Document:

Exhibit 10.5

 

GUERRILLA RF, INC.

 

2021
Equity Incentive Plan

 

1. PURPOSE.
The purpose of this Plan is to provide incentives to attract, retain, and motivate eligible persons whose present and potential contributions
are important to the success of the Company, and any Parents, Subsidiaries, and Affiliates that exist now or in the future, by offering
them an opportunity to participate in the Company’s future performance through the grant of Awards. Capitalized terms not defined
elsewhere in the text are defined in Section 29.

 

2. SHARES
SUBJECT TO THE PLAN.

 

2.1. Number
of Shares Available. Subject to Section 2.6 and Section 22 and any other applicable provisions hereof,
the total number of Shares reserved and available for grant and issuance pursuant to this Plan as of the date of adoption of the Plan
by the Board, is zero (0) Shares, plus (a) any reserved Shares not issued or subject to outstanding awards granted under the Company’s
2014 Long Term Stock Incentive Plan, as amended and restated (the “Prior Plan”) on the Effective Date (as defined
below), (b) Shares that are subject to awards granted under the Prior Plan that cease to be subject to such awards by forfeiture or otherwise
after the Effective Date, (c) Shares issued under the Prior Plan before or after the Effective Date pursuant to the exercise of stock
options that are, after the Effective Date, forfeited, (d) Shares that are subject to stock options or other awards under the Prior Plan
that are used to pay the exercise price of a stock option or withheld to satisfy the tax withholding obligations related to any award,
and (e) Shares that are subject to awards granted prior to the effectiveness of the Prior Plan that are forfeited or otherwise repurchased
by the Company.

 

2.2. Lapsed,
Returned Awards. Shares subject to Awards, and Shares issued under the Plan under any Award, will again be available for grant and
issuance in connection with subsequent Awards under this Plan to the extent such Shares: (a) are subject to issuance upon exercise of
an Option or SAR granted under this Plan but which cease to be subject to the Option or SAR for any reason other than exercise of the
Option or SAR, (b) are subject to Awards granted under this Plan that are forfeited or are repurchased by the Company at the original
issue price, (c) are subject to Awards granted under this Plan that otherwise terminate without such Shares being issued or (d) are surrendered
pursuant to an Exchange Program. To the extent an Award under the Plan is paid out in cash rather than Shares, such cash payment will
not result in reducing the number of Shares available for issuance under the Plan. Shares used to pay the exercise price of an Award or
withheld to satisfy the tax withholding obligations related to an Award will become available for grant and issuance in connection with
subsequent Awards under this Plan. For the avoidance of doubt, Shares that otherwise become available for grant and issuance because of
the provisions of this Section 2.2 will not include Shares subject to Awards that initially became available because
of the substitution clause in Section 22.2 hereof.

 

2.3. Minimum
Share Reserve. At all times the Company will reserve and keep available a sufficient number of Shares as will be required to satisfy
the requirements of all outstanding Awards granted under this Plan.

 

     

     

    

 

2.4. Automatic
Share Reserve Increase. Commencing January 1, 2022, the number of Shares available for grant and issuance under the Plan will be increased
on January 1 of each calendar year during the term of the Plan by the lesser of (a) five percent (5%) of the number of shares of all classes
of the Company’s common stock issued and outstanding on each December 31 immediately prior to the date of increase or (b) such number
of Shares determined by the Board.

 

2.5. ISO
Limitation. The maximum number of Shares that will be issued pursuant to the exercise of ISOs granted under the Plan shall be equal
to the number of Shares reserved for issuance and future grant under the Plan as set forth in Section 2.1, as such number is adjusted
from time to time in accordance with Section 2.4.

 

2.6. Adjustment
of Shares. If the number of outstanding Shares is changed by a stock dividend, extraordinary dividend or distribution (whether in
cash, shares, or other property, other than a regular cash dividend), recapitalization, stock split, reverse stock split, subdivision,
combination, consolidation, reclassification, spin-off, or similar change in the capital structure of the Company, without consideration,
then (a) the number and class of Shares reserved for issuance and future grant under the Plan set forth in Section 2.1, including
Shares reserved under sub-clauses (a)-(e) of Section 2.1, (b) the Exercise Prices of and number and class of Shares subject
to outstanding Options and SARs, (c) the number and class of Shares subject to other outstanding Awards, and (d) the maximum number and
class of Shares that may be issued as ISOs set forth in Section 2.5 will be proportionately adjusted, subject to any required action
by the Board or the stockholders of the Company and in compliance with applicable securities laws, provided that fractions of a Share
will not be issued.

 

If, by reason of an adjustment
pursuant to this Section 2.6, a Participant’s Award Agreement or other agreement related to any Award, or the Shares
subject to such Award, covers additional or different shares of stock or securities, then such additional or different shares, and the
Award Agreement or such other agreement in respect thereof, will be subject to all of the terms, conditions, and restrictions which were
applicable to the Award or the Shares subject to such Award prior to such adjustment.

 

3. ELIGIBILITY.
ISOs may be granted only to Employees. All other Awards may be granted to Employees, Consultants, Directors, and Non-Employee Directors,
provided that such Consultants, Directors, and Non-Employee Directors render bona fide services not in connection with the offer and sale
of securities in a capital-raising transaction.

 

4. ADMINISTRATION.

 

4.1. Committee
Composition; Authority. This Plan will be administered by the Committee or by the Board acting as the Committee. Subject to the general
purposes, terms, and conditions of this Plan, and to the direction of the Board, the Committee will have full power to implement and carry
out this Plan, except, however, the Board will establish the terms for the grant of an Award to Non-Employee Directors. The Committee
will have the authority to:

 

(a) construe
and interpret this Plan, any Award Agreement, and any other agreement or document executed pursuant to this Plan;

 

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(b) prescribe,
amend, and rescind rules and regulations relating to this Plan or any Award;

 

(c) select
persons to receive Awards;

 

(d) determine
the form and terms and conditions, not inconsistent with the terms of the Plan, of any Award granted hereunder. Such terms and conditions
include, but are not limited to, the Exercise Price, the time or times when Awards may vest and be exercised (which may be based on performance
criteria) or settled, any vesting acceleration or waiver of forfeiture restrictions, the method to satisfy tax withholding obligations
or any other tax liability legally due, and any restriction or limitation regarding any Award or the Shares relating thereto, based in
each case on such factors as the Committee will determine; 

 

(e) determine
the number of Shares or other consideration subject to Awards;

 

(f) determine
the Fair Market Value in good faith and interpret the applicable provisions of this Plan and the definition of Fair Market Value in connection
with circumstances that impact the Fair Market Value, if necessary;

 

(g) determine
whether Awards will be granted singly, in combination with, in tandem with, in replacement of, or as alternatives to, other Awards under
this Plan or any other incentive or compensation plan of the Company or any Parent, Subsidiary, or Affiliate;

 

(h) grant
waivers of Plan or Award conditions;

 

(i) determine
the vesting, exercisability, and payment of Awards;

 

(j) correct
any defect, supply any omission, or reconcile any inconsistency in this Plan, any Award, or any Award Agreement;

 

(k) determine
whether an Award has been vested and/or earned;

 

(l) determine
the terms and conditions of, and to institute, any Exchange Program;

 

(m) reduce
or modify any criteria with respect to Performance Factors;

 

(n) adjust
Performance Factors to take into account changes in law and accounting or tax rules as the Committee deems necessary or appropriate to
reflect the impact of extraordinary or unusual items, events, or circumstances to avoid windfalls or hardships;

 

(o) adopt
terms and conditions, rules, and/or procedures (including the adoption of any sub plan under this Plan) relating to the operation and
administration of the Plan to accommodate requirements of local law and procedures outside of the United States or to qualify Awards for
special tax treatment under laws of jurisdictions other than the United States;

 

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(p) exercise
discretion with respect to Performance Awards;

 

(q) make
all other determinations necessary or advisable for the administration of this Plan; and

 

(r) delegate
any of the foregoing to a subcommittee or to one or more executive officers pursuant to a specific delegation as permitted by applicable
law, including Section 157(c) of the Delaware General Corporation Law.

 

4.2. Committee
Interpretation and Discretion. Any determination made by the Committee with respect to any Award will be made in its sole discretion
at the time of grant of the Award or, unless in contravention of any express term of the Plan or Award, at any later time, and such determination
will be final and binding on the Company and all persons having an interest in any Award under the Plan. Any dispute regarding the interpretation
of the Plan or any Award Agreement will be submitted by the Participant or Company to the Committee for review. The resolution of such
a dispute by the Committee will be final and binding on the Company and the Participant. The Committee may delegate to one or more executive
officers the authority to review and resolve disputes with respect to Awards held by Participants who are not Insiders, and such resolution
will be final and binding on the Company and the Participant.

 

4.3. Indemnification.
In addition to such other rights of indemnification as they may have as Directors or members of the Committee, and to the extent allowed
by applicable law, the Committee shall be indemnified by the Company against the reasonable expenses, including attorney's fees, actually
incurred in connection with any action, suit or proceeding or in connection with any appeal therein, to which the Committee may be party
by reason of any action taken or failure to act under or in connection with the Plan or any Award granted under the Plan, and against
all amounts paid by the Committee in settlement thereof (provided, however, that the settlement has been approved by the Company,
which approval shall not be unreasonably withheld) or paid by the Committee in satisfaction of a judgment in any such action, suit or
proceeding, except in relation to matters as to which it shall be adjudged in such action, suit or proceeding that such Committee did
not act in good faith and in a manner which such person reasonably believed to be in the best interests of the Company, or in the case
of a criminal proceeding, had no reason to believe that the conduct complained of was unlawful; provided, however, that within
60 days after the institution of any such action, suit or proceeding, such Committee shall, in writing, offer the Company the opportunity
at its own expense to handle and defend such action, suit or proceeding.

  

4.4. Section
16 of the Exchange Act. Awards granted to Participants who are subject to Section 16 of the Exchange Act must be approved by two or
more “non-employee directors” (as defined in the regulations promulgated under Section 16 of the Exchange Act).

 

4.5. Documentation.
The Award Agreement for a given Award, the Plan, and any other documents may be delivered to, and accepted by, a Participant or any other
person in any manner (including electronic distribution or posting) that meets applicable legal requirements.

 

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4.6. Foreign
Award Recipients. Notwithstanding any provision of the Plan to the contrary, in order to comply with the laws and practices in other
countries in which the Company, its Subsidiaries, and Affiliates operate or have Employees or other individuals eligible for Awards, the
Committee, in its sole discretion, will have the power and authority to: (a) determine which Subsidiaries and Affiliates will be covered
by the Plan; (b) determine which individuals outside the United States are eligible to participate in the Plan, which may include individuals
who provide services to the Company, Subsidiary or Affiliate under an agreement with a foreign nation or agency; (c) modify the terms
and conditions of any Award granted to individuals outside the United States or foreign nationals to comply with applicable foreign laws,
policies, customs, and practices; (d) establish sub plans and modify exercise procedures, vesting conditions, and other terms and procedures
to the extent the Committee determines such actions to be necessary or advisable (and such sub plans and/or modifications will be attached
to this Plan as appendices, if necessary); and (e) take any action, before or after an Award is made, that the Committee determines to
be necessary or advisable to obtain approval or comply with any local governmental regulatory exemptions or approvals, provided, however,
that no action taken under this Section 4.5 will increase the Share limitations contained in Section 2.1 hereof.
Notwithstanding the foregoing, the Committee may not take any actions hereunder, and no Awards will be granted, that would violate the
Exchange Act or any other applicable United States securities law, the Code, or any other applicable United States governing statute or
law.

 

5. OPTIONS.
An Option is the right but not the obligation to purchase a Share, subject to certain conditions, if applicable. The Committee may grant
Options to eligible Employees, Consultants, and Directors and will determine whether such Options will be Incentive Stock Options within
the meaning of the Code (“ISOs”) or Nonqualified Stock Options (“NSOs”), the number
of Shares subject to the Option, the Exercise Price of the Option, the period during which the Option may vest and be exercised, and all
other terms and conditions of the Option, subject to the following terms of this section.

 

5.1. Option
Grant. Each Option granted under this Plan will identify the Option as an ISO or an NSO. An Option may be, but need not be, awarded
upon satisfaction of such Performance Factors during any Performance Period as are set out in advance in the Participant’s individual
Award Agreement. If the Option is being earned upon the satisfaction of Performance Factors, then the Committee will: (a) determine the
nature, length, and starting date of any Performance Period for each Option; and (b) select from among the Performance Factors to be used
to measure the performance, if any. Performance Periods may overlap, and Participants may participate simultaneously with respect to Options
that are subject to different performance goals and other criteria.

 

5.2. Date
of Grant. The date of grant of an Option will be the date on which the Committee makes the determination to grant such Option, or
a specified future date. The Award Agreement and a copy of this Plan will be delivered to the Participant within a reasonable time after
the granting of the Option.

  

5.3. Exercise
Period. Options may be vested and exercisable within the times or upon the conditions as set forth in the Award Agreement governing
such Option, provided, however, that no Option will be exercisable after the expiration of ten (10) years from the date the Option is
granted and provided further that no ISO granted to a person who, at the time the ISO is granted, directly or by attribution owns more
than ten percent (10%) of the total combined voting power of all classes of stock of the Company or of any Parent or Subsidiary (“Ten
Percent Stockholder”) will be exercisable after the expiration of five (5) years from the date the ISO is granted. The Committee
also may provide for Options to become exercisable at one time or from time to time, periodically or otherwise, in such number of Shares
or percentage of Shares as the Committee determines.

 

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5.4. Exercise
Price. The Exercise Price of an Option will be determined by the Committee when the Option is granted, provided that: (a) the Exercise
Price of an Option will be not less than one hundred percent (100%) of the Fair Market Value of the Shares on the date of grant, and (b)
the Exercise Price of any ISO granted to a Ten Percent Stockholder will not be less than one hundred ten percent (110%) of the Fair Market
Value of the Shares on the date of grant. Payment for the Shares purchased may be made in accordance with Section 12 and
the Award Agreement and in accordance with any procedures established by the Company.

 

5.5. Method
of Exercise. Any Option granted hereunder will be vested and exercisable according to the terms of the Plan and at such times and
under such conditions as determined by the Committee and set forth in the Award Agreement. An Option may not be exercised for a fraction
of a Share. An Option will be deemed exercised when the Company receives: (a) notice of exercise (in such form as the Committee may specify
from time to time) from the person entitled to exercise the Option (and/or via electronic execution through the authorized third-party
administrator), and (b) full payment for the Shares with respect to which the Option is exercised (together with applicable withholding
taxes). Full payment may consist of any consideration and method of payment authorized by the Committee and permitted by the Award Agreement
and the Plan. Shares issued upon exercise of an Option will be issued in the name of the Participant. Until the Shares are issued (as
evidenced by the appropriate entry on the books of the Company or of a duly authorized transfer agent of the Company), no right to vote
or receive dividends or any other rights as a stockholder will exist with respect to the Shares, notwithstanding the exercise of the Option.
The Company will issue (or cause to be issued) such Shares promptly after the Option is exercised. No adjustment will be made for a dividend
or other right for which the record date is prior to the date the Shares are issued, except as provided in Section 2.6 of
the Plan. Exercising an Option in any manner will decrease the number of Shares thereafter available, both for purposes of the Plan and
for sale under the Option, by the number of Shares as to which the Option is exercised.

