Document:

Exhibit 10.2

 

FORM OF RESTRICTED STOCK AGREEMENT

 

TALMER BANCORP, INC.
 EQUITY INCENTIVE PLAN

 

PARTICIPANT:          

 

NO. OF SHARES:          

 

DATE OF GRANT:          

 

This Restricted Stock Agreement (the “Agreement”) evidences the grant to the Participant named above (“you” or “Participant”) of the number of restricted shares set forth above (each, an “Award Share,” and collectively, the “Award Shares”) of the $1.00 par value Class A common stock of Talmer Bancorp, Inc., a Michigan corporation (the “Company”) as of the date of grant set forth above (the “Date of Grant”), pursuant to the Talmer Bancorp, Inc. Equity Incentive Plan, as amended (the “Plan”) and conditioned upon your agreement and compliance with the terms set forth below.  All of the provisions of the Plan are expressly incorporated into this Agreement.

 

1.                                      Terminology.  Capitalized words used in this Agreement and not defined herein shall have the meaning set forth in the Plan.

 

2.                                      Vesting.

 

(a)                                 As of the Date of Grant, all Award Shares are unvested.  All Award Shares shall become vested on the fifth anniversary of the Date of Grant, unless vested earlier in accordance with this Agreement.

 

(b)                                 Notwithstanding anything herein to the contrary, if prior to the vesting of the Award Shares in accordance with Section 2(a) above, there is a Change of Control Event, as defined in Section 2.07 of the Plan, all Award Shares shall become vested upon the earlier of (i) the vesting of the Award Shares in accordance with Section 2(a) above; (ii) the one-year anniversary of such Change of Control Event; or (iii) the date of termination of your employment by the Company (or its subsidiary, Talmer Bank and Trust (the “Bank”)) (or any of their respective successors) without Cause or by you for Good Reason during the one-year period following such Change of Control Event.

 

(c)                                  For purposes of this Agreement, “Cause” shall mean:

 

(i)                                     Participant’s failure or refusal, in any material manner, to perform all lawful services required of Participant as an employee of the Company or the Bank, which failure or refusal continues for more than twenty (20) days after the Participant’s receipt of written notice of such deficiency,

 

(ii)                                  Participant’s commission of fraud, embezzlement or theft, or a crime constituting moral turpitude, in any case whether or not involving the Company or the Bank, that in the reasonable good faith judgment of the Board of Directors of the Company or the Board of Directors of the Bank, renders Participant’s continued employment harmful to the Company or the Bank,

 

 

(iii)                               Participant’s misappropriation of assets or property of the Company or the Bank, including, without limitation, obtaining material reimbursement through fraudulent vouchers or expense reports, or

 

(iv)                              Participant’s conviction or the entry of a plea of guilty or no contest by Participant with respect to any felony or other crime that, in the reasonable good faith judgment of the Board of Directors of the Company or the Board of Directors of the Bank, adversely affects the Company or the Bank, or the reputation or business of the Company or the Bank.

 

(d)                                 For purposes of this Agreement, “Good Reason” means the occurrence of any of the following events:

 

(i)                                     a substantial adverse change, not consented to by Participant, in the nature or scope of Participant’s responsibilities, authorities or duties,

 

(ii)                                  a material involuntary reduction in Participant’s compensation except for an across-the-board and proportional salary reduction similarly affecting all or substantially all employees (provided that the compensation of the Participant shall be increased proportionately at any later time as any other senior executive base salary is thereafter increased), or

 

(iii)                               the relocation, without the Participant’s consent, of Participant’s principal place of employment to another location of the Company or the Bank outside a 60-mile radius from the location of Participant’s principal place of employment at the time of the Change of Control Event.

 

Participant must provide written notice to the Company of the existence of a condition, or conditions, that the Participant believes constitutes Good Reason within thirty (30) days of the initial existence of such condition(s). Upon receipt by the Company of such notice, the Company or the Bank will have fifteen (15) days to remedy the condition(s).  If the Company or the Bank remedies the condition(s) of which it received notice from Participant within fifteen (15) days, then such condition(s) shall not constitute Good Reason. Notwithstanding the foregoing, “Good Reason” shall not include (x) a change in the Participant’s reporting requirements following a Change of Control Event or (y) a change in the Participant’s title following a Change of Control Event.

