Document:

CANNABIS
SCIENCE, INC.

2016
Equity Award Plan B

 

 

SECTION
1. PURPOSE AND EFFECTIVE DATE

 

(a)
Purpose. The Cannabis Science, Inc. 2016 Equity Award Plan B (the “Plan”) is intended to promote the interests
of the Company and its shareholders by (i) promoting the growth and success of Cannabis Science, Inc. (the “Company”)
by linking a significant portion of Participant compensation to the increase in the value of the Company’s Stock, (ii) attracting
and retaining non-employee directors, executive personnel and other key employees by offering performance related incentives to
achieve a competitive incentive compensation program, (iii) rewarding innovation and outstanding performance as important contributing
factors to the Company’s growth and progress thereby aligning the interests of the executive officers, employees, Directors
and Consultants with those of the Company’s shareholders by reinforcing the relationship between Participant rewards and
shareholder gains obtained through the achievement by Plan Participants of short-term objectives and long-term goals, and (iv)
encouraging executive officers, employees, Directors and Consultants to obtain and maintain an equity interest in the Company.

 

(b)
Effective Date. The Plan will become effective, and Awards may be granted under the Plan, on and after the Effective Date;
provided that any Award granted prior to the date the Plan is approved by the Company’s shareholders shall be contingent
on such approval.

 

SECTION
2. DEFINITIONS

 

Capitalized
terms used but not otherwise defined in the Plan shall have the following meanings:

 

“10%
Stockholder” means a Participant who, as of the date that an Incentive Stock Option is granted to such individual, owns
more than ten percent (10%) of the total combined voting power of all classes of capital stock then issued by the Company or a
Subsidiary.

 

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

 

“Affiliate”
and “Associate” have the respective meanings ascribed to such terms in Rule 12b-2 under the Act. Notwithstanding
the foregoing, for purposes of determining those individuals to whom an Option or Stock Appreciation Right may be granted, the
term “Affiliate” means any entity that, directly or through one or more intermediaries, is controlled by, controls,
or is under common control with the Company within the meaning of Code Sections 414(b) or (c); provided that, in applying such
provisions, the phrase “at least 20 percent” shall be used in place of “at least 80 percent” each place
it appears therein.

 

“Award”
means a grant of Options or Performance Shares, or any other type of award permitted under the Plan.

 

“Board”
means the Board of Directors of the Company.

 

“Cause”
means (i) the willful failure of a Participant to perform substantially his or her duties, (ii) a Participant’s willful
or serious misconduct that has caused, or could reasonably be expected to result in, material injury to the business or reputation
of an Employer, (iii) a Participant’s conviction of, or entering a plea of guilty or nolo contendere to, a crime
constituting a felony, (iv) the breach by a Participant of any written covenant or agreement with an Employer, any material written
policy of any Employer or any Employer’s “code of conduct”, or (v) the Participant’s failure to cooperate
with an Employer in any internal investigation or administrative, regulatory or judicial proceeding. In addition, the Participant’s
Service shall be deemed to have terminated for Cause if, after the Participant’s Service has terminated (for a reason other
than Cause), facts and circumstances are discovered that would have justified a termination for Cause.

 

“Change
of Control” means the first occurrence of any of the following:

 

    	 	1	 

     

    

(i)
a transaction or series of transactions (other than an offering of Stock to the general public through a registration statement
filed with the Securities and Exchange Commission) whereby any “person” or related “group” of “persons”
(as such terms are used in Sections 13(d) and 14(d)(2) of the Act) (other than the Company, any of its Subsidiaries, an employee
benefit plan maintained by the Company or any of its Subsidiaries or a “person” that, prior to such transaction, directly
or indirectly controls, is controlled by, or is under common control with, the Company) directly or indirectly acquires beneficial
ownership (within the meaning of Rule 13d-3 under the Act) of securities of the Company possessing more than 50% of the total
combined voting power of the Company’s securities outstanding immediately after such acquisition; or

 

(ii)
during any period of two consecutive years, individuals who, at the beginning of such period, constitute the Board together with
any new director(s) (other than a director designated by a person who shall have entered into an agreement with the Company to
effect a transaction described herein as a Change of Control whose election by the Board or nomination for election by the Company’s
stockholders was approved by a vote of at least two-thirds of the directors then still in office who either were directors at
the beginning of the two-year period or whose election or nomination for election was previously so approved, cease for any reason
to constitute a majority thereof; or

 

(iii)
the consummation by the Company (whether directly involving the Company or indirectly involving the Company through one or more
intermediaries) of (x) a merger, consolidation, reorganization, or business combination or (y) a sale or other disposition of
all or substantially all of the Company’s assets in any single transaction or series of related transactions, in each case
other than a transaction:

 

(A)
that results in the Company’s voting securities outstanding immediately before the transaction continuing to represent (either
by remaining outstanding or by being converted into voting securities of the Company or the person that, as a result of the transaction,
controls, directly or indirectly, the Company or owns, directly or indirectly, all or substantially all of the Company’s
assets or otherwise succeeds to the business of the Company (the Company or such person, the “Successor Entity”))
directly or indirectly, at least a majority of the combined voting power of the Successor Entity’s outstanding voting securities
immediately after the transaction, and

 

(B)
after which no person or group beneficially owns voting securities representing 50% or more of the combined voting power of the
Successor Entity; provided, however, that no person or group shall be treated for purposes of this section as beneficially
owning 50% or more of combined voting power of the Successor Entity solely as a result of the voting power held in the Company
prior to the consummation of the transaction; or

 

(iv)
the Company’s shareholders approve a plan of complete liquidation or dissolution of the Company, or such a plan is commenced;
or

 

(v)
any other event not described in clauses (i) through (iv) above, that the Board, in its discretion, determines to be a Change
in Control.

 

Notwithstanding
the foregoing, with respect to an Award that is considered deferred compensation subject to Code Section 409A, the definition
of “Change of Control” shall be amended and interpreted in a manner that allows the definition to satisfy the requirements
of a change of control under Code Section 409A solely for purposes of determining the timing of payment of such Award.

 

“Code”
means the Internal Revenue Code of 1986, as amended from time to time.

 

“Committee”
means the Compensation Committee of the Board (or such other committee of the Board with the same or similar authority).

 

“Consultant”
means a Person or entity rendering services to the Company or an Affiliate other than as an employee of any such entity or
a Director.

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“Director”
means a member of the Board.

 

“Disability”
means, except as otherwise determined by the Committee and set forth in an Award Agreement: (i) with respect to an Incentive
Stock Option, the meaning given in Code Section 22(e)(3), and (ii) with respect to all other Awards, a physical or mental incapacity
which qualifies an individual to collect a benefit under a long term disability plan maintained by the Company, or such similar
mental or physical condition which the Committee may determine to be a disability, regardless of whether either the individual
or the condition is covered by any such long term disability plan. The Committee shall make the determination of Disability and
may request such evidence of Disability as it reasonably determines.

 

“Dividend
Equivalent Unit” means the right to receive a payment, in cash or Shares, equal to the cash dividends or other distributions
paid with respect to a Share.

 

“Effective
Date” means February 24, 2016, the date on which the Plan was approved by the Board.

 

“Employee”
means any officer or employee employed by any the Company and any Affiliate thereof in a common-law employee-employer relationship.

 

“Employer”
means the Company and any Affiliate thereof.

 

“Fair
Market Value” means the closing sales price (or average of the quoted closing bid and asked prices if there is no closing
sales price reported), per Share on a particular date of the Stock. If the Shares are neither listed on a national securities
exchange nor traded in an over-the-counter market, the price determined by the Committee, in its discretion, will be used.

 

“Incentive
Stock Option” means an Option that meets the requirements of Section 422 of the Code.

 

“Non-Employee
Director” means a Director who is not an employee of the Company or any Subsidiary.

 

“Nonqualified
Stock Option” means an Option that does not meet the requirements of Section 422 of the Code.

 

“Option”
means the right to purchase Shares at a stated price for a specified period of time.

 

“Participant”
means an Employee, Director or Consultant selected by the Committee to receive an Award under the Plan.

 

“Performance
Shares” means the right to receive Shares pursuant to the Plan.

 

“Person”
has the meaning given in Section 3(a)(9) of the Act, as modified and used in Sections 13(d) and 14(d) thereof.

 

“Section
16 Participants” means Participants who are subject to the provisions of Section 16 of the Act.

 

“Service”
means the provision of services to the Company or its Affiliates in the capacity of (i) an Employee, (ii) a Director, or (iii)
a Consultant.

 

“Share”
means a share of Stock.

 

“Stock”
means the common stock of the Company, par value of $0.001 per share.

 

“Subsidiary”
means any business entity in which the Company possesses directly or indirectly fifty percent (50%) or more of the total combined
voting power.

 

 

    	 	3	 

     

    

SECTION
3. POWERS OF THE COMMITTEE 

 

(a)
Eligibility. Each Employee, Director or Consultant who, in the opinion of the Committee, has the capacity to contribute to
the success of the Company is eligible to be a Participant in the Plan.

 

(b)
Power to Grant and Establish Terms of Awards. The Committee shall have the discretionary authority, subject to the terms of
the Plan, to determine which Employees, Directors or Consultants to whom Awards shall be granted, the type or types of Awards
to be granted, and the terms and conditions of any and all Awards including, without limitation, the number of shares of Stock
subject to an Award, the time or times at which Awards shall be granted, and the terms and conditions of applicable Award Agreements.
The Committee may establish different terms and conditions for different types of Awards, for different Participants receiving
the same type of Award, and for the same Participant for each type of Award such Participant may receive, whether or not granted
at the same or different times.

 

(c)
Administration. The Plan shall be administered by the Committee. The Committee shall have full discretionary authority to
administer the Plan, including but not limited to the authority to: (i) interpret the provisions of the Plan, (ii) prescribe,
amend and rescind rules and regulations relating to the Plan, (iii) correct any defect, supply any omission, or reconcile any
inconsistency in any Award or agreement covering an Award in the manner and to the extent it deems desirable to carry the Plan
into effect, and (iv) make all other determinations necessary or advisable for the administration of the Plan. The Committee’s
decisions (including any failure to make decisions) shall be binding upon all persons, including the Company, shareholders, Employers,
and each Employee, Director, Consultant, Participant or Designated Beneficiary, and shall be given deference in any proceeding
with respect thereto.

 

Notwithstanding
the above statement or any other provision of the Plan, once established, the Committee shall have no discretion to increase the
amount of compensation payable under an Award that is intended to be performance-based compensation under Section 162(m) of the
Code, although the Committee may decrease the amount of compensation a Participant may earn under such an Award. Any action by
the Committee to accelerate or otherwise amend an Award for reasons other than retirement, death, Disability or a termination
by the Company without Cause, or in connection with a Change of Control, shall include application of a commercially reasonable
discount to the compensation otherwise payable to reflect the value of the accelerated payment.

 

(d)
Delegation to Other Committees or Officers. The Committee may delegate to the Company’s Chief Executive Officer and/or
to such other officer(s) of the Company, the power and authority to make and/or administer Awards under the Plan with respect
to individuals who are below the position of an executive officer of the Company, pursuant to such conditions and limitations
as the Committee may establish and only the Committee or the Board may select, and grant Awards to, executive officers or exercise
any other discretionary authority under the Plan in respect of Awards granted to such executive officers. Unless the Committee
shall otherwise specify, any delegate shall have the authority and right to exercise (within the scope of such person’s
delegated authority) all of the same powers and discretion that would otherwise be available to the Committee pursuant to the
terms hereof. The Committee may also appoint agents (who may be officers or employees of the Company) to assist in the administration
of the Plan and may grant authority to such persons to execute agreements, including Award Agreements, or other documents on its
behalf. All expenses incurred in the administration of the Plan, including, without limitation, for the engagement of any counsel,
consultant or agent, shall be paid by the Company.

 

(e)
Indemnification. The Company will indemnify and hold harmless each member of the Board and the Committee, and each officer
or member of any other committee to whom a delegation under Section 3(b) has been made, as to any acts or omissions with respect
to the Plan or any Award to the maximum extent that the law and the Company’s By-Laws permit.

 

(f)
Participants Based Outside the United States. To conform with the provisions of local laws and regulations, or with local
compensation practices and policies, in foreign countries in which the Company or any of its Subsidiaries or Affiliates operate,
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, the Plan as it determines necessary or appropriate for such purposes. Any such amendment, restatement or alternative
versions that the Committee approves for purposes of using the Plan in a foreign country will not affect the terms of the Plan
for any other country.

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In
addition, if an Award is held by a Participant who is employed or residing in a foreign country and the amount payable or Shares
issuable under such Award would be taxable to the Participant under Section 457A of the Code in the year such Award is no longer
subject to a substantial risk of forfeiture, then the amount payable or Shares issuable under such Award shall be paid or issued
to the Participant as soon as practicable after such substantial risk of forfeiture lapses (or, for Awards that are not considered
nonqualified deferred compensation subject to Section 409A of the Code, no later than the end of the short-term deferral period
permitted by Section 457A of the Code) notwithstanding anything in the Plan or the Award Agreement to contrary.

 

SECTION
4. MAXIMUM AMOUNT AVAILABLE FOR AWARDS 

 

(a)
Number. Subject in all cases to the provisions of this Section 4, the maximum number of shares of Stock that are available
for Awards shall be 150,000,000 shares. Such maximum number of shares shall be subject to adjustment in Section 4(c). Notwithstanding
the provisions of Section 4(b) of the Plan, the maximum number of shares of Stock that may be issued in respect of Incentive Stock
Options shall not exceed 250,000,000 shares. Shares of Stock may be made available from Stock held in treasury or authorized but
unissued shares of the Company not reserved for any other purpose.

 

(b)
Canceled, Terminated or Forfeited Awards, Etc. Any share of Stock subject to an Award which for any reason expires without
having been exercised, is canceled or terminated or otherwise is settled without the issuance of any Stock shall again be available
for grant under the Plan; provided that, for purposes of Section 4(a) upon the Net Exercise of any Options, the gross number of
shares as to which such Option is being exercised, and not just the net number of shares delivered upon such exercise, shall be
treated as issued pursuant to the Plan.

 

(c)
Adjustment in Capitalization. In the event that the Committee shall determine that any stock dividend, stock split, share
combination, extraordinary cash dividend, recapitalization, reorganization, merger, consolidation, split-up, spin-off, combination,
exchange of shares, warrants or rights offering to purchase Stock at a price substantially below Fair Market Value, or other similar
corporate event affects the Stock such that an adjustment is required in order to preserve, or to prevent the enlargement of,
the benefits or potential benefits intended to be made available under this Plan, then an adjustment shall be made in the number
and class of shares of stock available for Awards under Section 4(a) and the limitations in Section 4(c) and the Committee shall
substitute for or add to each share of Stock that may become subject to an Award the number and kind of shares of stock or other
securities into which each outstanding share of Stock was changed, for which each such share of Stock was exchanged, or to which
each such share of Stock, as the case may be.

 

SECTION
5. STOCK OPTIONS

 

(a)
Grant. The Committee shall have the authority to grant Options, (whether Incentive Stock Options or Non-statutory Stock Options)
at such time or times as shall be determined by the Committee. The grant date of any Option under the Plan will be the date on
which such Option is awarded by the Committee, or such other future date as the Committee shall determine in its sole discretion.
Each Option awarded under the Plan shall be evidenced by an Award Agreement that shall specify (i) the type of Option Award granted,
(ii) the number of Shares subject to the Option, (iii) the date of grant, which may not be prior to the date of the Committee’s
approval of the grant, (iv) the exercise price, (v) the duration of the Option; and (vi) such other terms and conditions not inconsistent
with the Plan as the Committee shall determine including customary representations, warranties and covenants with respect to securities
law matters. In no case, may an Incentive Stock Option be granted to a Participant that is not an Employee.

 

(b)
Exercise Price. The Committee shall establish the exercise price at the time each Option is granted.

 

(c)
Vesting and Exercisability. The Committee shall establish the vesting and exercisability at the time each Option is granted.

  

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(d)
Payment of Option Exercise Price. No Stock shall be delivered pursuant to any exercise of an Option until payment in full
of the exercise price and any applicable withholding taxes is received by the Company. Such payment may be made in cash or its
equivalent or, if permitted by the Committee, (i) by exchanging shares of Stock owned by the Participant for at least six months
(or for such greater or lesser period as the Committee may determine from time to time) and which are not the subject of any pledge
or other security interest, (ii) through an arrangement with a broker approved by the Company whereby payment of the exercise
price is accomplished with the proceeds of the sale of Stock, or (iii) by a combination of the foregoing, provided that the combined
value of all cash and cash equivalents and the Fair Market Value of any such Stock so tendered to the Company, valued as of the
date of such tender, is at least equal to such exercise price of the portion of the Option being exercised. Additionally, to the
extent authorized by the Committee (whether at or after the grant date), Options may be Net Exercised subject to such terms and
conditions as the Committee may from time to time impose. The Company may not make a loan to a Participant to facilitate such
Participant’s exercise of any of his or her Options or payment of taxes. A Participant need not present stock certificates
when making payment in Stock, so long as other satisfactory proof of ownership of the Stock tendered is provided (e.g., attestation
of ownership of a sufficient number of shares of Stock to pay the exercise price).

 

(e)
Incentive Stock Option Status. Notwithstanding anything in this Plan to the contrary, no term of this Plan relating to Incentive
Stock Options shall be interpreted, amended or altered, nor shall any discretion or authority granted under the Plan be so exercised,
so as to disqualify the Plan under Section 422 of the Code.

 

SECTION
6. OTHER STOCK BASED AWARDS

 

(a)
Other Stock Based Awards. The Committee shall have the authority to grant to Participants other types of Awards, which shall
be denominated or payable in, valued in whole or in part by reference to, or otherwise based on, Shares, either alone or in addition
to or in conjunction with other Awards, and payable in Stock or cash. Without limitation, such Award may include the issuance
of Shares of unrestricted Stock, which may be awarded in payment of director fees, in lieu of cash compensation, in exchange for
cancellation of a compensation right, or rights to acquire Stock from the Company. Each such Other Stock Based Award shall be
evidenced by an Award Agreement that shall specify the terms and conditions of the Award, including but not limited to, the time
or times at which such Awards shall be made, and the number of Shares to be granted pursuant to such Awards or to which such Award
shall relate.

 

(b)
Termination of Service. In addition to any other terms and conditions that may be specified by the Committee, each Other Stock
Based Award shall specify the impact of a termination of Service upon the rights of a Participant in respect of such Award.

 

SECTION
7. CHANGE IN CONTROL 

 

(a)
Accelerated Vesting and Payment.

 

(i)
In General. Except as provided in an employment or individual severance agreement between a Participant and an Employer or an
Award Agreement, upon a Change in Control all outstanding Options shall become vested and exercisable immediately. Additionally,
the Committee (as constituted prior to the Change in Control) may provide that in connection with the Change in Control each Option
shall be canceled in exchange for an amount (payable in accordance with Section 7(a)(ii) below) equal to the excess, if any, of
the Fair Market Value over the exercise price for such Option.

 

(ii)
Payments. Payment of any amounts calculated in accordance with Section 7(a)(i) shall be made in cash or, if determined by the
Committee (as constituted prior to the Change in Control), in shares of the stock of the New Employer having an aggregate fair
market value equal to such amount or in a combination of such shares of stock and cash. All amounts payable hereunder shall be
payable in full, as soon as reasonably practicable, but in no event later than ten business days, following the Change in Control.
For purposes hereof, the fair market value of one share of stock of the New Employer shall be determined by the Committee (as
constituted prior to the consummation of the transaction constituting the Change in Control) in good faith.