 

5.6. Termination
of Service. If the Participant’s Service terminates for any reason except for Cause or the Participant’s death or Disability,
then the Participant may exercise such Participant’s Options only to the extent that such Options would have been exercisable by
the Participant on the date Participant’s Service terminates no later than three (3) months after the date Participant’s Service
terminates (or such shorter time period not less than thirty (30) days or longer time period as may be determined by the Committee, with
any exercise beyond three (3) months after the date Participant’s Service terminates deemed to be the exercise of an NSO), but in
any event no later than the expiration date of the Options.

 

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(a) Death.
If the Participant’s Service terminates because of the Participant’s death (or the Participant dies within three (3) months
after Participant’s Service terminates other than for Cause or because of the Participant’s Disability), then the Participant’s
Options may be exercised only to the extent that such Options would have been exercisable by the Participant on the date Participant’s
Service terminates and must be exercised by the Participant’s legal representative, or authorized assignee, no later than twelve
(12) months after the date Participant’s Service terminates (or such shorter time period not less than six (6) months or longer
time period as may be determined by the Committee), but in any event no later than the expiration date of the Options.

  

(b) Disability.
If the Participant’s Service terminates because of the Participant’s Disability, then the Participant’s Options may
be exercised only to the extent that such Options would have been exercisable by the Participant on the date Participant’s Service
terminates and must be exercised by the Participant (or the Participant’s legal representative or authorized assignee) no later
than twelve (12) months after the date Participant’s Service terminates (or such shorter time period not less than six (6) months
or longer time period as may be determined by the Committee, with any exercise beyond (a) three (3) months after the date Participant’s
Service terminates when the termination of Service is for a Disability that is not a “permanent and total disability” as defined
in Section 22(e)(3) of the Code or (b) twelve (12) months after the date Participant’s Service terminates when the termination of
Service is for a Disability that is a “permanent and total disability” as defined in Section 22(e)(3) of the Code, deemed
to be exercise of an NSO), but in any event no later than the expiration date of the Options.

 

(c) Cause.
Unless as otherwise determined by the Committee, if the Participant’s Service terminates for Cause, then Participant’s Options
(whether or not vested) will expire on the date of termination of Participant’s Service if the Committee has reasonably determined
in good faith that such cessation of Services has resulted in connection with an act or failure to act constituting Cause (or such Participant’s
Services could have been terminated for Cause (without regard to the lapsing of any required notice or cure periods in connection therewith)
at the time such Participant terminated Services), or at such later time and on such conditions as are determined by the Committee, but
in any event no later than the expiration date of the Options. Unless otherwise provided in an employment agreement, Award Agreement,
or other applicable agreement, Cause will have the meaning set forth in the Plan.

 

5.7. Limitations
on Exercise. The Committee may specify a minimum number of Shares that may be purchased on any exercise of an Option, provided
that such minimum number will not prevent any Participant from exercising the Option for the full number of Shares for which
it is then exercisable.

 

5.8. Limitations
on ISOs. With respect to Awards granted as ISOs, to the extent that the aggregate Fair Market Value of the Shares with respect to
which such ISOs are exercisable for the first time by the Participant during any calendar year (under all plans of the Company and any
Parent or Subsidiary) exceeds one hundred thousand dollars ($100,000), such Options will be treated as NSOs. For purposes of this Section
5.8, ISOs will be taken into account in the order in which they were granted. The Fair Market Value of the Shares will be determined
as of the time the Option with respect to such Shares is granted. In the event that the Code or the regulations promulgated thereunder
are amended after the Effective Date to provide for a different limit on the Fair Market Value of Shares permitted to be subject to ISOs,
such different limit will be automatically incorporated herein and will apply to any Options granted after the effective date of such
amendment.

 

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5.9. Modification,
Extension or Renewal. The Committee may modify, extend, or renew outstanding Options and authorize the grant of new Options in substitution
therefor, provided that any such action may not, without the written consent of a Participant, impair any of such Participant’s
rights under any Option previously granted. Any outstanding ISO that is modified, extended, renewed, or otherwise altered will be treated
in accordance with Section 424(h) of the Code. Subject to Section 19 of this Plan, by written notice to affected Participants,
the Committee may reduce the Exercise Price of outstanding Options without the consent of such Participants, provided, however, that the
Exercise Price may not be reduced below the Fair Market Value on the date the action is taken to reduce the Exercise Price.

  

5.10. No
Disqualification. Notwithstanding any other provision in this Plan, no term of this Plan relating to ISOs will be interpreted, amended,
or altered, nor will any discretion or authority granted under this Plan be exercised, so as to disqualify this Plan under Section 422
of the Code or, without the consent of the Participant affected, to disqualify any ISO under Section 422 of the Code.

 

6. RESTRICTED
STOCK AWARDS. A Restricted Stock Award is an offer by the Company to sell to an eligible Employee, Consultant, or Director Shares
that are subject to restrictions (“Restricted Stock”). The Committee will determine to whom an offer will be
made, the number of Shares the Participant may purchase, the Purchase Price, the restrictions under which the Shares will be subject,
and all other terms and conditions of the Restricted Stock Award, subject to the Plan.

 

6.1. Restricted
Stock Purchase Agreement. All purchases under a Restricted Stock Award will be evidenced by an Award Agreement. Except as may otherwise
be provided in an Award Agreement, a Participant accepts a Restricted Stock Award by signing and delivering to the Company an Award Agreement
with full payment of the Purchase Price, within thirty (30) days from the date the Award Agreement was delivered to the Participant. If
the Participant does not accept such Award within thirty (30) days, then the offer of such Restricted Stock Award will terminate, unless
the Committee determines otherwise.

 

6.2. Purchase
Price. The Purchase Price for a Restricted Stock Award will be determined by the Committee and may be less than Fair Market Value
on the date the Restricted Stock Award is granted. Payment of the Purchase Price must be made in accordance with Section 12 of
the Plan, and the Award Agreement and in accordance with any procedures established by the Company.

 

6.3. Terms
of Restricted Stock Awards. Restricted Stock Awards will be subject to such restrictions as the Committee may impose or are required
by law. These restrictions may be based on completion of a specified period of Service with the Company or upon completion of Performance
Factors, if any, during any Performance Period as set out in advance in the Participant’s Award Agreement. Prior to the grant of
a Restricted Stock Award, the Committee will: (a) determine the nature, length, and starting date of any Performance Period for the Restricted
Stock Award; (b) select from among the Performance Factors to be used to measure performance goals, if any; and (c) determine the number
of Shares that may be awarded to the Participant. Performance Periods may overlap, and a Participant may participate simultaneously with
respect to Restricted Stock Awards that are subject to different Performance Periods and having different performance goals and other
criteria.

 

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6.4. Termination
of Service. Except as may be set forth in the Participant’s Award Agreement, vesting ceases on such date Participant’s
Service terminates (unless determined otherwise by the Committee).

 

7. STOCK
BONUS AWARDS. A Stock Bonus Award is an award to an eligible Employee, Consultant, or Director of Shares for Services to be rendered
or for past Services already rendered to the Company or any Parent, Subsidiary, or Affiliate. All Stock Bonus Awards will be made pursuant
to an Award Agreement. No payment from the Participant will be required for Shares awarded pursuant to a Stock Bonus Award.

 

7.1. Terms
of Stock Bonus Awards. The Committee will determine the number of Shares to be awarded to the Participant under a Stock Bonus Award
and any restrictions thereon. These restrictions may be based upon completion of a specified period of Service with the Company or upon
satisfaction of performance goals based on Performance Factors during any Performance Period as set out in advance in the Participant’s
Stock Bonus Agreement. Prior to the grant of any Stock Bonus Award the Committee will: (a) determine the nature, length, and starting
date of any Performance Period for the Stock Bonus Award; (b) select from among the Performance Factors to be used to measure performance
goals; and (c) determine the number of Shares that may be awarded to the Participant. Performance Periods may overlap, and a Participant
may participate simultaneously with respect to Stock Bonus Awards that are subject to different Performance Periods and different performance
goals and other criteria.

 

7.2. Form
of Payment to Participant. Payment may be made in the form of cash, whole Shares, or a combination thereof, based on the Fair Market
Value of the Shares earned under a Stock Bonus Award on the date of payment, as determined in the sole discretion of the Committee.

 

7.3. Termination
of Service. Except as may be set forth in the Participant’s Award Agreement, vesting ceases on such date Participant’s
Service terminates (unless determined otherwise by the Committee).

 

8. STOCK
APPRECIATION RIGHTS. A Stock Appreciation Right (“SAR”) is an award to an eligible Employee, Consultant,
or Director that may be settled in cash or Shares (which may consist of Restricted Stock) having a value equal to (a) the difference between
the Fair Market Value on the date of exercise over the Exercise Price multiplied by (b) the number of Shares with respect to which the
SAR is being settled (subject to any maximum number of Shares that may be issuable as specified in an Award Agreement). All SARs will
be made pursuant to an Award Agreement.

 

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8.1. Terms
of SARs. The Committee will determine the terms of each SAR including, without limitation: (a) the number of Shares subject to the
SAR, (b) the Exercise Price and the time or times during which the SAR may be settled, (c) the consideration to be distributed on settlement
of the SAR, and (d) the effect of the Participant’s termination of Service on each SAR. The Exercise Price of the SAR will be determined
by the Committee when the SAR is granted and may not be less than Fair Market Value of the Shares on the date of grant. A SAR may be awarded
upon satisfaction of Performance Factors, if any, during any Performance Period as are set out in advance in the Participant’s individual
Award Agreement. If the SAR is being earned upon the satisfaction of Performance Factors, then the Committee will: (i) determine the nature,
length, and starting date of any Performance Period for each SAR; and (ii) select from among the Performance Factors to be used to measure
the performance, if any. Performance Periods may overlap, and Participants may participate simultaneously with respect to SARs that are
subject to different Performance Factors and other criteria.

 

8.2. Exercise
Period and Expiration Date. A SAR will be exercisable within the times or upon the occurrence of events determined by the Committee
and set forth in the Award Agreement governing such SAR. The SAR Agreement will set forth the expiration date, provided that no SAR will
be exercisable after the expiration of ten (10) years from the date the SAR is granted. The Committee may also provide for SARs to become
exercisable at one time or from time to time, periodically or otherwise (including, without limitation, upon the attainment during a Performance
Period of performance goals based on Performance Factors), in such number of Shares or percentage of the Shares subject to the SAR as
the Committee determines. Except as may be set forth in the Participant’s Award Agreement, vesting ceases on the date Participant’s
Service terminates (unless determined otherwise by the Committee). Notwithstanding the foregoing, the rules of Section 5.6 also
will apply to SARs.

 

8.3. Form
of Settlement. Upon exercise of a SAR, a Participant will be entitled to receive payment from the Company in an amount determined
by multiplying (a) the difference between the Fair Market Value of a Share on the date of exercise over the Exercise Price, by (b) the
number of Shares with respect to which the SAR is exercised. At the discretion of the Committee, the payment from the Company for the
SAR exercise may be in cash, in Shares of equivalent value, or in some combination thereof. The portion of a SAR being settled may be
paid currently or on a deferred basis with such interest, if any, as the Committee determines, provided that the terms
of the SAR and any deferral satisfy the requirements of Section 409A of the Code to the extent applicable.

 

8.4. Termination
of Service. Except as may be set forth in the Participant’s Award Agreement, vesting ceases on such date Participant’s
Service terminates (unless determined otherwise by the Committee).

 

9. RESTRICTED
STOCK UNITS. A Restricted Stock Unit (“RSU”) is an award to an eligible Employee, Consultant, or Director
covering a number of Shares that may be settled in cash, or by issuance of those Shares (which may consist of Restricted Stock). All RSUs
will be made pursuant to an Award Agreement.

 

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9.1. Terms
of RSUs. The Committee will determine the terms of an RSU including, without limitation: (a) the number of Shares subject to the RSU,
(b) the time or times during which the RSU may be settled, (c) the consideration to be distributed on settlement, and (d) the effect of
the Participant’s termination of Service on each RSU, provided that no RSU will have a term longer than ten (10) years. An RSU may
be awarded upon satisfaction of such performance goals based on Performance Factors during any Performance Period as are set out in advance
in the Participant’s Award Agreement. If the RSU is being earned upon satisfaction of Performance Factors, then the Committee will:
(i) determine the nature, length, and starting date of any Performance Period for the RSU; (ii) select from among the Performance Factors
to be used to measure the performance, if any; and (iii) determine the number of Shares deemed subject to the RSU. Performance Periods
may overlap, and Participants may participate simultaneously with respect to RSUs that are subject to different Performance Periods and
different performance goals and other criteria.

 

9.2. Form
and Timing of Settlement. Payment of earned RSUs will be made as soon as practicable after the date(s) determined by the Committee
and set forth in the Award Agreement. The Committee, in its sole discretion, may settle earned RSUs in cash, Shares, or a combination
of both. The Committee may also permit a Participant to defer payment under an RSU to a date or dates after the RSU is earned, provided
that the terms of the RSU and any deferral satisfy the requirements of Section 409A of the Code to the extent applicable.

 

9.3. Termination
of Service. Except as may be set forth in the Participant’s Award Agreement, vesting ceases on such date Participant’s
Service terminates (unless determined otherwise by the Committee).

 

10. PERFORMANCE
AWARDS.

 

10.1. Types
of Performance Awards. A Performance Award is an award to an eligible Employee, Consultant, or Director of the Company or any Parent,
Subsidiary, or Affiliate that is based upon the attainment of performance goals, as established by the Committee, and other terms and
conditions specified by the Committee, and may be settled in cash, Shares (which may consist of, without limitation, Restricted Stock),
other property, or any combination thereof. Grants of Performance Awards will be made pursuant to an Award Agreement.

 

(a) Performance
Shares. The Committee may grant Awards of Performance Shares, designate the Participants to whom Performance Shares are to be awarded,
and determine the number of Performance Shares and the terms and conditions of each such Award. Performance Shares will consist of a unit
valued by reference to a designated number of Shares, the value of which may be paid to the Participant by delivery of Shares or, if set
forth in the instrument evidencing the Award, of such property as the Committee will determine, including, without limitation, cash, Shares,
other property, or any combination thereof, upon the attainment of performance goals, as established by the Committee, and other terms
and conditions specified by the Committee. The amount to be paid under an Award of Performance Shares may be adjusted on the basis of
such further consideration as the Committee will determine in its sole discretion.

 

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(b) Performance
Units. The Committee may grant Awards of Performance Units, designate the Participants to whom Performance Units are to be awarded,
and determine the number of Performance Units and the terms and conditions of each such Award. Performance Units will consist of a unit
valued by reference to a designated amount of property other than Shares, which value may be paid to the Participant by delivery of such
property as the Committee will determine, including, without limitation, cash, Shares, other property, or any combination thereof, upon
the attainment of performance goals, as established by the Committee, and other terms and conditions specified by the Committee.

