9          “Common
Stock” means the common stock, par value $0.0001 per share, which the Company is currently authorized to issue or
may in the future be authorized to issue, or any securities into which or for which the common stock of the Company may be converted
or exchanged, as the case may be, pursuant to the terms of this Plan.

 

2.10          “Company”
means InspireMD, Inc., a Delaware corporation, and any successor entity.

 

2.11          “Contractor”
means any natural person, who is not an Employee, rendering bona fide services to the Company or a Subsidiary, with compensation,
pursuant to a written independent contractor agreement between such person (or any entity employing such person) and the Company
or a Subsidiary, provided that such services are not rendered in connection with the offer or sale of securities in a capital raising
transaction and do not directly or indirectly promote or maintain a market for the Company’s securities.

 

2.12          “Corporation”
means any entity that (i) is defined as a corporation under Section 7701 of the Code and (ii) is the Company or is in an unbroken
chain of corporations (other than the Company) beginning with the Company, if each of the corporations other than the last corporation
in the unbroken chain owns stock possessing a majority of the total combined voting power of all classes of stock in one of the
other corporations in the chain. For purposes of clause (ii) hereof, an entity shall be treated as a “corporation”
if it satisfies the definition of a corporation under Section 7701 of the Code.

 

2.13          “Date
of Grant” means the effective date on which an Award is made to a Participant as set forth in the applicable Award
Agreement; provided, however, that solely for purposes of Section 16 of the Exchange Act and the rules and regulations promulgated
thereunder, the Date of Grant of an Award shall be the date of stockholder approval of the Plan if such date is later than the
effective date of such Award as set forth in the Award Agreement.

 

2.14          “Dividend
Equivalent Right” means the right of the holder thereof to receive credits based on the cash dividends that would
have been paid on the shares of Common Stock specified in the Award if such shares were held by the Participant to whom the Award
is made.

 

2.15          “Employee”
means a common law employee (as defined in accordance with the Regulations and Revenue Rulings then applicable under Section 3401(c)
of the Code) of the Company or any Subsidiary of the Company; provided, however, in the case of individuals whose
employment status, by virtue of their employer or residence, is not determined under Section 3401(c) of the Code, “Employee”
shall mean an individual treated as an employee for local payroll tax or employment purposes by the applicable employer under Applicable
Law for the relevant period.

 

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

 

2.17          “Executive
Officer” means an officer of the Company or a Subsidiary subject to Section 16 of the Exchange Act or a “covered
employee” as defined in Section 162(m)(3) of the Code.

 

    	- 3 -

    	 

    

 

2.18          “Fair
Market Value” means, as of a particular date, (a) if the shares of Common Stock are listed
on any established national securities exchange, the closing sales price per share of Common Stock on the consolidated transaction
reporting system for the principal securities exchange for the Common Stock on that date, or, if there shall have been no such
sale so reported on that date, on the last preceding date on which such a sale was so reported; (b) if the shares of Common Stock
are not so listed, but are quoted on an automated quotation system, the closing sales price per share of Common Stock reported
on the automated quotation system on that date, or, if there shall have been no such sale so reported on that date, on the last
preceding date on which such a sale was so reported; (c) if the Common Stock is not so listed or quoted, the mean between the closing
bid and asked price on that date, or, if there are no quotations available for such date, on the last preceding date on which such
quotations shall be available, as reported by the OTC Bulletin Board operated by the Financial Industry Regulation Authority,
Inc. or the OTC Markets Group Inc., formerly known as Pink OTC Markets Inc.; or (d) if none of the above
is applicable, such amount as may be determined by the Committee (acting on the advice of an Independent Third Party, should the
Committee elect in its sole discretion to utilize an Independent Third Party for this purpose), in good faith, to be the fair market
value per share of Common Stock. The determination of Fair Market Value shall, where applicable, be in compliance with Section
409A of the Code.

 

2.19          “Incentive”
is defined in Section 2.2 hereof.

 

2.20          “Incentive
Stock Option” means an incentive stock option within the meaning of Section 422 of the Code, granted pursuant to
this Plan.

 

2.21          “Independent
Third Party” means an individual or entity independent of the Company having experience in providing investment banking
or similar appraisal or valuation services and with expertise generally in the valuation of securities or other property for purposes
of this Plan. The Committee may utilize one or more Independent Third Parties.

 

2.22          “Nonqualified
Stock Option” means a nonqualified stock option, granted pursuant to this Plan, which is not an Incentive Stock Option.

 

2.23          “Option
Price” means the price which must be paid by a Participant upon exercise of a Stock Option to purchase a share of
Common Stock.

 

2.24          “Other
Award” means an Award issued pursuant to Section 6.9 hereof.

 

2.25          “Outside
Director” means a director of the Company who is not an Employee or a Contractor.

 

2.26          “Participant”
means an Employee or Contractor of the Company or a Subsidiary or an Outside Director to whom an Award is granted under this Plan.

 

2.27          “Performance
Award” means an Award hereunder of cash, shares of Common Stock, units or rights based upon, payable in, or otherwise
related to, Common Stock pursuant to Section 6.7 hereof.

 

2.28          “Performance
Goal” means any of the goals set forth in Section 6.10 hereof.

 

2.29          “Plan”
means this InspireMD, Inc. 2013 Long-Term Incentive Plan, as amended from time to time.

 

    	- 4 -

    	 

    

 

2.30          “Reporting
Participant” means a Participant who is subject to the reporting requirements of Section 16 of the Exchange Act.

 

2.31          “Restricted
Stock” means shares of Common Stock issued or transferred to a Participant pursuant to Section 6.4 of this
Plan which are subject to restrictions or limitations set forth in this Plan and in the related Award Agreement.

 

2.32          “Restricted
Stock Units” means units awarded to Participants pursuant to Section 6.6 hereof, which are convertible into
Common Stock at such time as such units are no longer subject to restrictions as established by the Committee.

 

2.33          “Retirement”
means any Termination of Service solely due to retirement upon or after attainment of age sixty-five (65), or permitted early retirement
as determined by the Committee; provided, however, in the case of Participants who reside in the European Economic
Area, “Retirement” shall mean any Termination of Service as of a date they are eligible for mandatory retirement benefits
under local law, without regard to age.

 

2.34          “SAR”
or “Stock Appreciation Right” means the right to receive an amount, in cash and/or Common Stock, equal
to the excess of the Fair Market Value of a specified number of shares of Common Stock as of the date the SAR is exercised (or,
as provided in the Award Agreement, converted) over the SAR Price for such shares.

 

2.35          “SAR
Price” means the exercise price or conversion price of each share of Common Stock covered by a SAR, determined on
the Date of Grant of the SAR.

 

2.36          “Stock
Option” means a Nonqualified Stock Option or an Incentive Stock Option.

 

2.37          “Subsidiary”
means (i) any corporation in an unbroken chain of corporations beginning with the Company, if each of the corporations other than
the last corporation in the unbroken chain owns stock possessing a majority of the total combined voting power of all classes of
stock in one of the other corporations in the chain, (ii) any limited partnership, if the Company or any corporation described
in item (i) above owns a majority of the general partnership interest and a majority of the limited partnership interests entitled
to vote on the removal and replacement of the general partner, and (iii) any partnership or limited liability company, if the partners
or members thereof are composed only of the Company, any corporation listed in item (i) above or any limited partnership listed
in item (ii) above. “Subsidiaries” means more than one of any such corporations, limited partnerships,
partnerships or limited liability companies.

 

2.38          “Termination
of Service” occurs when a Participant who is (i) an Employee of the Company or any Subsidiary ceases to serve as
an Employee of the Company and its Subsidiaries, for any reason; (ii) an Outside Director of the Company or a Subsidiary ceases
to serve as a director of the Company and its Subsidiaries for any reason; or (iii) a Contractor of the Company or a Subsidiary
ceases to serve as a Contractor of the Company and its Subsidiaries for any reason. Except as may be necessary or desirable to
comply with applicable federal or state law, a “Termination of Service” shall not be deemed to have occurred when a
Participant who is an Employee becomes an Outside Director or Contractor or vice versa. If, however, a Participant who is an Employee
and who has an Incentive Stock Option ceases to be an Employee but does not suffer a Termination of Service, and if that Participant
does not exercise the Incentive Stock Option within the time required under Section 422 of the Code upon ceasing to be an Employee,
the Incentive Stock Option shall thereafter become a Nonqualified Stock Option. Notwithstanding the foregoing provisions of this
Section 2.38, in the event an Award issued under the Plan is subject to Section 409A of the Code, then, in lieu of the foregoing
definition and to the extent necessary to comply with the requirements of Section 409A of the Code, the definition of “Termination
of Service” for purposes of such Award shall be the definition of “separation from service” provided for under
Section 409A of the Code and the regulations or other guidance issued thereunder.

 

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2.39          “Total
and Permanent Disability” means a Participant is qualified for long-term disability benefits under the Company’s
or Subsidiary’s disability plan or insurance policy; or, if no such plan or policy is then in existence or if the Participant
is not eligible to participate in such plan or policy, that the Participant, because of a physical or mental condition resulting
from bodily injury, disease, or mental disorder, is unable to perform his or her duties of employment for a period of six (6) continuous
months, as determined in good faith by the Committee, based upon medical reports or other evidence satisfactory to the Committee;
provided that, with respect to any Incentive Stock Option, Total and Permanent Disability shall have the meaning
given it under the rules governing Incentive Stock Options under the Code. Notwithstanding the foregoing provisions of this Section
2.39, in the event an Award issued under the Plan is subject to Section 409A of the Code, then, in lieu of the foregoing definition
and to the extent necessary to comply with the requirements of Section 409A of the Code, the definition of “Total and Permanent
Disability” for purposes of such Award shall be the definition of “disability” provided for under Section 409A
of the Code and the regulations or other guidance issued thereunder.

 

Article
3

ADMINISTRATION

 

3.1          General Administration;
Establishment of Committee. Subject to the terms of this Article 3, the Plan shall be administered by the Board
or such committee of the Board as is designated by the Board to administer the Plan (the “Committee”).
The Committee shall consist of not fewer than two persons. Any member of the Committee may be removed at any time, with or without
cause, by resolution of the Board. Any vacancy occurring in the membership of the Committee may be filled by appointment by the
Board. At any time there is no Committee to administer the Plan, any references in this Plan to the Committee shall be deemed to
refer to the Board.

 

Membership on the Committee
shall be limited to those members of the Board who are “outside directors” under Section 162(m) of the Code and “non-employee
directors” as defined in Rule 16b-3 promulgated under the Exchange Act. The Committee shall select one of its members to
act as its Chairman. A majority of the Committee shall constitute a quorum, and the act of a majority of the members of the Committee
present at a meeting at which a quorum is present shall be the act of the Committee.

 

3.2          Designation
of Participants and Awards.

 

(a)          The
Committee or the Board shall determine and designate from time to time the eligible persons to whom Awards will be granted and
shall set forth in each related Award Agreement, where applicable, the Award Period, the Date of Grant, and such other terms, provisions,
limitations, and performance requirements, as are approved by the Committee, but not inconsistent with the Plan. The Committee
shall determine whether an Award shall include one type of Incentive or two or more Incentives granted in combination or two or
more Incentives granted in tandem (that is, a joint grant where exercise of one Incentive results in cancellation of all or a portion
of the other Incentive). Although the members of the Committee shall be eligible to receive Awards, all decisions with respect
to any Award, and the terms and conditions thereof, to be granted under the Plan to any member of the Committee shall be made solely
and exclusively by the other members of the Committee, or if such member is the only member of the Committee, by the Board.