 

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(b)
Termination of Service Prior to Change in Control. In the event that any Change in Control occurs as a result of any transaction
described in clause (i) of the definition of such term, any Participant whose Service is involuntarily terminated by an Employer
other than for Cause or is terminated due to a Special Termination, in either case, on or after the date on which the shareholders
of the Company approve the transaction giving rise to the Change in Control, but prior to the consummation thereof, shall be treated,
solely for purposes of this Plan (including, without limitation, this Section 7), as continuing in Service until the occurrence
of such Change in Control and to have been terminated immediately thereafter.

 

SECTION
8. EFFECTIVE DATE, AMENDMENT, MODIFICATION AND TERMINATION OF THE PLAN OR AWARDS 

 

(a)
General. The Plan shall be effective on the Effective Date, and shall continue in effect, unless sooner terminated pursuant
to this Section 8, until the tenth anniversary of the Effective Date, after which no new Awards may be granted under the Plan.
The Board may at any time in its sole discretion, for any reason whatsoever, terminate or suspend the Plan, and from time to time
may amend or modify the Plan; provided that without the approval by a majority of the votes cast at a duly constituted meeting
of shareholders of the Company, no amendment or modification to the Plan may (i) materially increase the benefits accruing to
Participants under the Plan, (ii) except as otherwise expressly provided in Section 4(c) of the Plan, (iii) materially modify
the requirements for participation in the Plan, or (iv) materially modify the Plan in any other way that would require shareholder
approval under any regulatory requirement that the Committee determines to be applicable. In the event that the Committee shall
determine that such action would, taking into account such factors as it deems relevant, be beneficial to the Company, the Committee
may affirmatively act to amend, modify or terminate any outstanding Award at any time prior to payment or exercise in any manner
not inconsistent with the terms of the Plan, subject to Section 8(b), including without limitation, to change the date or dates
as of which (A) an Option becomes exercisable, or (B) Award or Performance Share is deemed earned, except that no outstanding
Option may be amended or otherwise modified or exchanged (other than in connection with a transaction described in Section 4(c)
of the Plan) in a manner that would have the effect of reducing its original exercise price or otherwise constitute repricing.
Any such action by the Committee shall be subject to the Participant’s consent if the Committee determines that such action
would adversely affect in any material way the Participant’s rights under such Award, whether in whole or in part. No amendment,
modification or termination of the Plan or any Award shall adversely affect in any material way any Award theretofore granted
under the Plan, without the consent of the Participant.

 

(b)
Adjustment of Awards upon the Occurrence of Certain Events. 

 

(i)
Equity Restructurings. If the outstanding shares of Stock are increased, decreased, changed into or exchanged for a different
number or kind of shares or securities of the Company through a non-reciprocal transaction between the Company and its stockholders
that causes the per share fair market value underlying an Award to change, such as stock dividend, stock split, spin-off, rights
offering, recapitalization through a large, non-recurring cash dividend, or other similar transaction, a proportionate adjustment
shall be made to the number or kind of shares or securities allocated to Awards that have been granted prior to any such change.
Any such adjustment in an outstanding Option shall be made without change in the aggregate exercise price applicable to the unexercised
portion of such Option but with a corresponding adjustment in the exercise price for each share of Stock or other unit of any
security covered by such Option.

 

(ii)
Reciprocal Transactions. The Board may, but shall not be obligated to, make an appropriate and proportionate adjustment to an
Award or to the exercise price of any outstanding Award, and/or grant an additional Award to the holder of any outstanding Award,
to compensate for the diminution in the intrinsic value of the shares of Stock resulting from any reciprocal transaction.

 

(iii)
Certain Unusual or Nonrecurring Events. In recognition of unusual or nonrecurring events affecting the Company or its financial
statements, or in recognition of changes in applicable laws, regulations or accounting principles, and, whenever the Board determines
that adjustments are appropriate in order to prevent dilution or enlargement of the benefits or potential benefits intended to
be made available under the Plan, the Board may, using reasonable care, make adjustments in the terms and conditions of, and the
criteria included in, Awards. In case of an Award designed to qualify for the Performance-Based Exception (as defined in Code
Section 409A), the Board will take care not to make an adjustment that would disqualify the Award.

 

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(c)
Repricing and Backdating Prohibited. Notwithstanding anything in the Plan to the contrary, and except for the adjustments
provided in Section 8(b), neither the Committee nor any other Person may decrease the exercise price for any outstanding Option
after the date of grant nor allow a Participant to surrender an outstanding Option to the Company as consideration for the grant
of a new Option with a lower exercise price. In addition, the Committee may not make a grant of an Option with a grant date that
is effective prior to the date the Committee takes action to approve such Award.

 

SECTION
9. DEFERRALS AND SECTION 409A.

 

Notwithstanding
anything in this Plan to the contrary, no terms of this Plan relating to Awards or any deferral with respect thereto shall be
interpreted, amended or altered, nor shall any discretion or authority granted under the Plan be so exercised, so as to cause
an Award, or the deferral or payment thereof, to become subject to interests and additional tax under Section 409A.

 

SECTION
10. TAXES. 

 

(a)
Withholding. The Employer shall have the right to deduct from all amounts paid to a Participant in cash (whether under this
Plan or otherwise) any amount required by law to be withheld in respect of Awards under this Plan as may be necessary in the opinion
of the Employer to satisfy any applicable tax withholding requirements under the laws of any country, state, province, city or
other jurisdiction, including but not limited to income taxes, capital gains taxes, transfer taxes, social security contributions,
and medicare tax contributions that are required by law to be withheld. In the case of payments of Awards in the form of Stock,
at the Committee’s discretion, the Participant shall be required to either pay to the Employer the amount of any taxes required
to be withheld with respect to such Stock or, in lieu thereof, the Employer shall have the right to retain (or the Participant
may be offered the opportunity to elect to tender) the number of shares of Stock whose Fair Market Value equals such amount required
to be withheld.

 

(b)
No Guarantee of Tax Treatment. Notwithstanding any provisions of the Plan, the Company does not guarantee to any Participant
or any other Person with an interest in an Award that (i) any Award intended to be exempt from Code Section 409A shall be so exempt,
(ii) any Award intended to comply with Code Section 409A or Code Section 422 shall so comply, (iii) any Award shall otherwise
receive a specific tax treatment under any other applicable tax law, nor in any such case will the Company or any Affiliate indemnify,
defend or hold harmless any Person with respect to the tax consequences of any Award.

 

(c)
Participant Responsibilities. If a Participant shall dispose of Stock acquired through exercise of an Incentive Stock Option
within either (i) two (2) years after the date the Option is granted or (ii) one (1) year after the date the Option is exercised
(i.e. a disqualifying disposition under the Code), such Participant shall notify the Company within seven (7) days of the date
of such disqualifying disposition.

 

SECTION
11. GENERAL PROVISIONS. 

 

(a)
Nontransferability of Awards. No Award shall be assignable or transferable other than by will or the laws of descent and distribution;
provided that the Committee may permit, on such terms and conditions as it shall establish, a Participant to transfer some or
all of an Award to (i) the Participant’s spouse, child, or grandchild (the “Family Members”), (ii) a trust or
trusts in which the Family Members have all of the beneficial interest, or (iii) a partnership or limited liability company in
which such Family Members are the only partners or members. Any such transfer shall be without consideration and shall be irrevocable.
No Award so transferred may be subsequently transferred, except by will or applicable laws of descent and distribution. The Committee
may create additional conditions and requirements applicable to the transfer of Awards. Following the allowable transfer of a
vested Option, such Option shall continue to be subject to the same terms and conditions as were applicable to the Option immediately
prior to the transfer.

 

Notwithstanding
the foregoing, vested or earned Awards may be transferred without the Committee’s pre-approval if the transfer is made incident
to a divorce as required pursuant to the terms of a “domestic relations order” as defined in Section 414(p) of the
Code; provided that no such transfer will be allowed with respect to Incentive Stock Options if such transferability is not permitted
by Code Section 422.

 

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Except
to the extent required by law, no right or interest of any Participant shall be subject to any lien, obligation or liability of
the Participant. All rights with respect to Awards granted to a Participant under the Plan shall be exercisable during the Participant’s
lifetime only by such Participant or, if applicable, his or her permitted transferee(s). The rights of such permitted transferee
shall be limited to the rights conveyed to such permitted transferee, who shall be subject to and bound by the terms of the agreement
or agreements between the Participant and the Company.

 

(b)
No Right to Employment. The Plan and the issuance of an Award thereunder shall not confer upon a Participant any right with
respect to continued employment or service with the Company or any Affiliate, or the right to continue as a Director or Consultant.
The grant of an Award hereunder, and any future grant of Awards under the Plan is entirely voluntary, and at the complete discretion
of the Company. Neither the grant of an Award nor any future grant of Awards by the Company shall be deemed to create any obligation
to grant any further Awards, whether or not such a reservation is explicitly stated at the time of such a grant.

 

The
Plan shall not be deemed to constitute, and shall not be construed by the Participant to constitute, part of the terms and conditions
of employment and participation in the Plan shall not be deemed to constitute, and shall not be deemed by the Participant to constitute,
an employment or labor relationship of any kind with an Employer. Each Employer expressly reserves the right at any time to dismiss
a Participant free from any liability, or any claim under the Plan, except as provided herein and in any agreement entered into
with respect to an Award. The Company expressly reserves the right to require, as a condition of participation in the Plan, that
Award recipients agree and acknowledge the above in writing. Further, the Company expressly reserves the right to require Award
recipients, as a condition of participation, to consent in writing to the collection, transfer from the Employer to the Company
and third parties, storage and use of personal data for purposes of administering the Plan.

 

(c)
No Rights as Shareholder. Subject to the provisions of the applicable Award contained in the Plan and in the Award Agreement,
no Participant, Permitted Transferee or Designated Beneficiary shall have any rights as a shareholder with respect to any shares
of Stock to be distributed under the Plan until he or she has become the holder thereof.

 

(d)
Governing Law. The validity, construction, interpretation, administration and effect of the Plan and of its rules and regulations,
and rights relating to the Plan, shall be determined solely in accordance with the laws of the State of Nevada (without reference
to the principles of conflicts of law).

 

(e)
Construction. The headings and captions herein are provided for reference and convenience only, and shall not be considered
part of this Plan, and shall not be employed in the construction of this Plan. Whenever the context may require any words used
herein in the masculine, shall be construed in the feminine or neuter form; and wherever any words are used in the singular or
plural, they shall be construed as though they were used in the plural or singular, as the case may be, in all cases where they
would so apply.

 

(f)
Severability. If any provision of the Plan or any award agreement or any Award (i) is or becomes or is deemed to be invalid,
illegal or unenforceable in any jurisdiction, or as to any Person or Award, or (ii) would disqualify the Plan, any award agreement
or any Award under any law the Committee deems applicable, then such provision should be construed or deemed amended to conform
to applicable laws, or if it cannot be so construed or deemed amended without, in the determination of the Committee, materially
altering the intent of the Plan, award agreement or Award, then such provision should be stricken as to such jurisdiction, Person
or Award, and the remainder of the Plan, such award agreement and such Award will remain in full force and effect.

 

    	 	9	 

     

    

(g)
Compliance with Legal and Exchange Requirements. The Plan, the granting and exercising of Awards thereunder, and any obligations
of the Company under the Plan, shall be subject to all applicable federal, state and foreign country laws, rules and regulations,
and to such approvals by any regulatory or governmental agency as may be required, and to any rules or regulations of any exchange
on which the Stock is listed. The Company, in its discretion, may postpone the granting and exercising of Awards, the issuance
or delivery of Stock under any Award or any other action permitted under the Plan to permit the Company, with reasonable diligence,
to complete such stock exchange listing or registration or qualification of such Stock or other required action under any federal,
state or foreign country law, rule or regulation and may require any Participant to make such representations and furnish such
information as it may consider appropriate in connection with the issuance or delivery of Stock in compliance with applicable
laws, rules and regulations.

 

The
Company shall not be obligated by virtue of any provision of the Plan to recognize the exercise of any Award or to otherwise sell
or issue Stock in violation of any such laws, rules or regulations, and any postponement of the exercise or settlement of any
Award under this provision shall not extend the term of such Awards. Neither the Company nor its directors or officers shall have
any obligation or liability to a Participant with respect to any Award (or Stock issuable thereunder) that shall lapse because
of such postponement.

 

(h)
Indemnification. Each person who is or shall have been a member of the Committee and each delegate of such Committee shall
be indemnified and held harmless by the Company against and from any loss, cost, liability or expense that may be imposed upon
or reasonably incurred by him or her in connection with or resulting from any claim, action, suit or proceeding to which he or
she may be made a party or in which he or she may be involved in by reason of any action taken or failure to act under the Plan
and against and from any and all amounts paid by him or her in settlement thereof, with the Company’s approval, or paid
by him or her in satisfaction of any judgment in any such action, suit or proceeding against him or her, provided that the Company
is given an opportunity, at its own expense, to handle and defend the same before he or she undertakes to handle and defend it
personally. The foregoing right of indemnification shall not be exclusive and shall be independent of any other rights of indemnification
to which such persons may be entitled under the Company’s Certificate of Incorporation or by-laws, by contract, as a matter
of law, or otherwise.

 

(i)
No Impact on Benefits. Except as may otherwise be specifically stated under any employee benefit plan, policy or program,
no amount payable in respect of any Award shall be treated as compensation for purposes of calculating a Participant’s right
under any such plan, policy or program.

 

(j)
No Constraint on Corporate Action. Nothing in this Plan shall be construed (i) to limit, impair or otherwise affect the Company’s
right or power to make adjustments, reclassifications, reorganizations or changes of its capital or business structure, or to
merge or consolidate, or dissolve, liquidate, sell or transfer all or any part of its business or assets or (ii) to limit the
right or power of the Company, or any Subsidiary, to take any action which such entity deems to be necessary or appropriate.

 

(k)
No Fractional Shares. No fractional Shares or other securities may be issued or delivered pursuant to the Plan, and the Committee
may determine whether cash, other securities or other property will be paid or transferred in lieu of any fractional Shares or
other securities, or whether such fractional Shares or other securities or any rights to fractional Shares or other securities
will be canceled, terminated or otherwise eliminated.

 

 

(l)
Unfunded Plan. This Plan is unfunded and does not create, and should not be construed to create, a trust or separate fund
with respect to the Plan’s benefits. This Plan does not establish any fiduciary relationship between the Company and any
Participant or other Person. To the extent any Person holds any rights by virtue of an Award granted under the Plan, such rights
are no greater than the rights of the Company’s general unsecured creditors.

 

 

*
* * * * *

 

 

    	 	10	 

     

    

CANNABIS
SCIENCE, INC.

INCENTIVE
STOCK OPTION AGREEMENT 

 

This
Stock Option AWARD Agreement (the “Agreement”) is made as of [ISO
1] (the “Grant Date”) by and between Cannabis Science, Inc. (the “Company”), a Nevada corporation,
and [ISO 2] (“Grantee”). Capitalized terms used but not otherwise defined herein shall have the meaning ascribed
to such terms in the Company’s 2016 Equity Award Plan B (the “Plan”). To the extent that any term of this Agreement
conflicts or is otherwise inconsistent with any term of the Plan, as amended from time to time, the terms of the Plan shall take
precedence and supersede any such conflict or inconsistent term contained herein.

 

WHEREAS,
the Company and Grantee desire to enter into an agreement setting forth the terms pursuant to which the Company shall grant
to Grantee an option to acquire certain shares of the Company’s Common Stock, par value $0.001 per share (the “Common
Stock”).

 

NOW,
THEREFORE, for valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties hereto agree
as follows:

 

1.
Grant of Option. Pursuant to the Company’s 2016 Equity Award Plan B (the “Plan”) the Company hereby grants
to Grantee an option (the “Option”) to purchase an aggregate of [ ISO 3 ] shares (the “Underlying Shares”)
of Stock, par value $0.001 per share (“Common Stock”), of the Company at a price of $[ ISO 4 ] per share (the
“Exercise Price”), purchasable as set forth in and subject to the terms and conditions of this Incentive Stock Option
Agreement (the “Agreement”) and the Plan. Except where the context otherwise requires, the term “Company”
shall include the parent and all subsidiaries of the Company as defined in Sections 424(e) and 424(f) of the Code. Capitalized
terms used by not otherwise defined herein shall have the meaning ascribed to such terms in the Plan. To the extent that any term
of this Agreement conflicts or is otherwise inconsistent with any term of the Plan, as amended from time to time, the terms of
the Plan shall take precedence and supersede any such conflict or inconsistent term contained herein.

 

2.
Incentive Stock Option. This Option is intended to qualify as an incentive stock option within the meaning of Section 422
of the Code.

 

3.
Exercise of Option and Provisions for Termination. 

 

(a)
Vesting Schedule. Except as otherwise provided in this Agreement, this Option may be exercised prior to the tenth anniversary
of the date of grant (or, in the case of an option described in paragraph (f) of Section 7 of the Plan, prior to the [ISO 5]
anniversary of the date of grant) (hereinafter the “Expiration Date”) in installments as to not more than the
number of shares of Common Stock then vested pursuant to the vesting provisions set forth below. The right of exercise shall be
cumulative so that if this Option is not exercised to the maximum extent permissible during any exercise period it shall be exercisable,
in whole or in part, with respect to all shares not so purchased at any time prior to the Expiration Date or the earlier termination
of this Option.

 

This
Option shall become vested as to [ISO 6] % of the Underlying Shares on [ISO 7] (the “First Vest Date”).
Thereafter, this Option shall become vested as to an additional [ISO 8]% of the Underlying Shares on each [ISO 9]
anniversary of the First Vest Date for the next [ISO 10] periods. This option may not be exercised at any time on or after
the Expiration Date.

 

(b)
Exercise Procedure. Subject to the conditions set forth in this Agreement, this Option shall be exercised by the Employee’s
delivery of written notice of exercise to the Chief Financial Officer of the Company, specifying the number of shares of Common
Stock to be purchased and the Exercise Price to be paid therefor and accompanied by payment in full in accordance with Section
4 hereof; provided, however, that if this Option is held by a Section 16 Participant, such written notice shall be delivered to
the Committee. Such exercise shall be effective upon receipt by the Chief Financial Officer or the Committee, as applicable, of
the Company of such written notice together with the required payment. The Employee may purchase less than the number of Underlying
Shares for which this Option is vested and exercisable at any point in time; provided, however, that no partial exercise of this
Option may be for any fractional shares.

 

    	 	11	 

     

    

(c)
Continuous Employment Required. Except as otherwise provided in this Section 3, this Option may not be exercised unless the
Employee, at the time that he or she exercises this Option, is, and has been at all times since the date of grant of this Option,
an employee of the Company. For all purposes of this Agreement, (i) “employment” shall be defined in accordance with
the provisions of Section 1.421-7(h) of the regulations promulgated under the Code or any successor regulations, and (ii) if this
option shall be assumed or a new option substituted therefor in a transaction to which Section 424(a) of the Code applies, employment
by such assuming or substituting corporation shall be considered for all purposes of this option to be employment by the Company.