 

(c) Cash-Settled
Performance Awards. The Committee may also grant cash-based Performance Awards to Participants under the terms of this Plan. Such
awards will be based on the attainment of performance goals using the Performance Factors within this Plan that are established by the
Committee for the relevant performance period.

 

10.2. Terms
of Performance Awards. The Committee will determine, and each Award Agreement will set forth, the terms of each Performance Award
including, without limitation: (a) the amount of any cash bonus, (b) the number of Shares deemed subject to an award of Performance Shares,
(c) the Performance Factors and Performance Period that will determine the time and extent to which each award of Performance Shares will
be settled, (d) the consideration to be distributed on settlement, and (e) the effect of the Participant’s termination of Service
on each Performance Award. In establishing Performance Factors and the Performance Period the Committee will: (i) determine the nature,
length, and starting date of any Performance Period; (ii) select from among the Performance Factors to be used; and (iii) determine the
number of Shares deemed subject to the award of Performance Shares. Each Performance Share will have an initial value equal to the Fair
Market Value of a Share on the date of grant. Prior to settlement the Committee will determine the extent to which Performance Awards
have been earned. Performance Periods may overlap, and Participants may participate simultaneously with respect to Performance Awards
that are subject to different Performance Periods and different performance goals and other criteria.

 

10.3. Termination
of Service. Except as may be set forth in the Participant’s Award Agreement, vesting ceases on the date Participant’s
Service terminates (unless determined otherwise by the Committee).

 

11. CASH
AWARDS. A Cash Award (“Cash Award”) is an award that is denominated in, or payable to an eligible Participant
solely in, cash, as deemed by the Committee to be consistent with the purposes of the Plan. Cash Awards shall be subject to the terms,
conditions, restrictions, and limitations determined by the Committee, in its sole discretion, from time to time. Awards granted pursuant
to this Section 11 may be granted with value and payment contingent upon the achievement of Performance Factors.

 

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12. PAYMENT
FOR SHARE PURCHASES. Payment from a Participant for Shares purchased pursuant to this Plan may be made in cash or by check or,
where expressly approved for the Participant by the Committee and where permitted by law (and to the extent not otherwise set forth in
the applicable Award Agreement):

 

(a) by
cancellation of indebtedness of the Company to the Participant;

 

(b) by
surrender of shares of the Company held by the Participant that have a Fair Market Value on the date of surrender equal to the aggregate
exercise price of the Shares as to which said Award will be exercised or settled;

 

(c) by
waiver of compensation due or accrued to the Participant for services rendered or to be rendered to the Company or a Parent or Subsidiary;

 

(d) by
consideration received by the Company pursuant to a broker-assisted or other form of cashless exercise program implemented by the Company
in connection with the Plan;

 

(e) by
any combination of the foregoing; or

 

(f) by
any other method of payment as is permitted by applicable law.

 

The Committee may limit the
availability of any method of payment, to the extent the Committee determines, in its discretion, such limitation is necessary or advisable
to comply with applicable law or facilitate the administration of the Plan. Proceeds from the sale of Common Stock pursuant to Awards,
or upon exercise thereof, shall constitute general funds of the Company.

 

13. GRANTS
TO NON-EMPLOYEE DIRECTORS.

 

13.1. General.
Non-Employee Directors are eligible to receive any type of Award offered under this Plan except ISOs. Awards pursuant to this Section
13 may be automatically made pursuant to policy adopted by the Board or made from time to time as determined in the discretion
of the Board. No Non-Employee Director may receive Awards under the Plan that, when combined with cash compensation received for service
as a Non-Employee Director, exceed seven-hundred and fifty thousand dollars ($750,000) in value (as described below) in any calendar year.
The value of Awards for purposes of complying with this maximum will be determined as follows: (a) for Options and SARs, grant date fair
value will be calculated using the Black-Scholes valuation methodology on the date of grant of such Option or SAR, and (b) for all other
Awards other than Options and SARs, grant date fair value will be determined by either (i) calculating the product of the Fair Market
Value per Share on the date of grant and the aggregate number of Shares subject to the Award, or (ii) calculating the product using an
average of the Fair Market Value over a number of trading days and the aggregate number of Shares subject to the Award as determined by
the Committee. Awards granted to an individual while he or she was serving in the capacity as an Employee or while he or she was a Consultant
but not a Non-Employee Director will not count for purposes of the limitations set forth in this Section 13.1.

 

13.2. Eligibility.
Awards pursuant to this Section 13 will be granted only to Non-Employee Directors. A Non-Employee Director who is elected
or re-elected as a member of the Board will be eligible to receive an Award under this Section 13.

 

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13.3. Vesting,
Exercisability and Settlement. Except as set forth in Section 22, Awards will vest, become exercisable, and be settled
as determined by the Board. With respect to Options and SARs, the exercise price granted to Non-Employee Directors will not be less than
the Fair Market Value of the Shares at the time that such Option or SAR is granted.

 

13.4. Election
to Receive Awards in Lieu of Cash. A Non-Employee Director may elect to receive his or her annual retainer payments and/or meeting
fees from the Company in the form of cash or Awards or a combination thereof, if permitted, and as determined, by the Committee. Such
Awards will be issued under the Plan. An election under this Section 13.4 will be filed with the Company on the form
prescribed by the Company.

 

14. WITHHOLDING
TAXES.

 

14.1. Withholding
Generally. Whenever Shares are to be issued in satisfaction of Awards granted under this Plan or a tax event occurs, the Company may
require the Participant to remit to the Company, or to the Parent, Subsidiary, or Affiliate, as applicable, employing the Participant
an amount sufficient to satisfy applicable U.S. federal, state, local, and international tax or any other tax or social insurance liability
(the “Tax-Related Items”) legally due from the Participant prior to the delivery of Shares pursuant to exercise
or settlement of any Award. Whenever payments in satisfaction of Awards granted under this Plan are to be made in cash, such payment will
be net of an amount sufficient to satisfy applicable withholding obligations for Tax-Related Items. Unless otherwise determined by the
Committee, the Fair Market Value of the Shares will be determined as of the date that the taxes are required to be withheld and such Shares
will be valued based on the value of the actual trade or, if there is none, the Fair Market Value of the Shares as of the previous trading
day.

 

14.2. Stock
Withholding. The Committee, or its delegate(s), as permitted by applicable law, in its sole discretion and pursuant to such procedures
as it may specify from time to time and to limitations of local law, may require or permit a Participant to satisfy such Tax Related Items
legally due from the Participant, in whole or in part by (without limitation) (a) paying cash, (b) having the Company withhold otherwise
deliverable cash or Shares having a Fair Market Value equal to the Tax-Related Items to be withheld, (c) delivering to the Company already-owned
shares having a Fair Market Value equal to the Tax-Related Items to be withheld, or (d) withholding from the proceeds of the sale of otherwise
deliverable Shares acquired pursuant to an Award either through a voluntary sale or through a mandatory sale arranged by the Company.
The Company may withhold or account for these Tax-Related Items by considering applicable statutory withholding rates or other applicable
withholding rates, including up to the maximum permissible statutory tax rate for the applicable tax jurisdiction, to the extent consistent
with applicable laws.

 

15. TRANSFERABILITY.

 

15.1. Transfer
Generally. Unless determined otherwise by the Committee, an Award may not be sold, pledged, assigned, hypothecated, transferred, or
disposed of in any manner other than by will or by the laws of descent or distribution. If the Committee makes an Award transferable,
including, without limitation, by instrument to an inter vivos or testamentary trust in which the Awards are to be passed to beneficiaries
upon the death of the trustor (settlor) or by gift or by domestic relations order to a Permitted Transferee, such Award will contain such
additional terms and conditions as the Committee deems appropriate. All Awards will be exercisable: (a) during the Participant’s
lifetime only by the Participant or the Participant’s guardian or legal representative; (b) after the Participant’s death,
by the legal representative of the Participant’s heirs or legatees; and (c) in the case of all awards except ISOs, by a Permitted
Transferee.

 

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16. PRIVILEGES
OF STOCK OWNERSHIP; RESTRICTIONS ON SHARES.

 

16.1. Voting
and Dividends. No Participant will have any of the rights of a stockholder with respect to any Shares until the Shares are issued
to the Participant, except for any Dividend Equivalent Rights permitted by an applicable Award Agreement. Any Dividend Equivalent Rights
will be subject to the same vesting or performance conditions as the underlying Award. In addition, the Committee may provide that any
Dividend Equivalent Rights permitted by an applicable Award Agreement will be deemed to have been reinvested in additional Shares or otherwise
reinvested. After Shares are issued to the Participant, the Participant will be a stockholder and have all the rights of a stockholder
with respect to such Shares, including the right to vote and receive all dividends or other distributions made or paid with respect to
such Shares; provided, that if such Shares are Restricted Stock, then any new, additional or different securities the Participant
may become entitled to receive with respect to such Shares by virtue of a stock dividend, stock split or any other change in the corporate
or capital structure of the Company will be subject to the same restrictions as the Restricted Stock; provided, further,
that the Participant will have no right to such stock dividends or stock distributions with respect to Unvested Shares, and any such dividends
or stock distributions will be accrued and paid only at such time, if any, as such Unvested Shares become vested Shares. The Committee,
in its discretion, may provide in the Award Agreement evidencing any Award that the Participant will be entitled to Dividend Equivalent
Rights with respect to the payment of cash dividends on Shares underlying an Award during the period beginning on the date the Award is
granted and ending, with respect to each Share subject to the Award, on the earlier of the date on which the Award is exercised or settled
or the date on which it is forfeited provided, that no Dividend Equivalent Right will be paid with respect to the Unvested
Shares, and such dividends or stock distributions will be accrued and paid only at such time, if any, as such Unvested Shares become vested
Shares. Such Dividend Equivalent Rights, if any, will be credited to the Participant in the form of additional whole Shares as of the
date of payment of such cash dividends on Shares.

 

16.2. Restrictions
on Shares. At the discretion of the Committee, the Company may reserve to itself and/or its assignee(s) a right to repurchase (a “Right
of Repurchase”) a portion of any or all Unvested Shares held by a Participant following such Participant’s termination
of Service at any time within ninety (90) days (or such longer or shorter time determined by the Committee) after the later of the date
Participant’s Service terminates and the date the Participant purchases Shares under this Plan, for cash and/or cancellation of
purchase money indebtedness, at the Participant’s Purchase Price or Exercise Price, as the case may be.

 

17. CERTIFICATES.
All Shares or other securities whether or not certificated, delivered under this Plan will be subject to such stock transfer orders, legends,
and other restrictions as the Committee may deem necessary or advisable, including restrictions under any applicable U.S. federal, state,
or foreign securities law, or any rules, regulations, and other requirements of the SEC or any stock exchange or automated quotation system
upon which the Shares may be listed or quoted, and any non-U.S. exchange controls or securities law restrictions to which the Shares are
subject.

 

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18. ESCROW;
PLEDGE OF SHARES. To enforce any restrictions on a Participant’s Shares, the Committee may require the Participant to deposit
all certificates representing Shares, together with stock powers or other instruments of transfer approved by the Committee, appropriately
endorsed in blank, with the Company or an agent designated by the Company to hold in escrow until such restrictions have lapsed or terminated,
and the Committee may cause a legend or legends referencing such restrictions to be placed on the certificates. Any Participant who is
permitted to execute a promissory note as partial or full consideration for the purchase of Shares under this Plan will be required to
pledge and deposit with the Company all or part of the Shares so purchased as collateral to secure the payment of the Participant’s
obligation to the Company under the promissory note, provided, however, that the Committee may require or accept other or additional forms
of collateral to secure the payment of such obligation and, in any event, the Company will have full recourse against the Participant
under the promissory note notwithstanding any pledge of the Participant’s Shares or other collateral. In connection with any pledge
of the Shares, the Participant will be required to execute and deliver a written pledge agreement in such form as the Committee will from
time to time approve. The Shares purchased with the promissory note may be released from the pledge on a pro rata basis as the promissory
note is paid.

 

19. REPRICING;
EXCHANGE AND BUYOUT OF AWARDS. Without prior stockholder approval the Committee may (a) reprice Options or SARs (and where such
repricing is a reduction in the Exercise Price of outstanding Options or SARs, the consent of the affected Participants is not required
provided written notice is provided to them, notwithstanding any adverse tax consequences to them arising from the repricing), and (b)
with the consent of the respective Participants (unless not required pursuant to Section 5.9 of the Plan), pay cash or
issue new Awards in exchange for the surrender and cancellation of any, or all, outstanding Awards.

  

20. SECURITIES
LAW AND OTHER REGULATORY COMPLIANCE.

 

20.1. Securities
Law Compliance. An Award will not be effective unless such Award is in compliance with all applicable U.S. and foreign federal and
state securities and exchange control and other laws, rules, and regulations of any governmental body, and the requirements of any stock
exchange or automated quotation system upon which the Shares may then be listed or quoted, as they are in effect on the date of grant
of the Award and also on the date of exercise or other issuance. Notwithstanding any other provision in this Plan, the Company will have
no obligation to issue or deliver certificates for Shares under this Plan prior to: (a) obtaining any approvals from governmental agencies
that the Company determines are necessary or advisable and/or (b) completion of any registration or other qualification of such Shares
under any state, federal, or foreign law or ruling of any governmental body that the Company determines to be necessary or advisable.
The Company will be under no obligation to register the Shares with the SEC or to effect compliance with the registration, qualification,
or listing requirements of any foreign or state securities laws, exchange control laws, stock exchange, or automated quotation system,
and the Company will have no liability for any inability or failure to do so.

 

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20.2.  Disqualifying
Dispositions. Any Participant who shall make a "disposition" (as defined in Section 424 of the Code) of all or any portion
of shares of Common Stock acquired upon exercise of an ISO within two years from the Grant Date of such ISO or within one year after the
issuance of the shares of Common Stock acquired upon exercise of such ISO (a “Disqualifying Disposition”) shall be
required to immediately advise the Company in writing as to the occurrence of the sale and the price realized upon the sale of such shares
of Common Stock.

 

20.3. Section 16.
It is the intent of the Company that the Plan satisfy, and be interpreted in a manner that satisfies, the applicable requirements of Rule
16b-3 as promulgated under Section 16 of the Exchange Act so that Participants will be entitled to the benefit of Rule 16b-3, or any other
rule promulgated under Section 16 of the Exchange Act, and will not be subject to short-swing liability under Section 16 of the Exchange
Act. Accordingly, if the operation of any provision of the Plan would conflict with the intent expressed in this Section 20.3,
such provision to the extent possible shall be interpreted and/or deemed amended so as to avoid such conflict.

 

20.4.  Section
409A. The Plan is intended to comply with Section 409A of the Code to the extent subject thereto, and, accordingly, to the maximum
extent permitted, the Plan shall be interpreted and administered to be in compliance therewith. Any payments described in the Plan that
are due within the "short-term deferral period" as defined in Section 409A of the Code shall not be treated as deferred compensation
unless required by applicable law. Notwithstanding anything to the contrary in the Plan, to the extent required to avoid accelerated taxation
and tax penalties under Section 409A of the Code, amounts that would otherwise be payable and benefits that would otherwise be provided
pursuant to the Plan during the six (6) month period immediately following the Participant's termination of service shall instead be paid
on the first payroll date after the six-month anniversary of the Participant's separation from service (or the Participant's death, if
earlier). Notwithstanding the foregoing, neither the Company nor the Committee shall have any obligation to take any action to prevent
the assessment of any additional tax or penalty on any Participant under Section 409A of the Code and neither the Company nor the Committee
will have any liability to any Participant for such tax or penalty.