 

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(b)          Notwithstanding
Section 3.2(a), to the extent permitted by Applicable Law, the Board may, in its discretion and by a resolution adopted
by the Board, authorize one or more officers of the Company (an “Authorized Officer”) to (i) designate
one or more Employees as eligible persons to whom Awards will be granted under the Plan, and (ii) determine the number of shares
of Common Stock that will be subject to such Awards; provided, however, that the resolution of the Board granting
such authority shall (x) specify the total number of shares of Common Stock that may be made subject to the Awards, (y) set forth
the price or prices (or a formula by which such price or prices may be determined) to be paid for the purchase of the Common Stock
subject to such Awards, and (z) not authorize an officer to designate himself as a recipient of any Award.

 

3.3          Authority
of the Committee. The Committee, in its discretion, shall (i) interpret the Plan and Award Agreements, (ii) prescribe, amend,
and rescind any rules and regulations and sub-plans (including sub-plans for Awards made to Participants who are not resident in
the United States), as necessary or appropriate for the administration of the Plan, (iii) establish performance goals for an Award
and certify the extent of their achievement, and (iv) make such other determinations or certifications and take such other action
as it deems necessary or advisable in the administration of the Plan. Any interpretation, determination, or other action made or
taken by the Committee shall be final, binding, and conclusive on all interested parties. The Committee’s discretion set
forth herein shall not be limited by any provision of the Plan, including any provision which by its terms is applicable notwithstanding
any other provision of the Plan to the contrary.

 

The Committee may delegate
to officers of the Company, pursuant to a written delegation, the authority to perform specified functions under the Plan. Any
actions taken by any officers of the Company pursuant to such written delegation of authority shall be deemed to have been taken
by the Committee.

 

With respect to restrictions
in the Plan that are based on the requirements of Rule 16b-3 promulgated under the Exchange Act, Section 422 of the Code, Section
162(m) of the Code, the rules of any exchange or inter-dealer quotation system upon which the Company’s securities are listed
or quoted, or any other Applicable Law, to the extent that any such restrictions are no longer required by Applicable Law, the
Committee shall have the sole discretion and authority to grant Awards that are not subject to such mandated restrictions and/or
to waive any such mandated restrictions with respect to outstanding Awards.

 

Article
4

ELIGIBILITY

 

Any Employee (including
an Employee who is also a director or an officer), Contractor or Outside Director of the Company whose judgment, initiative, and
efforts contributed or may be expected to contribute to the successful performance of the Company is eligible to participate in
the Plan; provided that only Employees of a Corporation shall be eligible to receive Incentive Stock Options. The Committee, upon
its own action, may grant, but shall not be required to grant, an Award to any Employee, Contractor or Outside Director. Awards
may be granted by the Committee at any time and from time to time to new Participants, or to then Participants, or to a greater
or lesser number of Participants, and may include or exclude previous Participants, as the Committee shall determine. Except as
required by this Plan, Awards need not contain similar provisions. The Committee’s determinations under the Plan (including
without limitation determinations of which Employees, Contractors or Outside Directors, if any, are to receive Awards, the form,
amount and timing of such Awards, the terms and provisions of such Awards and the agreements evidencing same) need not be uniform
and may be made by it selectively among Participants who receive, or are eligible to receive, Awards under the Plan.

 

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Article
5

SHARES SUBJECT TO PLAN

 

5.1          Number Available
for Awards. Subject to adjustment as provided in Articles 11 and 12, the maximum number of shares of Common Stock
that may be delivered pursuant to Awards granted under the Plan is five million (5,000,000) shares, of which one hundred percent
(100%) may be delivered pursuant to Incentive Stock Options. Subject to adjustment pursuant to Articles 11 and 12,
the maximum number of shares of Common Stock with respect to which Stock Options or SARs may be granted to an Executive Officer
during any calendar year is one million (1,000,000) shares of Common Stock. Shares to be issued may be made available from authorized
but unissued Common Stock, Common Stock held by the Company in its treasury, or Common Stock purchased by the Company on the open
market or otherwise. During the term of this Plan, the Company will at all times reserve and keep available the number of shares
of Common Stock that shall be sufficient to satisfy the requirements of this Plan.

 

5.2          Reuse of
Shares. To the extent that any Award under this Plan shall be forfeited, shall expire or be canceled, in whole or in part,
then the number of shares of Common Stock covered by the Award or stock option so forfeited, expired or canceled may again be awarded
pursuant to the provisions of this Plan. In the event that previously acquired shares of Common Stock are delivered to the Company
in full or partial payment of the exercise price for the exercise of a Stock Option granted under this Plan, the number of shares
of Common Stock available for future Awards under this Plan shall be reduced only by the net number of shares of Common Stock issued
upon the exercise of the Stock Option. Awards that may be satisfied either by the issuance of shares of Common Stock or by cash
or other consideration shall be counted against the maximum number of shares of Common Stock that may be issued under this Plan
only during the period that the Award is outstanding or to the extent the Award is ultimately satisfied by the issuance of shares
of Common Stock. Awards will not reduce the number of shares of Common Stock that may be issued pursuant to this Plan if the settlement
of the Award will not require the issuance of shares of Common Stock, as, for example, a SAR that can be satisfied only by the
payment of cash. Notwithstanding any provisions of the Plan to the contrary, only shares forfeited back to the Company, shares
canceled on account of termination, expiration or lapse of an Award, shares surrendered in payment of the exercise price of an
option or shares withheld for payment of applicable employment taxes and/or withholding obligations resulting from the exercise
of an option shall again be available for grant of Incentive Stock Options under the Plan, but shall not increase the maximum number
of shares described in Section 5.1 above as the maximum number of shares of Common Stock that may be delivered pursuant
to Incentive Stock Options.

 

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Article
6

GRANT OF AWARDS

 

6.1          In General.

 

(a)          The
grant of an Award shall be authorized by the Committee and shall be evidenced by an Award Agreement setting forth the Incentive
or Incentives being granted, the total number of shares of Common Stock subject to the Incentive(s), the Option Price (if applicable),
the Award Period, the Date of Grant, and such other terms, provisions, limitations, and performance objectives, as are approved
by the Committee, but (i) not inconsistent with the Plan, (ii) to the extent an Award issued under the Plan is subject to Section
409A of the Code, in compliance with the applicable requirements of Section 409A of the Code and the regulations or other guidance
issued thereunder, and (iii) to the extent the Committee determines that an Award shall comply with the requirements of Section
162(m) of the Code, in compliance with the applicable requirements of Section 162(m) of the Code and the regulations and other
guidance issued thereunder. The Company shall execute an Award Agreement with a Participant after the Committee approves the issuance
of an Award. Any Award granted pursuant to this Plan must be granted within ten (10) years of the date of adoption of this Plan
by the Board. The Plan shall be submitted to the Company’s stockholders for approval; however, the Committee may grant Awards
under the Plan prior to the time of stockholder approval. Any such Award granted prior to such stockholder approval shall be made
subject to such stockholder approval. The grant of an Award to a Participant shall not be deemed either to entitle the Participant
to, or to disqualify the Participant from, receipt of any other Award under the Plan.

 

(b)          If
the Committee establishes a purchase price for an Award, the Participant must accept such Award within a period of thirty (30)
days (or such shorter period as the Committee may specify) after the Date of Grant by executing the applicable Award Agreement
and paying such purchase price.

 

(c)          Any
Award under this Plan that is settled in whole or in part in cash on a deferred basis may provide for interest equivalents to be
credited with respect to such cash payment. Interest equivalents may be compounded and shall be paid upon such terms and conditions
as may be specified by the grant.

 

6.2          Option Price.
The Option Price for any share of Common Stock which may be purchased under a Nonqualified Stock Option for any share of Common
Stock may be equal to or greater than the Fair Market Value of the share on the Date of Grant. The Option Price for any share of
Common Stock which may be purchased under an Incentive Stock Option must be at least equal to the Fair Market Value of the share
on the Date of Grant; if an Incentive Stock Option is granted to an Employee who owns or is deemed to own (by reason of the attribution
rules of Section 424(d) of the Code) more than ten percent (10%) of the combined voting power of all classes of stock of the Company
(or any parent or Subsidiary), the Option Price shall be at least one hundred ten percent (110%) of the Fair Market Value of the
Common Stock on the Date of Grant.

 

6.3          Maximum ISO
Grants. The Committee may not grant Incentive Stock Options under the Plan to any Employee which would permit the aggregate
Fair Market Value (determined on the Date of Grant) of the Common Stock with respect to which Incentive Stock Options (under this
and any other plan of the Company and its Subsidiaries) are exercisable for the first time by such Employee during any calendar
year to exceed $100,000. To the extent any Stock Option granted under this Plan which is designated as an Incentive Stock Option
exceeds this limit or otherwise fails to qualify as an Incentive Stock Option, such Stock Option (or any such portion thereof)
shall be a Nonqualified Stock Option. In such case, the Committee shall designate which stock will be treated as Incentive Stock
Option stock by causing the issuance of a separate stock certificate and identifying such stock as Incentive Stock Option stock
on the Company’s stock transfer records.

 

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6.4          Restricted
Stock. If Restricted Stock is granted to or received by a Participant under an Award (including a Stock Option), the Committee
shall set forth in the related Award Agreement: (i) the number of shares of Common Stock awarded, (ii) the price, if any, to be
paid by the Participant for such Restricted Stock and the method of payment of the price, (iii) the time or times within which
such Award may be subject to forfeiture, (iv) specified Performance Goals of the Company, a Subsidiary, any division thereof or
any group of Employees of the Company, or other criteria, which the Committee determines must be met in order to remove any restrictions
(including vesting) on such Award, and (v) all other terms, limitations, restrictions, and conditions of the Restricted Stock,
which shall be consistent with this Plan, to the extent applicable and in the event the Committee determines that an Award shall
comply with the requirements of Section 162(m) of the Code, in compliance with the requirements of Section 162(m) of the Code and
the regulations and other guidance issued thereunder and, to the extent Restricted Stock granted under the Plan is subject to Section
409A of the Code, in compliance with the applicable requirements of Section 409A of the Code and the regulations or other guidance
issued thereunder. The provisions of Restricted Stock need not be the same with respect to each Participant.

 

(a)          Legend
on Shares. The Company shall electronically register the Restricted Stock awarded to a Participant in the name of such Participant,
which shall bear an appropriate legend referring to the terms, conditions, and restrictions applicable to such Restricted Stock,
substantially as provided in Section 15.10 of the Plan. No stock certificate or certificates shall be issued with respect
to such shares of Common Stock, unless, following the expiration of the Restriction Period (as defined in Section 6.4(b)(i)(a)(i))
without forfeiture in respect of such shares of Common Stock, the Participant requests delivery of the certificate or certificates
by submitting a written request to the Committee (or such party designated by the Company) requesting delivery of the certificates.
The Company shall deliver the certificates requested by the Participant to the Participant as soon as administratively practicable
following the Company’s receipt of such request.

 

(b)          Restrictions
and Conditions. Shares of Restricted Stock shall be subject to the following restrictions and conditions:

 

(i)          Subject
to the other provisions of this Plan and the terms of the particular Award Agreements, during such period as may be determined
by the Committee commencing on the Date of Grant or the date of exercise of an Award (the “Restriction Period”),
the Participant shall not be permitted to sell, transfer, pledge or assign shares of Restricted Stock. Except for these limitations,
the Committee may in its sole discretion, remove any or all of the restrictions on such Restricted Stock whenever it may determine
that, by reason of changes in Applicable Laws or other changes in circumstances arising after the date of the Award, such action
is appropriate.

 

(ii)          Except
as provided in sub-paragraph (i) above or in the applicable Award Agreement, the Participant shall have, with respect to his or
her Restricted Stock, all of the rights of a stockholder of the Company, including the right to vote the shares, and the right
to receive any dividends thereon. Certificates for shares of Common Stock free of restriction under this Plan shall be delivered
to the Participant promptly after, and only after, the Restriction Period shall expire without forfeiture in respect of such shares
of Common Stock or after any other restrictions imposed on such shares of Common Stock by the applicable Award Agreement or other
agreement have expired. Certificates for the shares of Common Stock forfeited under the provisions of the Plan and the applicable
Award Agreement shall be promptly returned to the Company by the forfeiting Participant. Each Award Agreement shall require that
each Participant, in connection with the issuance of a certificate for Restricted Stock, shall endorse such certificate in blank
or execute a stock power in form satisfactory to the Company in blank and deliver such certificate and executed stock power to
the Company.