 

3.                                      Termination of Employment; Performance of Substantial Services.  Except for termination of your employment by the Company (or the Bank) (or any of their respective successors) without Cause or by you for Good Reason following such Change of Control Event as set forth in Section 2(b)(ii), if your employment with the Company (or the Bank) (or any of their respective successors) ceases for any reason, all Award Shares that are not then vested will be immediately and automatically forfeited and cancelled upon the date your employment terminates.  You will be required to perform “substantial services” (within the meaning of the Internal Revenue Code of 1986, as amended, (the “Code”) Section 409A(d)(4)) for the Company (including the Bank) (and any applicable successor of the Company and the Bank) through the vesting date in order for vesting to occur, if at all, on such date.

 

4.                                      Restrictions on Transfer.

 

(a)                                 Until an Award Share becomes vested, you may not sell, pledge, assign or otherwise directly or indirectly dispose of or transfer the Award Shares (whether by operation of law or otherwise) and the Awards Shares shall not be subject to execution, attachment or similar process.

 

(b)                                 The Company shall not be required to (i) transfer on its books any Award Shares that have been sold or transferred in contravention of this Agreement or (ii) treat as the owner of Award

 

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Shares, or otherwise accord voting, dividend or liquidation rights to, any transferee to whom Award Shares have been transferred in contravention of this Agreement.

 

(c)                                  Upon vesting, an Award Share shall be transferred to you without restrictions on further transfer in accordance with Section 5.

 

5.                                      Stock Issuance.

 

(a)                                 The Company shall issue the Award Shares in book entry form, registered in your name with notations regarding the applicable restrictions on transfer imposed under this Agreement; provided, however, that the Company may, in its discretion, elect to issue such shares in certificate form as provided below.

 

(b)                                 Any certificates representing the Award Shares that may be delivered to you by the Company prior to vesting shall be redelivered to the Company to be held by the Company until the restrictions on such Award Shares have lapsed and the Award Shares shall thereby have become vested or the shares represented thereby have been forfeited hereunder. Such certificates shall bear a legend as contemplated by this Section 5.

 

(c)                                  Promptly after the vesting of the Award Shares pursuant to this Agreement, the Company shall, as applicable, either remove the notations on any shares issued in book entry form which have vested or deliver to you a certificate or certificates evidencing the number of Award Shares which have vested.

 

(d)                                 If the Company elects to issue you certificates, you shall be required to execute a stock power, in the form attached as Exhibit A, with respect to the Award Shares. The Company shall not deliver any certificates in accordance with this Agreement unless and until the Company shall have received such stock power executed by you. You, by acceptance of this award, shall be deemed to appoint, and you do so appoint by execution of this Agreement, the Company and each of its authorized representatives as your attorney(s)-in-fact to effect any transfer of unvested forfeited Award Shares (or Award Shares otherwise reacquired by the Company hereunder) to the Company as may be required pursuant to the Plan or this Agreement and to execute such documents as the Company or such representatives deem necessary or advisable in connection with any such transfer.

 

(e)                                  Until the Award Shares become vested, any share certificates or book entry positions representing such shares will include a legend to the effect that you may sell, pledge, assign or otherwise directly or indirectly dispose of or transfer the Award Shares and the Award Shares are subject to the provisions of this Agreement and the Plan.

 

6.                                      Taxes: Election and Withholding.

 

(a)                                 You hereby agree to make adequate provision for foreign, federal, state and local taxes required by law to be withheld, if any, which arise in connection with the grant or vesting of the Award Shares.  You may elect, or the Company shall have the right, to deduct from any compensation or any other payment of any kind (including withholding the issuance of Shares) due you the amount of any federal, state, local or foreign taxes required by law to be withheld as a result of the grant or vesting of the Award Shares in whole or in part; provided, however, that the value of the Shares withheld may not exceed the statutory minimum withholding amount required by law.  The Company may report any income to the Internal Revenue Service and any other applicable governmental entity, even if you refuse to make any tax or withholding payments.  The value of Award Shares deducted is based on the Fair Market Value of the Shares on the applicable date of vesting.

 

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(b)  You hereby acknowledge that you have been advised by the Company to seek independent tax advice from your own advisors regarding the availability and advisability of making an election under Section 83(b) of the Code, and that any such election, if made, must be made within 30 days of the Date of Grant.  If you make an election under 83(b) of the Code, you agree to promptly deliver a copy of such election to the Company.  You expressly acknowledge that you are solely responsible for filing any such Section 83(b) election with the appropriate governmental authorities, irrespective of the fact that such election is also delivered to the Company.  You may not rely on the Company or any of its officers, directors or employees for tax or legal advice regarding this award.