 

21. NO
OBLIGATION TO EMPLOY. Nothing in this Plan or any Award granted under this Plan will confer or be deemed to confer on any Participant
any right to continue in the employ of, or to continue any other relationship with, the Company or any Parent, Subsidiary, or Affiliate
or limit in any way the right of the Company or any Parent, Subsidiary, or Affiliate to terminate Participant’s employment or other
relationship at any time.

 

22. CORPORATE
TRANSACTIONS.

 

22.1. Assumption
or Replacement of Awards by Successor. In the event of a Corporate Transaction any or all outstanding Awards may be (a) continued
by the Company, if the Company is the successor entity; or (b) assumed or substituted by the successor corporation, or a parent or subsidiary
of the successor corporation, for substantially equivalent Awards (including, but not limited to, an award to acquire the same consideration
paid to the stockholders of the Company pursuant to the Corporate Transaction), in each case after taking into account appropriate adjustments
for the number and kind of shares and exercise prices. The successor corporation may also issue, as replacement of outstanding Shares
of the Company held by the Participant, substantially similar shares or other property subject to repurchase restrictions no less favorable
to the Participant. In the event such successor corporation refuses to assume, substitute or replace any Award in accordance with this
Section 22, then notwithstanding any other provision in this Plan to the contrary, each such Award shall become fully vested and,
as applicable, exercisable and any rights of repurchase or forfeiture restrictions thereon shall lapse, immediately prior to the consummation
of the Corporation Transaction. Performance Awards not assumed pursuant to the foregoing shall be deemed earned and vested based on the
greater of actual performance (if determinable) or 100% of target level, unless otherwise indicated pursuant to the terms and conditions
of the applicable Award Agreement. The Board shall have full power and authority to assign the Company’s right to repurchase or
re-acquire or forfeiture rights to such successor or acquiring corporation. Awards need not be treated similarly in a Corporate Transaction.

 

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22.2. Assumption
of Awards by the Company. The Company, from time to time, also may substitute or assume outstanding awards granted by another company,
whether in connection with an acquisition of such other company or otherwise, by either: (a) granting an Award under this Plan in substitution
of such other company’s award, or (b) assuming such award as if it had been granted under this Plan if the terms of such assumed
award could be applied to an Award granted under this Plan. Such substitution or assumption will be permissible if the holder of the substituted
or assumed award would have been eligible to be granted an Award under this Plan if the other company had applied the rules of this Plan
to such grant. In the event the Company assumes an award granted by another company, the terms and conditions of such award will remain
unchanged (except that the Purchase Price or the Exercise Price, as the case may be, and the number and nature of Shares issuable
upon exercise or settlement of any such Award will be adjusted appropriately pursuant to Section 424(a) of the Code). In the event the
Company elects to grant a new Option in substitution rather than assuming an existing option, such new Option may be granted with a similarly
adjusted Exercise Price. Substitute Awards will not reduce the number of Shares authorized for grant under the Plan or authorized for
grant to a Participant in a calendar year.

 

22.3. Non-Employee
Directors’ Awards. Notwithstanding any provision to the contrary herein, in the event of a Corporate Transaction, the vesting
of all Awards granted to Non-Employee Directors will accelerate and such Awards will become exercisable (as applicable) in full prior
to the consummation of such event at such times and on such conditions as the Committee determines.

 

23. ADOPTION
AND STOCKHOLDER APPROVAL. This Plan will be submitted for the approval of the Company’s stockholders, consistent with applicable
laws, within twelve (12) months before or after the date this Plan is adopted by the Board.

 

24. TERM
OF PLAN/GOVERNING LAW. Unless earlier terminated as provided herein, this Plan will become effective on the Effective Date and
will terminate ten (10) years from the date this Plan is adopted by the Board. This Plan and all Awards granted hereunder will be governed
by and construed in accordance with the laws of the State of Delaware (excluding its conflict of laws rules).

 

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25. AMENDMENT
OR TERMINATION OF PLAN. The Board may at any time terminate or amend this Plan in any respect, including, without limitation,
amendment of any form of Award Agreement or instrument to be executed pursuant to this Plan, provided, however, that the Board will not,
without the approval of the stockholders of the Company, amend this Plan in any manner that requires such stockholder approval. No termination
or amendment of the Plan will affect any then-outstanding Award unless expressly provided by the Committee. In any event, no termination
or amendment of the Plan or any outstanding Award may adversely affect any then outstanding Award without the consent of the Participant,
unless such termination or amendment is necessary to comply with applicable law, regulation, or rule.

 

26. NONEXCLUSIVITY
OF THE PLAN. Neither the adoption of this Plan by the Board, the submission of this Plan to the stockholders of the Company for
approval, nor any provision of this Plan will be construed as creating any limitations on the power of the Board to adopt such additional
compensation arrangements as it may deem desirable, including, without limitation, the granting of stock awards and bonuses otherwise
than under this Plan, and such arrangements may be either generally applicable or applicable only in specific cases.

 

27. INSIDER
TRADING POLICY. Each Participant who receives an Award will comply with any policy adopted by the Company from time to time covering
transactions in the Company’s securities by Employees, officers, and/or Directors of the Company, as well as with any applicable
insider trading or market abuse laws to which the Participant may be subject.

 

28. ALL
AWARDS SUBJECT TO COMPANY CLAWBACK OR RECOUPMENT POLICY. All Awards, subject to applicable law, will be subject to clawback or
recoupment pursuant to any compensation clawback or recoupment policy adopted by the Board or required by law during the term of Participant’s
employment or other service with the Company that is applicable to officers, Employees, Directors or other service providers of the Company,
and in addition to any other remedies available under such policy and applicable law, may require the cancellation of outstanding Awards
and the recoupment of any gains realized with respect to Awards.

  

29. DEFINITIONS.
As used in this Plan, and except as elsewhere defined herein, the following terms will have the following meanings:

 

29.1. “Affiliate”
means (a) any entity that, directly or indirectly, is controlled by, controls, or is under common control with, the Company, and (b) any
entity in which the Company has a significant equity interest, in either case as determined by the Committee, whether now or hereafter
existing.

 

29.2. “Award”
means any award under the Plan, including any Option, Performance Award, Cash Award, Restricted Stock, Stock Bonus, Stock Appreciation
Right, or Restricted Stock Unit.

 

29.3. “Award
Agreement” means, with respect to each Award, the written or electronic agreement between the Company and the Participant
setting forth the terms and conditions of the Award, and country-specific appendix thereto for grants to non-U.S. Participants, which
will be in substantially a form (which need not be the same for each Participant) that the Committee (or in the case of Award agreements
that are not used for Insiders, the Committee’s delegate(s)) has from time to time approved, and will comply with and be subject
to the terms and conditions of this Plan.

 

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

 

29.5. “Cash
Award” means an award as defined in Section 11 and granted under the Plan.

 

29.6. “Cause”
means a determination by the Company (and in the case of Participant who is subject to Section 16 of the Exchange Act, the Committee)
that the Participant has committed an act or acts constituting any of the following: (i) dishonesty, fraud, misconduct or negligence in
connection with Participant’s duties to the Company, (ii) unauthorized disclosure or use of the Company’s confidential or
proprietary information, (iii) misappropriation of a business opportunity of the Company, (iv) materially aiding Company competitor, (v)
a felony conviction, (vi) failure or refusal to attend to the duties or obligations of the Participant’s position (vii) violation
or breach of, or failure to comply with, the Company’s code of ethics or conduct, any of the Company’s rules, policies or
procedures applicable to the Participant or any agreement in effect between the Company and the Participant or (viii) other conduct by
such Participant that could be expected to be harmful to the business, interests or reputation of the Company. The determination as to
whether Cause for a Participant’s termination exists will be made in good faith by the Company or Committee, as applicable, and
will be final and binding on the Participant. This definition does not in any way limit the Company’s or any Parent’s or Subsidiary’s
ability to terminate a Participant’s employment or services at any time as provided in Section 21 above. Notwithstanding
the foregoing, the foregoing definition of “Cause” may, in part or in whole, be modified or replaced if a definition of Cause
is set forth in such individual’s employment agreement, Award Agreement, or other applicable agreement with any Participant that
pertains to Awards under the Plan.

 

29.7. “Code”
means the United States Internal Revenue Code of 1986, as amended, and the regulations promulgated thereunder.

 

29.8. “Committee”
means the Compensation Committee of the Board or those persons to whom administration of the Plan, or part of the Plan, has been delegated
as permitted by law.

 

29.9. “Common
Stock” means the common stock of the Company.

 

29.10. “Company”
means Guerrilla RF, Inc., a Delaware corporation, or any successor corporation.

 

29.11. “Consultant”
means any natural person, including an advisor or independent contractor, engaged by the Company or a Parent, Subsidiary, or Affiliate
to render services to such entity.

 

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29.12. “Corporate
Transaction” means the occurrence of any of the following events: (a) any “Person” (as such term is used in
Sections 13(d) and 14(d) of the Exchange Act) becomes the “beneficial owner” (as defined in Rule 13d-3 of the Exchange Act),
directly or indirectly, of securities of the Company representing more than fifty percent (50%) of the total voting power represented
by the Company’s then-outstanding voting securities, provided, however, that for purposes of this sub clause (a) the acquisition
of additional securities by any one Person who is considered to own more than fifty percent (50%) of the total voting power of the securities
of the Company will not be considered a Corporate Transaction; (b) the consummation of the sale or disposition by the Company of all or
substantially all of the Company’s assets; (c) the consummation of a merger or consolidation of the Company with any other corporation,
other than a merger or consolidation which would result in the voting securities of the Company outstanding immediately prior thereto
continuing to represent (either by remaining outstanding or by being converted into voting securities of the surviving entity or its parent)
at least fifty percent (50%) of the total voting power represented by the voting securities of the Company or such surviving entity or
its parent outstanding immediately after such merger or consolidation; (d) any other transaction which qualifies as a “corporate
transaction” under Section 424(a) of the Code wherein the stockholders of the Company give up all of their equity interest in the
Company (except for the acquisition, sale or transfer of all or substantially all of the outstanding shares of capital stock of the Company),
or (e) a change in the effective control of the Company that occurs on the date that a majority of members of the Board is replaced during
any twelve (12) month period by members of the Board whose appointment or election is not endorsed by a majority of the members of the
Board prior to the date of the appointment or election. For purpose of this sub clause (e), if any Person is considered to be in effective
control of the Company, the acquisition of additional control of the Company by the same Person will not be considered a Corporate Transaction.
For purposes of this definition, Persons will be considered to be acting as a group if they are owners of a corporation that enters into
a merger, consolidation, purchase, or acquisition of stock, or similar business transaction with the Company. Notwithstanding the foregoing,
to the extent that any amount constituting deferred compensation (as defined in Section 409A of the Code) would become payable under this
Plan by reason of a Corporate Transaction, such amount will become payable only if the event constituting a Corporate Transaction would
also qualify as a change in ownership or effective control of the Company or a change in the ownership of a substantial portion of the
assets of the Company, each as defined within the meaning of Code Section 409A, as it has been and may be amended from time to time, and
any proposed or final Treasury Regulations and IRS guidance that has been promulgated or may be promulgated thereunder from time to time.

 

29.13. “Director”
means a member of the Board.

 

29.14. “Disability”
means in the case of incentive stock options, total and permanent disability as defined in Section 22(e)(3) of the Code and in the case
of other Awards, that the Participant is unable to engage in any substantial gainful activity by reason of any medically determinable
physical or mental impairment that can be expected to result in death or can be expected to last for a continuous period of not less than
twelve (12) months.

 

29.15. “Dividend
Equivalent Right” means the right of a Participant, granted at the discretion of the Committee or as otherwise provided
by the Plan, to receive a credit for the account of such Participant in an amount equal to the cash, stock, or other property dividends
equivalent to cash, stock, or other property dividends for each Share represented by an Award held by such Participant.

 

    21

     

    

 

29.16. “Effective
Date” means the day immediately prior to the Company’s IPO Registration Date, subject to approval of the Plan by the
Company’s stockholders.

 

29.17. “Employee”
means any person, including officers and Directors, providing services as an employee to the Company or any Parent, Subsidiary, or Affiliate.
Neither service as a Director nor payment of a director’s fee by the Company will be sufficient to constitute “employment”
by the Company.

  

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

 

29.19. “Exchange
Program” means a program pursuant to which (a) outstanding Awards are surrendered, cancelled, or exchanged for cash, the
same type of Award, or a different Award (or combination thereof); or (b) the exercise price of an outstanding Award is increased or reduced.

 

29.20. “Exercise
Price” means, with respect to an Option, the price at which a holder may purchase the Shares issuable upon exercise of an
Option and with respect to a SAR, the price at which the SAR is granted to the holder thereof.

 

29.21. “Fair
Market Value” means, as of any date, the value of a Share, determined as follows:

 

(a) if
such Common Stock is publicly traded and is then listed on a national securities exchange, its closing price on the date of determination
on the principal national securities exchange on which the Common Stock is listed or admitted to trading as reported in The Wall
Street Journal or such other source as the Committee deems reliable;

 

(b) if
such Common Stock is publicly traded but is neither listed nor admitted to trading on a national securities exchange, the average of the
closing bid and asked prices on the date of determination as reported in The Wall Street Journal or such other source
as the Committee deems reliable;

 

(c) in
the case of an Option or SAR grant made on the IPO Registration Date, the price per share at which Shares are initially offered for sale
to the public by the Company’s underwriters in the initial public offering of Shares as set forth in the Company’s final prospectus
included within the registration statement on Form S-1 filed with the SEC under the Securities Act; or

 

(d) by
the Board or the Committee in good faith.

 

29.22. “Insider”
means an officer or Director of the Company or any other person whose transactions in the Company’s Common Stock are subject to
Section 16 of the Exchange Act.

 

    22

     

    

 

29.23. “IPO
Registration Date” means the date on which the Company’s registration statement on Form S-1 in connection with its
initial public offering of common stock is declared effective by the SEC under the Securities Act.

 

29.24. “IRS”
means the United States Internal Revenue Service.

 

29.25. “Non-Employee
Director” means a Director who is not an Employee of the Company or any Parent, Subsidiary, or Affiliate.

 

29.26. “Option”
means an award of an option to purchase Shares pursuant to Section 5.

 

29.27. “Parent”
means any corporation (other than the Company) in an unbroken chain of corporations ending with the Company if each of such corporations
other than the Company owns stock possessing fifty percent (50%) or more of the total combined voting power of all classes of stock in
one of the other corporations in such chain.

 

29.28. “Participant”
means a person who holds an Award under this Plan.

  

29.29. “Performance
Award” means an Award as defined in Section 10 and granted under the Plan, the payment of which is contingent
upon achieving certain performance goals established by the Committee.