 

(d)
Exercise Period Upon Termination of Employment. If the Employee ceases to be employed by the Company for any reason other
than death or Disability or a discharge for Cause, the right to exercise this option shall terminate three months after such cessation
(but in no event after the Expiration Date); provided, however, that this option shall be exercisable only to the extent that
the Employee was entitled to exercise this option on the date of such cessation.

 

(e)
Exercise Period Upon Death or Disability. If the Employee dies or becomes Disabled prior to the Expiration Date while he or
she is an employee of the Company, or if the Employee dies within three months after the Employee ceases to be so employed (other
than as the result of a discharge for Cause as specified in paragraph (f) below), this Option shall be exercisable, within the
period of one year following the date of death or Disability of the Employee (but in no event after the Expiration Date), by the
Employee or by the person to whom this option is transferred by will or the laws of descent and distribution or pursuant to a
qualified domestic relations order (as defined in the Code) or Title I of the Employee Retirement Income Security Act (“ERISA”),
or the rules thereunder; provided, however, that this option shall be exercisable only to the extent that this option was exercisable
by the Employee on the date of his or her death or disability. Except as otherwise indicated by the context, the term “Employee,”
as used in this Agreement, shall be deemed to include the estate of the Employee or any person who acquires the right to exercise
this Option by bequest or inheritance or otherwise by reason of the death of the Employee or pursuant to a qualified domestic
relations order (as defined in the Code) or Title I of ERISA, or the rules promulgated thereunder.

 

(f)
Discharge for Cause. If the Employee, prior to the Expiration Date, ceases his or her employment with the Company because
he or she is discharged for Cause, the right to exercise this Option shall terminate immediately upon such termination for Cause.

 

4.
Payment of Exercise Price. 

 

(a)
Method of Payment. Payment of the Exercise Price for the Underlying Shares purchased upon exercise of this Option shall be
made by delivery to the Company of cash or a check to the order of the Company in an amount equal to the aggregate Exercise Price
for such Underlying Shares (a “Cash Exercise”), or by delivery to the Company of shares of Common Stock then owned
by the Employee having a Fair Market Value, as of the date prior to the date of exercise of this Option, equal in amount to the
aggregate Exercise Price for such Underlying Shares (a “Cashless Exercise”), or by any combination of Cash Exercise
and Cashless Exercise.

 

(b)
Delivery of Shares Tendered in Payment of Exercise Price. An Employee who elects to make a Cashless Exercise, in whole or
in part, may not transfer fractional shares or shares of Common Stock with an aggregate Fair Market Value in excess of the aggregate
Exercise Price plus applicable withholding taxes. An Employee shall provide satisfactory proof of ownership of the Common Stock
tendered in connection with a Cashless Exercise, as determined by the Chief Financial Officer of the Company in his or her sole
discretion; provided, however, that if this Option is held by a Section 16 Participant, such determination shall be made by the
Committee.

 

(c)
Restrictions on Use of Option Stock. Notwithstanding the foregoing, no shares of Common Stock of the Company may be tendered
in connection with a Cashless Exercise to the extent that the shares of Common Stock were (i) acquired within 12 months before
the date of such Cashless Exercise or (ii) were acquired in connection with an Award pursuant to the Plan.

 

    	 	12	 

     

    

5.
Delivery of Shares; Compliance with Securities Laws, Etc.

 

(a)
General. The Company shall, upon payment of the Exercise Price, instruct the transfer agent for the Company’s Common
Stock to make entry in the books and records of the Company reflecting the Employee as the holder of record the Underlying Shares
so purchased and shall promptly deliver to the Employee a statement reflecting such an entry; provided, however, that if any law
or regulation requires the Company to take any action with respect to such Underlying Shares before the issuance thereof, then
the date of such entry shall be extended for the period necessary to complete such action.

 

(b)
Listing, Qualification, Etc. This Option shall be subject to the requirement that if, at any time, legal counsel to the Company
shall determine that the listing, registration or qualification of the shares subject hereto upon any securities exchange or under
any state or Federal law, or the consent or approval of any governmental or regulatory body, is necessary as a condition of, or
in connection with, the issuance or purchase of Underlying Shares hereunder, this Option may not be exercised, in whole or in
part, unless such listing, registration, qualification, consent or approval shall have been effected or obtained on conditions
acceptable to the Committee. Nothing herein shall be deemed to require the Company to apply for or to obtain such listing, registration
or qualification.

 

6.
Non-transferability of Option. Except as provided in paragraph (e) of Section 3, this Option is personal and no rights granted
hereunder may be transferred, assigned, pledged or hypothecated in any way (whether by operation of law or otherwise) nor shall
any such rights be subject to execution, attachment or similar process. Upon any attempt to transfer, assign, pledge, hypothecate
or otherwise dispose of this Option or of such rights contrary to the provisions hereof, or upon the levy of any attachment or
similar process upon this Option or such rights, this Option and such rights shall, at the election of the Company, become null,
void and of no further force of effect.

 

7.
No Special Employment Rights. Nothing contained in the Plan or this Agreement shall be construed or deemed by any Person under
any circumstances to bind the Company to continue the employment of the Employee for the period within which this Option may be
exercised. However, during the period of the Employee’s employment, the Employee shall render diligently and faithfully
the services which are assigned to the Employee from time to time by the Board, any committee thereof, or by the executive officers
of the Company and shall at no time take any action which, directly or indirectly, would be inconsistent with the best interests
of the Company.

 

8.
Rights as a Shareholder. The Employee shall have no rights as a shareholder with respect to any shares which may be purchased
by exercise of this Option unless and until the date on which Employee becomes the holder of record of the Underlying Shares purchased
pursuant to this option on the books and records of the Company, as maintained by the transfer agent for the Company’s Common
Stock. No adjustment shall be made for dividends or other rights for which the record date is prior to such date.

 

9.
Adjustments. 

 

(a)
General. If: (i) the Company shall at any time be involved in a merger or other transaction in which shares of Common Stock
are changed or exchanged, (ii) the Company shall subdivide or combine shares of Common Stock or the Company shall declare a dividend
payable in shares of Common Stock, other securities or other property, (iii) the Company shall effect a cash dividend the amount
of which, on a per share of Common Stock basis, exceeds ten percent (10%) of the Fair Market Value of a share of Common Stock
at the time the dividend is declared, or the Company shall effect any other dividend or other distribution on shares of Common
Stock in the form of cash, or a repurchase of shares of Common Stock, that the Board determines by resolution is special or extraordinary
in nature or that is in connection with a transaction that the Company characterizes publicly as a recapitalization or reorganization
involving shares of Common Stock, or (iv) any other event shall occur, which in the judgment of the Board or Committee necessitates
an adjustment to prevent dilution or enlargement 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 to prevent dilution or enlargement of the benefits or
potential benefits intended to be made available under the Plan, adjust as applicable: (i) the number and kind of shares or other
securities subject to this Option and (ii) the Exercise Price for each share of Common Stock subject to this Option, without changing
the aggregate Exercise Price as to which this option remains exercisable.

 

    	 	13	 

     

    

(b)
Board Authority to Make Adjustments. Adjustments under this Section 9 will be made by the Committee, whose determination as
to what adjustments, if any, will be made and the extent thereof will be final and binding. No fractional shares will be issued
pursuant to this option on account of any such adjustments.

 

(c)
Limits on Adjustments. No adjustment shall be made under this Section 9 which would, within the meaning of any applicable
provision of the Code, constitute a modification, extension or renewal of this option or a grant of additional benefits to the
Employee.

 

10.
Change of Control. 

 

(a)
General. In the event of a Change of Control, the Employee shall, with respect to this option or any unexercised portion hereof,
be entitled to the rights and benefits, and be subject to the limitations, set forth in Section 9 of the Plan.

 

(b)
Acceleration. In the event of the occurrence of a Change of Control, the vesting schedule set forth in Section 3(a) of this
Agreement may be accelerated in whole or in part at the sole discretion of the Committee.

 

11.
Withholding Taxes. The Company’s obligation to deliver Underlying Share upon the exercise of this Option shall be subject
to the Employee’s satisfaction of all applicable Federal, state and local income and employment tax withholding requirements.

 

12.
Limitations on Disposition of Underlying Shares. It is understood and intended that this Option shall qualify as an “incentive
stock option” as defined in Section 422 of the Code. Accordingly, the Employee understands that in order to obtain the benefits
of an incentive stock option under Section 421 of the Code, no sale or other disposition may be made of any Underlying Shares
acquired upon exercise of this Option within one year after the day of the transfer of such shares to the Employee, nor within
two years after the grant of this Option. If the Employee intends to dispose, or does dispose (whether by sale, exchange, gift,
transfer or otherwise), of any such Underlying Shares within said periods, he or she will notify the Company in writing within
ten days after such disposition.

 

13.
Miscellaneous. 

 

(a)
This Agreement constitutes the entire agreement between the parties, and supersedes all prior agreements and understandings,
relating to the subject matter of this Agreement.

 

(b)
Except as provided herein, this option may not be amended or otherwise modified unless evidenced in writing and signed by
the Company and the Employee.

 

(c)
All notices under this option shall be mailed or delivered by hand to the parties at their respective addresses set forth
beneath their names below or at such other address as may be designated in writing by either of the parties to one another.

 

(d)
Whenever the context may require, any pronouns used in this Agreement are deemed to include the corresponding masculine, feminine
or neuter forms, and the singular form of nouns and pronouns are deemed to include the plural, and vice versa.

 

(e)
This option shall be governed by and construed in accordance with the laws of the State of Nevada, without giving effect to
the principles of conflicts of laws thereof.

 

[NEXT
PAGE IS SIGNATURE PAGE]

 

    	 	14	 

     

    

 

 

Date
of Grant, 2016CANNABIS SCIENCE, INC.

 

 

By:
______________________________

Printed
Name: _____________________

Title:
____________________________

 

 

EMPLOYEE’S
ACCEPTANCE

 

The
undersigned hereby accepts the foregoing Incentive Stock Option and agrees to the terms and conditions of this Agreement and the
Company’s 2016 Equity Award Plan B. The undersigned hereby acknowledges receipt of a copy of the Company’s 2016 Equity
Award Plan B.

 

EMPLOYEE

 

 

_____________________________________

Printed
Name: _________________________

Address:
_____________________________

_____________________________

Social
Security Number: _________________

    	 	15	 

     

    

 

 

SPOUSAL
CONSENT

 

The
spouse of _________________________, the grantee of the above Incentive Stock Option, is aware of, understands, and consents to
the provisions of the Incentive Stock Option and the Company’s 2016 Equity Award Plan B, and its binding effect upon any
community property interest or marital settlement awards he or she may now or hereafter own or receive, and agrees that the termination
of his or her marital relationship with such Member for any reason shall not have the effect of removing any Incentive Stock Option
Award subject to the Company’s 2016 Equity Award Plan B Agreement from the coverage thereof and that his or her awareness,
understanding, consent, and agreement is evidenced by his or her signature below.

 

 

 

By:
_______________________________

Printed
Name: _______________________

 

 

    	 	16	 

     

    

CANNABIS
SCIENCE, INC.

NONSTATUTORY
STOCK OPTION AGREEMENT

 

 

This
Stock Option AWARD Agreement (the “Agreement”) is made as of [NQSO
1] (the “Grant Date”) by and between Cannabis Science, Inc. (the “Company”), a Nevada corporation,
and [NQSO 2] (“Grantee”). Capitalized terms used but not otherwise defined herein shall have the meaning ascribed
to such terms in the Company’s 2016 Equity Award Plan B (the “Plan”). To the extent that any term of this Agreement
conflicts or is otherwise inconsistent with any term of the Plan, as amended from time to time, the terms of the Plan shall take
precedence and supersede any such conflict or inconsistent term contained herein.

 

WHEREAS,
the Company and Grantee desire to enter into an agreement setting forth the terms pursuant to which the Company shall grant
to Grantee an option to acquire certain shares of the Company’s Common Stock, par value $0.001 per share (the “Common
Stock”).

 

NOW,
THEREFORE, for valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties hereto agree
as follows:

 

1.
Grant of Option. Pursuant to the Company’s 2016 Equity Award Plan B (the “Plan”), the Company hereby grants
to Grantee an option (the “Option”) to purchase an aggregate of [ NQSO 3 ] shares (the “Underlying Shares”)
of Common Stock, par value $0.001 per share (“Common Stock”), of the Company at a price of $[ NQSO 4 ] per
share (the “Exercise Price”), purchasable as set forth in and subject to the terms and conditions of this Nonstatutory
Stock Option Agreement (the “Agreement”) and the Plan. Except where the context otherwise requires, the term “Company”
shall include the parent and all subsidiaries of the Company as defined in Sections 424(e) and 424(f) of the Code. Capitalized
terms used by not otherwise defined herein shall have the meaning ascribed to such terms in the Plan. To the extent that any term
of this Agreement conflicts or is otherwise inconsistent with any term of the Plan, as amended from time to time, the terms of
the Plan shall take precedence and supersede any such conflict or inconsistent term contained herein.

 

2.
Exercise of Option and Provisions for Termination.

 

(a)
Vesting Schedule. Except as otherwise provided in this Agreement, this Option may be exercised prior to the tenth anniversary
of the date of grant (or, in the case of an option described in paragraph (f) of Section 7 of the Plan, prior to the [NQSO
5] anniversary of the date of grant) (hereinafter the “Expiration Date”) in installments as to not more than the
number of shares of Common Stock then vested pursuant to the vesting provisions set forth below. The right of exercise shall be
cumulative so that if this Option is not exercised to the maximum extent permissible during any exercise period it shall be exercisable,
in whole or in part, with respect to all shares not so purchased at any time prior to the Expiration Date or the earlier termination
of this Option.

 

This
Option shall become vested as to [NQSO 6] % of the Underlying Shares on [NQSO 7] (the “First Vest Date”).
Thereafter, this Option shall become vested as to an additional [NQSO 8] % of the Underlying Shares on each anniversary
of the First Vest Date for the next [NQSO 9] % periods. This option may not be exercised at any time on or after the Expiration
Date.

 

(b)
Exercise Procedure. Subject to the conditions set forth in this Agreement, this Option shall be exercised by the Optionee’s
delivery of written notice of exercise to the Chief Financial Officer of the Company, specifying the number of shares of Common
Stock to be purchased and the Exercise Price to be paid therefor and accompanied by payment in full in accordance with Section
3 hereof; provided, however, that if this Option is held by a Section 16 Participant, such written notice shall be delivered to
the Committee. Such exercise shall be effective upon receipt by the Chief Financial Officer or the Committee, as applicable, of
the Company of such written notice together with the required payment. The Optionee may purchase less than the number of Underlying
Shares for which this Option is vested and exercisable at any point in time; provided, however, that no partial exercise of this
Option may be for any fractional shares.

 

    	 	17	 

     

    

(c)
Continuous Engagement Required. Except as otherwise provided in this Section 2, this Option may not be exercised unless the
Optionee, at the time that he or she exercises this Option, is, and has been at all times since the date of grant of this Option,
an employee of the Company, or in the case of an Optionee who is a Director of or Consultant to the Company, unless such relationship
is not interrupted or terminated by the Company. For all purposes of this Agreement, (i) “employment” shall be defined
in accordance with the provisions of Section 1.421-7(h) of the regulations promulgated under the Code or any successor regulations,
and (ii) if this option shall be assumed or a new option substituted therefor in a transaction to which Section 424(a) of the
Code applies, employment by such assuming or substituting corporation shall be considered for all purposes of this option to be
employment by the Company.

 

(d)
Exercise Period Upon Termination of Employment or Engagement. If the Optionee ceases to be employed by, or otherwise engaged
as a Director of or Consultant to, the Company for any reason other than death or Disability or a discharge for Cause, the right
to exercise this option shall terminate three months after such cessation (but in no event after the Expiration Date); provided,
however, that this option shall be exercisable only to the extent that the Optionee was entitled to exercise this Option on the
date of such cessation.

 

(e)
Exercise Period Upon Death or Disability. If the Optionee dies or becomes Disabled prior to the Expiration Date while he or
she is an employee of the Company or is otherwise engaged as a Director of or Consultant to the company, or if the Optionee dies
within three months after the Optionee ceases to be so employed or engaged (other than as the result of a discharge for Cause
as specified in paragraph (f) below), this Option shall be exercisable, within the period of one year following the date of death
or Disability of the Optionee (but in no event after the Expiration Date), by the Optionee or by the person to whom this option
is transferred by will or the laws of descent and distribution or pursuant to a qualified domestic relations order (as defined
in the Code) or Title I of the Optionee Retirement Income Security Act (“ERISA”), or the rules thereunder; provided,
however, that this option shall be exercisable only to the extent that this option was exercisable by the Optionee on the date
of his or her death or disability. Except as otherwise indicated by the context, the term “Optionee,” as used in this
Agreement, shall be deemed to include the estate of the Optionee or any person who acquires the right to exercise this Option
by bequest or inheritance or otherwise by reason of the death of the Optionee or pursuant to a qualified domestic relations order
(as defined in the Code) or Title I of ERISA, or the rules promulgated thereunder.

 

(f)
Discharge for Cause. If the Optionee, prior to the Expiration Date, ceases his or her employment or engagement with the Company
because he or she is discharged for Cause, the right to exercise this Option shall terminate immediately upon such termination
for Cause.

 

3.
Payment of Exercise Price. 

 

(a)
Method of Payment. Payment of the Exercise Price for the Underlying Shares purchased upon exercise of this Option shall be
made by delivery to the Company of cash or a check to the order of the Company in an amount equal to the aggregate Exercise Price
for such Underlying Shares (a “Cash Exercise”), or by delivery to the Company of shares of Common Stock then owned
by the Optionee having a Fair Market Value, as of the date prior to the date of exercise of this Option, equal in amount to the
aggregate Exercise Price for such Underlying Shares (a “Cashless Exercise”), or by any combination of Cash Exercise
and Cashless Exercise.

 

(b)
Delivery of Shares Tendered in Payment of Exercise Price. An Optionee who elects to make a Cashless Exercise, in whole or
in part, may not transfer fractional shares or shares of Common Stock with an aggregate Fair Market Value in excess of the aggregate
Exercise Price plus applicable withholding taxes. An Optionee shall provide satisfactory proof of ownership of the Common Stock
tendered in connection with a Cashless Exercise, as determined by the Chief Financial Officer of the Company in his or her sole
discretion; provided, however, that if this Option is held by a Section 16 Participant, such determination shall be made by the
Committee.

 

(c)
Restrictions on Use of Option Stock. Notwithstanding the foregoing, no shares of Common Stock of the Company may be tendered
in connection with a Cashless Exercise to the extent that the shares of Common Stock were (i) acquired within 12 months before
the date of such Cashless Exercise or (ii) were acquired in connection with an Award pursuant to the Plan.

 

    	 	18	 

     

    

4.
Delivery of Shares; Compliance with Securities Laws, Etc.

 

(a)
General. The Company shall, upon payment of the Exercise Price, instruct the transfer agent for the Company’s Common
Stock to make entry in the books and records of the Company reflecting the Optionee as the holder of record the Underlying Shares
so purchased and shall promptly deliver to the Optionee a statement reflecting such an entry; provided, however, that if any law
or regulation requires the Company to take any action with respect to such Underlying Shares before the issuance thereof, then
the date of such entry shall be extended for the period necessary to complete such action.