 

(iii)          The
Restriction Period of Restricted Stock shall commence on the Date of Grant or the date of exercise of an Award, as specified in
the Award Agreement, and, subject to Article 12 of the Plan, unless otherwise established by the Committee in the Award
Agreement setting forth the terms of the Restricted Stock, shall expire upon satisfaction of the conditions set forth in the Award
Agreement; such conditions may provide for vesting based on such Performance Goals, as may be determined by the Committee in its
sole discretion.

 

    	- 10 -

    	 

    

 

(iv)          Except
as otherwise provided in the particular Award Agreement, upon Termination of Service for any reason during the Restriction Period,
the nonvested shares of Restricted Stock shall be forfeited by the Participant. In the event a Participant has paid any consideration
to the Company for such forfeited Restricted Stock, the Committee shall specify in the Award Agreement that either (i) the Company
shall be obligated to, or (ii) the Company may, in its sole discretion, elect to, pay to the Participant, as soon as practicable
after the event causing forfeiture, in cash, an amount equal to the lesser of the total consideration paid by the Participant for
such forfeited shares or the Fair Market Value of such forfeited shares as of the date of Termination of Service, as the Committee,
in its sole discretion shall select. Upon any forfeiture, all rights of a Participant with respect to the forfeited shares of the
Restricted Stock shall cease and terminate, without any further obligation on the part of the Company.

 

6.5          SARs.
The Committee may grant SARs to any Participant, either as a separate Award or in connection with a
Stock Option. SARs shall be subject to such terms and conditions as the Committee shall impose, provided that such terms and conditions
are (i) not inconsistent with the Plan, (ii) to the extent a SAR issued under the Plan is subject to Section 409A of the Code,
in compliance with the applicable requirements of Section 409A of the Code and the regulations or other guidance issued thereunder,
and (iii) to the extent the Committee determines that a SAR shall comply with the requirements of Section 162(m) of the Code, in
compliance with the applicable requirements of Section 162(m) and the regulations and other guidance issued thereunder. The grant
of the SAR may provide that the holder may be paid for the value of the SAR either in cash or in shares of Common Stock, or a combination
thereof. In the event of the exercise of a SAR payable in shares of Common Stock, the holder of the SAR shall receive that number
of whole shares of Common Stock having an aggregate Fair Market Value on the date of exercise equal to the value obtained by multiplying
(i) the difference between the Fair Market Value of a share of Common Stock on the date of exercise over the SAR Price as set forth
in such SAR (or other value specified in the agreement granting the SAR), by (ii) the number of shares of Common Stock as to which
the SAR is exercised, with a cash settlement to be made for any fractional shares of Common Stock. The SAR Price for any share
of Common Stock subject to a SAR may be equal to or greater than the Fair Market Value of the share on the Date of Grant. The Committee,
in its sole discretion, may place a ceiling on the amount payable upon exercise of a SAR, but any such limitation shall be specified
at the time that the SAR is granted.

 

6.6          Restricted
Stock Units. Restricted Stock Units may be awarded or sold to any Participant under such terms and conditions as shall be established
by the Committee, provided, however, that such terms and conditions are (i) not inconsistent with the Plan, (ii) to the extent
a Restricted Stock Unit issued under the Plan is subject to Section 409A of the Code, in compliance with the applicable requirements
of Section 409A of the Code and the regulations or other guidance issued thereunder, and (iii) to the
extent the Committee determines that a Restricted Stock Unit award shall comply with the requirements of Section 162(m) of the
Code, in compliance with the applicable requirements of Section 162(m) and the regulations and other guidance issued thereunder.
Restricted Stock Units shall be subject to such restrictions as the Committee determines, including, without limitation, (a) a
prohibition against sale, assignment, transfer, pledge, hypothecation or other encumbrance for a specified period; or (b) a requirement
that the holder forfeit (or in the case of shares of Common Stock or units sold to the Participant, resell to the Company at cost)
such shares or units in the event of Termination of Service during the period of restriction.

 

    	- 11 -

    	 

    

 

6.7          Performance
Awards.          

 

(a)          The
Committee may grant Performance Awards to one or more Participants. The terms and conditions of Performance Awards shall be specified
at the time of the grant and may include provisions establishing the performance period, the Performance Goals to be achieved during
a performance period, and the maximum or minimum settlement values, provided that such terms and conditions
are (i) not inconsistent with the Plan and (ii) to the extent a Performance Award issued under the Plan is subject to Section 409A
of the Code, in compliance with the applicable requirements of Section 409A of the Code and the regulations or other guidance issued
thereunder. If the Performance Award is to be in shares of Common Stock, the Performance Awards may provide for the issuance
of the shares of Common Stock at the time of the grant of the Performance Award or at the time of the certification by the Committee
that the Performance Goals for the performance period have been met; provided, however, if shares of Common Stock
are issued at the time of the grant of the Performance Award and if, at the end of the performance period, the Performance Goals
are not certified by the Committee to have been fully satisfied, then, notwithstanding any other provisions of this Plan to the
contrary, the Common Stock shall be forfeited in accordance with the terms of the grant to the extent the Committee determines
that the Performance Goals were not met. The forfeiture of shares of Common Stock issued at the time of the grant of the Performance
Award due to failure to achieve the established Performance Goals shall be separate from and in addition to any other restrictions
provided for in this Plan that may be applicable to such shares of Common Stock. Each Performance Award granted to one or more
Participants shall have its own terms and conditions.

 

To
the extent the Committee determines that a Performance Award shall comply with the requirements of Section 162(m) of the Code and
the regulations and other guidance issued thereunder, and if it is determined to be necessary in order to satisfy Section
162(m) of the Code, at the time of the grant of a Performance Award (other than a Stock Option) and to the extent permitted under
Section 162(m) of the Code and the regulations issued thereunder, the Committee shall provide for the manner in which the Performance
Goals shall be reduced to take into account the negative effect on the achievement of specified levels of the Performance Goals
which may result from enumerated corporate transactions, extraordinary events, accounting changes and other similar occurrences
which were unanticipated at the time the Performance Goal was initially established. In no event, however, may the Committee increase
the amount earned under such a Performance Award, unless the reduction in the Performance Goals would reduce or eliminate the amount
to be earned under the Performance Award and the Committee determines not to make such reduction or elimination.

 

With respect
to a Performance Award that is not intended to satisfy the requirements of Code Section 162(m), if the Committee determines, in
its sole discretion, that the established performance measures or objectives are no longer suitable because of a change in the
Company’s business, operations, corporate structure, or for other reasons that the Committee deemed satisfactory, the Committee
may modify the performance measures or objectives and/or the performance period.

 

(b)          Performance
Awards may be valued by reference to the Fair Market Value of a share of Common Stock or according to any formula or method deemed
appropriate by the Committee, in its sole discretion, including, but not limited to, achievement of Performance Goals or other
specific financial, production, sales or cost performance objectives that the Committee believes to be relevant to the Company’s
business and/or remaining in the employ of the Company or a Subsidiary for a specified period of time. Performance Awards may be
paid in cash, shares of Common Stock, or other consideration, or any combination thereof. If payable in shares of Common Stock,
the consideration for the issuance of such shares may be the achievement of the performance objective established at the time of
the grant of the Performance Award. Performance Awards may be payable in a single payment or in installments and may be payable
at a specified date or dates or upon attaining the performance objective. The extent to which any applicable performance objective
has been achieved shall be conclusively determined by the Committee.

 

    	- 12 -

    	 

    

 

(c)          Notwithstanding
the foregoing, in order to comply with the requirements of Section 162(m) of the Code, if applicable, no Participant may receive
in any calendar year Performance Awards intended to comply with the requirements of Section 162(m) of the Code which have an aggregate
value of more than $5,000,000, and if such Performance Awards involve the issuance of shares of Common Stock, said aggregate value
shall be based on the Fair Market Value of such shares on the time of the grant of the Performance Award. In no event, however,
shall any Performance Awards not intended to comply with the requirements of Section 162(m) of the Code be issued contingent upon
the failure to attain the Performance Goals applicable to any Performance Awards granted hereunder that the Committee intends to
comply with the requirements of Section 162(m) of the Code.

 

6.8          Dividend
Equivalent Rights. The Committee may grant a Dividend Equivalent Right to any Participant, either as a component of another
Award or as a separate Award. The terms and conditions of the Dividend Equivalent Right shall be specified by the grant. Dividend
equivalents credited to the holder of a Dividend Equivalent Right may be paid currently or may be deemed to be reinvested in additional
shares of Common Stock (which may thereafter accrue additional dividend equivalents). Any such reinvestment shall be at the Fair
Market Value at the time thereof. Dividend Equivalent Rights may be settled in cash or shares of Common Stock, or a combination
thereof, in a single payment or in installments. A Dividend Equivalent Right granted as a component of another Award may provide
that such Dividend Equivalent Right shall be settled upon exercise, settlement, or payment of, or lapse of restrictions on, such
other Award, and that such Dividend Equivalent Right granted as a component of another Award may also contain terms and conditions
different from such other Award.

 

6.9          Other Awards.
The Committee may grant to any Participant other forms of Awards, based upon, payable in, or otherwise related to, in whole or
in part, shares of Common Stock, if the Committee determines that such other form of Award is consistent with the purpose and restrictions
of this Plan. The terms and conditions of such other form of Award shall be specified by the grant. Such Other Awards may be granted
for no cash consideration, for such minimum consideration as may be required by Applicable Law, or for such other consideration
as may be specified by the grant.

 

    	- 13 -

    	 

    

 

6.10          Performance
Goals. Awards of Restricted Stock, Restricted Stock Units, Performance Award and Other Awards (whether relating to cash or
shares of Common Stock) under the Plan may be made subject to the attainment of Performance Goals relating to one or more business
criteria which, where applicable, shall be within the meaning of Section 162(m) of the Code and consist of one or more or any combination
of the following criteria: cash flow; cost; revenues; sales; ratio of debt to debt plus equity; net borrowing, credit quality or
debt ratings; profit before tax; economic profit; earnings before interest and taxes; earnings before interest, taxes, depreciation
and amortization; gross margin; earnings per share (whether on a pre-tax, after-tax, operational or other basis); operating earnings;
capital expenditures; expenses or expense levels; economic value added; ratio of operating earnings to capital spending or any
other operating ratios; free cash flow; net profit; net sales; net asset value per share; the accomplishment of mergers, acquisitions,
dispositions, public offerings or similar extraordinary business transactions; sales growth; price of the Company’s Common
Stock; return on assets, equity or stockholders’ equity; market share; inventory levels, inventory turn or shrinkage; or
total return to stockholders (“Performance Criteria”). Any Performance Criteria may be used to measure
the performance of the Company as a whole or any business unit of the Company and may be measured relative to a peer group or index.
Any Performance Criteria may include or exclude (i) extraordinary, unusual and/or non-recurring items of gain or loss, (ii) gains
or losses on the disposition of a business, (iii) changes in tax or accounting regulations or laws, (iv) the effect of a merger
or acquisition, as identified in the Company’s quarterly and annual earnings releases, or (v) other similar occurrences.
In all other respects, Performance Criteria shall be calculated in accordance with the Company’s financial statements, under
generally accepted accounting principles, or under a methodology established by the Committee prior to the issuance of an Award
which is consistently applied and identified in the audited financial statements, including footnotes, or the Compensation Discussion
and Analysis section of the Company’s annual report. However, to the extent Section 162(m) of the Code is applicable, the
Committee may not in any event increase the amount of compensation payable to an individual upon the attainment of a Performance
Goal.