 

29.30. “Performance
Factors” means any of the factors selected by the Committee and specified in an Award Agreement, from among the following
measures, either individually, alternatively or in any combination, applied to the Company as a whole or any business unit or Subsidiary,
either individually, alternatively, or in any combination, on a GAAP or non-GAAP basis, and measured, to the extent applicable on an absolute
basis or relative to a pre-established target, to determine whether the performance goals established by the Committee with respect to
applicable Awards have been satisfied:

 

(a) profit
before tax;

 

(b) billings;

 

(c) revenue;

 

(d) net
revenue;

 

(e) earnings
(which may include earnings before interest and taxes, earnings before taxes, net earnings, stock-based compensation expenses, depreciation,
and amortization);

 

(f) operating
income;

 

(g) operating
margin;

 

(h) operating
profit;

 

    23

     

    

 

(i) controllable
operating profit or net operating profit;

 

(j) net
profit;

 

(k) gross
margin;

 

(l) operating
expenses or operating expenses as a percentage of revenue;

 

(m) net
income;

 

(n) earnings
per share;

 

(o) total
stockholder return;

 

(p) market
share;

 

(q) return
on assets or net assets;

 

(r) the
Company’s stock price;

 

(s) growth
in stockholder value relative to a pre-determined index;

 

(t) return
on equity;

 

(u) return
on invested capital;

 

(v) cash
flow (including free cash flow or operating cash flows);

 

(w) cash
conversion cycle;

 

(x) economic
value added;

 

(y) individual
confidential business objectives;

 

(z) contract
awards or backlog;

 

(aa) overhead or other expense reduction;

 

(bb) credit rating;

 

(cc) strategic plan development and
implementation;

 

(dd) succession plan development and
implementation;

 

(ee) improvement in workforce diversity;

 

    24

     

    

 

(ff) customer indicators and/or satisfaction;

 

(gg) new product invention or innovation;

 

(hh) attainment of research and development
milestones;

 

(ii) improvements
in productivity;

 

(jj) bookings;

 

(kk) attainment of objective operating
goals and employee metrics;

 

(ll) sales;

 

(mm) expenses;

 

(nn) balance of cash, cash equivalents,
and marketable securities;

 

(oo) completion
of an identified special project;

 

(pp) completion of a joint venture
or other corporate transaction;

 

(qq) employee satisfaction and/or retention;

 

(rr) research and development expenses;

 

(ss) working capital targets and changes
in working capital; and

 

(tt) any other metric that is capable
of measurement as determined by the Committee.

 

The Committee may provide
for one or more equitable adjustments to the Performance Factors to preserve the Committee’s original intent regarding the Performance
Factors at the time of the initial award grant, such as but not limited to, adjustments in recognition of unusual or non-recurring items
such as acquisition related activities or changes in applicable accounting rules. It is within the sole discretion of the Committee to
make or not make any such equitable adjustments.

 

29.31. “Performance
Period” means one or more periods of time, which may be of varying and overlapping durations, as the Committee may select,
over which the attainment of one or more Performance Factors will be measured for the purpose of determining a Participant’s right
to, and the payment of, a Performance Award.

 

29.32. “Performance
Share” means an Award as defined in Section 10 and granted under the Plan, the payment of which is contingent
upon achieving certain performance goals established by the Committee.

 

    25

     

    

 

29.33. “Performance
Unit” means an Award as defined in Section 10 and granted under the Plan, the payment of which is contingent
upon achieving certain performance goals established by the Committee.

 

29.34. “Permitted
Transferee” means any child, stepchild, grandchild, parent, stepparent, grandparent, spouse, former spouse, sibling, niece,
nephew, mother-in-law, father-in-law, son-in-law, daughter-in-law, brother-in-law, or sister-in-law (including adoptive relationships)
of the Employee, any person sharing the Employee’s household (other than a tenant or employee), a trust in which these persons (or
the Employee) have more than 50% of the beneficial interest, a foundation in which these persons (or the Employee) control the management
of assets, and any other entity in which these persons (or the Employee) own more than 50% of the voting interests.

 

29.35. “Plan”
means this Guerrilla RF, Inc. 2021 Equity Incentive Plan.

 

29.36. “Purchase
Price” means the price to be paid for Shares acquired under the Plan, other than Shares acquired upon exercise of an Option
or SAR.

 

29.37. “Restricted
Stock Award” means an Award as defined in Section 6 and granted under the Plan or issued pursuant to the
early exercise of an Option.

 

29.38. “Restricted
Stock Unit” means an Award as defined in Section 9 and granted under the Plan.

 

29.39. “SEC”
means the United States Securities and Exchange Commission.

 

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

  

29.41. “Service”
will mean service as an Employee, Consultant, Director, or Non-Employee Director, to the Company or a Parent, Subsidiary, or Affiliate,
subject to such further limitations as may be set forth in the Plan or the applicable Award Agreement. An Employee will not be deemed
to have ceased to provide Service in the case of (a) sick leave, (b) military leave, or (c) any other leave of absence approved by the
Company, provided that such leave is for a period of not more than ninety (90) days unless reemployment upon the expiration of such leave
is guaranteed by contract or statute. Notwithstanding anything to the contrary, an Employee will not be deemed to have ceased to provide
Service if a formal policy adopted from time to time by the Company and issued and promulgated to employees in writing provides otherwise.
In the case of any Employee on an approved leave of absence or a reduction in hours worked (for illustrative purposes only, a change in
schedule from that of full-time to part-time), the Committee may make such provisions respecting suspension or modification of vesting
of the Award while on leave from the employ of the Company or a Parent, Subsidiary, or Affiliate or during such change in working hours
as it may deem appropriate, except that in no event may an Award be exercised after the expiration of the term set forth in the applicable
Award Agreement. In the event of military or other protected leave, if required by applicable laws, vesting will continue for the longest
period that vesting continues under any other statutory or Company approved leave of absence and, upon a Participant’s returning
from military leave, he or she will be given vesting credit with respect to Awards to the same extent as would have applied had the Participant
continued to provide Service to the Company throughout the leave on the same terms as he or she was providing Service immediately prior
to such leave. An employee will have terminated employment as of the date he or she ceases to provide Service (regardless of whether the
termination is in breach of local employment laws or is later found to be invalid) and employment will not be extended by any notice period
or garden leave mandated by local law, provided, however, that a change in status from an Employee to a Consultant or Non-Employee
Director (or vice versa) will not terminate the Participant’s Service, unless determined by the Committee, in its discretion. The
Committee will have sole discretion to determine whether a Participant has ceased to provide Service and the effective date on which the
Participant ceased to provide Service.

 

    26

     

    

 

29.42. “Shares”
means shares of the Common Stock and the common stock of any successor entity of the Company.

 

29.43. “Stock
Appreciation Right” means an Award defined in Section 8 and granted under the Plan.

 

29.44. “Stock
Bonus” means an Award defined in Section 7 and granted under the Plan.

 

29.45. “Subsidiary”
means any corporation (other than the Company) in an unbroken chain of corporations beginning with the Company if each of the corporations
other than the last corporation in the unbroken chain owns stock possessing fifty percent (50%) or more of the total combined voting power
of all classes of stock in one of the other corporations in such chain.

 

29.46. “Treasury
Regulations” means regulations promulgated by the United States Treasury Department.

 

29.47. “Unvested
Shares” means Shares that have not yet vested or are subject to a right of repurchase in favor of the Company (or any successor
thereto).

 

As Adopted by the Board of Directors of [*] on ________,
2021.

As Approved by the Shareholders of [*] on _________,
20__.

 

    27

     

    

 

GUERRILLA RF, INC.

2021
Equity Incentive Plan

 

Stock Bonus Award Agreement

 

Unless otherwise defined in
this Stock Bonus Award Agreement (this “Agreement”), any capitalized terms used herein will have the same meaning ascribed
to them in the Guerrilla RF, Inc. 2021 Equity Incentive Plan (the “Plan”).

 

Participant has been granted
Shares (the “Award Shares”) in connection with a Stock Bonus Award (the “Award”) subject to the terms, restrictions,
and conditions of the Plan, the Notice of Restricted Stock Unit Award (the “Notice”), and this Agreement, including any applicable
country-specific provisions in any appendix attached hereto (the “Appendix”), which constitutes part of this Agreement. In
the event of a conflict between the terms and conditions of the Plan and the terms and conditions of the Notice or this Agreement, the
terms and conditions of the Plan will prevail.

 

1. Settlement.
The Award and the Award Shares shall immediately vest on the Date of Grant (as set forth in the Notice) and shall be issued within thirty
(30) days following the applicable Date of Grant.

 

2. Taxes.

 

(a) Responsibility
for Taxes. Participant acknowledges that, regardless of any action taken by the Company or, if different, a Parent, Subsidiary or
Affiliate employing or retaining Participant (the “Employer”), the ultimate liability for all income tax, social insurance,
payroll tax, fringe benefits tax, payment on account or other tax-related items related to Participant’s participation in the Plan
and legally applicable to Participant (“Tax-Related Items”) is and remains Participant’s responsibility and may exceed
the amount actually withheld by the Company or the Employer, if any. Participant further acknowledges that the Company and/or the Employer
(i) make no representations or undertakings regarding the treatment of any Tax-Related Items in connection with any aspect of the Award,
including, but not limited to, the grant, vesting or settlement of the Award Shares and the subsequent sale of Award Shares and the receipt
of any dividends, and (ii) do not commit to and are under no obligation to structure the terms of the grant or any aspect of the Award
to reduce or eliminate Participant’s liability for Tax-Related Items or achieve any particular tax result. Further, if Participant
is subject to Tax-Related Items in more than one jurisdiction, Participant acknowledges that the Company and/or the Employer (or former
employer, as applicable) may be required to withhold or account for Tax-Related Items in more than one jurisdiction. PARTICIPANT SHOULD
CONSULT A TAX ADVISER APPROPRIATELY QUALIFIED IN THE COUNTRY OR COUNTRIES IN WHICH PARTICIPANT RESIDES OR IS SUBJECT TO TAXATION.

 

(b) Withholding.
Prior to any relevant taxable or tax withholding event, as applicable, Participant agrees to make arrangements satisfactory to the Company
and/or the Employer to satisfy all Tax-Related Items. In this regard, Participant authorizes the Company and/or the Employer, or their
respective agents, at their discretion, to satisfy any withholding obligations for Tax-Related Items by one or a combination of the following:

 

    28

     

    

 

(i) withholding
from Participant’s wages or other cash compensation paid to Participant by the Company and/or the Employer; or

 

(ii) withholding
from proceeds of the sale of Award Shares acquired upon settlement of the Award either through a voluntary sale or through a mandatory
sale arranged by the Company (on Participant’s behalf pursuant to this authorization and without further consent);

 

(iii) withholding
Award Shares to be issued upon settlement of the Award, provided the Company only withholds the number of Award Shares necessary to satisfy
no more than the maximum applicable statutory withholding amounts;

 

(iv) Participant’s
payment of a cash amount (including by check representing readily available funds or a wire transfer); or

 

(v) any
other arrangement approved by the Committee and permitted under applicable law;

 

all under such rules as may be established
by the Committee and in compliance with the Company’s Insider Trading and Section 16 Reporting Policy, if applicable, or any additional
applicable policy that may be adopted by the Company’s Board of Directors; provided however, that if Participant is a Section 16
officer of the Company under the Exchange Act, then the Committee (as constituted in accordance with Rule 16b-3 under the Exchange Act)
will establish the method of withholding from alternatives (i)-(v) above prior to the Tax-Related Items withholding event.

 

Depending on the withholding method,
the Company may withhold or account for Tax-Related Items by considering applicable statutory withholding rates or other applicable withholding
rates, including up to the maximum permissible statutory rate for Participant’s tax jurisdiction(s) in which case Participant will
have no entitlement to the equivalent amount in Award Shares and will receive a refund of any over-withheld amount in cash in accordance
with applicable law. If the obligation for Tax-Related Items is satisfied by withholding in Award Shares, for tax purposes, Participant
is deemed to have been issued the full number of Award Shares, notwithstanding that a number of the Award Shares are held back solely
for the purpose of satisfying the withholding obligation for Tax-Related Items.

 

Finally, Participant agrees to pay
to the Company and/or the Employer any amount of Tax-Related Items that the Company and/or the Employer may be required to withhold or
account for as a result of Participant’s participation in the Plan that cannot be satisfied by the means previously described. The
Company may refuse to issue or deliver the Shares or the proceeds of the sale of Shares, if Participant fails to comply with Participant’s
obligations in connection with the Tax-Related Items.

 

    29

     

    

 

3. Nature
of Grant. By accepting the Award, Participant acknowledges, understands and agrees that:

 

(a) the
Plan is established voluntarily by the Company, it is discretionary in nature and it may be modified, amended, suspended or terminated
by the Company at any time, to the extent permitted by the Plan;

 

(b) the
grant of the Award is exceptional, voluntary, and occasional, and does not create any contractual or other right to receive future Stock
Bonus Awards or benefits in lieu of Stock Bonus Awards, even if Stock Bonus Awards have been granted in the past;

 

(c) all
decisions with respect to future Stock Bonus Awards or other grants, if any, will be at the sole discretion of the Company;

 

(d)  Participant
is voluntarily participating in the Plan;

 

 (e)  the
Award and the Award Shares, and the income and value of same, are not intended to replace other compensation;

 

(f)  the
Award and the Award Shares, and the income and value of same, are not part of normal or expected compensation for any purpose, including,
but not limited to, calculating any severance, resignation, termination, redundancy, dismissal, end-of-service payments, bonuses, long-service
awards, pension or retirement, or welfare benefits or similar payments;

 

4.  No
Advice Regarding Grant. The Company is not providing any tax, legal, or financial advice, nor is the Company making any recommendations
regarding Participant’s participation in the Plan, or Participant’s acquisition or sale of the Award Shares. Participant acknowledges,
understands and agrees he or she should consult with his or her own personal tax, legal, and financial advisors regarding his or her participation
in the Plan before taking any action related to the Plan.

 

5.  Data
Privacy. Participant hereby explicitly and unambiguously consents to the collection, use and transfer, in electronic or other form,
of Participant’s personal data as described in this Agreement and any other Award grant materials by and among, as applicable, the
Employer, the Company and any Parent, Subsidiary or Affiliate for the exclusive purpose of implementing, administering and managing Participant’s
participation in the Plan.

 

Participant understands
that the Company and the Employer may hold certain personal information about Participant, including, but not limited to, Participant’s
name, home address, email address and telephone number, date of birth, social insurance number, passport number or other identification
number, salary, nationality, job title, any shares of stock or directorships held in the Company, details of all Award Shares or any other
entitlement to shares of stock awarded, canceled, exercised, vested, unvested or outstanding in Participant’s favor (“Data”),
for the exclusive purpose of implementing, administering and managing the Plan.