 

(b)
Listing, Qualification, Etc. This Option shall be subject to the requirement that if, at any time, legal counsel to the Company
shall determine that the listing, registration or qualification of the shares subject hereto upon any securities exchange or under
any state or Federal law, or the consent or approval of any governmental or regulatory body, is necessary as a condition of, or
in connection with, the issuance or purchase of Underlying Shares hereunder, this Option may not be exercised, in whole or in
part, unless such listing, registration, qualification, consent or approval shall have been effected or obtained on conditions
acceptable to the Committee. Nothing herein shall be deemed to require the Company to apply for or to obtain such listing, registration
or qualification.

 

5.
Non-transferability of Option. Except as provided in paragraph (e) of Section 2, this Option is personal and no rights granted
hereunder may be transferred, assigned, pledged or hypothecated in any way (whether by operation of law or otherwise) nor shall
any such rights be subject to execution, attachment or similar process. Upon any attempt to transfer, assign, pledge, hypothecate
or otherwise dispose of this Option or of such rights contrary to the provisions hereof, or upon the levy of any attachment or
similar process upon this Option or such rights, this Option and such rights shall, at the election of the Company, become null,
void and of no further force of effect.

 

6.
No Special Employment or Consulting Rights. Nothing contained in the Plan or this Agreement shall be construed or deemed by
any Person under any circumstances to bind the Company to continue the employment of the Optionee or the engagement of a Director
or Consultant for the period within which this Option may be exercised. However, during the period of the Optionee’s employment
or engagement, the Optionee shall render diligently and faithfully the services which are assigned to the Optionee from time to
time by the Board, any committee thereof, or by the executive officers of the Company and shall at no time take any action which,
directly or indirectly, would be inconsistent with the best interests of the Company.

 

7.
Rights as a Shareholder. The Optionee shall have no rights as a shareholder with respect to any shares which may be purchased
by exercise of this Option unless and until the date on which Optionee becomes the holder of record of the Underlying Shares purchased
pursuant to this option on the books and records of the Company, as maintained by the transfer agent for the Company’s Common
Stock. No adjustment shall be made for dividends or other rights for which the record date is prior to such date.

 

8.
Adjustments. 

 

(a)
General. If: (i) the Company shall at any time be involved in a merger or other transaction in which shares of Common Stock
are changed or exchanged, (ii) the Company shall subdivide or combine shares of Common Stock or the Company shall declare a dividend
payable in shares of Common Stock, other securities or other property, (iii) the Company shall effect a cash dividend the amount
of which, on a per share of Common Stock basis, exceeds ten percent (10%) of the Fair Market Value of a share of Common Stock
at the time the dividend is declared, or the Company shall effect any other dividend or other distribution on shares of Common
Stock in the form of cash, or a repurchase of shares of Common Stock, that the Board determines by resolution is special or extraordinary
in nature or that is in connection with a transaction that the Company characterizes publicly as a recapitalization or reorganization
involving shares of Common Stock, or (iv) any other event shall occur, which in the judgment of the Board or Committee necessitates
an adjustment to prevent dilution or enlargement 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 to prevent dilution or enlargement of the benefits or
potential benefits intended to be made available under the Plan, adjust as applicable: (i) the number and kind of shares or other
securities subject to this Option and (ii) the Exercise Price for each share of Common Stock subject to this Option, without changing
the aggregate Exercise Price as to which this option remains exercisable.

 

    	 	19	 

     

    

(b)
Board Authority to Make Adjustments. Adjustments under this Section 8 will be made by the Committee, whose determination as
to what adjustments, if any, will be made and the extent thereof will be final and binding. No fractional shares will be issued
pursuant to this option on account of any such adjustments.

 

(c)
Limits on Adjustments. No adjustment shall be made under this Section 8 which would, within the meaning of any applicable
provision of the Code, constitute a modification, extension or renewal of this option or a grant of additional benefits to the
Optionee.

 

9.
Change of Control. 

 

(a)
General. In the event of a Change of Control, the Optionee shall, with respect to this option or any unexercised portion hereof,
be entitled to the rights and benefits, and be subject to the limitations, set forth in Section 9 of the Plan.

 

(b)
Acceleration. In the event of the occurrence of a Change of Control, the vesting schedule set forth in Section 2(a) of this
Agreement may be accelerated in whole or in part at the sole discretion of the Committee.

 

10.
Withholding Taxes. The Company’s obligation to deliver Underlying Shares upon the exercise of this Option shall be subject
to the Optionee’s satisfaction of all applicable Federal, state and local income and employment tax withholding requirements.

 

11.
Miscellaneous. 

 

(a)
This Agreement constitutes the entire agreement between the parties, and supersedes all prior agreements and understandings,
relating to the subject matter of this Agreement.

 

(b)
Except as provided herein, this option may not be amended or otherwise modified unless evidenced in writing and signed by
the Company and the Optionee.

 

(c)
All notices under this option shall be mailed or delivered by hand to the parties at their respective addresses set forth
beneath their names below or at such other address as may be designated in writing by either of the parties to one another.

 

(d)
Whenever the context may require, any pronouns used in this Agreement are deemed to include the corresponding masculine, feminine
or neuter forms, and the singular form of nouns and pronouns are deemed to include the plural, and vice versa.

 

(e)
This option shall be governed by and construed in accordance with the laws of the State of Nevada, without giving effect to
the principles of conflicts of laws thereof.

 

[NEXT
PAGE IS SIGNATURE PAGE]

    	 	20	 

     

    

 

 

Date
of Grant, 2016CANNABIS SCIENCE, INC.

 

 

By:
______________________________

Printed
Name: _____________________

Title:
____________________________

 

Address:
_____________________________

_____________________________

Social
Security Number: _________________

 

    	 	21	 

     

    

 

SPOUSAL
CONSENT

 

The
spouse of ________________________, the grantee of the above Non-Qualified Stock Option, is aware of, understands, and consents
to the provisions of the Non-Qualified Stock Option and the Company’s 2016 Equity Award Plan B, and its binding effect upon
any community property interest or marital settlement awards he or she may now or hereafter own or receive, and agrees that the
termination of his or her marital relationship with such Member for any reason shall not have the effect of removing any Non-Qualified
Stock Option Award subject to the Company’s 2016 Equity Award Plan B Agreement from the coverage thereof and that his or
her awareness, understanding, consent, and agreement is evidenced by his or her signature below.

 

 

 

By:
________________________________

Printed
Name: ________________________

 

 

 

    	 	22EX-4.4

 Exhibit 4.4 

NOVAN, INC. 
 2016
INCENTIVE AWARD PLAN 
 ARTICLE 1. 

PURPOSE 
 The purpose of
the Novan, Inc. 2016 Incentive Award Plan (as it may be amended or restated from time to time, the “Plan”) is to promote the success and enhance the value of Novan, Inc. the (“Company”) by linking the individual
interests of the members of the Board, Employees, and Consultants to those of Company stockholders and by providing such individuals with an incentive for outstanding performance to generate superior returns to Company stockholders. The Plan is
further intended to provide flexibility to the Company in its ability to motivate, attract, and retain the services of members of the Board, Employees, and Consultants upon whose judgment, interest, and special effort the successful conduct of the
Company’s operation is largely dependent. 
 ARTICLE 2. 

DEFINITIONS AND CONSTRUCTION 

Wherever the following terms are used in the Plan they shall have the meanings specified below, unless the context clearly indicates
otherwise. The singular pronoun shall include the plural where the context so indicates. 
 2.1 “Administrator” shall mean
the entity that conducts the general administration of the Plan as provided in Article 12. With reference to the duties of the Committee under the Plan which have been delegated to one or more persons pursuant to Section 12.6, or as to which
the Board has assumed, the term “Administrator” shall refer to such person(s) unless the Committee or the Board has revoked such delegation or the Board has terminated the assumption of such duties. 

2.2 “Applicable Accounting Standards” shall mean Generally Accepted Accounting Principles in the United States, International
Financial Reporting Standards or such other accounting principles or standards as may apply to the Company’s financial statements under United States federal securities laws from time to time. 

2.3 “Applicable Law” shall mean any applicable law, including without limitation: (a) provisions of the Code, the
Securities Act, the Exchange Act and any rules or regulations thereunder; (b) corporate, securities, tax or other laws, statutes, rules, requirements or regulations, whether federal, state, local or foreign; and (c) rules of any securities
exchange or automated quotation system on which the Shares are listed, quoted or traded. 
 2.4 “Automatic Exercise Date”
shall mean, with respect to an Option or a Stock Appreciation Right, the last business day of the applicable Option Term or Stock Appreciation Right Term that was initially established by the Administrator for such Option or Stock Appreciation Right
(e.g., the last business day prior to the tenth anniversary of the date of grant of such Option or Stock Appreciation Right if the Option or Stock Appreciation Right initially had a ten-year Option Term or Stock Appreciation Right Term, as
applicable). 

 2.5 “Award” shall mean an Option, a Stock Appreciation Right, a Restricted Stock
award, a Restricted Stock Unit award, an Other Stock or Cash Based Award or a Dividend Equivalent award, which may be awarded or granted under the Plan. 

2.6 “Award Agreement” shall mean any written notice, agreement, terms and conditions, contract or other instrument or document
evidencing an Award, including through electronic medium, which shall contain such terms and conditions with respect to an Award as the Administrator shall determine consistent with the Plan. 

2.7 “Award Limit” shall mean with respect to Awards that shall be payable in Shares or in cash, as the case may be, the
respective limit set forth in Section 3.2. 
 2.8 “Board” shall mean the Board of Directors of the Company. 

2.9 “Change in Control” shall mean and includes each of the following: 

(a) A transaction or series of transactions (other than an offering of Common Stock to the general public through a registration statement
filed with the Securities and Exchange Commission) whereby any “person” or related “group” of “persons” (as such terms are used in Sections 13(d) and 14(d)(2) of the Exchange Act) directly or indirectly acquires
beneficial ownership (within the meaning of Rules 13d-3 and 13d-5 under the Exchange Act) of securities of the Company possessing more than 50% of the total combined voting power of the Company’s securities outstanding immediately after such
acquisition; provided, however, that the following acquisitions shall not constitute a Change in Control: (i) any acquisition by the Company or any of its Subsidiaries; (ii) any acquisition by an employee benefit plan
maintained by the Company or any of its Subsidiaries, (iii) any acquisition which complies with Sections 2.9(c)(i), 2.9(c)(ii) and 2.9(c)(iii); or (iv) in respect of an Award held by a particular Holder, any acquisition by the Holder or
any group of persons including the Holder (or any entity controlled by the Holder or any group of persons including the Holder); or 
 (b)
The Incumbent Directors cease for any reason to constitute a majority of the Board; 
 (c) The consummation by the Company (whether directly
involving the Company or indirectly involving the Company through one or more intermediaries) of (x) a merger, consolidation, reorganization, or business combination, (y) a sale or other disposition of all or substantially all of the
Company’s assets in any single transaction or series of related transactions or (z) the acquisition of assets or stock of another entity, in each case other than a transaction: 

(i) which results in the Company’s voting securities outstanding immediately before the transaction continuing to represent (either
by remaining outstanding or by being converted into voting securities of the Company or the person that, as a result of the transaction, controls, directly or indirectly, the Company or owns, directly or indirectly, all or substantially all of the
Company’s assets or otherwise succeeds to the business of the Company (the Company or such person, the “Successor Entity”)) directly or indirectly, at least a majority of the combined voting power of the Successor Entity’s
outstanding voting securities immediately after the transaction, and 

  
 2 

 (ii) after which no person or group beneficially owns voting securities representing 50% or
more of the combined voting power of the Successor Entity; provided, however, that no person or group shall be treated for purposes of this Section 2.9(c)(ii) as beneficially owning 50% or more of the combined voting power of the
Successor Entity solely as a result of the voting power held in the Company prior to the consummation of the transaction; and 

(iii) after which at least a majority of the members of the board of directors (or the analogous governing body) of the Successor Entity
were Board members at the time of the Board’s approval of the execution of the initial agreement providing for such transaction; or 

(d) The date of the completion of a liquidation or dissolution of the Company. 

Notwithstanding the foregoing, if a Change in Control constitutes a payment event with respect to any Award (or any portion of an Award) that provides for the
deferral of compensation that is subject to Section 409A, to the extent required to avoid the imposition of additional taxes under Section 409A, the transaction or event described in subsection (a), (b), (c) or (d) with respect
to such Award (or portion thereof) shall only constitute a Change in Control for purposes of the payment timing of such Award if such transaction also constitutes a “change in control event,” as defined in Treasury Regulation
Section 1.409A-3(i)(5). 
 The Administrator shall have full and final authority, which shall be exercised in its sole discretion, to determine
conclusively whether a Change in Control has occurred pursuant to the above definition, the date of the occurrence of such Change in Control and any incidental matters relating thereto; provided that any exercise of authority in conjunction with a
determination of whether a Change in Control is a “change in control event” as defined in Treasury Regulation Section 1.409A-3(i)(5) shall be consistent with such regulation. 

2.10 “Code” shall mean the Internal Revenue Code of 1986, as amended from time to time, together with the regulations and
official guidance promulgated thereunder, whether issued prior or subsequent to the grant of any Award. 
 2.11 “Committee”
shall mean the Compensation Committee of the Board, or another committee or subcommittee of the Board or the Compensation Committee of the Board described in Article 12 hereof. 

2.12 “Common Stock” shall mean the common stock of the Company, par value $0.0001 per share. 

2.13 “Company” shall have the meaning set forth in Article 1. 

2.14 “Consultant” shall mean any consultant or adviser engaged to provide services to the Company or any Subsidiary who
qualifies as a consultant or advisor under the applicable rules of the Securities and Exchange Commission for registration of shares on a Form S-8 Registration Statement. 

  
 3 

 2.15 “Covered Employee” shall mean any Employee who is, or could become, a
“covered employee” within the meaning of Section 162(m) of the Code. 
 2.16 “Director” shall mean a member
of the Board, as constituted from time to time. 2.17 “Director Limit” shall have the meaning set forth in Section 4.6. 
 2.18
“Dividend Equivalent” shall mean a right to receive the equivalent value (in cash or Shares) of dividends paid on Shares, awarded under Section 10.2. 

2.19 “DRO” shall mean a “domestic relations order” as defined by the Code or Title I of the Employee Retirement
Income Security Act of 1974, as amended from time to time, or the rules thereunder. 
 2.20 “Effective Date” shall mean the
day prior to the Public Trading Date. 
 2.21 “Eligible Individual” shall mean any person who is an Employee, a Consultant
or a Non-Employee Director, as determined by the Administrator. 
 2.22 “Employee” shall mean any officer or other employee
(as determined in accordance with Section 3401(c) of the Code and the Treasury Regulations thereunder) of the Company or of any Subsidiary. 

2.23 “Equity Restructuring” shall mean a nonreciprocal transaction between the Company and its stockholders, such as a stock
dividend, stock split, spin-off, rights offering or recapitalization through a large, nonrecurring cash dividend, that affects the number or kind of Shares (or other securities of the Company) or the share price of Common Stock (or other securities)
and causes a change in the per-share value of the Common Stock underlying outstanding Awards. 
 2.24 “Exchange Act” shall
mean the Securities Exchange Act of 1934, as amended from time to time. 
 2.25 “Expiration Date” shall have the meaning
given to such term in Section 13.1(c). 
 2.26 “Fair Market Value” shall mean, as of any given date, the value of a
Share determined as follows: 
 (a) If the Common Stock is (i) listed on any established securities exchange (such as the New York
Stock Exchange, the NASDAQ Capital Market, the NASDAQ Global Market and the NASDAQ Global Select Market), (ii) listed on any national market system or (iii) quoted or traded on any automated quotation system, its Fair Market Value shall be
the closing sales price for a Share as quoted on such exchange or system for such date or, if there is no closing sales price for a Share on the date in question, the closing sales price for a Share on the last preceding date for which such
quotation exists, as reported in The Wall Street Journal or such other source as the Administrator deems reliable; 

  
 4 

 (b) If the Common Stock is not listed on an established securities exchange, national market
system or automated quotation system, but the Common Stock is regularly quoted by a recognized securities dealer, its Fair Market Value shall be the mean of the high bid and low asked prices for such date or, if there are no high bid and low asked
prices for a Share on such date, the high bid and low asked prices for a Share on the last preceding date for which such information exists, as reported in The Wall Street Journal or such other source as the Administrator deems reliable; or

 (c) If the Common Stock is neither listed on an established securities exchange, national market system or automated quotation system
nor regularly quoted by a recognized securities dealer, its Fair Market Value shall be established by the Administrator in good faith. 

Notwithstanding the foregoing, with respect to any Award granted after the effectiveness of the Company’s registration statement relating
to its initial public offering and prior to the Public Trading Date, the Fair Market Value shall mean the initial public offering price of a Share as set forth in the Company’s final prospectus relating to its initial public offering filed with
the Securities and Exchange Commission. 
 2.27 “Greater Than 10% Stockholder” shall mean an individual then owning (within
the meaning of Section 424(d) of the Code) more than 10% of the total combined voting power of all classes of stock of the Company or any subsidiary corporation (as defined in Section 424(f) of the Code) or parent corporation thereof (as
defined in Section 424(e) of the Code). 
 2.28 “Holder” shall mean a person who has been granted an Award. 

2.29 “Incentive Stock Option” shall mean an Option that is intended to qualify as an incentive stock option and conforms to
the applicable provisions of Section 422 of the Code. 
 2.30 “Incumbent Directors’ shall mean for any period of 12
consecutive months, individuals who, at the beginning of such period, constitute the Board together with any new Director(s) (other than a Director designated by a person who shall have entered into an agreement with the Company to effect a
transaction described in Section 2.9(a) or 2.9(c)) whose election or nomination for election to the Board was approved by a vote of at least a majority (either by a specific vote or by approval of the proxy statement of the Company in which
such person is named as a nominee for Director without objection to such nomination) of the Directors then still in office who either were Directors at the beginning of the 12-month period or whose election or nomination for election was previously
so approved. No individual initially elected or nominated as a director of the Company as a result of an actual or threatened election contest with respect to Directors or as a result of any other actual or threatened solicitation of proxies by or
on behalf of any person other than the Board shall be an Incumbent Director. 
 2.31 “Non-Employee Director” shall mean a
Director of the Company who is not an Employee. 

  
 5 

 2.32 “Non-Employee Director Equity Compensation Policy” shall have the meaning
set forth in Section 4.6. 
 2.33 “Non-Qualified Stock Option” shall mean an Option that is not an Incentive Stock
Option or which is designated as an Incentive Stock Option but does not meet the applicable requirements of Section 422 of the Code. 

2.34 “Option” shall mean a right to purchase Shares at a specified exercise price, granted under Article 6. An Option shall be
either a Non-Qualified Stock Option or an Incentive Stock Option; provided, however, that Options granted to Non-Employee Directors and Consultants shall only be Non-Qualified Stock Options. 

2.35 “Option Term” shall have the meaning set forth in Section 6.4. 