 

7.                                      Required Forfeitures and Clawbacks.  Each Award Share is conditioned on your forfeiting, waiving, or repaying to the Company any amount or Award Share as may be required in compliance with Section 304 of the Sarbanes-Oxley Act, Section 954 of the Dodd-Frank Wall Street Reform and Consumer Protection Act, and the Company’s clawback compliance policy as in effect from time to time and as directed by the Administrator.  You agree to execute any documents to effect any required forfeiture, waiver or clawback.  You agree to assign any Award Shares to the Company or pay any cash amount in lieu thereof as may be required for such compliance.

 

8.                                      Rights as Shareholder.  Except as otherwise provided in this Agreement with respect to the Award Shares which have not vested, you are entitled to all rights of a shareholder of the Company, including the right to vote the Award Shares (subject to any applicable Voting Agreement or similar arrangement to which you may be a party) and receive dividends and/or other distributions declared on the Award Shares; provided, however, that any dividends and/or other distributions declared on the Award Shares will be held by the Company, and your rights to receive such dividends and/or other distributions will vest at the same time as the Award Shares.  If you forfeit any Award Shares granted pursuant to this Agreement, such Award Shares (and any cash dividends with respect thereto) shall automatically revert to the Company (without any payment by the Company to you).

 

9.                                      The Company’s Rights.  The existence of the Award Shares shall not affect in any way the right or power of the Company or its shareholders to make or authorize any or all adjustments, recapitalizations, reorganizations or other changes in the Company’s capital structure or its business, or any merger or consolidation of the Company, or any issue of bonds, debentures, preferred or other stocks with preference ahead of or convertible into, or otherwise affecting the Shares or the rights thereof, or the dissolution or liquidation of the Company, or any sale or transfer of all or any part of the Company’s assets or business, or any other corporate act or proceeding, whether of a similar character or otherwise.

 

10.                               Non-Guarantee of Employment or Service Relationship.  Nothing in the Plan or this Agreement shall alter your at-will or other employment status or other service relationship with the Company, nor be construed as a contract of employment or service relationship between the Company and you, or as a contractual right of you to continue in the employ of, or in a service relationship with, the Company for any period of time, or as a limitation of the right of the Company to discharge you at any time with or without cause or notice and whether or not such discharge results in the forfeiture of any Award Shares or any other adverse effect on your interests under the Plan.

 

11.                               Successors.

 

(a)                                                   This Agreement is personal to the Participant and without the prior written consent of the Company shall not be assignable by the Participant.

 

(b)                                                   This Agreement shall inure to the benefit of and be binding upon the Company and its successors and assigns.

 

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(c)                                                    The Company will require any successor (whether direct or indirect, by purchase, merger, consolidation or otherwise) to all or substantially all of the business and/or assets of the Company to assume expressly and agree to perform this Agreement in the same manner and to the same extent that the Company would be required to perform it if no such succession had taken place.  As used in this Agreement, “the Bank” shall mean Talmer Bank and Trust as hereinbefore defined and any successor to its business and/or assets as aforesaid which assumes and agrees to perform this Agreement by operation of law, or otherwise.  As used in this Agreement, “the Company” shall mean Talmer Bancorp, Inc. as hereinbefore defined and any successor to its business and/or assets as aforesaid which assumes and agrees to perform this Agreement by operation of law, or otherwise.

 

12.                               Miscellaneous.

 

(a)                                 Notices.  All notices and other communications made or given pursuant to this Agreement shall be in writing and shall be sufficiently made or given if hand delivered, mailed by certified mail, transmitted by facsimile or email, addressed to you at the address contained in the records of the Company, or addressed to the Administrator, care of the Company for the attention of its Corporate Secretary at its principal executive office.

 

(b)                                 Entire Agreement.  This Agreement, together with the Plan, contains the entire agreement between the parties with respect to the Award Shares granted hereunder.  Any oral or written agreements, representations, warranties, written inducements, or other communications made prior to the execution of this Agreement with respect to the Award Shares granted hereunder shall be void and ineffective for all purposes.

 

(c)                                  Severability.  If one or more provisions of this Agreement are held to be unenforceable under applicable law, the parties agree to renegotiate such provision in good faith.  In the event that the parties cannot reach a mutually agreeable and enforceable replacement for such provision, then (i) such provision shall be excluded from this Agreement, (ii) the balance of the Agreement shall be interpreted as if such provision were so excluded and (iii) the balance of the Agreement shall be enforceable in accordance with its terms.