 

    30

     

    

 

Participant understands
that Data will be transferred to the stock plan service provider as may be designated by the Company from time to time or its affiliates
or such other stock plan service provider as may be selected by the Company in the future, which is assisting the Company with the implementation,
administration and management of the Plan. Participant understands that the recipients of the Data may be located in the United States
or elsewhere, and that the recipients’ country (e.g., the United States) may have different data privacy laws and protections than
Participant’s country. Participant understands that if he or she resides outside the United States, he or she may request a list
with the names and addresses of any potential recipients of the Data by contacting his or her local human resources representative. Participant
authorizes the Company, the stock plan service provider as may be designated by the Company from time to time, and its affiliates, and
any other possible recipients which may assist the Company (presently or in the future) with implementing, administering and managing
the Plan to receive, possess, use, retain and transfer the Data, in electronic or other form, for the sole purpose of implementing, administering
and managing his or her participation in the Plan. Participant understands that Data will be held only as long as is necessary to implement,
administer and manage Participant’s participation in the Plan. Participant understands that if he or she resides outside the United
States, he or she may, at any time, view Data, request additional information about the storage and processing of Data, require any necessary
amendments to Data or refuse or withdraw the consents herein, in any case without cost, by contacting in writing his or her local human
resources representative. Further, Participant understands that he or she is providing the consents herein on a purely voluntary basis.
If Participant does not consent, or if Participant later seeks to revoke his or her consent, his or her employment status or service and
career with the Employer will not be adversely affected; the only adverse consequence of refusing or withdrawing Participant’s consent
is that the Company would not be able to grant Participant Stock Bonus Awards or other equity awards or administer or maintain such awards.
Therefore, Participant understands that refusing or withdrawing his or her consent may affect Participant’s ability to participate
in the Plan. For more information on the consequences of Participant’s refusal to consent or withdrawal of consent, Participant
understands that he or she may contact his or her local human resources representative.

 

6.  Language.
If Participant has received this Agreement or any other document related to the Award and/or the Plan translated into a language other
than English and if the meaning of the translated version is different than the English version, the English version will control.

 

7.  Imposition
of Other Requirements. The Company reserves the right to impose other requirements on Participant’s participation in the Plan,
on the Award and on any Shares acquired under the Plan, to the extent the Company determines it is necessary or advisable for legal or
administrative reasons, and to require Participant to sign any additional agreements or undertakings that may be necessary to accomplish
the foregoing.

 

    31

     

    

 

8.  Acknowledgement.
The Company and Participant agree that the Award Shares are granted under and governed by the Notice, this Agreement, and the Plan (incorporated
herein by reference). Participant: (a) acknowledges receipt of a copy of the Plan and the Plan prospectus, (b) represents that Participant
has carefully read and is familiar with their provisions, and (c) hereby accepts the Award Shares subject to all of the terms and conditions
set forth herein and those set forth in the Plan and the Notice.

 

9.  Entire
Agreement; Enforcement of Rights. This Agreement, the Plan, and the Notice constitute the entire agreement and understanding of the
parties relating to the subject matter herein and supersede all prior discussions between them. Any prior agreements, commitments, or
negotiations concerning the purchase of the Shares hereunder are superseded. No adverse modification of or adverse amendment to this Agreement,
nor any waiver of any rights under this Agreement, will be effective unless in writing and signed by the parties to this Agreement (which
writing and signing may be electronic). The failure by either party to enforce any rights under this Agreement will not be construed as
a waiver of any rights of such party.

 

10.
Compliance with Laws and Regulations. The issuance of Award Shares and the sale of Award Shares will be subject to and conditioned
upon compliance by the Company and Participant with all applicable state, federal, local and foreign laws and regulations and with all
applicable requirements of any stock exchange or automated quotation system on which the Company’s Shares may be listed or quoted
at the time of such issuance or transfer. Participant understands that the Company is under no obligation to register or qualify the Common
Stock with any state, federal, or foreign securities commission or to seek approval or clearance from any governmental authority for the
issuance or sale of the Shares. Further, Participant agrees that the Company will have unilateral authority to amend the Plan and this
Stock Bonus Award Agreement without Participant’s consent to the extent necessary to comply with securities or other laws applicable
to issuance of Award Shares. Finally, the Award Shares issued pursuant to this Stock Bonus Award Agreement will be endorsed with appropriate
legends, if any, determined by the Company.

 

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

 

12. Governing
Law and Venue. This Agreement and all acts and transactions pursuant hereto and the rights and obligations of the parties hereto will
be governed, construed, and interpreted in accordance with the laws of the State of Delaware, without giving effect to such state’s
conflict of laws rules.

 

Any and all disputes relating to, concerning or
arising from this Agreement, or relating to, concerning, or arising from the relationship between the parties evidenced by the Plan or
this Agreement, will be brought and heard exclusively in the United States Middle District Court for the Middle District of North Carolina
or any state court in Guilford County, North Carolina. Each of the parties hereby represents and agrees that such party is subject to
the personal jurisdiction of said courts; hereby irrevocably consents to the jurisdiction of such courts in any legal or equitable proceedings
related to, concerning, or arising from such dispute, and waives, to the fullest extent permitted by law, any objection which such party
may now or hereafter have that the laying of the venue of any legal or equitable proceedings related to, concerning, or arising from such
dispute which is brought in such courts is improper or that such proceedings have been brought in an inconvenient forum.

 

    32

     

    

 

13. No
Rights as Employee, Director or Consultant. Nothing in this Agreement will affect in any manner whatsoever any right or power of the
Employer or the Company to terminate Participant’s Service, for any reason, with or without Cause.

 

14. Consent
to Electronic Delivery of All Plan Documents and Disclosures. By Participant’s acceptance of the Notice (whether in writing
or electronically), Participant and the Company agree that the Award Shares are granted under and governed by the terms and conditions
of the Plan, the Notice, and this Agreement. Participant has reviewed the Plan, the Notice, and this Agreement in their entirety, has
had an opportunity to obtain the advice of counsel prior to executing this Notice and Agreement, and fully understands all provisions
of the Plan, the Notice, and this Agreement. Participant hereby agrees to accept as binding, conclusive, and final all decisions or interpretations
of the Committee upon any questions relating to the Plan, the Notice, and this Agreement. Participant further agrees to notify the Company
upon any change in Participant’s residence address. By acceptance of the Award, Participant agrees to participate in the Plan through
an on-line or electronic system established and maintained by the Company or a third party designated by the Company and consents to the
electronic delivery of the Notice, this Agreement, the Plan, account statements, Plan prospectuses required by the U.S. Securities and
Exchange Commission, U.S. financial reports of the Company, and all other documents that the Company is required to deliver to its security
holders (including, without limitation, annual reports and proxy statements), or other communications or information related to the Award
Shares and current or future participation in the Plan. Electronic delivery may include the delivery of a link to the Company intranet
or the internet site of a third party involved in administering the Plan, the delivery of the document via e-mail, or such other delivery
determined at the Company’s discretion. Participant acknowledges that Participant may receive from the Company a paper copy of any
documents delivered electronically at no cost if Participant contacts the Company by telephone, through a postal service, or electronic
mail to the Compensation Committee. Participant further acknowledges that Participant will be provided with a paper copy of any documents
delivered electronically if electronic delivery fails; similarly, Participant understands that Participant must provide on request to
the Company or any designated third party a paper copy of any documents delivered electronically if electronic delivery fails. Also, Participant
understands that Participant’s consent may be revoked or changed, including any change in the electronic mail address to which documents
are delivered (if Participant has provided an electronic mail address), at any time by notifying the Company of such revised or revoked
consent by telephone, postal service, or electronic mail to the Compensation Committee. Finally, Participant understands that Participant
is not required to consent to electronic delivery if local laws prohibit such consent.

 

    33

     

    

 

15. Insider
Trading Restrictions/Market Abuse Laws. Participant acknowledges that, depending on Participant’s country, Participant may be
subject to insider trading restrictions and/or market abuse laws, which may affect Participant’s ability to acquire or sell the
Shares or rights to Shares under the Plan during such times as Participant is considered to have “inside information” regarding
the Company (as defined by the laws in Participant’s country). Any restrictions under these laws or regulations are separate from
and in addition to any restrictions that may be imposed under any applicable Company insider trading policy. Participant acknowledges
that it is Participant’s responsibility to comply with any applicable restrictions and understands that Participant should consult
his or her personal legal advisor on such matters. In addition, Participant acknowledges that he or she read the Company’s Insider
Trading and Section 16 Policy, and agrees to comply with such policy, as it may be amended from time to time, whenever Participant acquires
or disposes of the Company’s securities.

 

16. Award
Subject to Company Clawback or Recoupment. To the extent permitted by applicable law, the Award Shares will be subject to clawback
or recoupment pursuant to any compensation clawback or recoupment policy adopted by the Board or required by law during the term of Participant’s
employment or other Service that is applicable to Participant. In addition to any other remedies available under such policy and applicable
law, the Company may require the cancellation of Participant’s Award Shares and the recoupment of any gains realized with respect
to Participant’s Award Shares.

 

BY ACCEPTING THIS AWARD, PARTICIPANT AGREES TO
ALL OF THE TERMS AND CONDITIONS DESCRIBED ABOVE AND IN THE PLAN.

 

 

34Exhibit 10.1

 

 

December 22, 2021

 

Karla Lunan

3860 Paradise Avenue North

Stillwater, MN 55082

 

Dear Karla:

 

We are delighted to offer you a new position at
Tile Shop Holdings, Inc. (the "Company"). This letter serves as an employment agreement to confirm the new terms of your
employment:

 

		Position:	Chief Financial Officer

 

		Start Date:	January 3, 2022

 

		Status:	Full Time, Regular

 

		Reporting to:	You will report to the President & Chief Executive
Officer, who will direct your day-to-day responsibilities, and you will work closely with other senior officers of the Company.

 

		Base Salary:	Base salary (annualized) of $280,000, paid in accordance with
the Company's normal payroll procedures.

 

You should note that the Company may
modify salaries and benefits from time to time as its Board of Directors or the Compensation Committee thereof deems necessary or appropriate,
and all forms of compensation referred to in this agreement are subject to applicable withholding and payroll taxes.

 

		Cash Incentive	Your annual cash incentive compensation opportunity will be
between 0% and

 

		Compensation:	80% of your base salary, with a target of 50%, and receipt of such cash incentive compensation will be
based on achieving Company-wide goals and personal goals and objectives, pro-rated for any partial year during which you are employed
by the Company.

 

		Benefits:	You will be eligible to receive the Company's standard benefit package for employees of your level.

 

		Equity Awards:	Subject to approval by the Company’s Board of Directors,
you will be granted equity awards with an aggregate value of $200,000, which may include time vesting and performance vesting restricted
shares. The number of shares awarded will be determined based on the 30-day average closing price of the Company’s stock leading
up to the date of grant. The terms of the awards will be set forth in further detail in the grant agreements which will be made pursuant
to the Company’s 2021 Omnibus Award Plan (the “Plan”).

 

    	 	 

                                                                                CORPORATE OFFICES | 14000 CARLSON PARKWAY | PLYMOUTH MN 55441
	 

     

    

 

 

 

		Vacation:	The most favorable of (i) 3 weeks or (ii) the then-current Company vacation policy applicable
to you.

 

		Change of Control:	(A)	In the event of a Change of Control (as defined in the Plan) of the Company, if (1) you are not offered employment or continued
employment by the Successor Entity (as defined in the Plan) upon consummation of such Change of Control, or (2) prior to the first
anniversary of such Change of Control, (a) you are discharged by the Successor Entity other than for Cause (as defined in the Plan)
or (b) you resign from employment with the Successor Entity as a result of a Constructive Termination (as defined below), all of
your unvested stock options will vest and become exercisable immediately prior to such Change of Control or cessation of employment,
as applicable.

 

		 	(B)	"Constructive Termination" will occur if you resign from your employment with the Successor
Entity within 30 days following (1) a material reduction in your annual base salary or job responsibility or (2) the relocation
of your principal office location to a facility or location located more than 50 miles from your principal office location on the date
of the Change of Control.

 

		Severance:	(A)	If you are terminated without Severance Cause (as defined below) or resign for Good Reason (as defined below), you will be entitled to
receive an amount equal to (1) your then-current base salary for a six-month period commencing with the effective date of your termination
of employment with the Company (the "Severance Period") and (2) an amount equal to six times the monthly amount that the
Company paid for your participation in the Company's health insurance plan during the month immediately preceding your termination date.
The foregoing amounts will be payable pro rata over the Severance Period in accordance with the Company's normal payroll practices; provided,
however, that the Company will not make any severance payments unless and until (a) you execute and deliver to the Company a general
release in the form of Exhibit B hereto (the "Release"), (b) such Release is executed and delivered to the Company
within 21 days after your termination date and (c) all time periods for revoking the Release have lapsed. If you are terminated
during the month of December of any calendar year and are owed severance hereunder, no severance payments will be made prior to
January 1st of the next calendar year and any amount that would have otherwise been payable to you in December of
the preceding calendar year will be paid to you on the first date in January on which you would otherwise be entitled to any payment.
Following your termination date, all benefits offered by the Company, including health insurance benefits, will cease. From and after
such date, you may elect to continue your participation in the Company's health insurance benefits at your expense pursuant to COBRA
by notifying the Company in the time specified in the COBRA notice you will be provided and paying the monthly premium yourself. Notwithstanding
the above, if you are a "specified employee " within the meaning of Section 409A of the Internal Revenue Code of 1986,
as amended (the "Code"), then any amounts payable to you during the first six months and one day following the date of termination
that constitute nonqualified deferred compensation within the meaning of Section 409A of the Code (as determined by the Company
in its sole discretion) will not be paid to you until the date that is six months and one day following such termination to the extent
necessary to avoid adverse tax consequences under Section 409A of the Code.

 

    	 	 

                                                                                CORPORATE OFFICES | 14000 CARLSON PARKWAY | PLYMOUTH MN 55441
	 

     

    

 

 

 

		 	(B)	"Severance Cause" means (1) willful misconduct in connection with your employment or willful
failure to perform your responsibilities in the best interests of the Company, as determined by the Company' s Board of Directors; (2) conviction
of, or plea of nolo contendre or guilty to, a felony other than an act involving a traffic related infraction; (3) any act of fraud,
theft, embezzlement or other material dishonesty by you that harmed the Company; (4) intentional violation of a federal or state
law or regulation applicable to the Company's business, which violation was or is reasonably likely to be injurious to the Company; or
(5) repeated failure to perform your duties and obligations of your position with the Company, which failure is not cured within
30 days after notice of such failure from the Company' s Board of Directors to you.

 

		 	(C)	"Good Reason" for your resignation will exist if you resign from your employment with the Company
as a result of (1) a material reduction in your annual base salary or job responsibility or (2) the relocation of your principal
office location to a facility or location located more than 50 miles from your current principal office location.

 

Please understand that your employment with the
Company is for no specified period and constitutes "at-will" employment. As a result, you are free to resign at any time, for
any reason or for no reason, with or without notice. Similarly, the Company is free to conclude its employment relationship with you at
any time, with or without cause, and with or without notice.

 

Like all Company employees of your level, you
will be required, as a condition of your employment with the Company, to sign the Company's Nondisclosure, Confidentiality, Assignment
and Noncompetition Agreement, a copy of which is attached hereto as Exhibit A (the "Non-Competition and Non-Disclosure Agreement").

 

You agree that, during the term of your employment
with the Company, you will not engage in any other employment, occupation, consulting or other business activity directly related to the
business in which the Company is now involved or becomes involved during the term of your employment, nor will you engage in any other
activities that conflict with your obligations to the Company.