2.36 “Organizational Documents” shall mean, collectively, (a) the Company’s articles of incorporation, certificate
of incorporation, bylaws or other similar organizational documents relating to the creation and governance of the Company, and (b) the Committee’s charter or other similar organizational documentation relating to the creation and
governance of the Committee. 
 2.37 “Other Stock or Cash Based Award” shall mean a cash payment, cash bonus award, stock
payment, stock bonus award, performance award or incentive award that is paid in cash, Shares or a combination of both, awarded under Section 10.1, which may include, without limitation, deferred stock, deferred stock units, retainers,
committee fees, and meeting-based fees. 
 2.38 Performance-Based Compensation” shall mean any compensation that is intended to
qualify as “performance-based compensation” as described in Section 162(m)(4)(C) of the Code. 
 2.39 “Performance
Criteria” shall mean the criteria (and adjustments) that the Administrator selects for an Award for purposes of establishing the Performance Goal or Performance Goals for a Performance Period, determined as follows: 

(a) The Performance Criteria that shall be used to establish Performance Goals are limited to the following: (i) net earnings or
losses (either before or after one or more of the following: (A) interest, (B) taxes, (C) depreciation, (D) amortization and (E) non-cash equity-based compensation expense); (ii) gross or net sales or revenue or sales
or revenue growth; (iii) net income (either before or after taxes); (iv) adjusted net income; (v) operating earnings or profit (either before or after taxes); (vi) cash flow (including, but not limited to, operating cash flow and
free cash flow); (vii) return on assets or net assets; (viii) return on capital (or invested capital) and cost of capital; (ix) return on stockholders’ equity; (x) total stockholder return; (xi) return on sales;
(xii) gross or net profit or operating margin; (xiii) costs, reductions in costs and cost control measures; (xiv) funds from operations or funds available for distributions; (xv) expenses; (xvi) working capital;
(xvii) earnings or loss per share; (xviii) adjusted earnings or loss per share; (xix) price per share or dividends per share (or appreciation in and/or maintenance of such price or dividends); (xx) economic value added models or
similar metrics; (xxi) regulatory achievements or compliance (including, without limitation, regulatory body approval for commercialization of a product); (xxii) implementation, completion or attainment of critical projects, processes or
objectives relating to research, development, regulatory, commercial, or strategic milestones or 

  
 6 

 
developments; (xxiii) sales, unit volume or market share; (xxiv) licensing revenue; (xxv) brand recognition/acceptance, (xxvi) inventory turns or cycle time,
(xxvii) strategic initiatives (including, without limitation, with respect to market penetration and spending efficiency, geographic business expansion, manufacturing, commercialization, production and productivity, customer satisfaction and
growth, employee satisfaction, recruitment and maintenance of personnel, human resources management, supervision of litigation and other legal matters, information technology, strategic partnerships and transactions (including acquisitions,
dispositions, joint ventures, in-licensing and out-licensing of intellectual property, and establishment of relationships with commercial entities with respect to the marketing, distribution and sale of Company products, and factoring transactions,
research and development and related activity, financial or other capital raising transactions, operating efficiency, and asset quality)); (xxiii) financial ratios (including, without limitation, those measuring liquidity, activity,
profitability or leverage); and (xxix) compound annual growth rate, any of which may be measured either in absolute terms or as compared to any incremental increase or decrease or as compared to results of a peer group or to market performance
indicators or indices. 
 (b) The Administrator, in its sole discretion, may provide that one or more objectively determinable adjustments
shall be made to one or more of the Performance Goals. Such adjustments may include, but are not limited to, one or more of the following: (i) items related to a change in Applicable Accounting Standards; (ii) items relating to financing
activities; (iii) expenses for restructuring or productivity initiatives; (iv) other non-operating items; (v) items related to acquisitions; (vi) items attributable to the business operations of any entity acquired by the Company
during the Performance Period; (vii) items related to the sale or disposition of a business or segment of a business; (viii) items related to discontinued operations that do not qualify as a segment of a business under Applicable
Accounting Standards; (ix) items attributable to any stock dividend, stock split, combination or exchange of stock occurring during the Performance Period; (x) any other items of significant income or expense which are determined to be
appropriate adjustments; (xi) items relating to unusual or nonrecurring corporate transactions, events or developments, (xii) items related to amortization of acquired intangible assets; (xiii) items that are outside the scope of the
Company’s core, on-going business activities; (xiv) items related to acquired in-process research and development; (xv) items relating to changes in tax laws; (xvi) items relating to major licensing or partnership arrangements;
(xvii) items relating to asset impairment charges; (xviii) items relating to gains or losses for litigation, arbitration and contractual settlements; (xix) items attributable to expenses incurred in connection with a reduction in
force or early retirement initiative; (xx) items relating to foreign exchange or currency transactions and/or fluctuations; or (xxi) items relating to any other unusual or nonrecurring events or changes in Applicable Law, Applicable
Accounting Standards or business conditions. For all Awards intended to qualify as Performance-Based Compensation, such determinations shall be made within the time prescribed by, and otherwise in compliance with, Section 162(m) of the Code.

 2.40 “Performance Goals” shall mean, for a Performance Period, one or more goals established in writing by the
Administrator for the Performance Period based upon one or more Performance Criteria. Depending on the Performance Criteria used to establish such Performance Goals, the Performance Goals may be expressed in terms of overall Company performance or
the performance of a Subsidiary, division, business unit, or an individual. The achievement of each Performance Goal shall be determined, to the extent applicable, with reference to Applicable Accounting Standards. 

  
 7 

 2.41 “Performance Period” shall mean one or more periods of time, which may be
of varying and overlapping durations, as the Administrator may select, over which the attainment of one or more Performance Goals will be measured for the purpose of determining a Holder’s right to, vesting of, and/or the payment in respect of,
an Award. 
 2.42 “Permitted Transferee” shall mean, with respect to a Holder, any “family member” of the Holder,
as defined in the General Instructions to Form S-8 Registration Statement under the Securities Act (or any successor form thereto), after taking into account Applicable Law. 

2.43 “Plan” shall have the meaning set forth in Article 1. 

2.44 “Program” shall mean any program adopted by the Administrator pursuant to the Plan containing the terms and conditions
intended to govern a specified type of Award granted under the Plan and pursuant to which such type of Award may be granted under the Plan. 

2.45 “Public Trading Date” shall mean the first date upon which Common Stock is listed (or approved for listing) upon notice
of issuance on any securities exchange or designated (or approved for designation) upon notice of issuance as a national market security on an interdealer quotation system. 

2.46 “Restricted Stock” shall mean Common Stock awarded under Article 8 that is subject to certain restrictions and may be
subject to risk of forfeiture or repurchase. 
 2.47 “Restricted Stock Units” shall mean the right to receive Shares awarded
under Article 9. 
 2.48 “Section 409A” shall mean Section 409A of the Code and the Department of Treasury regulations
and other interpretive guidance issued thereunder, including, without limitation, any such regulations or other guidance that may be issued after the Effective Date. 

2.49 “Securities Act” shall mean the Securities Act of 1933, as amended. 2.50 “Shares” shall mean shares of Common
Stock. 
 2.51 “Stock Appreciation Right” shall mean an Award entitling the Holder (or other person entitled to exercise
pursuant to the Plan) to exercise all or a specified portion thereof (to the extent then exercisable pursuant to its terms) and to receive from the Company an amount determined by multiplying the difference obtained by subtracting the exercise price
per share of such Award from the Fair Market Value on the date of exercise of such Award by the number of Shares with respect to which such Award shall have been exercised, subject to any limitations the Administrator may impose. 

2.52 “SAR Term” shall have the meaning set forth in Section 6.4. 

  
 8 

 2.53 “Subsidiary” shall mean any entity (other than the Company), whether
domestic or foreign, in an unbroken chain of entities beginning with the Company if each of the entities other than the last entity in the unbroken chain beneficially owns, at the time of the determination, securities or interests representing at
least fifty percent (50%) of the total combined voting power of all classes of securities or interests in one of the other entities in such chain. 

2.54 “Substitute Award” shall mean an Award granted under the Plan in connection with a corporate transaction, such as a
merger, combination, consolidation or acquisition of property or stock, in any case, upon the assumption of, or in substitution for, outstanding equity awards previously granted by a company or other entity; provided, however, that in
no event shall the term “Substitute Award” be construed to refer to an award made in connection with the cancellation and repricing of an Option or Stock Appreciation Right. 

2.55 “Termination of Service” shall mean: 

(a) As to a Consultant, the time when the engagement of a Holder as a Consultant to the Company or a Subsidiary is terminated for any reason,
with or without cause, including, without limitation, by resignation, discharge, death or retirement, but excluding terminations where the Consultant simultaneously commences or remains in employment or service with the Company or any Subsidiary.

 (b) As to a Non-Employee Director, the time when a Holder who is a Non-Employee Director ceases to be a Director for any reason,
including, without limitation, a termination by resignation, failure to be elected, death or retirement, but excluding terminations where the Holder simultaneously commences or remains in employment or service with the Company or any Subsidiary.

 (c) As to an Employee, the time when the employee-employer relationship between a Holder and the Company or any Subsidiary is terminated
for any reason, including, without limitation, a termination by resignation, discharge, death, disability or retirement; but excluding terminations where the Holder simultaneously commences or remains in employment or service with the Company or any
Subsidiary. 
 The Administrator, in its sole discretion, shall determine the effect of all matters and questions relating to any
Termination of Service, including, without limitation, whether a Termination of Service has occurred, whether a Termination of Service resulted from a discharge for cause and all questions of whether particular leaves of absence constitute a
Termination of Service; provided, however, that, with respect to Incentive Stock Options, unless the Administrator otherwise provides in the terms of any Program, Award Agreement or otherwise, or as otherwise required by Applicable
Law, a leave of absence, change in status from an employee to an independent contractor or other change in the employee-employer relationship shall constitute a Termination of Service only if, and to the extent that, such leave of absence, change in
status or other change interrupts employment for the purposes of Section 422(a)(2) of the Code and the then-applicable regulations and revenue rulings under said Section. For purposes of the Plan, a Holder’s employee-employer relationship
or consultancy relations shall be deemed to be terminated in the event that the Subsidiary employing or contracting with such Holder ceases to remain an Subsidiary following any merger, sale of stock or other corporate transaction or event
(including, without limitation, a spin-off). 

  
 9 

 ARTICLE 3. 

SHARES SUBJECT TO THE PLAN 

3.1 Number of Shares. 

(a) Subject to Sections 3.1(b) and 13.2, the aggregate number of Shares which may be issued or transferred pursuant to Awards (including,
without limitation, Incentive Stock Options) under the Plan is 833,333. Any Shares distributed pursuant to an Award may consist, in whole or in part, of authorized and unissued Common Stock, treasury Common Stock or Common Stock purchased on the
open market. 
 (b) If any Shares subject to an Award are forfeited or expire, or such Award is settled for cash (in whole or in part), the
Shares subject to such Award shall, to the extent of such forfeiture, expiration or cash settlement, again be available for future grants of Awards under the Plan. Notwithstanding anything to the contrary contained herein, the following Shares shall
not be added to the Shares authorized for grant under Section 3.1(a) and shall not be available for future grants of Awards: (i) Shares tendered by a Holder or withheld by the Company in payment of the exercise price of an Option;
(ii) Shares tendered by the Holder or withheld by the Company to satisfy any tax withholding obligation with respect to an Award; (iii) Shares subject to a Stock Appreciation Right that are not issued in connection with the stock
settlement of the Stock Appreciation Right on exercise thereof; and (iv) Shares purchased on the open market with the cash proceeds from the exercise of Options. Any Shares repurchased by the Company under Section 8.4 at the same price
paid by the Holder so that such Shares are returned to the Company shall again be available for Awards. The payment of Dividend Equivalents in cash in conjunction with any outstanding Awards shall not be counted against the Shares available for
issuance under the Plan. Notwithstanding the provisions of this Section 3.1(b), no Shares may again be optioned, granted or awarded if such action would cause an Incentive Stock Option to fail to qualify as an incentive stock option under
Section 422 of the Code. 
 (c) Substitute Awards shall not reduce the Shares authorized for grant under the Plan, except as may be
required by reason of Section 422 of the Code. Additionally, in the event that a company acquired by the Company or any Subsidiary or with which the Company or any Subsidiary combines has shares available under a pre-existing plan approved by
its stockholders and not adopted in contemplation of such acquisition or combination, the shares available for grant pursuant to the terms of such pre-existing plan (as adjusted, to the extent appropriate, using the exchange ratio or other
adjustment or valuation ratio or formula used in such acquisition or combination to determine the consideration payable to the holders of common stock of the entities party to such acquisition or combination) may be used for Awards under the Plan
and shall not reduce the Shares authorized for grant under the Plan; provided that Awards using such available Shares shall not be made after the date awards or grants could have been made under the terms of the pre-existing plan, absent the
acquisition or combination, and shall only be made to individuals who were not employed by or providing services to the Company or its Subsidiaries immediately prior to such acquisition or combination. 

  
 10 

 3.2 Limitation on Number of Shares Subject to Awards. Notwithstanding any provision in the
Plan to the contrary, and subject to Section 13.2, the maximum aggregate number of Shares with respect to one or more Awards that may be granted to any one person during any calendar year shall be 250,000 and the maximum aggregate amount of
cash that may be paid in cash to any one person during any calendar year with respect to one or more Awards payable in cash shall be $2,000,000; provided, however, that the foregoing limitations shall not apply prior to the Public
Trading Date and, following the Public Trading Date, the foregoing limitations shall not apply until the earliest of: (a) the first material modification of the Plan (including any increase in the number of Shares reserved for issuance under
the Plan in accordance with Section 3.1); (b) the issuance of all of the Shares reserved for issuance under the Plan; (c) the expiration of the Plan; (d) the first meeting of stockholders at which members of the Board are to be
elected that occurs after the close of the third calendar year following the calendar year in which occurred the first registration of an equity security of the Company under Section 12 of the Exchange Act; or (e) such other date, if any,
on which the “reliance period” described under U.S. Treasury Regulation 1.162-27(f)(2) expires pursuant to Section 162(m) of the Code and the rules and regulations promulgated thereunder. To the extent required by Section 162(m)
of the Code, Shares subject to Awards which are canceled shall continue to be counted against the Award Limit. 
 ARTICLE 4. 

GRANTING OF AWARDS 
 4.1
Participation. The Administrator may, from time to time, select from among all Eligible Individuals, those to whom an Award shall be granted and shall determine the nature and amount of each Award, which shall not be inconsistent with the
requirements of the Plan. Except for any Non-Employee Director’s right to Awards that may be required pursuant to the Non-Employee Director Equity Compensation Policy as described in Section 4.6, no Eligible Individual or other Person
shall have any right to be granted an Award pursuant to the Plan and neither the Company nor the Administrator is obligated to treat Eligible Individuals, Holders or any other persons uniformly. Participation by each Holder in the Plan shall be
voluntary and nothing in the Plan or any Program shall be construed as mandating that any Eligible Individual or other Person shall participate in the Plan. 

4.2 Award Agreement. Each Award shall be evidenced by an Award Agreement that sets forth the terms, conditions and limitations for such
Award as determined by the Administrator in its sole discretion (consistent with the requirements of the Plan and any applicable Program). Award Agreements evidencing Awards intended to qualify as Performance-Based Compensation shall contain such
terms and conditions as may be necessary to meet the applicable provisions of Section 162(m) of the Code. Award Agreements evidencing Incentive Stock Options shall contain such terms and conditions as may be necessary to meet the applicable
provisions of Section 422 of the Code. 
 4.3 Limitations Applicable to Section 16 Persons. Notwithstanding any other
provision of the Plan, the Plan, and any Award granted or awarded to any individual who is then subject to Section 16 of the Exchange Act, shall be subject to any additional limitations set forth in any applicable exemptive rule under
Section 16 of the Exchange Act (including Rule 16b-3 of the Exchange Act and any amendments thereto) that are requirements for the application of such exemptive rule. To the extent permitted by Applicable Law, the Plan and Awards granted or
awarded hereunder shall be deemed amended to the extent necessary to conform to such applicable exemptive rule. 

  
 11 

 4.4 At-Will Service. Nothing in the Plan or in any Program or Award Agreement hereunder
shall confer upon any Holder any right to continue in the employ of, or as a Director or Consultant for, the Company or any Subsidiary, or shall interfere with or restrict in any way the rights of the Company and any Subsidiary, which rights are
hereby expressly reserved, to discharge any Holder at any time for any reason whatsoever, with or without cause, and with or without notice, or to terminate or change all other terms and conditions of employment or engagement, except to the extent
expressly provided otherwise in a written agreement between the Holder and the Company or any Subsidiary. 
 4.5 Foreign Holders.
Notwithstanding any provision of the Plan or applicable Program to the contrary, in order to comply with the laws in countries other than the United States in which the Company and its Subsidiaries operate or have Employees, Non-Employee Directors
or Consultants, or in order to comply with the requirements of any foreign securities exchange or other Applicable Law, the Administrator, in its sole discretion, shall have the power and authority to: (a) determine which Subsidiaries shall be
covered by the Plan; (b) determine which Eligible Individuals outside the United States are eligible to participate in the Plan; (c) modify the terms and conditions of any Award granted to Eligible Individuals outside the United States to
comply with Applicable Law (including, without limitation, applicable foreign laws or listing requirements of any foreign securities exchange); (d) establish subplans and modify exercise procedures and other terms and procedures, to the extent
such actions may be necessary or advisable; provided, however, that no such subplans and/or modifications shall increase the share limitation contained in Section 3.1, the Award Limit or the Director Limit; and (e) take any
action, before or after an Award is made, that it deems advisable to obtain approval or comply with any necessary local governmental regulatory exemptions or approvals or listing requirements of any foreign securities exchange. 

4.6 Non-Employee Director Awards. 

(a) Non-Employee Director Equity Compensation Policy. The Administrator, in its sole discretion, may provide that Awards granted to
Non-Employee Directors shall be granted pursuant to a written nondiscretionary formula established by the Administrator (the “Non-Employee Director Equity Compensation Policy”), subject to the limitations of the Plan. The
Non-Employee Director Equity Compensation Policy shall set forth the type of Award(s) to be granted to Non-Employee Directors, the number of Shares to be subject to Non-Employee Director Awards, the conditions on which such Awards shall be granted,
become exercisable and/or payable and expire, and such other terms and conditions as the Administrator shall determine in its sole discretion. The Non-Employee Director Equity Compensation Policy may be modified by the Administrator from time to
time in its sole discretion. 
 (b) Director Limit. Notwithstanding any provision to the contrary in the Plan or in the Non-Employee
Director Equity Compensation Policy, the sum of the grant date fair value of equity-based Awards and the amount of any cash-based Awards granted to a Non-Employee Director during any calendar year shall not exceed $500,000 (the “Director
Limit”). 

  
 12 

 ARTICLE 5. 