 

(d)                                 Amendment.  This Agreement may be amended from time to time by the Administrator in its discretion; provided, however, that this Agreement may not be modified in a manner that would have an adverse effect on the Award Shares as determined in the discretion of the Administrator, except as provided in the Plan or in a written document signed by each of the parties hereto.

 

(e)                                  Conformity with Plan.  This Agreement is intended to conform in all respects with, and is subject to all applicable provisions of, the Plan.  Inconsistencies between this Agreement and the Plan shall be resolved in accordance with the terms of this Agreement.  A copy of the Plan has been provided to you.

 

(f)                                   Governing Law.  The validity, construction and effect of this Agreement, and of any determinations or decisions made by the Administrator relating to this Agreement, and the rights of any and all persons having or claiming to have any interest under this Agreement, shall be determined exclusively in accordance with the laws of the State of Michigan, without regard to its provisions concerning the applicability of laws of other jurisdictions.

 

(g)                                  Captions.  The captions (i.e., all section headings) used in this Agreement are for convenience only and shall not be deemed to limit, characterize or affect in any way any provisions of the Agreement.

 

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(h)                                 Counterparts.  This Agreement may be executed in counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.

 

THE PARTIES’ SIGNATURES ARE CONTAINED ON THE FOLLOWING PAGE.

 

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IN WITNESS WHEREOF, the Company has caused this Agreement to be executed by its duly authorized officer.

 

 

	
 
    	
TALMER   BANCORP, INC.
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
Name:
    	
 
    
	
 
    	
Title:
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
Date:
    	
 
    

 

 

The undersigned hereby acknowledges that he/she has carefully read this Agreement and agrees to be bound by all of the provisions set forth herein.

 

	
 
    	
PARTICIPANT
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
Name:
    
	
 
    	
 
    
	
 
    	
Date:
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
Address:
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    
	
 
    	
Facsimile:
    	
 
    
						

 

Enclosure:  Talmer Bancorp, Inc. Equity Incentive Plan, as amended

 

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{This Stock Power should be signed in blank and deposited with the Company if share certificates are issued and/or delivered to the Participant for Award Shares that are forfeitable.}

 

STOCK POWER

 

FOR VALUE RECEIVED, the undersigned,                                                       , hereby sells, assigns and transfers unto Talmer Bancorp, Inc., a Michigan corporation (the “Company”), or its successor,                    shares of restricted Class A common stock, par value $1.00 per share, of the Company standing in my name on the books of the Company, represented by Certificate No.       , which is attached hereto, and hereby irrevocably constitutes and appoints                                                              as my attorney-in-fact to transfer the said stock on the books of the Company with full power of substitution in the premises.

 

This Stock Power may only be used in connection with the forfeiture of Award Shares pursuant to that certain Restricted Stock Agreement between                          and the Company, dated                             .

 

 

	
 
    	
 
    
	
 
    	
Name:
    
	
 
    	
 
    
	
 
    	
Dated:
    	
 
    

 

 

IF YOU WISH TO MAKE A SECTION 83(B) ELECTION, THE FILING OF SUCH ELECTION IS YOUR RESPONSIBILITY.

 

YOU MUST FILE THIS FORM WITHIN 30 DAYS OF THE DATE OF GRANT OF THE SHARES.

 

YOU (AND NOT THE COMPANY OR ANY OF ITS AGENTS) SHALL BE SOLELY RESPONSIBLE FOR FILING SUCH FORM WITH THE IRS, EVEN IF YOU REQUEST THE COMPANY OR ITS AGENTS TO MAKE THIS FILING ON YOUR BEHALF AND EVEN IF THE COMPANY OR ITS AGENTS HAVE PREVIOUSLY MADE THIS FILING ON YOUR  BEHALF.Exhibit 10.1

 

ALLIQUA, INC.

 

2014 LONG-TERM INCENTIVE PLAN

 

The Alliqua, Inc. 2014
Long-Term Incentive Plan (the “Plan”) was adopted by the Board of Directors of Alliqua, Inc., a Delaware
corporation (the “Company”), effective as of June 5, 2014, 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
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 Company’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 Company may attract able persons as Employees, Contractors, and Outside Directors.

 

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, 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 Unit, 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.

 

2.7“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 $0.001 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 Alliqua, Inc., a Delaware corporation, and any successor entity.