 

    	 	 

                                                                                CORPORATE OFFICES | 14000 CARLSON PARKWAY | PLYMOUTH MN 55441
	 

     

    

 

 

 

To indicate your acceptance of our offer, please
sign and date the attached Acceptance and Acknowledgement. This agreement, along with the Company's Non-Competition and Non-Disclosure
Agreement, set forth the terms of your employment with the Company and supersede any prior representations or agreements, whether written
or oral. This agreement may not be modified or amended except by a written agreement, signed by an executive officer of the Company and
by you.

 

Karla, we are looking forward to your new role
with the Company and expect your direct contributions to have a significant positive impact on the organization.

 

Sincerely,

 

TILE SHOP HOLDINGS, INC.

 

	By:	/s/ Cabell Lolmaugh	 
	Name:	Cabell Lolmaugh	 
	Title:	Chief Executive Officer	 

 

    	 	 

                                                                                CORPORATE OFFICES | 14000 CARLSON PARKWAY | PLYMOUTH MN 55441
	 

     

    

 

 

 

ACCEPTANCE AND ACKNOWLEDGMENT

 

I accept the offer of employment
from the Company as Chief Financial Officer as set forth in the employment agreement effective as of January 3, 2022. I understand
and acknowledge that my employment with the Company is for no particular duration and is at-will, meaning that I, or the Company, may
terminate the employment relationship at any time, with or without cause and with or without prior notice.

 

I understand and agree that
the terms and conditions set forth in the employment agreement represent the entire agreement between the Company and me superseding all
prior negotiations and agreements, whether written or oral. I understand that the terms and conditions described in the employment agreement,
along with the Company's Nondisclosure, Confidentiality, Assignment and Noncompetition Agreement are the terms and conditions of my employment.
No one other than an executive officer of the Company is authorized to sign any employment or other agreement that modifies the terms
of the employment agreement and the Company's Nondisclosure, Confidentiality, Assignment and Noncompetition Agreement, and any such modification
must be in writing and signed by such individual. I understand that the Company may modify salary and benefits as well as other plans
and programs from time to time as its Board of Directors or the Compensation Committee thereof deems necessary or appropriate.

 

	Signature:	/s/ Karla Lunan	 
	Name:	Karla Lunan	 
	Date:	December 22, 2021	 

 

    	 	 

                                                                                CORPORATE OFFICES | 14000 CARLSON PARKWAY | PLYMOUTH MN 55441
	 

     

    

 

EXHIBIT A

 

TILE SHOP HOLDINGS, INC.

 

NONDISCLOSURE, CONFIDENTIALITY, ASSIGNMENT AND
NONCOMPETITION AGREEMENT

 

THIS NONDISCLOSURE, CONFIDENTIALITY,
ASSIGNMENT AND NONCOMPETITION AGREEMENT (this "Agreement") is made this 22nd day of December, 2021, by and between
Tile Shop Holdings, Inc., a Delaware corporation (collectively with any predecessors, successors, and assignees, the "Company"),
and Karla Lunan (“I” or " me"), to be effective on January 3, 2022.

 

In consideration of my engagement
or continued engagement as an officer, employee, director, advisor, partner, independent contractor or consultant of the Company (an "Associate"),
and for other valuable consideration, the receipt and sufficiency of which is hereby acknowledged, I hereby agree as follows:

 

1.            DEFINITIONS.

 

1.1.            "Affiliate"
means any direct or indirect subsidiary of the Company.

 

1.2.            "Confidential
Information" means any and all confidential and/or proprietary knowledge, data or information concerning the business, business
relationships and financial affairs of the Company or its Affiliates whether or not in writing and whether or not labeled or identified
as confidential or proprietary. By way of illustration, but not limitation, Confidential Information includes (a) Inventions and
(b) research and development activities of the Company or its Affiliates, services and marketing plans, business plans, budgets and
unpublished financial statements, licenses, prices and costs, customer and supplier information and information disclosed to the Company
or its Affiliates or to me by third parties of a proprietary or confidential nature or under an obligation of confidence. Confidential
Information is contained in various media, including without limitation, patent applications, computer programs in object and/or source
code, flow charts and other program documentation, manuals, plans, drawings, designs, technical specifications, laboratory notebooks,
supplier and customer lists, internal financial data and other documents and records of the Company or its Affiliates. Notwithstanding
the foregoing, nothing in this Agreement is intended to or will be used in any way to prevent disclosure of Confidential Information in
accordance with the immunity provisions set forth in the Defend Trade Secrets Act of 2016 (18 U.S.C. § 1833(b)), meaning the disclosure
is (1) in confidence to a government official or attorney solely for the purpose of reporting or investigating a suspected legal
violation; or (2) under seal in connection with a lawsuit or other proceeding (including an anti-retaliation lawsuit) .

 

1.3.            "Inventions"
means all ideas, concepts, discoveries, inventions, developments, improvements, formulations, products, processes, know-how, designs,
formulas, methods, developmental or experimental work, clinical data, original works of authorship, software programs, software and systems
documentation, trade secrets, technical data, or licenses to use (whether or not patentable or registrable under copyright or similar
statutes), that are or were made, conceived, devised, invented, developed or reduced to practice or tangible medium by me, either alone
or jointly with others (a) during any period that I am an Associate of the Company, whether or not during normal working hours or
on the premises of the Company, that relate, directly or indirectly, to the business of the Company or its Affiliates, (b) at the
request of or for the benefit of the Company during any period prior to my engagement as an Associate of the Company that relate, directly
or indirectly, to the business of the Company or its Affiliates, or (c) that arise out of, or are incidental to, my engagement as
an Associate of the Company.

 

     

     

    

 

1.4.            "Prior
Inventions" means any inventions made, conceived, devised, invented, developed or first reduced to practice by me, under my direction
or jointly with others prior to the date of this Agreement and that do not constitute Inventions within the meaning of Section 1.3
above. Prior Inventions also means an invention for which no equipment, supplies, facility or trade secret information of the Company
was used and which was developed entirely on my own time, and (1) which does not relate (a) directly to the business of the
Company or (b) to the Company's actual or demonstrably anticipated research or development, or (2) which does not result from
any work performed by the me for the Company.

 

1.5.            "Third
Party Information" means any confidential or proprietary information received by the Company or its Affiliates from third parties.

 

2.            CONFIDENTIALITY.

 

2.1.            Recognition
of the Company's Rights. I understand that the Company continually obtains and develops valuable Confidential Information that may
or has become known to me in connection with my engagement as an Associate of the Company. I acknowledge that all Confidential Information
is and will remain the exclusive property of the Company or the third party providing such Confidential Information to myself, the Company,
or the Company's Affiliates.

 

2.2.            Nondisclosure
of Confidential Information. I agree that during the term of my engagement as an Associate of the Company and thereafter, I will
hold in strictest confidence and will not disclose, use, lecture upon, publish or otherwise make available to any third party (other than
personnel of the Company or its Affiliates who need to know such information in connection with their work for the Company), any Confidential
Information of the Company, except as such disclosure, use or publication may be required in connection with my work for the Company,
or as expressly authorized in writing by an executive officer of the Company. I agree that I will use such Confidential Information only
in the performance of my duties for the Company and in accordance with any Company policies with respect to the protection of Confidential
Information. I agree not to use such Confidential Information for my own benefit or for the benefit of any other person or business entity.

 

2.3.            Third
Party Information. In addition, I understand that the Company has received and, in the future, will receive Third Party Information
subject to a duty on the Company's part to maintain the confidentiality of such information and to use it only for certain limited purposes.
During the term of my engagement as an Associate of the Company and thereafter, I will hold Third Party Information in the strictest
confidence and will not disclose to anyone (other than personnel of the Company or its Affiliates who need to know such information in
connection with the performance of their duties for the Company) or use any Third Party Information, except as such disclosure or use
may be required in connection with the performance of my duties for the Company, or as expressly authorized in writing by an executive
officer of the Company.

 

2.4.            Exceptions.
My obligations under Sections 2.2 and 2.3 hereof will not apply to the extent that certain Confidential Information (a) is or becomes
generally known within the Company's industry through no fault of mine; (b) was known to me at the time it was disclosed as evidenced
by my written records at the time of disclosure; (c) is lawfully and in good faith made available to me by a third party who did
not derive it from the Company or the Company' s Affiliates and who imposes no obligation of confidence to me, the Company, or the Company's
Affiliates; or (d) is required to be disclosed by a governmental authority or by order of a court of competent jurisdiction, provided
that such disclosure is subject to all applicable governmental or judicial protection available for like material and reasonable advance
notice is given to the Company.

 

     

     

    

 

2.5.            Protection
and Return of Confidential Information. I agree to exercise all reasonable precautions to protect the integrity and confidentiality
of Confidential Information in my possession and not to remove any materials containing Confidential Information from the premises of
the Company, except to the extent necessary in the performance of my duties for the Company or unless expressly authorized in writing
by an executive officer of the Company. Upon the termination of my engagement as an Associate of the Company, or at any time upon the
Company's request, I will return immediately to the Company any and all notes, memoranda, specifications, devices, formulas and documents,
together with copies thereof, and any other material containing or disclosing any Confidential Information of the Company or Third Party
Information then in my possession or under my control.

 

3.            ASSIGNMENT
OF INVENTIONS.

 

3.1.            Ownership
of Inventions. I acknowledge that all Inventions already existing at the date of this Agreement or that arise after the date of this
Agreement, belong to and are the absolute property of the Company and will not be used by me for any purpose other than carrying out my
duties as an Associate of the Company.

 

3.2.            Assignment
of Inventions; Enforcement of Rights. Subject to Section 3.6, I hereby assign and agree to assign in the future to the Company
all of my right, title and interest to any and all Inventions and any and all related patent rights, copyrights and applications and registrations
therefore. I also agree to assign all my right, title and interest in and to any particular Inventions to a third party as directed by
the Company. During and after my engagement as an Associate of the Company, I will cooperate with the Company, at the Company's expense,
in obtaining proprietary protection for the Inventions and I will execute all documents that the Company reasonably requests in order
to perfect the Company's rights in the Inventions. I hereby appoint the Company my attorney to execute and deliver any such documents
on my behalf in the event I should fail or refuse to do so within a reasonable period following the Company's request. I understand that,
to the extent this Agreement is construed in accordance with the laws of any country or state that limits the assignability to the Company
of certain inventions, this Agreement will be interpreted not to apply to any such invention that a court rules or the Company agrees
is subject to such limitation.

 

3.3.            Works
for Hire. I acknowledge that all original works of authorship made by me (solely or jointly with others) within the scope of my engagement
as an Associate of the Company or any prior engagement by the Company, that are protectable by copyright are intended to be "works
made for hire", as that term is defined in Section 101 of the United States Copyright Act of 1976 (the "Act"), and
will be the property of the Company and the Company will be the sole author within the meaning of the Act. If the copyright to any such
copyrightable work is not the property of the Company by operation of law, I will, without further consideration, assign to the Company
all of my right, title and interest in such copyrightable work and will cooperate with the Company and its designees, at the Company's
expense, to secure, maintain and defend for the Company's benefit copyrights and any extensions and renewals thereof on any and all such
work. I hereby waive all claims to moral rights in any Inventions.

 

     

     

    

 

3.4.            Records.
I agree to keep and maintain adequate and current records (in the form of notes, sketches, drawings and in any other form that may be
required by the Company) of all Inventions made by me during the period of my engagement as an Associate of the Company or any prior engagement
by the Company, which records will be available to and remain the sole property of the Company at all times.

 

3.5.            Obligation
to Keep Company Informed. During the period of my engagement as an Associate of the Company, and for six months after termination
of my engagement as an Associate of the Company, I agree to promptly disclose to the Company fully and in writing all Inventions
authored, conceived or reduced to practice by me, either alone or jointly with others. In addition, I will promptly disclose to the
Company all patent applications filed by me or on my behalf within one year after termination of my engagement as an Associate of the
Company.

 

3.6.            Prior
Inventions. I further represent that the attached Schedule A contains a complete list of all Prior Inventions. I agree to update and/or
amend Schedule A during my employment as may be necessary and to promptly notify the Company of the same. Such Prior Inventions are considered
to be my property or the property of third parties and are not assigned to the Company hereunder. If there is no such Schedule A attached
hereto, I represent that there are no such Prior Inventions. If I am claiming any Prior Inventions on Schedule A, I agree that,
if in the course of my engagement as an Associate of the Company or any prior engagement by the Company, I incorporate any Prior
Invention into a Company product, process or machine, the Company will automatically be granted and will have a non-exclusive, royalty-free,
irrevocable, transferable, perpetual, world-wide license (with rights to sublicense) to make, have made, modify, use and sell such Prior
Invention as part of, or in connection with, such product, process or machine. Notwithstanding the foregoing, I agree that I will
not incorporate, or permit to be incorporated, Prior Inventions in any Company Inventions without the Company' s prior written consent.

 

4.            OTHER
AGREEMENTS.

 

4.1.            No
Conflicting Obligations. I hereby represent to the Company that, except as identified on Schedule B, I am not bound by any agreement
or any other previous or existing business relationship that conflicts with or prevents the full performance of my duties and obligations
to the Company (including my duties and obligations under this or any other agreement with the Company) during my engagement as an Associate
of the Company. I agree I will not enter into any agreement, either written or oral, that conflicts with this Agreement.

 

4.2.            No
Improper Use of Information of Prior Employers or Others. I understand that the Company does not desire to acquire from me any trade
secrets, know-how or confidential business information I may have acquired from others. Therefore, I agree during my engagement as
an Associate of the Company, I will not improperly use or disclose any proprietary information or trade secrets of any former or
concurrent employer, or any other person or entity with whom I have an agreement or to whom I owe a duty to keep such information in confidence.
Those persons or entities with whom I have such agreements or to whom I owe such a duty are identified on Schedule B.

 

5.            NON-COMPETITION.
I agree that while I am engaged as an Associate of the Company and for a period of one year after termination or cessation of such engagement
for any reason, I will not, without the Company's prior written consent, directly or indirectly, as a principal, employee, consultant,
partner, or stockholder of, or in any other capacity with, any business enterprise (other than in my capacity as a holder of not more
than 1% of the combined voting power of the outstanding stock of a publicly held company) (a) engage in direct or indirect competition
with the Company or its Affiliates, (b) conduct a business of the type or character engaged in by the Company or its Affiliates at
the time of termination or cessation of my engagement as an Associate of the Company, or (c) develop products or services competitive
with those of the Company or its Affiliates.

 

     

     

    

 

6.            GENERAL
NON-SOLICITATION. I agree that while I am engaged as an Associate of the Company and for a period of one year after termination or cessation
of such engagement for any reason, I will not solicit, divert or take away, or attempt to divert or take away, the business or patronage
of any of the clients, customers or accounts, or prospective clients, customers or accounts, of the Company or its Affiliates that were
contacted, solicited or served by me while I was engaged as an Associate of the Company or any Affiliate.

 

7.            NON-SOLICITATION
OF EMPLOYEES AND CONSULTANTS. I agree that while I am engaged as an Associate of the Company and for a period of one year after termination
or cessation of such engagement for any reason, I will not directly or indirectly hire, recruit, or solicit any employee, independent
contractor or consultant of the Company or its Affiliates, or induce or attempt to induce any employee independent contractor or consultant
of the Company or its Affiliates to discontinue his or her relationship with the Company or its Affiliates.