PROVISIONS APPLICABLE TO AWARDS INTENDED TO QUALIFY AS 

PERFORMANCE-BASED COMPENSATION 

5.1 Purpose. The Administrator may, in its sole discretion, (a) determine whether an Award is intended to qualify as
Performance-Based Compensation and (b) at any time after any such determination, alter such intent for any or no reason. If the Administrator, in its sole discretion, decides to grant an Award that is intended to qualify as Performance-Based
Compensation (other than an Option or Stock Appreciation Right), then the provisions of this Article 5 shall control over any contrary provision contained in the Plan or any applicable Program; provided that, if after such decision the
Administrator alters such intention for any reason, the provisions of this Article 5 shall no longer control over any other provision contained in the Plan or any applicable Program. The Administrator, in its sole discretion, may (i) grant
Awards to Eligible Individuals that are based on Performance Criteria or Performance Goals or any such other criteria and goals as the Administrator shall establish, but that do not satisfy the requirements of this Article 5 and that are not
intended to qualify as Performance-Based Compensation and (ii) subject any Awards intended to qualify as Performance-Based Compensation to additional conditions and restrictions unrelated to any Performance Criteria or Performance Goals
(including, without limitation, continued employment or service requirements) to the extent such Awards otherwise satisfy the requirements of this Article 5 with respect to the Performance Criteria and Performance Goals applicable thereto. Unless
otherwise specified by the Administrator at the time of grant, the Performance Criteria with respect to an Award intended to be Performance-Based Compensation payable to a Covered Employee shall be determined on the basis of Applicable Accounting
Standards. 
 5.2 Procedures with Respect to Performance-Based Awards. To the extent necessary to comply with the requirements of
Section 162(m)(4)(C) of the Code, with respect to any Award which is intended to qualify as Performance-Based Compensation, no later than 90 days following the commencement of any Performance Period or any designated fiscal period or period of
service (or such earlier time as may be required under Section 162(m) of the Code), the Administrator shall, in writing, (a) designate one or more Eligible Individuals, (b) select the Performance Criteria applicable to the Performance
Period, (c) establish the Performance Goals, and amounts of such Awards, as applicable, which may be earned for such Performance Period based on the Performance Criteria, and (d) specify the relationship between Performance Criteria and
the Performance Goals and the amounts of such Awards, as applicable, to be earned by each Covered Employee for such Performance Period. Following the completion of each Performance Period, the Administrator shall certify in writing whether and the
extent to which the applicable Performance Goals have been achieved for such Performance Period. In determining the amount earned under such Awards, the Administrator (i) shall, unless otherwise provided in an Award Agreement, have the right to
reduce or eliminate the amount payable at a given level of performance to take into account additional factors that the Administrator may deem relevant, including the assessment of individual or corporate performance for the Performance Period, but
(ii) shall in no event have the right to increase the amount payable for any reason. 

  
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 5.3 Payment of Performance-Based Awards. Unless otherwise provided in the applicable
Program or Award Agreement and only to the extent otherwise permitted by Section 162(m) of the Code, as to an Award that is intended to qualify as Performance-Based Compensation, the Holder must be employed by the Company or a Subsidiary throughout
the Performance Period. Unless otherwise provided in the applicable Program or Award Agreement, a Holder shall be eligible to receive payment pursuant to such Awards for a Performance Period only if and to the extent the Performance Goals for such
Performance Period are achieved. 
 5.4 Additional Limitations. Notwithstanding any other provision of the Plan and except as
otherwise determined by the Administrator, any Award which is granted to an Eligible Individual and is intended to qualify as Performance-Based Compensation shall be subject to any additional limitations set forth in Section 162(m) of the Code
or any regulations or rulings issued thereunder that are requirements for qualification as Performance-Based Compensation, and the Plan and the applicable Program and Award Agreement shall be deemed amended to the extent necessary to conform to such
requirements. 
 ARTICLE 6. 

GRANTING OF OPTIONS AND STOCK APPRECIATION RIGHTS 

6.1 Granting of Options and Stock Appreciation Rights to Eligible Individuals. The Administrator is authorized to grant Options and
Stock Appreciation Rights to Eligible Individuals from time to time, in its sole discretion, on such terms and conditions as it may determine, which shall not be inconsistent with the Plan. 

6.2 Qualification of Incentive Stock Options. The Administrator may grant Options intended to qualify as Incentive Stock Options only to
employees of the Company, any of the Company’s present or future “parent corporations” or “subsidiary corporations” as defined in Sections 424(e) or (f) of the Code, respectively, and any other entities the employees of
which are eligible to receive Incentive Stock Options under the Code. No person who qualifies as a Greater Than 10% Stockholder may be granted an Incentive Stock Option unless such Incentive Stock Option conforms to the applicable provisions of
Section 422 of the Code. To the extent that the aggregate fair market value of stock with respect to which “incentive stock options” (within the meaning of Section 422 of the Code, but without regard to Section 422(d) of the
Code) are exercisable for the first time by a Holder during any calendar year under the Plan, and all other plans of the Company and any parent corporation or subsidiary corporation thereof (as defined in Section 424(e) and 424(f) of the Code,
respectively), exceeds $100,000, the Options shall be treated as Non-Qualified Stock Options to the extent required by Section 422 of the Code. The rule set forth in the immediately preceding sentence shall be applied by taking Options and
other “incentive stock options” into account in the order in which they were granted and the fair market value of stock shall be determined as of the time the respective options were granted. Any interpretations and rules under the Plan
with respect to Incentive Stock Options shall be consistent with the provisions of Section 422 of the Code. Neither the Company nor the Administrator shall have any liability to a Holder, or any other Person, (a) if an Option (or any part
thereof) which is intended to qualify as an Incentive Stock Option fails to qualify as an Incentive Stock Option or (b) for any action or omission by the Company or the Administrator that causes an Option not to qualify as an Incentive Stock
Option, including without limitation, the conversion of an Incentive Stock Option to a Non-Qualified Stock Option or the grant of an Option intended as an Incentive Stock Option that fails to satisfy the requirements under the Code applicable to an
Incentive Stock Option. 

  
 14 

 6.3 Option and Stock Appreciation Right Exercise Price. The exercise price per Share
subject to each Option and Stock Appreciation Right shall be set by the Administrator, but shall not be less than 100% of the Fair Market Value of a Share on the date the Option or Stock Appreciation Right, as applicable, is granted (or, as to
Incentive Stock Options, on the date the Option is modified, extended or renewed for purposes of Section 424(h) of the Code). In addition, in the case of Incentive Stock Options granted to a Greater Than 10% Stockholder, such price shall not be
less than 110% of the Fair Market Value of a Share on the date the Option is granted (or the date the Option is modified, extended or renewed for purposes of Section 424(h) of the Code). Notwithstanding the foregoing, in the case of an Option
or Stock Appreciation Right that is a Substitute Award, the exercise price per share of the Shares subject to such Option or Stock Appreciation Right, as applicable, may be less than the Fair Market Value per share on the date of grant; provided
that the exercise price of any Substitute Award shall be determined in accordance with the applicable requirements of Section 424 and 409A of the Code. 

6.4 Option and SAR Term. The term of each Option (the “Option Term”) and the term of each Stock Appreciation Right (the
“SAR Term”) shall be set by the Administrator in its sole discretion; provided, however, that the Option Term or SAR Term, as applicable, shall not be more than (a) ten (10) years from the date the Option or
Stock Appreciation Right, as applicable, is granted to an Eligible Individual (other than, in the case of Incentive Stock Options, a Greater Than 10% Stockholder), or (b) five (5) years from the date an Incentive Stock Option is granted to
a Greater Than 10% Stockholder. Except as limited by the requirements of Section 409A or Section 422 of the Code and regulations and rulings thereunder or the first sentence of this Section 6.4 and without limiting the Company’s
rights under Section 11.7, the Administrator may extend the Option Term of any outstanding Option or the SAR Term of any outstanding Stock Appreciation Right, and may extend the time period during which vested Options or Stock Appreciation
Rights may be exercised, in connection with any Termination of Service of the Holder or otherwise, and may amend, subject to Section 11.7 and 13.1, any other term or condition of such Option or Stock Appreciation Right relating to such
Termination of Service of the Holder or otherwise. 
 6.5 Option and SAR Vesting. The period during which the right to exercise, in
whole or in part, an Option or Stock Appreciation Right vests in the Holder shall be set by the Administrator and set forth in the applicable Award Agreement. Unless otherwise determined by the Administrator in the Award Agreement, the applicable
Program or by action of the Administrator following the grant of the Option or Stock Appreciation Right, (a) no portion of an Option or Stock Appreciation Right which is unexercisable at a Holder’s Termination of Service shall thereafter
become exercisable and (b) the portion of an Option or Stock Appreciation Right that is unexercisable at a Holder’s Termination of Service shall automatically expire thirty (30) days following the date of a Termination of Service due
to death or disability and on the date of any a Termination of Service for any other reason. 

  
 15 

 6.6 Substitution of Stock Appreciation Rights; Early Exercise of Options. The
Administrator may provide in the applicable Program or Award Agreement evidencing the grant of an Option that the Administrator, in its sole discretion, shall have the right to substitute a Stock Appreciation Right for such Option at any time prior
to or upon exercise of such Option; provided that such Stock Appreciation Right shall be exercisable with respect to the same number of Shares for which such substituted Option would have been exercisable, and shall also have the same exercise
price, vesting schedule and remaining term as the substituted Option. The Administrator may provide in the terms of an Award Agreement that the Holder may exercise an Option in whole or in part prior to the full vesting of the Option in exchange for
unvested shares of Restricted Stock with respect to any unvested portion of the Option so exercised. Shares of Restricted Stock acquired upon the exercise of any unvested portion of an Option shall be subject to such terms and conditions as the
Administrator shall determine. 
 ARTICLE 7. 

EXERCISE OF OPTIONS AND STOCK APPRECIATION RIGHTS 

7.1 Exercise and Payment. An exercisable Option or Stock Appreciation Right may be exercised in whole or in part. However, an Option or
Stock Appreciation Right shall not be exercisable with respect to fractional Shares and the Administrator may require that, by the terms of the Option or Stock Appreciation Right, a partial exercise must be with respect to a minimum number of
Shares. Payment of the amounts payable with respect to Stock Appreciation Rights pursuant to this Article 7 shall be in cash, Shares (based on its Fair Market Value as of the date the Stock Appreciation Right is exercised), or a combination of both,
as determined by the Administrator. 
 7.2 Manner of Exercise. Except as set forth in Section 7.3, all or a portion of an
exercisable Option or Stock Appreciation Right shall be deemed exercised upon delivery of all of the following to the Secretary of the Company, the stock plan administrator of the Company or such other person or entity designated by the
Administrator, or his, her or its office, as applicable: 
 (a) A written or electronic notice complying with the applicable rules
established by the Administrator stating that the Option or Stock Appreciation Right, or a portion thereof, is exercised. The notice shall be signed or otherwise acknowledged electronically by the Holder or other person then entitled to exercise the
Option or Stock Appreciation Right or such portion thereof; 
 (b) Such representations and documents as the Administrator, in its sole
discretion, deems necessary or advisable to effect compliance with Applicable Law; 
 (c) In the event that the Option shall be
exercised pursuant to Section 11.3 by any person or persons other than the Holder, appropriate proof of the right of such person or persons to exercise the Option or Stock Appreciation Right, as determined in the sole discretion of the
Administrator; and 
 (d) Full payment of the exercise price and applicable withholding taxes for the Shares with respect to which the
Option or Stock Appreciation Right, or portion thereof, is exercised, in a manner permitted by the Administrator in accordance with Sections 11.1 and 11.2. 

  
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 7.3 Expiration of Option Term or SAR Term: Automatic Exercise of In-The-Money Options and
Stock Appreciation Rights. Unless otherwise provided by the Administrator in an Award Agreement or otherwise or as otherwise directed by an Option or Stock Appreciation Rights Holder in writing to the Company, each vested and exercisable Option
and Stock Appreciation Right outstanding on the Automatic Exercise Date with an exercise price per Share that is less than the Fair Market Value per Share as of such date shall automatically and without further action by the Option or Stock
Appreciation Rights Holder or the Company be exercised on the Automatic Exercise Date. In the sole discretion of the Administrator, payment of the exercise price of any such Option shall be made pursuant to Section 11.1(b) or 11.1(c) and the
Company or any Subsidiary shall be entitled to deduct or withhold an amount sufficient to satisfy all taxes associated with such exercise in accordance with Section 11.2. Unless otherwise determined by the Administrator, this Section 7.3
shall not apply to an Option or Stock Appreciation Right if the Holder of such Option or Stock Appreciation Right incurs a Termination of Service on or before the Automatic Exercise Date. For the avoidance of doubt, no Option or Stock Appreciation
Right with an exercise price per Share that is equal to or greater than the Fair Market Value per Share on the Automatic Exercise Date shall be exercised pursuant to this Section 7.3. 

7.4 Notification Regarding Disposition. The Holder shall give the Company prompt written or electronic notice of any disposition of
Shares acquired by exercise of an Incentive Stock Option which occurs within (a) two years from the date of granting (including the date the Option is modified, extended or renewed for purposes of Section 424(h) of the Code) such Option to
such Holder, or (b) one year after the date of transfer of such Shares to such Holder. Such notice shall specify the date of such disposition or other transfer and the amount realized, in cash, other property, assumption of indebtedness or
other consideration, by the Holder in such disposition or other transfer. 
 ARTICLE 8. 

AWARD OF RESTRICTED STOCK 

8.1 Award of Restricted Stock. The Administrator is authorized to grant Restricted Stock to Eligible Individuals, and shall determine
the terms and conditions, including the restrictions applicable to each award of Restricted Stock, which terms and conditions shall not be inconsistent with the Plan or any applicable Program, and may impose such conditions on the issuance of such
Restricted Stock as it deems appropriate. The Administrator shall establish the purchase price, if any, and form of payment for Restricted Stock; provided, however, that if a purchase price is charged, such purchase price shall be no
less than the par value, if any, of the Shares to be purchased, unless otherwise permitted by Applicable Law. In all cases, legal consideration shall be required for each issuance of Restricted Stock to the extent required by Applicable Law. 

8.2 Rights as Stockholders. Subject to Section 8.4, upon issuance of Restricted Stock, the Holder shall have, unless otherwise
provided by the Administrator, all the rights of a stockholder with respect to said Shares, subject to the restrictions in the Plan, any applicable Program and/or the applicable Award Agreement, including the right to receive all dividends and other
distributions paid or made with respect to the Shares to the extent such dividends and other distributions have a record date that is on or after the date on which the Holder to whom such Shares are granted becomes the record holder of such
Restricted Stock; provided, however, that, in the sole discretion of the Administrator, any extraordinary distributions with respect to the 

  
 17 

 
Shares may be subject to the restrictions set forth in Section 8.3. In addition, with respect to a share of Restricted Stock with performance-based vesting, dividends which are paid prior to
vesting shall only be paid out to the Holder to the extent that the performance-based vesting conditions are subsequently satisfied and the share of Restricted Stock vests. 

8.3 Restrictions. All shares of Restricted Stock (including any shares received by Holders thereof with respect to shares of Restricted
Stock as a result of stock dividends, stock splits or any other form of recapitalization) shall be subject to such restrictions and vesting requirements as the Administrator shall provide in the applicable Program or Award Agreement. By action taken
after the Restricted Stock is issued, the Administrator may, on such terms and conditions as it may determine to be appropriate, accelerate the vesting of such Restricted Stock by removing any or all of the restrictions imposed by the terms of the
applicable Program or Award Agreement. 
 8.4 Repurchase or Forfeiture of Restricted Stock. Except as otherwise determined by the
Administrator, if no price was paid by the Holder for the Restricted Stock, upon a Termination of Service during the applicable restriction period, the Holder’s rights in unvested Restricted Stock then subject to restrictions shall lapse, and
such Restricted Stock shall be surrendered to the Company and cancelled without consideration on the date of such Termination of Service. If a price was paid by the Holder for the Restricted Stock, upon a Termination of Service during the applicable
restriction period, the Company shall have the right to repurchase from the Holder the unvested Restricted Stock then subject to restrictions at a cash price per share equal to the price paid by the Holder for such Restricted Stock or such other
amount as may be specified in the applicable Program or Award Agreement. Notwithstanding the foregoing, the Administrator, in its sole discretion, may provide that upon certain events, including, without limitation, a Change in Control, the
Holder’s death, retirement or disability or any other specified Termination of Service or any other event, the Holder’s rights in unvested Restricted Stock then subject to restrictions shall not lapse, such Restricted Stock shall vest and
cease to be forfeitable and, if applicable, the Company shall cease to have a right of repurchase. 
 8.5 Section 83(b) Election.
If a Holder makes an election under Section 83(b) of the Code to be taxed with respect to the Restricted Stock as of the date of transfer of the Restricted Stock rather than as of the date or dates upon which the Holder would otherwise be
taxable under Section 83(a) of the Code, the Holder shall be required to deliver a copy of such election to the Company promptly after filing such election with the Internal Revenue Service along with proof of the timely filing thereof with the
Internal Revenue Service. 
 ARTICLE 9. 

AWARD OF RESTRICTED STOCK UNITS 

9.1 Grant of Restricted Stock Units. The Administrator is authorized to grant Awards of Restricted Stock Units to any Eligible
Individual selected by the Administrator in such amounts and subject to such terms and conditions as determined by the Administrator. 
 9.2
Term. Except as otherwise provided herein, the term of a Restricted Stock Unit award shall be set by the Administrator in its sole discretion. 

  
 18 

 9.3 Purchase Price. The Administrator shall specify the purchase price, if any, to be paid
by the Holder to the Company with respect to any Restricted Stock Unit award; provided, however, that value of the consideration shall not be less than the par value of a Share, unless otherwise permitted by Applicable Law. 

9.4 Vesting of Restricted Stock Units. At the time of grant, the Administrator shall specify the date or dates on which the Restricted
Stock Units shall become fully vested and nonforfeitable, and may specify such conditions to vesting as it deems appropriate, including, without limitation, vesting based upon the Holder’s duration of service to the Company or any Subsidiary,
one or more Performance Criteria, Company performance, individual performance or other specific criteria, in each case on a specified date or dates or over any period or periods, as determined by the Administrator. 

9.5 Maturity and Payment. At the time of grant, the Administrator shall specify the maturity date applicable to each grant of Restricted
Stock Units, which shall be no earlier than the vesting date or dates of the Award and may be determined at the election of the Holder (if permitted by the applicable Award Agreement); provided that, except as otherwise determined by the
Administrator, and subject to compliance with Section 409A, in no event shall the maturity date relating to each Restricted Stock Unit occur following the later of (a) the 15th day of
the third month following the end of calendar year in which the applicable portion of the Restricted Stock Unit vests; or (b) the 15th day of the third month following the end of the
Company’s fiscal year in which the applicable portion of the Restricted Stock Unit vests. On the maturity date, the Company shall, in accordance with the applicable Award Agreement and subject to Section 11.4(f), transfer to the Holder one
unrestricted, fully transferable Share for each Restricted Stock Unit scheduled to be paid out on such date and not previously forfeited, or in the sole discretion of the Administrator, an amount in cash equal to the Fair Market Value of such Shares
on the maturity date or a combination of cash and Common Stock as determined by the Administrator. 
 9.6 Payment upon Termination of
Service. An Award of Restricted Stock Units shall only be payable while the Holder is an Employee, a Consultant or a member of the Board, as applicable; provided, however, that the Administrator, in its sole discretion, may provide
(in an Award Agreement or otherwise) that a Restricted Stock Unit award may be paid subsequent to a Termination of Service in certain events, including a Change in Control, the Holder’s death, retirement or disability or any other specified
Termination of Service. 
 ARTICLE 10. 