 

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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.

 

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.

 

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.

 

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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 Alliqua, Inc. 2014 Long-Term Incentive Plan, as amended from time to time.

 

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.

 

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.

 

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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.

 

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.

 

    	- 5 -

    	 

    

 

Article
3

ADMINISTRATION

 

3.1General 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.

 

3.2Designation
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.

 

(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 Nonqualified Stock Options, Incentive Stock Options or SARs will be granted under the
Plan, and (ii) determine the number of shares of Common Stock that will be subject to such Nonqualified Stock Options, Incentive
Stock Options or SARs; 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 Nonqualified Stock Options, Incentive Stock Options
or SARs, (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 Nonqualified Stock Options, Incentive Stock Options or SARs, and (z) not authorize an officer
to designate himself as a recipient of any Award.

 

3.3Authority
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, 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.

 

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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.

 

Article
5

SHARES SUBJECT TO PLAN

 

5.1Number 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 two million (2,000,000) 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 hundred fifteen thousand (115,000) 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.

 

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5.2Reuse 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.

 

Article
6

GRANT OF AWARDS

 

6.1In 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.

 

    	- 8 -

    	 

    

 

(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.

 

6.2Option 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.

 

6.3Maximum 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.

 

6.4Restricted
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.

 

    	- 9 -

    	 

    

 

(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.

 

(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.

 

    	- 10 -

    	 

    

 

6.5SARs.
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.

 

6.6Restricted
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.

 

6.7Performance
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.

 

    	- 11 -

    	 

    

 

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.

 

(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 $1,500,000, 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.

 

    	- 12 -

    	 

    

 

6.8Dividend
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.

 

6.9Other 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.

 

6.10Performance
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.

 

6.11Tandem 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.

 

    	- 13 -

    	 

    

 

Article
7

AWARD PERIOD; VESTING

 

7.1Award 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.

 

7.2Vesting.
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

 

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

 

8.2Securities
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.

 

8.3Exercise
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.

 

    	- 14 -

    	 

    

 

(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.

 

(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.

 

    	- 15 -

    	 

    

 

8.4SARs.
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.

 

8.5Disqualifying
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.

 

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.

 

    	- 16 -

    	 

    

 

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 June __, 2024, 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.

 

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

 

12.1No 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.

 

    	- 17 -

    	 

    

 

 

12.2Conversion
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.

 

12.3Exchange
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.

 

12.4Cancellation
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:

 

(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.

 

    	- 18 -

    	 

    

 

(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.

 

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

 

15.1Investment
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.

 

    	- 19 -

    	 

    

 

15.2No 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.

 

15.3Indemnification
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.

 

15.4Effect 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.

 

15.5Compliance
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.

 

15.6Foreign
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.

 

15.7Tax 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.

 

    	- 20 -

    	 

    

 

15.8Assignability.
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, Awards may not be transferred, assigned, pledged, hypothecated or otherwise conveyed or encumbered other than
by will or the laws of descent and distribution. Notwithstanding the foregoing, 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.

 

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.

 

    	- 21 -

    	 

    

 

15.9Use 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.

 

15.10Legend.
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 Alliqua, Inc. 2014 Long-Term
Incentive Plan, a copy of which is on file at the principal office of the Company in New York, New York. 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:

 

“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.”

 

15.11Governing
Law. The Plan shall be governed by, construed, and enforced in accordance with the laws of the State of Delaware (excluding
any conflict of laws, rule or principle of Delaware law that might refer the governance, construction, or interpretation of this
Agreement to the laws of another state).

 

Article
16

ACCELERATION OF AWARD VESTING

 

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

 

    	- 22 -

    	 

    

 

16.2Definitions.

 

(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.

 

16.3Number 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.”

 

16.4Full 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 New York, New York.

 

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

 

    	- 23 -

    	 

    

IN WITNESS WHEREOF,
the Company has caused this instrument to be executed as of June 5, 2014, by its Chief Executive Officer and Secretary pursuant
to prior action taken by the Board.

 

 

	 	ALLIQUA, INC.
	 	 	 
	 	 	 
	 	By:	/s/ David I. Johnson
	 	Name:	David I. Johnson
	 	Title:	Chief Executive Officer

 

 

 

	Attest:	 	 
	 	 	 
	 	 	 
	By:	/s/ Brian M. Posner	 
	Name:	Brian M. Posner	 
	Title:	Secretary	 

  

    	-24-

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