 

6.11          Tandem Awards.
The Committee may grant two or more Incentives in one Award in the form of a “tandem Award,” so that the right of the
Participant to exercise one Incentive shall be canceled if, and to the extent, the other Incentive is exercised. For example, if
a Stock Option and a SAR are issued in a tandem Award, and the Participant exercises the SAR with respect to one hundred (100)
shares of Common Stock, the right of the Participant to exercise the related Stock Option shall be canceled to the extent of one
hundred (100) shares of Common Stock.

 

Article
7

AWARD PERIOD; VESTING

 

7.1          Award Period.
Subject to the other provisions of this Plan, the Committee may, in its discretion, provide that an Incentive may not be exercised
in whole or in part for any period or periods of time or beyond any date specified in the Award Agreement. Except as provided in
the Award Agreement, an Incentive may be exercised in whole or in part at any time during its term. The Award Period for an Incentive
shall be reduced or terminated upon Termination of Service. No Incentive granted under the Plan may be exercised at any time after
the end of its Award Period. No portion of any Incentive may be exercised after the expiration of ten (10) years from its Date
of Grant. However, if an Employee owns or is deemed to own (by reason of the attribution rules of Section 424(d) of the Code) more
than ten percent (10%) of the combined voting power of all classes of stock of the Company (or any parent or Subsidiary) and an
Incentive Stock Option is granted to such Employee, the term of such Incentive Stock Option (to the extent required by the Code
at the time of grant) shall be no more than five (5) years from the Date of Grant.

 

7.2          Vesting.
The Committee, in its sole discretion, may determine that an Incentive will be immediately vested in whole or in part, or that
all or any portion may not be vested until a date, or dates, subsequent to its Date of Grant, or until the occurrence of one or
more specified events, subject in any case to the terms of the Plan. If the Committee imposes conditions upon vesting, then, subsequent
to the Date of Grant, the Committee may, in its sole discretion, accelerate the date on which all or any portion of the Incentive
may be vested.

 

Article
8

EXERCISE OR CONVERSION OF INCENTIVE

 

8.1          In General.
A vested Incentive may be exercised or converted, during its Award Period, subject to limitations and restrictions set forth in
the Award Agreement.

 

    	- 14 -

    	 

    

 

8.2          Securities
Law and Exchange Restrictions. In no event may an Incentive be exercised or shares of Common Stock issued pursuant to an Award
if a necessary listing or quotation of the shares of Common Stock on a stock exchange or inter-dealer quotation system or any registration
under state or federal securities laws required under the circumstances has not been accomplished.

 

8.3          Exercise
of Stock Option.

 

(a)          In
General. If a Stock Option is exercisable prior to the time it is vested, the Common Stock obtained on the exercise of the
Stock Option shall be Restricted Stock which is subject to the applicable provisions of the Plan and the Award Agreement. If the
Committee imposes conditions upon exercise, then subsequent to the Date of Grant, the Committee may, in its sole discretion, accelerate
the date on which all or any portion of the Stock Option may be exercised. No Stock Option may be exercised for a fractional share
of Common Stock. The granting of a Stock Option shall impose no obligation upon the Participant to exercise that Stock Option.

 

(b)          Notice
and Payment. Subject to such administrative regulations as the Committee may from time to time adopt, a Stock Option may be
exercised by the delivery of written notice to the Committee setting forth the number of shares of Common Stock with respect to
which the Stock Option is to be exercised and the date of exercise thereof (the “Exercise Date”) which
shall be at least three (3) days after giving such notice unless an earlier time shall have been mutually agreed upon. On the Exercise
Date, the Participant shall deliver to the Company consideration with a value equal to the total Option Price of the shares to
be purchased, payable as provided in the Award Agreement, which may provide for payment in any one or more of the following ways:
(a) cash or check, bank draft, or money order payable to the order of the Company, (b) Common Stock (including Restricted Stock)
owned by the Participant on the Exercise Date, valued at its Fair Market Value on the Exercise Date, and which the Participant
has not acquired from the Company within six (6) months prior to the Exercise Date, (c) by delivery (including by FAX) to the Company
or its designated agent of an executed irrevocable option exercise form together with irrevocable instructions from the Participant
to a broker or dealer, reasonably acceptable to the Company, to sell certain of the shares of Common Stock purchased upon exercise
of the Stock Option or to pledge such shares as collateral for a loan and promptly deliver to the Company the amount of sale or
loan proceeds necessary to pay such purchase price, and/or (d) in any other form of valid consideration that is acceptable to the
Committee in its sole discretion. In the event that shares of Restricted Stock are tendered as consideration for the exercise of
a Stock Option, a number of shares of Common Stock issued upon the exercise of the Stock Option equal to the number of shares of
Restricted Stock used as consideration therefor shall be subject to the same restrictions and provisions as the Restricted Stock
so tendered.

 

    	- 15 -

    	 

    

 

(c)          Issuance
of Certificate. Except as otherwise provided in Section 6.4 hereof (with respect to shares of Restricted Stock) or in
the applicable Award Agreement, upon payment of all amounts due from the Participant, the Company shall cause the Common Stock
then being purchased to be registered in the Participant’s name (or the person exercising the Participant’s Stock Option
in the event of his or her death), but shall not issue certificates for the Common Stock unless the Participant or such other person
requests delivery of the certificates for the Common Stock, in writing in accordance with the procedures established by the Committee.
The Company shall deliver certificates to the Participant (or the person exercising the Participant’s Stock Option in the
event of his or her death) as soon as administratively practicable following the Company’s receipt of a written request from
the Participant or such other person for delivery of the certificates. Notwithstanding the forgoing, if the Participant has exercised
an Incentive Stock Option, the Company may at its option retain physical possession of the certificate evidencing the shares acquired
upon exercise until the expiration of the holding periods described in Section 422(a)(1) of the Code. Any obligation of the Company
to deliver shares of Common Stock shall, however, be subject to the condition that, if at any time the Committee shall determine
in its discretion that the listing, registration, or qualification of the Stock Option or the Common Stock upon any securities
exchange or inter-dealer quotation system or under any state or federal law, or the consent or approval of any governmental regulatory
body, is necessary as a condition of, or in connection with, the Stock Option or the issuance or purchase of shares of Common Stock
thereunder, the Stock Option may not be exercised in whole or in part unless such listing, registration, qualification, consent,
or approval shall have been effected or obtained free of any conditions not reasonably acceptable to the Committee.

 

(d)          Failure
to Pay. Except as may otherwise be provided in an Award Agreement, if the Participant fails to pay for any of the Common Stock
specified in such notice or fails to accept delivery thereof, that portion of the Participant’s Stock Option and right to
purchase such Common Stock may be forfeited by the Participant.

 

8.4          SARs.
Subject to the conditions of this Section 8.4 and such administrative regulations as the Committee
may from time to time adopt, a SAR may be exercised by the delivery (including by FAX) of written notice to the Committee setting
forth the number of shares of Common Stock with respect to which the SAR is to be exercised and the date of exercise thereof (the
“Exercise Date”) which shall be at least three (3) days after giving such notice unless an earlier time
shall have been mutually agreed upon. Subject to the terms of the Award Agreement and only if permissible under Section 409A of
the Code and the regulations or other guidance issued thereunder (or, if not so permissible, at such time as permitted by Section
409A of the Code and the regulations or other guidance issued thereunder), the Participant shall receive from the Company in exchange
therefor in the discretion of the Committee, and subject to the terms of the Award Agreement:

 

(a)          cash
in an amount equal to the excess (if any) of the Fair Market Value (as of the Exercise Date, or if provided in the Award Agreement,
conversion, of the SAR) per share of Common Stock over the SAR Price per share specified in such SAR, multiplied by the total number
of shares of Common Stock of the SAR being surrendered;

 

(b)          that
number of shares of Common Stock having an aggregate Fair Market Value (as of the Exercise Date, or if provided in the Award Agreement,
conversion, of the SAR) equal to the amount of cash otherwise payable to the Participant, with a cash settlement to be made for
any fractional share interests; or

 

(c)          the
Company may settle such obligation in part with shares of Common Stock and in part with cash.

 

The distribution of
any cash or Common Stock pursuant to the foregoing sentence shall be made at such time as set forth in the Award Agreement.

 

8.5          Disqualifying
Disposition of Incentive Stock Option. If shares of Common Stock acquired upon exercise of an Incentive Stock Option are disposed
of by a Participant prior to the expiration of either two (2) years from the Date of Grant of such Stock Option or one (1) year
from the transfer of shares of Common Stock to the Participant pursuant to the exercise of such Stock Option, or in any other disqualifying
disposition within the meaning of Section 422 of the Code, such Participant shall notify the Company in writing of the date and
terms of such disposition. A disqualifying disposition by a Participant shall not affect the status of any other Stock Option granted
under the Plan as an Incentive Stock Option within the meaning of Section 422 of the Code.

 

    	- 16 -

    	 

    

 

Article
9

AMENDMENT OR DISCONTINUANCE

 

Subject to the limitations
set forth in this Article 9, the Board may at any time and from time to time, without the consent of the Participants, alter,
amend, revise, suspend, or discontinue the Plan in whole or in part; provided, however, that no amendment for which stockholder
approval is required either (i) by any securities exchange or inter-dealer quotation system on which the Common Stock is listed
or traded or (ii) in order for the Plan and Incentives awarded under the Plan to continue to comply with Sections 162(m), 421,
and 422 of the Code, including any successors to such Sections, or other Applicable Law, shall be effective unless such amendment
shall be approved by the requisite vote of the stockholders of the Company entitled to vote thereon. Any such amendment shall,
to the extent deemed necessary or advisable by the Committee, be applicable to any outstanding Incentives theretofore granted under
the Plan, notwithstanding any contrary provisions contained in any Award Agreement. In the event of any such amendment to the Plan,
the holder of any Incentive outstanding under the Plan shall, upon request of the Committee and as a condition to the exercisability
thereof, execute a conforming amendment in the form prescribed by the Committee to any Award Agreement relating thereto. Notwithstanding
anything contained in this Plan to the contrary, unless required by law, no action contemplated or permitted by this Article
9 shall adversely affect any rights of Participants or obligations of the Company to Participants with respect to any Incentive
theretofore granted under the Plan without the consent of the affected Participant.

 

Article
10

TERM

 

The Plan shall be effective
from the date that this Plan is adopted by the Board. Unless sooner terminated by action of the Board, the Plan will terminate
on October 25, 2023, but Incentives granted before that date will continue to be effective in accordance with their terms and conditions.

 

Article
11

CAPITAL ADJUSTMENTS

 

In the event that any
dividend or other distribution (whether in the form of cash, Common Stock, other securities, or other property), recapitalization,
stock split, reverse stock split, rights offering, reorganization, merger, consolidation, split-up, spin-off, split-off, combination,
subdivision, repurchase, or exchange of Common Stock or other securities of the Company, issuance of warrants or other rights to
purchase Common Stock or other securities of the Company, or other similar corporate transaction or event affects the fair value
of an Award, then the Committee shall adjust any or all of the following so that the fair value of the Award immediately after
the transaction or event is equal to the fair value of the Award immediately prior to the transaction or event (i) the number of
shares and type of Common Stock (or the securities or property) which thereafter may be made the subject of Awards, (ii) the number
of shares and type of Common Stock (or other securities or property) subject to outstanding Awards, (iii) the number of shares
and type of Common Stock (or other securities or property) specified as the annual per-participant limitation under Section
5.1 of the Plan, (iv) the Option Price of each outstanding Award, (v) the amount, if any, the Company pays for forfeited shares
of Common Stock in accordance with Section 6.4, and (vi) the number of or SAR Price of shares of Common Stock then subject
to outstanding SARs previously granted and unexercised under the Plan, to the end that the same proportion of the Company’s
issued and outstanding shares of Common Stock in each instance shall remain subject to exercise at the same aggregate SAR Price;
provided however, that the number of shares of Common Stock (or other securities or property) subject to any Award shall always
be a whole number. Notwithstanding the foregoing, no such adjustment shall be made or authorized to the extent that such adjustment
would cause the Plan or any Stock Option to violate Section 422 of the Code or Section 409A of the Code. Such adjustments shall
be made in accordance with the rules of any securities exchange, stock market, or stock quotation system to which the Company is
subject.