 

8.            NOTICE
OF SUBSEQUENT EMPLOYMENT OR ENGAGEMENT. I will, for a period of one year after the termination or cessation of my engagement as an Associate
of the Company, notify the Company of any change of address, and of any subsequent employment or engagement (stating the name and address
of the employer and the nature of the position) or any other business activity.

 

9.            GENERAL.

 

9.1.            Assignment;
Successors and Assigns. This Agreement may not be assigned by either party except that the Company may assign this Agreement to any
Affiliate or in connection with the merger, consolidation or sale of all or substantially all of its business or assets. This Agreement
will be binding upon and will inure to the benefit of the parties hereto and their respective successors and other legal representatives
and, to the extent that any assignment hereof is permitted hereunder, their assignees.

 

9.2.            Entire
Agreement. The obligations pursuant to Sections 2 and J of this Agreement will apply to any time during which I was previously engaged
as an Associate of the Company, or am in the future engaged as an Associate of the Company or any Affiliate if no other agreement governs
nondisclosure and assignment of inventions during such period. This Agreement supersedes all prior agreements, written or oral, with respect
to the subject matter of this Agreement.

 

9.3.            Severability.
In the event that any one or more of the provisions contained herein is, for any reason, held to be invalid, illegal, or unenforceable
in any respect, such invalidity, illegality, or unenforceability will not affect any other provisions of this Agreement, and all other
provisions will remain in full force and effect. If any of the provisions of this Agreement is held to be excessively broad, it will be
reformed and construed by limiting and reducing it so as to be enforceable to the maximum extent permitted by law.

 

9.4.            Amendments
and Waivers. No modification of or amendment to this Agreement, nor any waiver of any rights under this Agreement, will be effective
unless in writing and signed by the party to be charged. No delay or omission by the Company in exercising any right under this Agreement
will operate as a waiver of that or any other right. A waiver or consent given by the Company on any occasion if effective only in that
instance and will not be construed as a bar to or waiver of any right on any other occasion.

 

     

     

    

 

9.5.            Employment.
I understand that this Agreement does not constitute a contract of employment or create an obligation on the part of the Company to continue
my employment (if any) with the Company. I understand that my employment (if any) is "at will" and that my obligations under
this Agreement will not be affected by any change in my position, title or function with, or compensation, by the Company. Any subsequent
change or changes in my duties, salary or compensation will not affect the validity or scope of this Agreement.

 

9.6.            Legal
and Equitable Remedies. I acknowledge that (a) the business of the Company and its Affiliates is global in scope and its services
may be marketed and sold throughout the world; (b) the Company and its Affiliates compete with other businesses that are or could
be located in any part of the world; (c) the Company has required that I make the covenants contained in this Agreement as a condition
to my engagement as an Associate of the Company; and (d) the restrictions contained in this Agreement are necessary for the protection
of the business and goodwill of the Company and its Affiliates and are reasonable for such purpose. I agree that any breach of this Agreement
by me will cause irreparable damage to the Company and its Affiliates and that in the event of such breach, the Company will be entitled,
in addition to monetary damages and to any other remedies available to the Company under this Agreement and at law, to equitable relief,
including injunctive relief, and to payment by myself of all costs incurred by the Company in enforcing of the provisions of this Agreement,
including reasonable attorneys' fees. I agree that should I violate any obligation imposed on me in this Agreement, I will continue
to be bound by the obligation until a period equal to the term of such obligation has expired without violation of such obligation.

 

9.7.            Governing
Law. This Agreement will be construed as a sealed instrument and will in all events and for all purposes be governed by, and construed
in accordance with, the laws of the State of Delaware without regard to any choice of law principle that would dictate the application
of the laws of another jurisdiction. Any action, suit or other legal proceeding that I may commence to resolve any matter arising under
or relating to any provision of this Agreement will be commenced only in a court of the State of Delaware (or, if appropriate, a federal
court located within the State of Delaware), and I hereby consent to the jurisdiction of such court with respect to any action, suit or
proceeding commenced in such court by the Company.

 

[Next Page is Signature Page]

 

     

     

    

 

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

 

	/s/ Karla Lunan	 
	Karla Lunan	 

 

	/s/ Cabell Lolmaugh	 
	TILE SHOP HOLDINGS, INC.	 
	Title: Chief Executive Officer	 

 

     

     

    

 

EXHIBIT B

 

WAIVER OF CLAIMS AND GENERAL RELEASE

 

This Waiver of Claims and
General Release (the “Release”) is to confirm that the undersigned’s at-will employment with Tile Shop Holdings, Inc.
(the “Company”) is terminated effective as of ________________ (the “Termination Date”). Effective as of the Termination
Date, by execution of this Release, the undersigned (“you”) hereby relinquish all authority you have to act on behalf of the
Company and any of its subsidiaries.

 

Please read this Release carefully.
To help you understand the Release and your rights as a terminated employee, you are advised to consult with your attorney before signing
it.

 

Consistent with the provisions
of that certain Employment Agreement by and between you and the Company dated as of December 21, 2021 (the “Employment Agreement”),
the Company will provide you with severance pay pursuant to the terms of the Employment Agreement. In consideration for the severance
payments and other good and valuable consideration set forth in the Employment Agreement, you hereby agree as follows:

 

1.            Release.
You hereby release and forever discharge the Company and each of its past and present officers, directors, employees, agents, advisors,
consultants, successors and assigns from any and all claims and liabilities of any nature by you including, but not limited to, all actions,
causes of actions, suits, debts, sums of money, attorneys’ fees, costs, accounts, covenants, controversies, agreements, promises,
damages, claims, grievances, arbitrations, and demands whatsoever, known or unknown, at law or in equity, by contract (express or implied),
tort, pursuant to statute, or otherwise, that you now have, ever have had or will ever have based on, by reason of, or arising out of,
any event, occurrence, action, inaction, transition or thing of any kind or nature occurring prior to or on the effective date of this
Release. Without limiting the generality of the above, you specifically release and discharge any and all claims and causes of action
arising, directly or indirectly, from your employment at the Company, arising under applicable state, federal and local law, including
but not limited to the Employee Retirement Income Security Act of 1974 (except as to claims pertaining to vested benefits under employee
benefit plan(s) of the Company), Title VII of the Civil Rights Act of 1964, the Age Discrimination in Employment Act of 1967, as
amended (the “ADEA”), the Equal Pay Act, the Rehabilitation Act, the Americans With Disabilities Act, and any other law, statute,
ordinance, rule, regulation, decision or order pertaining to employment or pertaining to discrimination on the basis of age, alienage,
race, color, creed, gender, national origin, religion, physical or mental disability, marital status, citizenship, sexual orientation,
non-work activities or any other protected class or conduct. Payment of any amounts and the provision of any benefits provided for in
this Release do not signify any admission of wrongdoing by the Company or any of its affiliates.

 

You also agree that if you file, or there is filed
on your behalf, a charge, complaint, or action, the payment and benefits described in this Release are in complete satisfaction of any
and all claims in connection with such charge, complaint, or action and you waive, and agree not to take, any award of money or other
damages from such charge, complaint, or action.

 

     

     

    

 

By signing this Release you are not releasing
or waiving (a) any vested interest you may have in any employee retirement plan (as defined in ERISA Section 3(2)) by virtue
of your employment with the Company; (b) any rights or claims that may arise after the Termination Date; (c) the post-employment
payment and benefits described in the third paragraph of this Release; (d) the right to institute legal action for the purpose of
enforcing the provisions of this Release; (e) the right to apply for state unemployment compensation benefits; (f) any right
you may have to workers’ compensation benefits; (g) any rights you may have under COBRA; (h) the right to file a charge
or complaint with a governmental agency such as the Equal Employment Opportunity Commission (“EEOC”), the National Labor Relations
Board (“NLRB”), the Occupational Safety and Health Administration (“OSHA”), the Securities and Exchange Commission
(“SEC”) or any other federal, state or local governmental agency, subject to the preceding paragraph of this Section 1;
(i) the right to communicate with, testify, assist, or participate in an investigation, hearing, or proceeding conducted by, the
EEOC, NLRB, OSHA, SEC, or other governmental agency; (j) the right to receive and retain a monetary award from a government-administered
whistleblower award program for providing information directly to a governmental agency; and (k) any rights of indemnification or
contribution afforded you by the Indemnification Agreement, dated September 6, 2019 between you and the Company, by statute or by
common law, including any insurance coverage maintained by or on behalf of the Company.

 

2.            Opportunity
to Consider. You have been advised that you have 21 days from the date on which you received this Release to consider whether you
wish to sign it. However, the Company will not accept, and you may not execute, this Release until the Termination Date. You are also
advised to consult with an attorney prior to signing this Release. The date on which you received this Release is accurately reflected
in Section 10 below.

 

3.            Opportunity
to Rescind. You may cancel this Release as to the release of claims arising under the Minnesota Human Rights Act within 15 days after
signing it and as to the release of claims arising under the ADEA within 7 days of signing it. The Release will not become effective or
enforceable until both rescission periods have passed. If you decide to rescind the Release you must mail or hand deliver the notice of
rescission to: Chief Executive Officer, Tile Shop Holdings, Inc., 14000 Carlson Parkway, Plymouth, Minnesota 55441. If you mail the
notice of rescission, the notice must be postmarked within the 15 or 7 day period, as applicable, and must be sent via certified mail,
return receipt requested, as addressed above. If you exercise the right to rescind under this Section 3, all other provisions of
the Release will immediately be null and void and you will not receive severance pay as described in the Employment Agreement or otherwise.

 

4.            Confidentiality
of this Release. You agree that you will keep the terms of this Release strictly confidential and not disclose, directly or indirectly,
any information concerning them to any third party, with the exception of your spouse (if you have a spouse), and financial or legal advisors,
provided that they agree to keep such information confidential as set forth herein and not disclose it to others, and except as may be
required by court order or legal process.

 

5.            Breach.
You agree that all of the payments and benefits provided for in this Release are subject to termination, reduction or cancellation in
the event of your material breach of this Release.

 

6.            Enforcement.
The parties agree that any legal proceeding brought to enforce the provisions of this Release may be brought only in the courts of the
State of Minnesota or the federal courts located in Minnesota and each party hereby consents to the jurisdiction of such courts.

 

7.            Severability.
If any of the terms of this Release is held to be invalid and unenforceable, other than the release of claims provided in Section 1,
and cannot be rewritten or interpreted by the court to be valid, enforceable and to meet the intent of the parties expressed herein, then
the remaining terms of this Release are severable and will not be affected thereby. In the event any aspect of the release of claims in
Section 1 is held to be invalid or unenforceable in any respect, the remaining provisions of this Release will be voidable at the
option of the Company and you agree to return any payments made and benefits provided by the Company except that nothing in this Release
will be construed as permitting the Company to obligate or require tender back of any payments or benefits provided in exchange for your
release of ADEA claims.

 

     

     

    

 

8.            Miscellaneous.
This Release and the Employment Agreement constitutes the entire agreement between the parties about or relating to your termination of
employment with the Company, or the Company's obligations to you with respect to your termination and fully supersedes any and all prior
agreements or understandings between the parties except for those express provisions contained in the Employment Agreement and the Tile
Shop Holdings, Inc. Nondisclosure, Confidentiality, Assignment and Noncompetition Agreement that are intended to survive the termination
of the employment relationship.

 

9.            Representations.
You affirm that the consideration for signing this Release is described in the Employment Agreement as referenced herein and that no other
promises or agreements of any kind have been made to or with you by any person or entity whatsoever to cause you to sign this Release,
and that you fully understand the meaning and intent of this instrument. You agree that at all times during your employment you were properly
compensated for all hours you worked, that you received all benefits and leave to which you were entitled, and that you suffered no work-related
accident, illness or injury. You agree that you will not disparage the Company in any way, nor will you make any public comments or communications
that tend to cast the Company, its owners, directors, officers or employees in a negative light. The Company agrees that none of the Company’s
officers, owners, directors or management employees will disparage you in any way, nor will the Company’s officers, owners, directors
or management employees make any public comments or communications that tend to cast you in a negative light.

 

You also affirm that you are the legal party in
interest in this Release, with legal title to all rights and claims asserted and hereby released; that you have not filed for bankruptcy
or assigned or transferred any rights against the Company to any other person or entity; and that you have returned to the Company all
of its property in your possession or control, including but not limited to, all documents and materials, whether on computer disc, hard
drive, or other form, and all copies thereof that in any way relate to the business of the Company. You further affirm that you have fully
complied with the Tile Shop Holdings, Inc. Nondisclosure, Confidentiality, Assignment and Noncompetition Agreement that you signed
before beginning employment with the Company.

 

10. Section 409A and
Taxes Generally. This Release is intended to comply with Section 409A of the Internal Revenue Code of 1986, as amended, and the
regulations, notices and other guidance of general applicability issued thereunder (collectively, “Section 409A”) or
an exemption thereunder, and will be construed and administered in accordance with Section 409A. Notwithstanding any other provision
of this Release, payments provided under this Release may only be made upon an event and in a manner that complies with Section 409A
or an applicable exemption. Any payments under this Release that may be excluded from Section 409A, either as separation pay due
to an involuntary separation from service or as a short-term deferral, will be excluded from Section 409A to the maximum extent possible.
For purposes of Section 409A, each installment payment provided under this Release will be treated as a separate payment. Any payments
to be made under this Release upon a termination of employment will only be made if such termination of employment constitutes a “separation
from service” under Section 409A. Notwithstanding the foregoing, the Company makes no representations that the payments and
benefits provided under this Release comply with Section 409A and in no event will Company be liable for all or any portion of any
taxes, penalties, interest or other expenses that may be incurred by you on account of non-compliance with Section 409A.

 

     

     

    

 

Notwithstanding any other provision of this Release,
if on the Termination Date, you are a “specified employee” within the meaning of Section 409A and determined in accordance
with Section 409A, any payments and benefits provided under this Release that constitute “nonqualified deferred compensation”
subject to Section 409A that are provided to you on account of your separation from service will not be paid until the first payroll
date to occur following the six month anniversary of the Termination Date (“Specified Employee Payment Date”). The aggregate
amount of any payments that would otherwise have been made during such six-month period will be paid in a lump sum on the Specified Employee
Payment Date, without interest, and thereafter, any remaining payments will be paid without delay in accordance with their original schedule.
If you die during the six-month period, any delayed payments will be paid to your estate in a lump sum upon your death.

 

11.            Date
of Receipt. You acknowledge that you received this Release on ________________, that you have carefully read this Release, voluntarily
agree to all of its terms and conditions, understand its contents and the final and binding effect of this Release, and that you have
signed the same as your own free act with the full intent of releasing the Company from all claims you may have against it.

 

[Next Page is Signature Page]

 

     

     

    

 

IN WITNESS WHEREOF, the parties
have caused this Release to be duly executed and delivered as of the day and year indicated below.

 

EMPLOYEE:

 

	 	 
	Karla Lunan	 

 

	Date Signed:	 	 

 

TILE SHOP HOLDINGS, INC.:

 

	By:	 	 
	Name:	 	 
	Title:	 Chief Executive Officer	 

 

	Date Signed:

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