AWARD OF OTHER STOCK OR CASH BASED AWARDS AND DIVIDEND 

EQUIVALENTS 
 10.1 Other
Stock or Cash Based Awards. The Administrator is authorized to (a) grant Other Stock or Cash Based Awards, including awards entitling a Holder to receive Shares or cash to be delivered immediately or in the future, to any Eligible
Individual and (b) determine whether such Other Stock or Cash Based Awards shall be Performance-Based Compensation. Subject to the provisions of the Plan and any applicable Program, the Administrator shall determine the terms and conditions of
each Other Stock or Cash Based Award, including the term of the Award, any exercise or purchase price, performance goals, including the Performance Criteria, transfer 

  
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restrictions, vesting conditions and other terms and conditions applicable thereto, which shall be set forth in the applicable Award Agreement. Other Stock or Cash Based Awards may be paid in
cash, Shares, or a combination of cash and Shares, as determined by the Administrator, and may be available as a form of payment in the settlement of other Awards granted under the Plan, as stand-alone payments, as a part of a bonus, deferred bonus,
deferred compensation or other arrangement, and/or as payment in lieu of compensation to which an Eligible Individual is otherwise entitled. 

10.2 Dividend Equivalents. Dividend Equivalents may be granted by the Administrator, either alone or in tandem with another Award, based
on dividends declared on the Common Stock, to be credited as of dividend payment dates during the period between the date the Dividend Equivalents are granted to a Holder and the date such Dividend Equivalents terminate or expire, as determined by
the Administrator. Such Dividend Equivalents shall be converted to cash or additional Shares by such formula and at such time and subject to such restrictions and limitations as may be determined by the Administrator. In addition, Dividend
Equivalents with respect to an Award with performance-based vesting that are based on dividends paid prior to the vesting of such Award shall only be paid out to the Holder to the extent that the performance-based vesting conditions are subsequently
satisfied and the Award vests. Notwithstanding the foregoing, no Dividend Equivalents shall be payable with respect to Options or Stock Appreciation Rights. 

ARTICLE 11. 
 ADDITIONAL
TERMS OF AWARDS 
 11.1 Payment. The Administrator shall determine the method or methods by which payments by any Holder with
respect to any Awards granted under the Plan shall be made, including, without limitation: (a) cash or check, (b) Shares (including, in the case of payment of the exercise price of an Award, Shares issuable pursuant to the exercise of the
Award) held for any minimum period of time as may be established by the Administrator having a Fair Market Value on the date of delivery equal to the aggregate payments required, (c) delivery of a written or electronic notice that the Holder
has placed a market sell order with a broker acceptable to the Company with respect to Shares then issuable upon exercise or vesting of an Award, and that the broker has been directed to pay a sufficient portion of the net proceeds of the sale to
the Company in satisfaction of the aggregate payments required; provided that payment of such proceeds is then made to the Company upon settlement of such sale, (d) other form of legal consideration acceptable to the Administrator in its
sole discretion, or (e) any combination of the above permitted forms of payment. Notwithstanding any other provision of the Plan to the contrary, no Holder who is a Director or an “executive officer” of the Company within the meaning
of Section 13(k) of the Exchange Act shall be permitted to make payment with respect to any Awards granted under the Plan, or continue any extension of credit with respect to such payment, with a loan from the Company or a loan arranged by the
Company in violation of Section 13(k) of the Exchange Act. 
 11.2 Tax Withholding. The Company or any Subsidiary shall have the
authority and the right to deduct or withhold, or require a Holder to remit to the Company, an amount sufficient to satisfy federal, state, local and foreign taxes (including the Holder’s FICA, employment tax or other social security
contribution obligation) required by law to be withheld with respect to any taxable event concerning a Holder arising as a result of the Plan or any Award. The Administrator 

  
 20 

 
may, in its sole discretion and in satisfaction of the foregoing requirement, allow a Holder to satisfy such obligations by any payment means described in Section 11.1 hereof, including
without limitation, by allowing such Holder to have the Company or any Subsidiary withhold Shares otherwise issuable under an Award (or allow the surrender of Shares). The number of Shares which may be so withheld or surrendered shall be no greater
than the number of Shares which have a fair market value on the date of withholding or repurchase equal to the aggregate amount of such liabilities based on the minimum statutory withholding rates for federal, state, local and foreign income tax and
payroll tax purposes that are applicable to such supplemental taxable income (or such other number as would not result in adverse financial accounting consequences for the Company or any of its Subsidiaries). The Administrator shall determine the
fair market value of the Shares, consistent with applicable provisions of the Code, for tax withholding obligations due in connection with a broker-assisted cashless Option or Stock Appreciation Right exercise involving the sale of Shares to pay the
Option or Stock Appreciation Right exercise price or any tax withholding obligation. 
 11.3 Transferability of Awards. 

(a) Except as otherwise provided in Sections 11.3(b) and 11.3(c): 

(i) No Award under the Plan may be sold, pledged, assigned or transferred in any manner other than (A) by will or the laws of descent and
distribution or (B) subject to the consent of the Administrator, pursuant to a DRO, unless and until such Award has been exercised or the Shares underlying such Award have been issued, and all restrictions applicable to such Shares have lapsed;

 (ii) No Award or interest or right therein shall be liable for or otherwise subject to the debts, contracts or engagements of the
Holder or the Holder’s successors in interest or shall be subject to disposition by transfer, alienation, anticipation, pledge, hypothecation, encumbrance, assignment or any other means whether such disposition be voluntary or involuntary or by
operation of law by judgment, levy, attachment, garnishment or any other legal or equitable proceedings (including bankruptcy) unless and until such Award has been exercised, or the Shares underlying such Award have been issued, and all restrictions
applicable to such Shares have lapsed, and any attempted disposition of an Award prior to satisfaction of these conditions shall be null and void and of no effect, except to the extent that such disposition is permitted by Section 11.3(a)(i);
and 
 (iii) During the lifetime of the Holder, only the Holder may exercise any exercisable portion of an Award granted to such Holder
under the Plan, unless it has been disposed of pursuant to a DRO. After the death of the Holder, any exercisable portion of an Award may, prior to the time when such portion becomes unexercisable under the Plan or the applicable Program or Award
Agreement, be exercised by the Holder’s personal representative or by any person empowered to do so under the deceased Holder’s will or under the then-applicable laws of descent and distribution. 

(b) Notwithstanding Section 11.3(a), the Administrator, in its sole discretion, may determine to permit a Holder or a Permitted Transferee
of such Holder to transfer an Award other than an Incentive Stock Option (unless such Incentive Stock Option is intended to become a 

  
 21 

 
Nonqualified Stock Option) to any one or more Permitted Transferees of such Holder, subject to the following terms and conditions: (i) an Award transferred to a Permitted Transferee shall
not be assignable or transferable by the Permitted Transferee other than (A) to another Permitted Transferee of the applicable Holder or (B) by will or the laws of descent and distribution or, subject to the consent of the Administrator,
pursuant to a DRO; (ii) an Award transferred to a Permitted Transferee shall continue to be subject to all the terms and conditions of the Award as applicable to the original Holder (other than the ability to further transfer the Award to any
Person other than another Permitted Transferee of the applicable Holder); and (iii) the Holder (or transferring Permitted Transferee) and the receiving Permitted Transferee shall execute any and all documents requested by the Administrator,
including, without limitation documents to (A) confirm the status of the transferee as a Permitted Transferee, (B) satisfy any requirements for an exemption for the transfer under Applicable Law and (C) evidence the transfer. In
addition, and further notwithstanding Section 11.3(a), hereof, the Administrator, in its sole discretion, may determine to permit a Holder to transfer Incentive Stock Options to a trust that constitutes a Permitted Transferee if, under
Section 671 of the Code and other Applicable Law, the Holder is considered the sole beneficial owner of the Incentive Stock Option while it is held in the trust. 

(c) Notwithstanding Section 11.3(a), a Holder may, in the manner determined by the Administrator, designate a beneficiary to exercise the
rights of the Holder and to receive any distribution with respect to any Award upon the Holder’s death. A beneficiary, legal guardian, legal representative, or other person claiming any rights pursuant to the Plan is subject to all terms and
conditions of the Plan and any Program or Award Agreement applicable to the Holder and any additional restrictions deemed necessary or appropriate by the Administrator. If the Holder is married or a domestic partner in a domestic partnership
qualified under Applicable Law and resides in a community property state, a designation of a person other than the Holder’s spouse or domestic partner, as applicable, as the Holder’s beneficiary with respect to more than 50% of the
Holder’s interest in the Award shall not be effective without the prior written or electronic consent of the Holder’s spouse or domestic partner. If no beneficiary has been designated or survives the Holder, payment shall be made to the
person entitled thereto pursuant to the Holder’s will or the laws of descent and distribution. Subject to the foregoing, a beneficiary designation may be changed or revoked by a Holder at any time; provided that the change or revocation
is delivered in writing to the Administrator prior to the Holder’s death. 
 11.4 Conditions to Issuance of Shares. 

(a) The Administrator shall determine the methods by which Shares shall be delivered or deemed to be delivered to Holders. Notwithstanding
anything herein to the contrary, the Company shall not be required to issue or deliver any certificates or make any book entries evidencing Shares pursuant to the exercise of any Award, unless and until the Administrator has determined, with advice
of counsel, that the issuance of such Shares is in compliance with Applicable Law and the Shares are covered by an effective registration statement or applicable exemption from registration. In addition to the terms and conditions provided herein,
the Administrator may require that a Holder make such reasonable covenants, agreements and representations as the Administrator, in its sole discretion, deems advisable in order to comply with Applicable Law. 

  
 22 

 (b) All share certificates delivered pursuant to the Plan and all Shares issued pursuant to book
entry procedures are subject to any stop-transfer orders and other restrictions as the Administrator deems necessary or advisable to comply with Applicable Law. The Administrator may place legends on any share certificate or book entry to reference
restrictions applicable to the Shares (including, without limitation, restrictions applicable to Restricted Stock). 
 (c) The Administrator
shall have the right to require any Holder to comply with any timing or other restrictions with respect to the settlement, distribution or exercise of any Award, including a window-period limitation, as may be imposed in the sole discretion of the
Administrator. 
 (d) No fractional Shares shall be issued and the Administrator, in its sole discretion, shall determine whether cash shall
be given in lieu of fractional Shares or whether such fractional Shares shall be eliminated by rounding down. 
 (e) The Company, in its sole
discretion, may (i) retain physical possession of any stock certificate evidencing Shares until any restrictions thereon shall have lapsed and/or (ii) require that the stock certificates evidencing such Shares be held in custody by a
designated escrow agent (which may but need not be the Company) until the restrictions thereon shall have lapsed, and that the Holder deliver a stock power, endorsed in blank, relating to such Shares. 

(f) Notwithstanding any other provision of the Plan, unless otherwise determined by the Administrator or required by Applicable Law, the
Company shall not deliver to any Holder certificates evidencing Shares issued in connection with any Award and instead such Shares shall be recorded in the books of the Company (or, as applicable, its transfer agent or stock plan administrator).

 11.5 Forfeiture and Claw-Back Provisions. All Awards (including any proceeds, gains or other economic benefit actually or
constructively received by a Holder upon any receipt or exercise of any Award or upon the receipt or resale of any Shares underlying the Award and any payments of a portion of an incentive-based bonus pool allocated to a Holder) shall be subject to
the provisions of any claw-back policy implemented by the Company, including, without limitation, any claw-back policy adopted to comply with the requirements of Applicable Law, including, without limitation, the Dodd-Frank Wall Street Reform and
Consumer Protection Act and any rules or regulations promulgated thereunder, whether or not such claw-back policy was in place at the time of grant of an Award, to the extent set forth in such claw-back policy and/or in the applicable Award
Agreement. 
 11.6 Prohibition on Repricing. Subject to Section 13.2, the Administrator shall not, without the approval of the
stockholders of the Company, (a) authorize the amendment of any outstanding Option or Stock Appreciation Right to reduce its price per Share, or (b) cancel any Option or Stock Appreciation Right in exchange for cash or another Award when
the Option or Stock Appreciation Right price per Share exceeds the Fair Market Value of the underlying Shares. Furthermore, for purposes of this Section 11.6, except in connection with a corporate transaction involving the Company (including,
without limitation, any stock dividend, stock split, extraordinary cash dividend, recapitalization, reorganization, merger, consolidation, split-up, spin-off, combination or exchange of shares), the terms of outstanding Awards may not be amended to

  
 23 

 
reduce the exercise price per Share of outstanding Options or Stock Appreciation Rights or cancel outstanding Options or Stock Appreciation Rights in exchange for cash, other Awards or Options or
Stock Appreciation Rights with an exercise price per Share that is less than the exercise price per Share of the original Options or Stock Appreciation Rights without the approval of the stockholders of the Company. 

11.7 Amendment of Awards. Subject to Applicable Law, the Administrator may amend, modify or terminate any outstanding Award, including
but not limited to, substituting therefor another Award of the same or a different type, changing the date of exercise or settlement, and converting an Incentive Stock Option to a Non-Qualified Stock Option. The Holder’s consent to such action
shall be required unless (a) the Administrator determines that the action, taking into account any related action, would not materially and adversely affect the Holder, or (b) the change is otherwise permitted under the Plan (including,
without limitation, under Section 13.2 or 13.10). 
 11.8 Data Privacy. As a condition of receipt of any Award, each Holder
explicitly and unambiguously consents to the collection, use and transfer, in electronic or other form, of personal data as described in this Section 11.8 by and among, as applicable, the Company and its Subsidiaries for the exclusive purpose
of implementing, administering and managing the Holder’s participation in the Plan. The Company and its Subsidiaries may hold certain personal information about a Holder, including but not limited to, the Holder’s name, home address and
telephone number, date of birth, social security or insurance number or other identification number, salary, nationality, job title(s), any shares of stock held in the Company or any of its Subsidiaries, details of all Awards, in each case, for the
purpose of implementing, managing and administering the Plan and Awards (the “Data”). The Company and its Subsidiaries may transfer the Data amongst themselves as necessary for the purpose of implementation, administration and
management of a Holder’s participation in the Plan, and the Company and its Subsidiaries may each further transfer the Data to any third parties assisting the Company and its Subsidiaries in the implementation, administration and management of
the Plan. These recipients may be located in the Holder’s country, or elsewhere, and the Holder’s country may have different data privacy laws and protections than the recipients’ country. Through acceptance of an Award, each Holder
authorizes such recipients to receive, possess, use, retain and transfer the Data, in electronic or other form, for the purposes of implementing, administering and managing the Holder’s participation in the Plan, including any requisite
transfer of such Data as may be required to a broker or other third party with whom the Company or any of its Subsidiaries or the Holder may elect to deposit any Shares. The Data related to a Holder will be held only as long as is necessary to
implement, administer, and manage the Holder’s participation in the Plan. A Holder may, at any time, view the Data held by the Company with respect to such Holder, request additional information about the storage and processing of the Data with
respect to such Holder, recommend any necessary corrections to the Data with respect to the Holder or refuse or withdraw the consents herein in writing, in any case without cost, by contacting his or her local human resources representative. The
Company may cancel Holder’s ability to participate in the Plan and, in the Administrator’s discretion, the Holder may forfeit any outstanding Awards if the Holder refuses or withdraws his or her consents as described herein. For more
information on the consequences of refusal to consent or withdrawal of consent, Holders may contact their local human resources representative. 

  
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 ARTICLE 12. 

ADMINISTRATION 
 12.1
Administrator. The Committee shall administer the Plan (except as otherwise permitted herein). To the extent necessary to comply with Rule 16b-3 of the Exchange Act, and with respect to Awards that are intended to be Performance-Based
Compensation, including Options and Stock Appreciation Rights, then the Committee shall take all action with respect to such Awards, and the individuals taking such action shall consist solely of two or more Non-Employee Directors, each of whom is
intended to qualify as both a “non-employee director” as defined by Rule 16b-3 of the Exchange Act or any successor rule and an “outside director” for purposes of Section 162(m) of the Code. Additionally, to the extent
required by Applicable Law, each of the individuals constituting the Committee shall be an “independent director” under the rules of any securities exchange or automated quotation system on which the Shares are listed, quoted or traded.
Notwithstanding the foregoing, any action taken by the Committee shall be valid and effective, whether or not members of the Committee at the time of such action are later determined not to have satisfied the requirements for membership set forth in
this Section 12.1 or the Organizational Documents. Except as may otherwise be provided in the Organizational Documents or as otherwise required by Applicable Law, (a) appointment of Committee members shall be effective upon acceptance of
appointment, (b) Committee members may resign at any time by delivering written or electronic notice to the Board and (c) vacancies in the Committee may only be filled by the Board. Notwithstanding the foregoing, (i) the full Board,
acting by a majority of its members in office, shall conduct the general administration of the Plan with respect to Awards granted to Non-Employee Directors and, with respect to such Awards, the terms “Administrator” as used in the Plan
shall be deemed to refer to the Board and (ii) the Board or Committee may delegate its authority hereunder to the extent permitted by Section 12.6. 

12.2 Duties and Powers of Administrator. It shall be the duty of the Administrator to conduct the general administration of the Plan in
accordance with its provisions. The Administrator shall have the power to interpret the Plan, all Programs and Award Agreements, and to adopt such rules for the administration, interpretation and application of the Plan and any Program as are not
inconsistent with the Plan, to interpret, amend or revoke any such rules and to amend the Plan or any Program or Award Agreement; provided that the rights or obligations of the Holder of the Award that is the subject of any such Program or Award
Agreement are not materially and adversely affected by such amendment, unless the consent of the Holder is obtained or such amendment is otherwise permitted under Section 11.5 or Section 13.10. In its sole discretion, the Board may at any
time and from time to time exercise any and all rights and duties of the Committee in its capacity as the Administrator under the Plan except with respect to matters which under Rule 16b-3 under the Exchange Act or any successor rule, or
Section 162(m) of the Code, or any regulations or rules issued thereunder, or the rules of any securities exchange or automated quotation system on which the Shares are listed, quoted or traded are required to be determined in the sole
discretion of the Committee. 
 12.3 Action by the Administrator. Unless otherwise established by the Board, set forth in any
Organizational Documents or as required by Applicable Law, a majority of the Administrator shall constitute a quorum and the acts of a majority of the members present at any meeting at which a quorum is present, and acts approved in writing by all
members of the 

  
 25 

 
Administrator in lieu of a meeting, shall be deemed the acts of the Administrator. Each member of the Administrator is entitled to, in good faith, rely or act upon any report or other information
furnished to that member by any officer or other employee of the Company or any Subsidiary, the Company’s independent certified public accountants, or any executive compensation consultant or other professional retained by the Company to assist
in the administration of the Plan. 
 12.4 Authority of Administrator. Subject to the Organizational Documents, any specific
designation in the Plan and Applicable Law, the Administrator has the exclusive power, authority and sole discretion to: 

(a) Designate Eligible Individuals to receive Awards; 

(b) Determine the type or types of Awards to be granted to each Eligible Individual (including, without limitation, any Awards granted in
tandem with another Award granted pursuant to the Plan); 
 (c) Determine the number of Awards to be granted and the number of Shares to
which an Award will relate; 
 (d) Determine the terms and conditions of any Award granted pursuant to the Plan, including, but not
limited to, the exercise price, grant price, purchase price, any Performance Criteria or performance criteria, any restrictions or limitations on the Award, any schedule for vesting, lapse of forfeiture restrictions or restrictions on the
exercisability of an Award, and accelerations or waivers thereof, and any provisions related to non-competition and claw-back and recapture of gain on an Award, based in each case on such considerations as the Administrator in its sole discretion
determines; 
 (e) Determine whether, to what extent, and under what circumstances an Award may be settled in, or the exercise price of
an Award may be paid in cash, Shares, other Awards, or other property, or an Award may be canceled, forfeited, or surrendered; 

(f) Prescribe the form of each Award Agreement, which need not be identical for each Holder; 

(g) Decide all other matters that must be determined in connection with an Award; 

(h) Establish, adopt, or revise any Programs, rules and regulations as it may deem necessary or advisable to administer the Plan; 

(i) Interpret the terms of, and any matter arising pursuant to, the Plan, any Program or any Award Agreement; 

(j) Make all other decisions and determinations that may be required pursuant to the Plan or as the Administrator deems necessary or
advisable to administer the Plan; and 

  
 26 

 (k) Accelerate wholly or partially the vesting or lapse of restrictions of any Award or portion
thereof at any time after the grant of an Award, subject to whatever terms and conditions it selects and Section 13.2. 
 12.5
Decisions Binding. The Administrator’s interpretation of the Plan, any Awards granted pursuant to the Plan, any Program or any Award Agreement and all decisions and determinations by the Administrator with respect to the Plan are final,
binding and conclusive on all Persons. 
 12.6 Delegation of Authority. The Board or Committee may from time to time delegate to a
committee of one or more members of the Board or one or more officers of the Company the authority to grant or amend Awards or to take other administrative actions pursuant to this Article 12; provided, however, that in no event shall
an officer of the Company be delegated the authority to grant Awards to, or amend Awards held by, the following individuals: (a) individuals who are subject to Section 16 of the Exchange Act, (b) Covered Employees with respect to
Awards intended to constitute Performance Based Compensation, or (c) officers of the Company (or Directors) to whom authority to grant or amend Awards has been delegated hereunder; provided, further, that any delegation of administrative
authority shall only be permitted to the extent it is permissible under any Organizational Documents and Applicable Law (including, without limitation, Section 162(m) of the Code). Any delegation hereunder shall be subject to the restrictions
and limits that the Board or Committee specifies at the time of such delegation or that are otherwise included in the applicable Organizational Documents, and the Board or Committee, as applicable, may at any time rescind the authority so delegated
or appoint a new delegatee. At all times, the delegatee appointed under this Section 12.6 shall serve in such capacity at the pleasure of the Board or the Committee, as applicable, and the Board or the Committee may abolish any committee at any
time and re-vest in itself any previously delegated authority. 
 ARTICLE 13. 