 

    	- 17 -

    	 

    

 

Upon the occurrence
of any such adjustment, the Company shall provide notice to each affected Participant of its computation of such adjustment which
shall be conclusive and shall be binding upon each such Participant.

 

Article
12

RECAPITALIZATION, MERGER AND CONSOLIDATION

 

12.1          No Effect
on Company’s Authority. The existence of this Plan and Incentives granted hereunder shall not affect in any way the right
or power of the Company or its stockholders to make or authorize any or all adjustments, recapitalizations, reorganizations, or
other changes in the Company’s capital structure and its business, or any Change in Control, or any merger or consolidation
of the Company, or any issuance of bonds, debentures, preferred or preference stocks ranking prior to or otherwise affecting the
Common Stock or the rights thereof (or any rights, options, or warrants to purchase same), or the dissolution or liquidation of
the Company, or any sale or transfer of all or any part of its assets or business, or any other corporate act or proceeding, whether
of a similar character or otherwise.

 

12.2          Conversion
of Incentives Where Company Survives. Subject to any required action by the stockholders and except as otherwise provided by
Section 12.4 hereof or as may be required to comply with Section 409A of the Code and the regulations or other guidance
issued thereunder, if the Company shall be the surviving or resulting corporation in any merger, consolidation or share exchange,
any Incentive granted hereunder shall pertain to and apply to the securities or rights (including cash, property, or assets) to
which a holder of the number of shares of Common Stock subject to the Incentive would have been entitled.

 

12.3          Exchange
or Cancellation of Incentives Where Company Does Not Survive. Except as otherwise provided by Section 12.4 hereof or
as may be required to comply with Section 409A of the Code and the regulations or other guidance issued thereunder, in the event
of any merger, consolidation or share exchange pursuant to which the Company is not the surviving or resulting corporation, there
shall be substituted for each share of Common Stock subject to the unexercised portions of outstanding Incentives, that number
of shares of each class of stock or other securities or that amount of cash, property, or assets of the surviving, resulting or
consolidated company which were distributed or distributable to the stockholders of the Company in respect to each share of Common
Stock held by them, such outstanding Incentives to be thereafter exercisable for such stock, securities, cash, or property in accordance
with their terms.

 

12.4          Cancellation
of Incentives. Notwithstanding the provisions of Sections 12.2 and 12.3  hereof, and except as may be required to comply
with Section 409A of the Code and the regulations or other guidance issued thereunder, all Incentives granted hereunder may be
canceled by the Company, in its sole discretion, as of the effective date of any Change in Control, merger, consolidation or share
exchange, or any issuance of bonds, debentures, preferred or preference stocks ranking prior to or otherwise affecting the Common
Stock or the rights thereof (or any rights, options, or warrants to purchase same), or of any proposed sale of all or substantially
all of the assets of the Company, or of any dissolution or liquidation of the Company, by either:

 

    	- 18 -

    	 

    

 

(a)          giving
notice to each holder thereof or his personal representative of its intention to cancel those Incentives for which the issuance
of shares of Common Stock involved payment by the Participant for such shares, and permitting the purchase during the thirty (30)
day period next preceding such effective date of any or all of the shares of Common Stock subject to such outstanding Incentives,
including in the Board’s discretion some or all of the shares as to which such Incentives would not otherwise be vested and
exercisable; or

 

(b)          in
the case of Incentives that are either (i) settled only in shares of Common Stock, or (ii) at the election of the Participant,
settled in shares of Common Stock, paying the holder thereof an amount equal to a reasonable estimate of the difference between
the net amount per share payable in such transaction or as a result of such transaction, and the price per share of such Incentive
to be paid by the Participant (hereinafter the “Spread”), multiplied by the number of shares subject
to the Incentive. In cases where the shares constitute, or would after exercise, constitute Restricted Stock, the Company, in its
discretion, may include some or all of those shares in the calculation of the amount payable hereunder. In estimating the Spread,
appropriate adjustments to give effect to the existence of the Incentives shall be made, such as deeming the Incentives to have
been exercised, with the Company receiving the exercise price payable thereunder, and treating the shares receivable upon exercise
of the Incentives as being outstanding in determining the net amount per share. In cases where the proposed transaction consists
of the acquisition of assets of the Company, the net amount per share shall be calculated on the basis of the net amount receivable
with respect to shares of Common Stock upon a distribution and liquidation by the Company after giving effect to expenses and charges,
including but not limited to taxes, payable by the Company before such liquidation could be completed.

 

(c)          An
Award that by its terms would be fully vested or exercisable upon a Change in Control will be considered vested or exercisable
for purposes of Section 12.4(a) hereof.

 

Article
13

LIQUIDATION OR DISSOLUTION

 

Subject to Section
12.4 hereof, in case the Company shall, at any time while any Incentive under this Plan shall be in force and remain unexpired,
(i) sell all or substantially all of its property, or (ii) dissolve, liquidate, or wind up its affairs, then each Participant shall
be entitled to receive, in lieu of each share of Common Stock of the Company which such Participant would have been entitled to
receive under the Incentive, the same kind and amount of any securities or assets as may be issuable, distributable, or payable
upon any such sale, dissolution, liquidation, or winding up with respect to each share of Common Stock of the Company. If the Company
shall, at any time prior to the expiration of any Incentive, make any partial distribution of its assets, in the nature of a partial
liquidation, whether payable in cash or in kind (but excluding the distribution of a cash dividend payable out of earned surplus
and designated as such) and an adjustment is determined by the Committee to be appropriate to prevent the dilution of the benefits
or potential benefits intended to be made available under the Plan, then the Committee shall, in such manner as it may deem equitable,
make such adjustment in accordance with the provisions of Article 11 hereof.

 

    	- 19 -

    	 

    

 

Article
14

INCENTIVES IN SUBSTITUTION FOR

INCENTIVES GRANTED BY OTHER ENTITIES

 

Incentives may be granted
under the Plan from time to time in substitution for similar instruments held by employees, independent contractors or directors
of a corporation, partnership, or limited liability company who become or are about to become Employees, Contractors or Outside
Directors of the Company or any Subsidiary as a result of a merger or consolidation of the employing corporation with the Company,
the acquisition by the Company of equity of the employing entity, or any other similar transaction pursuant to which the Company
becomes the successor employer. The terms and conditions of the substitute Incentives so granted may vary from the terms and conditions
set forth in this Plan to such extent as the Committee at the time of grant may deem appropriate to conform, in whole or in part,
to the provisions of the Incentives in substitution for which they are granted.

 

Article
15

MISCELLANEOUS PROVISIONS

 

15.1          Investment
Intent. The Company may require that there be presented to and filed with it by any Participant under the Plan, such evidence
as it may deem necessary to establish that the Incentives granted or the shares of Common Stock to be purchased or transferred
are being acquired for investment and not with a view to their distribution.

 

15.2          No Right
to Continued Employment. Neither the Plan nor any Incentive granted under the Plan shall confer upon any Participant any right
with respect to continuance of employment by the Company or any Subsidiary.

 

15.3          Indemnification
of Board and Committee. No member of the Board or the Committee, nor any officer or Employee of the Company acting on behalf
of the Board or the Committee, shall be personally liable for any action, determination, or interpretation taken or made in good
faith with respect to the Plan, and all members of the Board and the Committee, each officer of the Company, and each Employee
of the Company acting on behalf of the Board or the Committee shall, to the extent permitted by law, be fully indemnified and protected
by the Company in respect of any such action, determination, or interpretation.

 

15.4          Effect of
the Plan. Neither the adoption of this Plan nor any action of the Board or the Committee shall be deemed to give any person
any right to be granted an Award or any other rights except as may be evidenced by an Award Agreement, or any amendment thereto,
duly authorized by the Committee and executed on behalf of the Company, and then only to the extent and upon the terms and conditions
expressly set forth therein.

 

15.5          Compliance
With Other Laws and Regulations. Notwithstanding anything contained herein to the contrary, the Company shall not be required
to sell or issue shares of Common Stock under any Incentive if the issuance thereof would constitute a violation by the Participant
or the Company of any provisions of any law or regulation of any governmental authority or any national securities exchange or
inter-dealer quotation system or other forum in which shares of Common Stock are quoted or traded (including without limitation
Section 16 of the Exchange Act and Section 162(m) of the Code); and, as a condition of any sale or issuance of shares of Common
Stock under an Incentive, the Committee may require such agreements or undertakings, if any, as the Committee may deem necessary
or advisable to assure compliance with any such law or regulation. The Plan, the grant and exercise of Incentives hereunder, and
the obligation of the Company to sell and deliver shares of Common Stock, shall be subject to all applicable federal and state
laws, rules and regulations and to such approvals by any government or regulatory agency as may be required.

 

    	- 20 -

    	 

    

 

15.6          Foreign
Participation. To assure the viability of Awards granted to Participants employed in foreign countries, the Committee may provide
for such special terms as it may consider necessary or appropriate to accommodate differences in local law, tax policy or custom.
Moreover, the Committee may approve such supplements to, or amendments, restatements or alternative versions of, this Plan as it
determines is necessary or appropriate for such purposes. Any such amendment, restatement or alternative versions that the Committee
approves for purposes of using this Plan in a foreign country will not affect the terms of this Plan for any other country.

 

15.7          Tax Requirements.
The Company or, if applicable, any Subsidiary (for purposes of this Section 15.7, the term “Company”
shall be deemed to include any applicable Subsidiary), shall have the right to deduct from all amounts paid in cash or other form
in connection with the Plan, any Federal, state, local, or other taxes required by law to be withheld in connection with an Award
granted under this Plan. The Company may, in its sole discretion, also require the Participant receiving shares of Common Stock
issued under the Plan to pay the Company the amount of any taxes that the Company is required to withhold in connection with the
Participant’s income arising with respect to the Award. Such payments shall be required to be made when requested by Company
and may be required to be made prior to the delivery of any certificate representing shares of Common Stock. Such payment may be
made (i) by the delivery of cash to the Company in an amount that equals or exceeds (to avoid the issuance of fractional shares
under (iii) below) the required tax withholding obligations of the Company; (ii) if the Company, in its sole discretion, so consents
in writing, the actual delivery by the exercising Participant to the Company of shares of Common Stock that the Participant has
not acquired from the Company within six (6) months prior to the date of exercise, which shares so delivered have an aggregate
Fair Market Value that equals or exceeds (to avoid the issuance of fractional shares under (iii) below) the required tax withholding
payment; (iii) if the Company, in its sole discretion, so consents in writing, the Company’s withholding of a number of shares
to be delivered upon the exercise of the Stock Option, which shares so withheld have an aggregate fair market value that equals
(but does not exceed) the required tax withholding payment; or (iv) any combination of (i), (ii), or (iii). The Company may, in
its sole discretion, withhold any such taxes from any other cash remuneration otherwise paid by the Company to the Participant.
The Committee may in the Award Agreement impose any additional tax requirements or provisions that the Committee deems necessary
or desirable.

 

15.8          Assignability.
Incentive Stock Options may not be transferred, assigned, pledged, hypothecated or otherwise conveyed or encumbered other than
by will or the laws of descent and distribution and may be exercised during the lifetime of the Participant only by the Participant
or the Participant’s legally authorized representative, and each Award Agreement in respect of an Incentive Stock Option
shall so provide. The designation by a Participant of a beneficiary will not constitute a transfer of the Stock Option. The Committee
may waive or modify any limitation contained in the preceding sentences of this Section 15.8 that is not required for compliance
with Section 422 of the Code.

 

Except as otherwise
provided herein, Nonqualified Stock Options and SARs may not be transferred, assigned, pledged, hypothecated or otherwise conveyed
or encumbered other than by will or the laws of descent and distribution. The Committee may, in its discretion, authorize all or
a portion of a Nonqualified Stock Option or SAR to be granted to a Participant on terms which permit transfer by such Participant
to (i) the spouse (or former spouse), children or grandchildren of the Participant (“Immediate Family Members”),
(ii) a trust or trusts for the exclusive benefit of such Immediate Family Members, (iii) a partnership in which the only partners
are (1) such Immediate Family Members and/or (2) entities which are controlled by Immediate Family Members, (iv) an entity exempt
from federal income tax pursuant to Section 501(c)(3) of the Code or any successor provision, or (v) a split interest trust or
pooled income fund described in Section 2522(c)(2) of the Code or any successor provision, provided that (x) there shall
be no consideration for any such transfer, (y) the Award Agreement pursuant to which such Nonqualified Stock Option or SAR is granted
must be approved by the Committee and must expressly provide for transferability in a manner consistent with this Section, and
(z) subsequent transfers of transferred Nonqualified Stock Options or SARs shall be prohibited except those by will or the laws
of descent and distribution.

 

    	- 21 -

    	 

    

 

Following any transfer,
any such Nonqualified Stock Option and SAR shall continue to be subject to the same terms and conditions as were applicable immediately
prior to transfer, provided that for purposes of Articles 8, 9, 11, 13 and 15 hereof the term “Participant”
shall be deemed to include the transferee. The events of Termination of Service shall continue to be applied with respect to the
original Participant, following which the Nonqualified Stock Options and SARs shall be exercisable or convertible by the transferee
only to the extent and for the periods specified in the Award Agreement. The Committee and the Company shall have no obligation
to inform any transferee of a Nonqualified Stock Option or SAR of any expiration, termination, lapse or acceleration of such Stock
Option or SAR. The Company shall have no obligation to register with any federal or state securities commission or agency any Common
Stock issuable or issued under a Nonqualified Stock Option or SAR that has been transferred by a Participant under this Section
15.8.

 

15.9          Use of Proceeds.
Proceeds from the sale of shares of Common Stock pursuant to Incentives granted under this Plan shall constitute general funds
of the Company.

 

15.10        Legend.
Each certificate representing shares of Restricted Stock issued to a Participant shall bear the following legend, or a similar
legend deemed by the Company to constitute an appropriate notice of the provisions hereof (any such certificate not having such
legend shall be surrendered upon demand by the Company and so endorsed):

 

    On the face of the certificate:

 

“Transfer of this stock
is restricted in accordance with conditions printed on the reverse of this certificate.”

 

    On the reverse:

 

“The shares of stock evidenced
by this certificate are subject to and transferable only in accordance with that certain InspireMD, Inc. 2013 Long-Term Incentive
Plan, a copy of which is on file at the principal office of the Company in Boston, Massachusetts. No transfer or pledge of the
shares evidenced hereby may be made except in accordance with and subject to the provisions of said Plan. By acceptance of this
certificate, any holder, transferee or pledgee hereof agrees to be bound by all of the provisions of said Plan.”

 

The following legend
shall be inserted on a certificate evidencing Common Stock issued under the Plan if the shares were not issued in a transaction
registered under the applicable federal and state securities laws:

 

    	- 22 -

    	 

    

 

“Shares of stock represented
by this certificate have been acquired by the holder for investment and not for resale, transfer or distribution, have been issued
pursuant to exemptions from the registration requirements of applicable state and federal securities laws, and may not be offered
for sale, sold or transferred other than pursuant to effective registration under such laws, or in transactions otherwise in compliance
with such laws, and upon evidence satisfactory to the Company of compliance with such laws, as to which the Company may rely upon
an opinion of counsel satisfactory to the Company.”

 

Article
16

ACCELERATION OF AWARD VESTING

 

16.1          Application.
The provisions of this Article 16 shall apply notwithstanding any provisions of this Plan to the contrary.

 

16.2          Definitions.

 

(a)          “Exempt
Shares” means shares of Common Stock designated as “Exempt Shares” pursuant to Section 16.3.

 

(b)          “Full
Value Award” means any Award with a net benefit to the Participant, without regard to any restrictions such as those
described in Section 6.4(b), equal to the aggregate Fair Market Value of the total shares of Common Stock subject to the
Award. Full Value Awards include Restricted Stock and Restricted Stock Units, but do not include Stock Options and SARs.

 

(c)          “Tenure
Award” means an Award hereunder of cash, shares of Common Stock, units or rights based upon, payable in, or otherwise
related to, Common Stock that vests over time based upon the Participant’s continued employment with or service to the Company
or its Subsidiaries.

 

16.3          Number of
Shares Available for Awards. No more than ten percent (10%) of the shares of Common Stock that may be delivered pursuant to
Awards under Section 5.1 may be shares designated as “Exempt Shares.”

 

16.4          Full Value
Award Vesting. Except as otherwise provided herein, the Committee must grant all Full Value Awards in accordance with the following
provisions:

 

(a)          All
Full Value Awards granted by the Committee that constitute Performance Awards must vest no earlier than one (1) year after the
Date of Grant.

 

(b)          All
Full Value Awards granted by the Committee that constitute Tenure Awards must vest no earlier than over the three (3) year period
commencing on the Date of Grant on a pro rata basis.

 

(c)          The
Committee may not accelerate the date on which all or any portion of a Full Value Award may be vested or waive the Restriction
Period on a Full Value Award except upon the Participant's death, Total and Permanent Disability or Retirement or the occurrence
of a Change in Control.

 

Notwithstanding the
foregoing, the Committee may, in its sole discretion, grant Full Value Awards with more favorable vesting provisions than set forth
in this Section 16.4 or accelerate the vesting or waive the Restriction Period for Full Value Awards at any time, provided
that the shares of Common Stock subject to such Awards shall be Exempt Shares.

 

A copy of this Plan
shall be kept on file in the principal office of the Company in Boston, Massachusetts.

 

***************

 

    	- 23 -

    	 

    

 

IN WITNESS WHEREOF,
the Company has caused this instrument to be executed as of October 25, 2013, by its Chief Executive Officer and Secretary pursuant
to prior action taken by the Board.

 

	 	INSPIREMD, INC.
	 	 
	 	By:	/s/ Alan Milinazzo
	 	Name:	Alan Milinazzo
	 	Title:	Chief Executive Officer

 

Attest:

 

	By:	/s/ Craig Shore	 
	Name:	Craig Shore	 
	Title:	Secretary	 

 

    	- 24 -

    	 

    

 

APPENDIX A

 

INSPIREMD, INC.

 

2013 Employee Stock Incentive Plan

 

Designated for the Israeli Income Tax
Ordinance

 

ARTICLE I

Purpose

 

		1.	The purpose of this 2013 Employee Stock Incentive Plan (the “Israeli Plan”)
shall be as defined in the InspireMD, Inc. 2013 Long-Term Incentive Plan (the “Incentive Plan”), and
is intended to harmonize the terms and conditions of the Incentive Plan with applicable Israeli law and provide specific provisions
regarding Participants (as defined in the Incentive Plan) who are subject to the Ordinance (as defined below). Unless expressly
provided in this Israeli Plan, the provisions of the Incentive Plan shall apply. Capitalized terms not expressly defined in this
Israeli Plan shall have the meaning ascribed to them under the Incentive Plan.

 

		2.	This Israeli Plan is intended to promote the interests of InspireMD, Inc. (the “Company”)
and its Affiliates, if any, (the “Group Companies”) by providing present and future officers of the Group
Companies, other employees of the Group Companies (including directors of the Group Companies) and consultants of the Group Companies
with an incentive to enter into and continue in the employ of the Group Companies and to acquire a proprietary interest in the
long-term success of the Group Companies.

 

		3.	The word “Affiliate”,
                                                          when used in the Israeli Plan, shall mean any “employer company”
                                                          within the meaning of Section 102(a) of the Israeli Income Tax Ordinance
                                                          (New Version), 5721-1961 (the “Ordinance”).1

 

ARTICLE II

Administration

 

		4.	The Israeli Plan shall be administered by the Board or the Committee (the “Administrator”)
as shall be resolved by the Board. The Administrator shall have the authority in its sole discretion, subject and not inconsistent
with the express provisions of the Israeli Plan, to administer the Israeli Plan and to exercise all the powers and authorities
specifically granted to it under the Israeli Plan as necessary and advisable in the administration of the Israeli Plan, including,
without limitation:

 

 

1
s. 102 (a) of the Ordinance: “employer company” – any of the following: (1) an employer that
is an Israeli resident company or a foreign resident company with a permanent enterprise or a research and development center
in Israel, if the Commissioner so approved (for this purpose: the employer), (2) a company that is a controlling member of the
employer or of which the employer is a controlling member, or (3) a company controlled by a person if the same person controls
the employer.

 

    	A-1

    	 

    

 

		a.	To determine which of the eligible,
                                                            officers, employees, directors, and consultants of the Group Companies
                                                            or other person shall be granted options to purchase Common Stock
                                                            (each an “Option”), as that term is defined
                                                            below, or other Awards, provided however, that (a) employees, officers
                                                            and directors (excluding controlling members as defined in Section
                                                            32(9) of the Ordinance2) (“Employees”,
                                                            and each an “Employee”) may only be granted
                                                            Awards, pursuant to Section 102 of the Ordinance and the rules and
                                                            regulations promulgated thereunder, including the Income Tax Regulations
                                                            (Tax Relief for Issue of Shares to Employees), 5763 -2003, (“Section
                                                            102 Incentives”); and (b) those who have no employee/employer
                                                            relationship with the Group Companies and are not ‘office holders’
                                                            (such as consultants and service providers), and Controlling Members
                                                            (“Consultants”, and each a “Consultant”),
                                                            may only be granted Incentives pursuant to Section 3(i) of the Ordinance
                                                            (“Section 3(i) Incentives”);

 

		b.	To determine the type of Incentives to be granted, i.e. Section 102 Incentives or Section
3(i) Incentives , or any other type of Incentive provided in Section 6 of the Incentive Plan, and their Date of Grant;

 

		c.	To determine the number of shares of Common Stock, to which an Incentive may relate, the terms,
conditions and restrictions of each Award and Incentive, the exercise price of each Option (the “Option Exercise Price”),
the date on which each Option or other Incentives becomes exercisable or free of any restrictions (the “Exercise Date”),
the Award Period and any other restrictions on (i) the exercise of Options issued hereunder, or (ii) other Incentives;

 

		d.	To determine the form or forms of the award agreements under the Israeli Plan (the “Award
Agreement”) (which forms shall be consistent with the terms of the Incentive Plan but need not be identical), any
other instruments that constitute or contain a Company obligation to grant an Incentive under the Israeli Plan (each, a “Grant
Instrument”), as that term is defined below, and ancillary documentation;

 

		e.	To determine whether, to what extent, and under what circumstances, an Incentive may be settled,
canceled, forfeited, exchanged or surrendered;

 

		f.	To construe and interpret the Israeli Plan, Award Agreements, any Incentive, Grant Instruments
and ancillary documentation and to make all other determinations deemed necessary or advisable for the administration of the Israeli
Plan; and

 

		g.	To prescribe, amend and rescind rules and regulations relating to the Israeli Plan.

 

		5.	All decisions, determinations and interpretations of the Administrator shall be final and binding
on all Participants, unless otherwise determined by the Board of Directors.

 

 

2
s. 32(9) of the Ordinance: “controlling member” –
a person who holds, directly or indirectly, alone or with a relative, one of the following: (a) at least 10% of the issued share
capital or at least 10% of the voting power; the right to hold at least 10% of the issued share capital or at least 10% of the
voting power, or a right to acquire either; (c) the right to receive at least 10% of the profits; (d) the right to appoint a director.