MISCELLANEOUS PROVISIONS 

13.1 Amendment, Suspension or Termination of the Plan. 

(a) Except as otherwise provided in Section 13.1(b), the Plan may be wholly or partially amended or otherwise modified, suspended or
terminated at any time or from time to time by the Board; provided that, except as provided in Section 11.5 and Section 13.10, no amendment, suspension or termination of the Plan shall, without the consent of the Holder, materially
and adversely affect any rights or obligations under any Award theretofore granted or awarded, unless the Award itself otherwise expressly so provides. 

(b) Notwithstanding Section 13.1(a), the Board may not, except as provided in Section 13.2, take any of the following actions without
approval of the Company’s stockholders given within twelve (12) months before or after such action: (i) increase the limit imposed in Section 3.1 on the maximum number of Shares which may be issued under the Plan or the Award
Limit, (ii) reduce the price per share of any outstanding Option or Stock Appreciation Right granted under the Plan or take any action prohibited under Section 11.6, or (iii) cancel any Option or Stock Appreciation Right in exchange
for cash or another Award in violation of Section 11.6. 

  
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 (c) No Awards may be granted or awarded during any period of suspension or after termination of
the Plan, and notwithstanding anything herein to the contrary, in no event may any Award be granted under the Plan after the tenth (10th) anniversary of the earlier of (i) the date on which the Plan was adopted by the Board or
(ii) the date the Plan was approved by the Company’s stockholders (such anniversary, the “Expiration Date”). Any Awards that are outstanding on the Expiration Date shall remain in force according to the terms of the Plan,
the applicable Program and the applicable Award Agreement. 
 13.2 Changes in Common Stock or Assets of the Company, Acquisition or
Liquidation of the Company and Other Corporate Events. 
 (a) In the event of any stock dividend, stock split, combination or exchange of
shares, merger, consolidation or other distribution (other than normal cash dividends) of Company assets to stockholders, or any other change affecting the shares of the Company’s stock or the share price of the Company’s stock other than
an Equity Restructuring, the Administrator may make equitable adjustments, if any, to reflect such change with respect to: (i) the aggregate number and kind of Shares that may be issued under the Plan (including, but not limited to, adjustments
of the limitations in Section 3.1 on the maximum number and kind of Shares which may be issued under the Plan, and adjustments of the Award Limit ); (ii) the number and kind of Shares (or other securities or property) subject to
outstanding Awards; (iii) the terms and conditions of any outstanding Awards (including, without limitation, any applicable performance targets or criteria with respect thereto); (iv) the grant or exercise price per share for any
outstanding Awards under the Plan; and (v) the number and kind of Shares (or other securities or property) for which automatic grants are subsequently to be made to new and continuing Non-Employee Directors pursuant to Section 4.6. Any
adjustment affecting an Award intended as Performance-Based Compensation shall be made consistent with the requirements of Section 162(m) of the Code unless otherwise determined by the Administrator. 

(b) In the event of any transaction or event described in Section 13.2(a) or any unusual or nonrecurring transactions or events affecting
the Company, any Subsidiary of the Company, or the financial statements of the Company or any Subsidiary, or of changes in Applicable Law or Applicable Accounting Standards, the Administrator, in its sole discretion, and on such terms and conditions
as it deems appropriate, either by the terms of the Award or by action taken prior to the occurrence of such transaction or event, is hereby authorized to take any one or more of the following actions whenever the Administrator determines that such
action is appropriate in order to prevent dilution or enlargement of the benefits or potential benefits intended to be made available under the Plan or with respect to any Award under the Plan, to facilitate such transactions or events or to give
effect to such changes in Applicable Law or Applicable Accounting Standards: 
 (i) To provide for the termination of any such Award in
exchange for an amount of cash and/or other property with a value equal to the amount that would have been attained upon the exercise of such Award or realization of the Holder’s rights (and, for the avoidance of doubt, if as of the date of the
occurrence of the transaction or event described in this Section 13.2 the Administrator determines in good faith that no amount would have been attained upon the exercise of such Award or realization of the Holder’s rights, then such Award
may be terminated by the Company without payment); 

  
 28 

 (ii) To provide that such Award be assumed by the successor or survivor corporation, or a parent
or subsidiary thereof, or shall be substituted for by similar options, rights or awards covering the stock of the successor or survivor corporation, or a parent or subsidiary thereof, with appropriate adjustments as to the number and kind of shares
and applicable exercise or purchase price, in all cases, as determined by the Administrator; 
 (iii) To make adjustments in the number
and type of Shares of the Company’s stock (or other securities or property) subject to such Awards, and/or in the terms and conditions of (including the grant or exercise price), and the criteria included in, outstanding Awards and Awards which
may be granted in the future; 
 (iv) To provide that such Award shall be exercisable or payable or fully vested with respect to all
Shares covered thereby, notwithstanding anything to the contrary in the Plan or the applicable Program or Award Agreement; 
 (v) To
replace such Award with other rights or property selected by the Administrator; and/or 
 (vi) To provide that the Award cannot vest,
be exercised or become payable after such event. 
 (c) In connection with the occurrence of any Equity Restructuring, and notwithstanding
anything to the contrary in Sections 13.2(a) and 13.2(b): 
 (i) The number and type of securities subject to each outstanding Award
and the exercise price or grant price thereof, if applicable, shall be equitably adjusted (and the adjustments provided under this Section 13.2(c)(i) shall be nondiscretionary and shall be final and binding on the affected Holder and the
Company); and/or 
 (ii) The Administrator shall make such equitable adjustments, if any, as the Administrator, in its sole discretion,
may deem appropriate to reflect such Equity Restructuring with respect to the aggregate number and kind of Shares that may be issued under the Plan (including, but not limited to, adjustments of the limitation in Section 3.1 on the maximum
number and kind of Shares which may be issued under the Plan, and adjustments of the Award Limit,). 
 (d) Notwithstanding any other
provision of the Plan, in the event of a Change in Control, unless the Administrator elects to (i) terminate an Award in exchange for cash, rights or property, or (ii) cause an Award to become fully exercisable and no longer subject to any
forfeiture restrictions prior to the consummation of a Change in Control, pursuant to Section 13.2, (A) such Award (other than any portion subject to performance-based vesting) shall continue in effect or be assumed or an equivalent Award
substituted by the successor corporation or a parent or subsidiary of the successor corporation and (B) the portion of such Award subject to performance-based vesting shall be subject to the terms and conditions of the applicable Award
Agreement and, in the absence of applicable terms and conditions, the Administrator’s discretion. In the event an Award continues in effect or is assumed or an equivalent Award substituted, and a Holder incurs a Termination of Service without
“cause” (as such term is defined in the sole discretion of the Administrator, or as set forth in the Award Agreement relating to such Award) upon or within twelve (12) months following the Change in Control, then such Holder shall be
fully vested in such continued, assumed or substituted Award. 

  
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 (e) In the event that the successor corporation in a Change in Control refuses to assume or
substitute for an Award (other than any portion subject to performance-based vesting), the Administrator may cause (i) any or all of such Award (or portion thereof) to terminate in exchange for cash, rights or other property pursuant to
Section 13.2(b)(i) or (ii) any or all of such Award (or portion thereof) to become fully exercisable immediately prior to the consummation of such transaction and all forfeiture restrictions on any or all of such Award to lapse. If any
such Award is exercisable in lieu of assumption or substitution in the event of a Change in Control, the Administrator shall notify the Holder that such Award shall be fully exercisable for a period of fifteen (15) days from the date of such
notice, contingent upon the occurrence of the Change in Control, and such Award shall terminate upon the expiration of such period. 
 (f)
For the purposes of this Section 13.2, an Award shall be considered assumed if, following the Change in Control, the Award confers the right to purchase or receive, for each Share subject to the Award immediately prior to the Change in Control,
the consideration (whether stock, cash, or other securities or property) received in the Change in Control by holders of Common Stock for each Share held on the effective date of the transaction (and if holders were offered a choice of
consideration, the type of consideration chosen by the holders of a majority of the outstanding Shares); provided, however, that if such consideration received in the Change in Control was not solely common stock of the successor
corporation or its parent, the Administrator may, with the consent of the successor corporation, provide for the consideration to be received upon the exercise of the Award, for each Share subject to an Award, to be solely common stock of the
successor corporation or its parent equal in fair market value to the per-share consideration received by holders of Common Stock in the Change in Control. 

(g) The Administrator, in its sole discretion, may include such further provisions and limitations in any Award, agreement or certificate, as
it may deem equitable and in the best interests of the Company that are not inconsistent with the provisions of the Plan. 
 (h) Unless
otherwise determined by the Administrator, no adjustment or action described in this Section 13.2 or in any other provision of the Plan shall be authorized to the extent it would (i) with respect to Awards which are granted to Covered
Employees and are intended to qualify as Performance-Based Compensation, cause such Awards to fail to so qualify as Performance-Based Compensation, (ii) cause the Plan to violate Section 422(b)(1) of the Code, (iii) result in
short-swing profits liability under Section 16 of the Exchange Act or violate the exemptive conditions of Rule 16b-3 of the Exchange Act, or (iv) cause an Award to fail to be exempt from or comply with Section 409A. 

(i) The existence of the Plan, any Program, any Award Agreement and/or the Awards granted hereunder shall not affect or restrict in any way the
right or power of the Company or the stockholders of the Company to make or authorize any adjustment, recapitalization, reorganization or other change in the Company’s capital structure or its business, any merger or 

  
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consolidation of the Company, any issue of stock or of options, warrants or rights to purchase stock or of bonds, debentures, preferred or prior preference stocks whose rights are superior to or
affect the Common Stock or the rights thereof or which are convertible into or exchangeable for Common Stock, 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. 
 (j) In the event of any pending stock dividend, stock split,
combination or exchange of shares, merger, consolidation or other distribution (other than normal cash dividends) of Company assets to stockholders, or any other change affecting the Shares or the share price of the Common Stock including any Equity
Restructuring, for reasons of administrative convenience, the Administrator, in its sole discretion, may refuse to permit the exercise of any Award during a period of up to thirty (30) days prior to the consummation of any such transaction.

 13.3 Approval of Plan by Stockholders. The Plan shall be submitted for the approval of the Company’s stockholders within
twelve (12) months after the date of the Board’s initial adoption of the Plan. 
 13.4 No Stockholders Rights. Except as
otherwise provided herein or in an applicable Program or Award Agreement, a Holder shall have none of the rights of a stockholder with respect to Shares covered by any Award until the Holder becomes the record owner of such Shares. 

13.5 Paperless Administration. In the event that the Company establishes, for itself or using the services of a third party, an
automated system for the documentation, granting or exercise of Awards, such as a system using an internet website or interactive voice response, then the paperless documentation, granting or exercise of Awards by a Holder may be permitted through
the use of such an automated system. 
 13.6 Effect of Plan upon Other Compensation Plans. The adoption of the Plan shall not affect
any other compensation or incentive plans in effect for the Company or any Subsidiary. Nothing in the Plan shall be construed to limit the right of the Company or any Subsidiary: (a) to establish any other forms of incentives or compensation
for Employees, Directors or Consultants of the Company or any Subsidiary, or (b) to grant or assume options or other rights or awards otherwise than under the Plan in connection with any proper corporate purpose including without limitation,
the grant or assumption of options in connection with the acquisition by purchase, lease, merger, consolidation or otherwise, of the business, stock or assets of any corporation, partnership, limited liability company, firm or association. 

13.7 Compliance with Laws. The Plan, the granting and vesting of Awards under the Plan and the issuance and delivery of Shares and the
payment of money under the Plan or under Awards granted or awarded hereunder are subject to compliance with all Applicable Law (including but not limited to state, federal and foreign securities law and margin requirements), and to such approvals by
any listing, regulatory or governmental authority as may, in the opinion of counsel for the Company, be necessary or advisable in connection therewith. Any securities delivered under the Plan shall be subject to such restrictions, and the person
acquiring such securities shall, if requested by the Company, provide such assurances and representations to the Company as the Company may deem necessary or desirable to assure compliance with all 

  
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Applicable Law. The Administrator, in its sole discretion, may take whatever actions it deems necessary or appropriate to effect compliance with Applicable Law, including, without limitation,
placing legends on share certificates and issuing stop-transfer notices to agents and registrars. Notwithstanding anything to the contrary herein, the Administrator may not take any actions hereunder, and no Awards shall be granted, that would
violate Applicable Law. To the extent permitted by Applicable Law, the Plan and Awards granted or awarded hereunder shall be deemed amended to the extent necessary to conform to Applicable Law. 

13.8 Titles and Headings, References to Sections of the Code or Exchange Act. The titles and headings of the Sections in the Plan are
for convenience of reference only and, in the event of any conflict, the text of the Plan, rather than such titles or headings, shall control. References to sections of the Code or the Exchange Act shall include any amendment or successor thereto.

 13.9 Governing Law. The Plan and any Programs and Award Agreements hereunder shall be administered, interpreted and enforced under
the internal laws of the State of Delaware without regard to conflicts of laws thereof or of any other jurisdiction. 
 13.10
Section 409A. To the extent that the Administrator determines that any Award granted under the Plan is subject to Section 409A, the Plan, the Program pursuant to which such Award is granted and the Award Agreement evidencing such
Award shall incorporate the terms and conditions required by Section 409A. In that regard, to the extent any Award under the Plan or any other compensatory plan or arrangement of the Company or any of its Subsidiaries is subject to
Section 409A, and such Award or other amount is payable on account of a Participant’s Termination of Service (or any similarly defined term), then (a) such Award or amount shall only be paid to the extent such Termination of Service
qualifies as a “separation from service” as defined in Section 409A, and (b) if such Award or amount is payable to a “specified employee” as defined in Section 409A then to the extent required in order to avoid a
prohibited distribution under Section 409A, such Award or other compensatory payment shall not be payable prior to the earlier of (i) the expiration of the six-month period measured from the date of the Participant’s Termination of
Service, or (ii) the date of the Participant’s death. To the extent applicable, the Plan, the Program and any Award Agreements shall be interpreted in accordance with Section 409A. Notwithstanding any provision of the Plan to the
contrary, in the event that following the Effective Date the Administrator determines that any Award may be subject to Section 409A, the Administrator may (but is not obligated to), without a Holder’s consent, adopt such amendments to the
Plan and the applicable Program and Award Agreement or adopt other policies and procedures (including amendments, policies and procedures with retroactive effect), or take any other actions, that the Administrator determines are necessary or
appropriate to (A) exempt the Award from Section 409A and/or preserve the intended tax treatment of the benefits provided with respect to the Award, or (B) comply with the requirements of Section 409A and thereby avoid the
application of any penalty taxes under Section 409A. The Company makes no representations or warranties as to the tax treatment of any Award under Section 409A or otherwise. The Company shall have no obligation under this
Section 13.10 or otherwise to take any action (whether or not described herein) to avoid the imposition of taxes, penalties or interest under Section 409A with respect to any Award and shall have no liability to any Holder or any other
person if any Award, compensation or other benefits under the Plan are determined to constitute non-compliant, “nonqualified deferred compensation” subject to the imposition of taxes, penalties and/or interest under Section 409A. 

  
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 13.11 Unfunded Status of Awards. The Plan is intended to be an “unfunded” plan
for incentive compensation. With respect to any payments not yet made to a Holder pursuant to an Award, nothing contained in the Plan or any Program or Award Agreement shall give the Holder any rights that are greater than those of a general
creditor of the Company or any Subsidiary. 
 13.12 Indemnification. To the extent permitted under Applicable Law and the
Organizational Documents, each member of the Administrator shall be indemnified and held harmless by the Company from any loss, cost, liability, or expense that may be imposed upon or reasonably incurred by such member in connection with or
resulting from any claim, action, suit, or proceeding to which he or she may be a party or in which he or she may be involved by reason of any action or failure to act pursuant to the Plan and against and from any and all amounts paid by him or her
in satisfaction of judgment in such action, suit, or proceeding against him or her; provided he or she gives the Company an opportunity, at its own expense, to handle and defend the same before he or she undertakes to handle and defend it on
his or her own behalf. The foregoing right of indemnification shall not be exclusive of any other rights of indemnification to which such persons may be entitled pursuant to the Organizational Documents, as a matter of law, or otherwise, or any
power that the Company may have to indemnify them or hold them harmless. 
 13.13 Relationship to other Benefits. No payment pursuant
to the Plan shall be taken into account in determining any benefits under any pension, retirement, savings, profit sharing, group insurance, welfare or other benefit plan of the Company or any Subsidiary except to the extent otherwise expressly
provided in writing in such other plan or an agreement thereunder. 
 13.14 Expenses. The expenses of administering the Plan shall be
borne by the Company and its Subsidiaries. 
 *  *  *  *  * 

I hereby certify that the foregoing Plan was duly adopted by the Board of Directors of Novan, Inc. on April 13, 2016. 

*  *  *  *  * 

I hereby certify that the foregoing Plan was approved by the stockholders of Novan, Inc. on August 31, 2016. 

Executed on this 20th day of September, 2016. 
  

	
	/s/ Jeff N. Hunter
	Corporate Secretary

  
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