 

    	A-2

    	 

    

 

		6.	Insofar as the Board is entitled by law to delegate all and any of its powers and authority granted
it under this Israeli Plan to a Committee, the Board shall be entitled to do so. The Committee’s authorities shall be as
provided in the Incentive Plan. Any action may be taken by a written document (in lieu of meeting) signed by the Committee, and
action so taken shall be fully as effective as if it had been taken by a vote of the majority of the members at a meeting duly
called and held. The Committee may appoint a Secretary who shall keep records of its meetings, and shall make such rules and regulations
for the conduct of its business as it shall determine.

 

		7.	No member or former member of the Administrator shall be liable for any action, failure to act,
or determination made in good faith with respect to the Israeli Plan or any right granted thereunder.

 

		8.	The Administrator may designate Incentives granted pursuant to Section 102 as (1) “Approved
102 Incentives” (i.e. Incentives granted pursuant to Section 102(b) of the Ordinance and held in trust by a trustee
for the benefit of the Participant); or (2) “Unapproved 102 Incentives” (i.e. Incentives granted
pursuant to Section 102(c) of the Ordinance and not held in trust by a trustee).

 

		9.	The Administrator may elect for Approved 102 Incentives to be classified as either (1) “Work
Income Incentives” that qualify for tax treatment in accordance with the provisions of Section 102(b)(1) of the Ordinance;
or (2) “Capital Gain Incentives” that qualify for tax treatment in accordance with the provisions of
Section 102(b)(2) of the Ordinance (the “Election”).

 

		10.	Unapproved 102 Incentives may be granted until the Administrator’s Election has been appropriately
filed with the Israeli tax authorities, which election must be made at least thirty days before the date of the first grant of
an Approved 102 Incentive under this Israeli Plan or according to the instructions published by the Israeli tax authorities from
time to time. The Election shall remain in effect until the end of the subsequent year following the year during which the Administrator
first granted such Approved 102 Incentives. During the period indicated in the sentence above, the Administrator may grant only
the type of Approved 102 Incentive it has elected, which Election shall apply to all Participants who were granted Approved 102
Incentives during the period indicated herein, all in accordance with the provisions of Section 102(g) of the Ordinance, as amended.
For the avoidance of doubt, such Election shall not prevent the Administrator from granting, at all times, Unapproved 102 Incentives
to Employees or Section 3(i) Incentives to Consultants.

 

ARTICLE III

Incentive Shares

 

		11.	The shares to be issued under the Israeli Plan (the “Incentive Shares”)
shall be authorized but unissued Common Stock (the “Shares”). The total number of Shares reserved for
issuance under the Israeli Plan shall be equal to the total number of Shares reserved under Section 5.1 of the Incentive
Plan, subject to any adjustments and reductions made pursuant to the Incentive Plan. Such Shares are reserved out of the total
number of Shares reserved under Section 5.1 of the Incentive Plan.

 

		12.	The number of Shares available for grant of Incentives under the Israeli Plan shall be decreased
by the sum of the number of Shares with respect to which Incentives have been issued and are then outstanding and the number of
Shares issued upon exercise of Options. In the event that any outstanding Incentive under the Israeli Plan for any reason expires,
is terminated, or is canceled, the Shares covered by the unexercised portion of such Incentive may again be subject to Awards under
the Israeli Plan.

 

    	A-3

    	 

    

 

		13.	The Company shall at all times during the term of the Israeli Plan reserve and keep available such
number of Shares as will be sufficient to satisfy the requirements of the Incentives granted according to this Israeli Plan, shall
pay all original issue taxes (which shall not include income taxes of the Participant), if any, with respect to the issuance of
Shares pursuant hereto and all other fees and expenses necessarily incurred by the Company in connection therewith, and shall,
from time to time, use its best efforts to comply with all laws and regulations which, in the opinion of counsel for the Company,
shall be applicable thereto.

 

ARTICLE IV

Incentive Price

 

		14.	Each Award Agreement and Grant Instrument with respect to an Award shall set forth the amount (the
“Incentive Price”) which will be paid by the Participant to the Company upon exercise of the Options
or allocation of other Incentives. Payment shall be made in cash, or by certified check in the manner prescribed in Article VI
(Exercise of Options, Termination) hereof.

 

ARTICLE V

Terms of Awards

 

		15.	The Administrator shall determine the dates after which, or circumstances in which, Options may
be exercised or other Incentives may be released of any restriction thereto, in whole or in part. If Incentives are exercisable
in installments, then the installments or portions thereof which are exercisable and not exercised shall remain exercisable until
such Incentives expire or terminate in accordance with the provisions herein.

 

		16.	Notwithstanding any other provision of the Israeli Plan but subject to Section 7.1 of the
Incentive Plan, no Incentive shall be exercisable or otherwise valid after a date ten years from the date of grant of such Award
(the “Expiration Date”).

 

		17.	Unless determined otherwise by the Administrator with regard to all or any of the Participants
or the Options and subject to Section 7.2 of the Incentive Plan, the Options will be exercisable into Shares, as follows:

 

		a.	One fourth (1/4th) of the optioned Shares shall vest and that portion of the Option
shall become exercisable upon the expiration of twelve (12) months after their Date of Grant (the “First Vesting Date”),
provided, that the Participant is continuously employed or engaged by a Group Company from the Date of Grant until
the end of First Vesting Date;

 

		b.	an additional one fourth (1/4th) of the optioned Shares shall
vest and that portion of the Option shall become exercisable upon the expiration of twenty four (24) months after their Date of
Grant (the “Second Vesting Date”), provided, that that the Participant is continuously
employed or engaged by a Group Company from the First Vesting Date until the end of Second Vesting Date;

 

		c.	an additional one fourth (1/4th) of the optioned Shares shall
vest and that portion of the Option shall become exercisable upon the expiration of thirty six (36) months after their Date of
Grant the Award (the “Third Vesting Date”), provided, that the Participant is continuously
employed or engaged by a Group Company from the Second Vesting Date until the end of Third Vesting Date; and

 

    	A-4

    	 

    

 

		d.	an additional one fourth (1/4th) of the optioned Shares shall
vest and that portion of the Option shall become exercisable upon the expiration of forty eight (48) months after their Date of
Grant (the “Fourth Vesting Date”), provided, that the Participant is continuously employed
or engaged by a Group Company from the Third Vesting Date until the end of Forth Vesting Date.

 

ARTICLE VI

Exercise of Options, Termination

 

		18.	Subject to Article X (Trustee) below and as more fully provided in Section 8.3 of the Incentive
Plan, the exercise of any Option shall be effected by a Participant signing and returning to the Company at its principal office
a notice of exercise in the form prescribed from time to time by the Company or the Committee (a “Notice of Exercise”),
along with payment for the Incentive Shares purchased thereby. Such payment will be made in dollars or shekels in accordance with
the terms of the specific Award Agreement.

 

		19.	Subject to Article X (Trustee) below, the Company shall issue Incentive Shares, in the name of
the respective Participant, and deliver to him a certificate or certificates, as the case may be, representing such Shares as soon
as practicable after a Notice of Exercise and payment for the Shares shall be received. If Article X (Trustee) applies, then exercise
of the Incentives will be subject to the agreement with the Trustee, as that term is defined below, and in accordance with Section
102 of the Ordinance.

 

		20.	The Company may, if required under any Applicable Law, require that an Participant deposit with
the Company, in cash, at the time of exercise, such amount as the Company deems necessary to satisfy its obligations to withhold
taxes or other amounts incurred by reason of the exercise or the transfer of Shares thereupon.

 

		21.	All Shares purchased upon the exercise of an Option or other grant of an Incentive as provided
herein shall be fully paid and non-assessable.

 

		22.	In the event that an Option is exercised by any person or persons other than the Participant, pursuant
to Article VII (Non-Transferability of Incentive Rights), such Notice of Exercise shall be accompanied by appropriate proof of
the right of such person or persons to exercise the Option.

 

		23.	If the Participant shall cease to be employed or engaged by a Group Company, as the result of his
resignation, then the Participant shall have the right to exercise the Options, but only to the extent that the Options are exercisable
as of the date Participant resigns (according to the provisions of Article V (Terms of Awards)), within thirty (30) days as of
the Termination Date.

 

		24.	If the Participant shall cease to be employed or engaged by a Group Company, as the result of his
dismissal without Cause, then the Participant shall have the right to exercise the Options, but only to the extent that the Options
are exercisable on the date of Participant’s dismissal (according to the provisions of Article V (Terms of Awards)), within
sixty (60) days after the Termination Date.

 

		25.	If the Participant shall cease to be employed or engaged by a Group Company as the result of his
disability or retirement with the consent of the Group Company, then the Option, to the extent that it is exercisable by him at
the time he ceases to be employed or engaged by the Group Company, and only to the extent that the Option is exercisable as of
such time as defined in Article V (Terms of Awards), may be exercised by him within one (1) year, after the Termination Date.

 

    	A-5

    	 

    

 

		26.	If the Participant shall die while employed or engaged by a Group Company, his estate, personal
representative, or beneficiary shall have the right, subject to the provisions of Article V (Terms of Options), to exercise the
Option (to the extent that the Participant would have been entitled to do so at the time of his death) at any time within two (2)
years from the date of his death.

 

		27.	If the Participants shall be terminated for Cause, then, all Options, whether exercisable or not
on the date that the Group Company delivers to the employee a termination notice, will expire and may not be further exercised.

 

		28.	For the purpose of this Israeli Plan, “Cause” shall exist if the Participant
(i) breaches any of the material terms or conditions of his employment agreement, or agreement to provide services to the Group
Company, including, without limitation, the breach of any duty of non-disclosure or non-competition; (ii) engages in willful misconduct
or acts in bad faith with respect to any Group Company in connection with his employment or other agreement with a Group Company;
or (iii) is convicted of a felony.

 

		29.	In the event of the institution of any legal proceedings directed to the validity of the Israeli
Plan or any Option, the Company may, in its sole discretion, and without incurring any liability therefore to the Participant,
terminate the Option.

 

		30.	All terms and conditions herein are subject to any Applicable Law.

 

		31.	For purposes of this Article VI, “Termination Date” shall mean the date
on which Participant’s employment or engagement with a Group Company is terminated.

 

ARTICLE VII

Non-Transferability of Incentive Rights

 

		32.	An Incentive that is granted hereunder shall not be transferable otherwise than by will or the
laws of descent and distribution. To the extent provided in Article VI (Exercise of Options, Termination), an Option may be exercised,
during the lifetime of the Participant, only by the Participant. More particularly (but without limiting the generality of the
foregoing), the Option may not be assigned, transferred (except as provided above), pledged or hypothecated in any way, shall not
be assignable by operation of law, and shall not be subject to execution, attachment or similar process. Any attempted assignment,
transfer, pledge, hypothecation or other disposition of an Incentive contrary to the provisions of the AwardAgreement or the Israeli
Plan, and the levy of any execution, attachment, or similar process upon the Incentive, shall be null and void and without effect;
provided, however, that if the Participant shall die while in the employ of the Company or any subsidiary, his estate, personal
representative, or beneficiary shall have the right to exercise the Option to the extent exercisable in accordance with Article
VI (Exercise of Options, Termination).

 

    	A-6

    	 

    

 

ARTICLE VIII

Adjustments

 

		33.	Except as otherwise provided by Section 12.4 of the Incentive Plan, upon the occurrence
of any of the following events (each a “Transaction”):

 

		a.	a merger or consolidation of the Company (a “Merger”) with or into any
company (the “Successor Company”) resulting in the Successor Company being the surviving entity; or

 

		b.	an acquisition of: (i) all or substantially all of the shares or assets of the Company in one or
more related transactions to another party (a “Share Sale”), or (ii) all or substantially all of the
assets of the Company, in one or more related transactions to another party, in each case such acquirer of shares or assets is
referred to herein as the “Acquiring Company”;

 

for any unexercised Incentive
remain outstanding under the Israeli Plan (the “Unexercised Incentive”), there shall be substituted for
the Shares subject to the Unexercised Incentive an appropriate number of shares of such class of shares or other securities of
the Successor Company or the Acquiring Company, as the case may be (or, if such company is not an operating company, of the first
operating company in the ownership chain of such company) (the “Substitute Shares”). Appropriate equitable
adjustments shall be made in the purchase price per share of the Substitute Shares subject to the Unexercised Incentive, and all
other terms and conditions of the Award Agreements, such as the vesting dates, shall remain in force, all as will be determined
by the Board whose determination shall be final.

 

		34.	The Committee shall have full authority to determine any provisions regarding the acceleration
of the vesting period of any Incentive or the cancellation of all or any portion of any outstanding restrictions with respect to
any Incentive upon certain events or occurrences, and to include such provisions in the Award Agreement on such terms and conditions
as the Committee shall deem appropriate.

 

		35.	Subject to Applicable Law, the Committee shall have full authority to, at any time and from time
to time, without the approval of the stockholders of the Company, (i) grant in its discretion to the holder of an outstanding Incentive,
in exchange for the surrender and cancellation of such Incentive, a new Incentive having an exercise price or purchase price, as
the case may be, lower than provided in the Award (and related Award Agreement) so surrendered and canceled and containing such
other terms and conditions as the Committee may prescribe in accordance with the provisions of the Israeli Plan and any Applicable
Law, or (ii) effectuate a decrease in the Incentive Price of outstanding Incentives.
At the full discretion of the Administrator,
such actions may be brought before the stockholders of the Company for their approval.

 

		36.	In the event of a Share Sale or a Merger, each Participant shall participate in the Share Sale
or the Merger and sell or exchange, as the case may be, all of his or her Shares and Incentives in the Company, provided,
however, that each such Share or Incentive shall be sold or exchanged at a price or ratio (as the case may be) equal to
that of any other share sold or exchanged under the Share Sale or the Merger (minus the applicable exercise price), while accounting
for changes in such price or ratio due to the respective terms of any such Award.

 

    	A-7

    	 

    

 

		37.	With respect to Incentive Shares held in trust the following procedure will be applied: the Trustee
(as defined below) will transfer the Incentive Shares held in trust and sign any document in order to effectuate the transfer of
Incentive Shares, including share transfer deeds, provided, however, that the Trustee receives a notice from the
Board, specifying that: (i) all or substantially all of the issued outstanding share capital of the Company is to be sold or exchanged,
and therefore the Trustee is obligated to transfer the Incentive Shares held in trust; (ii) the Company is obligated to withhold
at the source all taxes required to be paid upon release of the Incentive Shares from the trust and to provide the Trustee with
evidence, satisfactory to the Trustee, that such taxes indeed have been paid; (iii) the Company is obligated to transfer the consideration
for the Incentive Shares directly to the Participant.

 

ARTICLE IX 

Changes in Capitalization

 

		38.	In case of any change in capitalization event as provided in Article 11 of the Incentive
Plan, appropriate equitable adjustments shall be made by the Board, whose determination shall be final, to the number of Shares
which may be purchased under the Israeli Plan, the number of Shares subject to Awards, and the Incentive Price per Share which
may be purchased under outstanding Award Agreements, all as in accordance with Article 11 of the Incentive Plan.

 

ARTICLE X

Trustee

 

		39.	Approved 102 Incentives granted under the Israeli Plan and any Shares allocated or issued upon
exercise of such Approved 102 Incentives, including all rights attaching to such shares, and other shares received subsequently
following any realization of rights (including bonus shares), will be allocated or issued to a trustee nominated by the Board (the
“Trustee”) and approved in accordance with the provisions of Section 102 of the Ordinance, and will be
held by the Trustee for the benefit of the Participants.

 

		40.	Approved 102 Incentives and any Shares received following exercise of Approved 102 Incentives,
including all rights attached to such Shares, and other Shares received subsequently following any realization of rights (including
bonus Shares), will be held by the Trustee for a period of (i) at least twenty four (24) months from the Date of Grant of the Capital
Gain Incentives , or (ii) at least twelve (12) months from the Date of Grant of the Work Income Incentives (the “Trust
Period”). If the requirements for Approved 102 Incentives are not met, then the Approved 102 Incentives will be
regarded as Unapproved 102 Incentives. Notwithstanding the aforesaid, Shares received upon the exercise of Incentives may be sold
or transferred, and the Trustee may release such Shares (or Approved 102 Incentives) from trust, prior to the lapse of the Trust
Period, provided, however, that tax is paid or withheld in accordance with Section 102(b)(4) of the Ordinance and Section 7 of
the Income Tax Rules (Tax Relief in Issuance of Shares to Employees), 2003. However, the Administrator may, in its sole discretion,
require a Participant not to sell the Shares or transfer the Incentives in the Participant’s name prior to the lapse of the
Trust Period.

 

		41.	All rights attaching to any Shares received following exercise of Approved 102 Incentives, and
other shares received subsequently following any realization of rights (including bonus Shares), will be subject to the same taxation
treatment applicable to such received Shares.

 

		42.	Section 3(i) Incentives granted under the Israeli Plan and any Shares allocated or issued upon
exercise of such Section 3(i) Incentives and other Shares received following any realization of rights, in the Administrator’s
discretion, may be allocated or issued to a Trustee and will be held by the Trustee until all of the terms required for release
thereof, as set forth herein and in the applicable Award agreement with the Participant, are fulfilled, including payment of the
required taxes. Anything to the contrary notwithstanding, the Trustee shall not transfer to a Participant any Section 3(i) Incentives
which were not already exercised into Shares by the Participant.

 

    	A-8

    	 

    

 

		43.	The Trustee shall not transfer to the Participant any Shares allocated or issued upon exercise
of Incentives prior to the full payment of the Participant’s tax liabilities arising from or relating to Incentives, which
were granted to the Participant or any Shares allocated or issued upon exercise of such Incentives.

 

ARTICLE XI

No Obligation to Exercise Incentive

 

		44.	Granting of an Incentive shall impose no obligation on the recipient to exercise such Incentive.

 

ARTICLE XII

Use of Proceeds

 

		45.	The proceeds received from the issuance of Shares upon exercise of Incentives pursuant to the Israeli
Plan shall be used for general corporate purposes.

 

ARTICLE XIII

Rights of a Stockholder; Voting Rights

 

		46.	The Participant shall have no rights of a stockholder with respect to Shares to be acquired by
the exercise of an Incentive until a certificate or certificates representing such Shares are issued to him following exercise
of those Incentives which are fully vested and exercisable. Upon issuance of a certificate or certificates, the Participant shall
have the rights of a stockholder attaching to Shares subject to any restrictions or legends under any law, this Israeli Plan or
the Incentive Plan.

 

ARTICLE XIV

Employment Rights

 

		47.	Nothing in the Israeli Plan or in any Approved 102 Incentive granted hereunder shall confer on
any Participant who is an employee or service provider any right to continue in the employ of the Company or a Group Company, or
to interfere in any way with the right of the Company or a Group Company to terminate the Participant’s employment or engagement
at any time.

 

ARTICLE XV

Compliance with the Law

 

		48.	The Company and each of its Affiliates shall be relieved from any liability for the non-issuance
or non-transfer or any delay in issuance or transfer of any Shares subject to Incentives under the Israeli Plan which results from
the inability of the Company or its Affiliates to obtain, or from any delay in obtaining, from any regulatory body having jurisdiction,
all requisite authority to issue or transfer the Shares upon exercise of the Incentives under the Israeli Plan, if counsel for
the Company deems such authority necessary for lawful issuance or transfer of any such shares. Appropriate legends may be placed
on the stock certificates evidencing shares issued upon exercise of Incentives to reflect such transfer restrictions.

 

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ARTICLE XVI

Transfer of Shares

 

		49.	Any issued Shares shall, unless such shares are registered in accordance with the United States
Securities Act of 1933, as amended (the “Act”), be sold only in accordance with exemptions under such
Act. There shall be no exercises, transfers, sales or other dispositions of issued Shares unless such shares are either registered
or exempt from registration, provided, however, that such exercise, transfer or other disposition may be subject to any lock up
provision as agreed by the Company.

 

ARTICLE XVII

Investment Representation

 

		50.	Each Participant exercising any Incentive under the Israeli Plan acknowledges, by virtue of such
exercise, that the Company has not, as of the date of the approval of this Plan by the Board, registered the Shares covered thereby
under the Act. The Participant shall sign and deliver to the Company, if requested, a separate investment representation, certificate
or such other document as may be required by the Company’s counsel, to such effect; provided, however, that
such Incentive, representation, certificate or other document may provide that the said investment restriction shall not be operative
as to such Shares as may in the future be registered with the Securities and Exchange Commission pursuant to the Act. Furthermore,
the Company may place a legend on any Shares certificate delivered to the Participant to the effect that such Shares were acquired
pursuant to an investment representation and without registration of the Shares.

 

ARTICLE XVIII

Effectiveness and Term of Plan

 

		51.	This Israeli Plan was originally adopted by the Board on October 25, 2013. The Israeli Plan shall
expire on October 25, 2023, except as to Incentives outstanding on that date. No Incentive shall be granted pursuant to the Israeli
Plan after its expiration. All Shares reserved for issuance under the Israeli Plan, in respect of which the right of a Participant
to purchase the same shall for any reason terminate, expire or otherwise cease to exist, shall again be available for grant through
Incentives under the Israeli Plan.

 

ARTICLE XIX

Amendment or Discontinuance of Plan

 

		52.	The Board may, without the consent of the stockholders of the Company or the Participants under
the Israeli Plan, at any time terminate the Israeli Plan entirely and at any time, from time to time, amend or modify the Israeli
Plan, provided that no such action shall adversely affect Incentives granted hereunder without the Participant’s consent,
and provided further that no such action by the Board, without the approval of the stockholders, may increase the total number
of Shares which may be purchased pursuant to Incentives granted under the Israeli Plan.

 

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ARTICLE XX

Tax Consequences and Other Requirements

 

		53.	The exercise of an Incentive that is granted hereunder shall be subject to the condition that if
at any time the Company shall determine in its discretion that the satisfaction of withholding tax or other withholding liabilities,
or that the listing, registration, or qualification of any shares otherwise deliverable upon such exercise upon any securities
exchange or under any national, state or federal law, or that the consent or approval of any regulatory body, is necessary or desirable
as a condition of, or in connection with, such exercise in the delivery or purchase of shares pursuant thereto, then in any such
event, such exercise shall not be effective unless such withholding, listing, registration, qualification, consent or approval
shall have been effected or obtained free of any conditions not acceptable to the Company. Any tax obligations arising from the
grant or exercise of an Incentive, from the payment for the Shares covered thereby or from any other event or act (of the Company
or the Participant) hereunder, shall be borne solely by the Participant. Furthermore, the Participant hereby agrees and undertakes
to indemnify the Company, its directors and officers and any Trustee that holds the Incentives, and hold them harmless against
and from any and all liability for any such tax or interest thereon, including without limitation, liabilities relating to the
necessity to withhold, or to have withheld, any such tax from any payment made to the Participants.

 

ARTICLE XXI

Governing Law

 

		54.	The Israeli Plan and all instruments issued hereunder shall be governed by and interpreted in accordance
with the laws of the State of Israel.

 

ARTICLE XXII

Notices

 

		55.	Each notice relating to the Israeli Plan shall be in writing and delivered in person or by first
class mail; postage prepaid, to the address as hereinafter provided. Each notice shall be deemed to have been given on the date
it is received. Each notice to the Company shall be addressed to it at its principal offices. Each notice to the Participant or
other person or persons then entitled to exercise an Incentive shall be addressed to the Participant or such other person or persons
at the Participant’s last known address.

 

ARTICLE XXIII

Interpretation

 

		56.	The interpretation and construction of any terms or conditions of the Israeli Plan, or of the Award
Agreement or other matters related to the Israeli Plan by the Administrator shall be final and conclusive.

 

***************

 

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