Document:

Exhibit
10.1

 

MORNINGSTAR, INC.

AMENDED AND RESTATED 2011 STOCK INCENTIVE PLAN

 

(Effective May 14, 2021)

 

 I. INTRODUCTION

 

1.1         
Purposes. The purposes of the Amended and Restated Morningstar, Inc. 2011 Stock Incentive Plan are (i) to align the
interests of the Company’s shareholders and the recipients of awards under this Plan by increasing the proprietary interest of such
recipients in the Company’s growth and success, (ii) to advance the interests of the Company by attracting and retaining directors,
officers, other employees and consultants or other independent contractors and (iii) to motivate such persons to act in the long-term
best interests of the Company and its shareholders.

 

1.2         
Certain Definitions.

 

“Agreement” shall mean
any written or electronic agreement, contract, or other instrument evidencing an award hereunder between the Company and the recipient
of such award, which may, but need not, be executed or acknowledged by both the Company and the recipient.

 

“Applicable
Law” shall mean any applicable law, including, without limitation: (i) provisions of the Code, the Securities Act,
the Exchange Act and any rules or regulations thereunder; (ii) corporate, securities, tax or other laws, statutes, rules, requirements
or regulations, whether U.S. or non-U.S., federal, state or local; and (iii) rules of any securities exchange or automated quotation system
on which the shares of Common Stock are listed, quoted or traded.

 

“Board” shall mean the
Board of Directors of the Company.

 

“Change in Control” shall
have the meaning set forth in Section 5.8(b).

 

“Code” shall mean the
U.S. Internal Revenue Code of 1986, as amended, together with the regulations and official guidance promulgated thereunder, whether issued
prior or subsequent to the grant of any award.

 

“Committee” shall mean
the Committee designated by the Board, consisting of two or more members of the Board, each of whom may be (i) a “Non-Employee Director”
within the meaning of Rule 16b-3 under the Exchange Act, (ii) an “outside director” within the meaning of Section 162(m) of
the Code (to the extent necessary for purposes of Outstanding Qualified Performance-Based Awards) and (iii) “independent”
within the meaning of the rules of the Nasdaq Stock Market or any other stock exchange on which the Common Stock is then traded.

 

“Common Stock” shall
mean the common stock, no par value, of the Company, and all rights appurtenant thereto.

 

     

     

    

 

“Company” shall mean
Morningstar, Inc., an Illinois corporation, or any successor thereto.

 

“Director” shall mean
a member of the Board, as constituted from time to time.

 

“Effective Date” shall
have the meaning set forth in Section 5.1.

 

“Employee” shall mean
any officer or other employee (as determined in accordance with Section 3401(c) of the Code) of the Company or of any parent of the Company
or any Subsidiary.

 

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

 

“Fair Market Value” shall
mean the closing transaction price of a share of Common Stock as reported on the Nasdaq Stock Market on the last trading day prior to
the date as of which such value is being determined or, if the Common Stock is not listed on the Nasdaq Stock Market, the closing transaction
price of a share of Common Stock on the principal national stock exchange on which the Common Stock is traded on the last trading day
prior to the date as of which such value is being determined or, if there shall be no reported transactions on the date prior to the date
as of which such value is being determined, on the next preceding date for which transactions were reported; provided, however,
that if the Common Stock is not listed on a national stock exchange or if Fair Market Value for any date cannot be so determined, Fair
Market Value shall be determined by the Committee in good faith and in accordance with Section 409A of the Code. Notwithstanding the foregoing,
for U.S. and non-U.S. federal, state, and local tax reporting and withholding purposes, fair market value may be determined by the Committee
in accordance with uniform and nondiscriminatory standards adopted by it from time to time consistent with Applicable Law.

 

“Incentive Stock Option”
shall mean an option to purchase shares of Common Stock that meets the requirements of Section 422 of the Code, or any successor provision,
which is intended by the Committee to constitute an Incentive Stock Option.

 

“Incumbent Board” shall
have the meaning set forth in Section 5.2(b)(ii).

 

“Mansueto Holder” shall
mean Joe Mansueto, his spouse, parents, siblings or descendants (whether by birth, adoption or marriage), and any trustee or custodian
for and on behalf of any the foregoing or any partnership, corporation, limited liability company or other business entity wholly owned,
directly or indirectly, by any of the foregoing.

 

“Non-Employee Director”
shall mean a Director of the Company who is not an Employee.

 

“Nonqualified Stock Option”
shall mean an option to purchase shares of Common Stock which is not an Incentive Stock Option.

 

“Outstanding
Qualified Performance-Based Award” shall have the meaning set forth in Section 5.15.

 

    2 

     

    

 

“Participant”
shall mean an eligible person who has been granted an award.

 

“Performance Measures”
shall mean the criteria and objectives, established by the Committee, which shall be satisfied or met (i) as a condition to the grant
or exercisability of all or a portion of an option or SAR or (ii) during the applicable Restriction Period or Performance Period as a
condition to the vesting of the holder’s interest, in the case of a Restricted Stock Award, of the shares of Common Stock subject
to such award, or, in the case of a Restricted Stock Unit Award or Performance Unit Award, to the holder’s receipt of the shares
of Common Stock subject to such award or of payment with respect to such award. Such criteria and objectives may be based on the attainment
of one or any combination of the following corporate-wide or subsidiary, division, operating unit or individual measures, or such other
performance criteria as may be selected by the Committee, stated in either absolute terms or relative terms, such as rates of growth or
improvement: earnings before or after interest and/or taxes (EBIT); earnings before interest, taxes, depreciation and amortization (EBITDA);
earnings before interest, taxes and amortization (EBITA); net earnings; operating earnings or income; earnings growth; net income; pretax
operating earnings after interest expense and before incentives and/or extraordinary or special items; net income per share; cash flows,
including operating cash flow, free cash flow, discounted cash flow return on investment, and cash flow in excess of cost of capital;
earnings per share; return on shareholders' equity; stock price; return on common shareholders' equity; return on capital; return on investments;
return on assets; economic value added (income in excess of cost of capital); expense reduction; ratio of operating expenses to operating
revenues; interest expense; revenues; revenue backlog; gross margin; operating margin; margins realized on delivered services; total shareholder
return; debt-to-capital ratio; market share; and strategic business criteria, consisting of one or more objectives based on meeting specified
market penetration, geographic business expansion goals, cost targets, customer satisfaction, reductions in errors and omissions, reductions
in lost business, management of employment practices and employee benefits, supervision of litigation and information technology, quality
and quality audit scores, productivity, efficiency, and goals relating to acquisitions or divestitures, or any combination of the foregoing.
In the sole discretion of the Committee, the Committee may amend or adjust the Performance Measures or other terms and conditions of an
outstanding award in recognition of unusual, nonrecurring or one-time events affecting the Company or its financial statements or changes
in law or accounting principles.

 

“Performance Option”
shall mean an Incentive Stock Option or Nonqualified Stock Option, the grant of which or the exercisability of all or a portion of which
is contingent upon the attainment of specified Performance Measures within a specified Performance Period.

 

“Performance Period”
shall mean any period designated by the Committee during which (i) the Performance Measures applicable to an award shall be measured and
(ii) the conditions to vesting applicable to an award shall remain in effect.

 

“Performance Unit” shall
mean a right to receive, contingent upon the attainment of specified Performance Measures within a specified Performance Period, a specified
cash amount or, in lieu thereof, shares of Common Stock having a Fair Market Value equal to such cash amount.

 

    3 

     

    

 

“Performance Unit Award”
shall mean an award of Performance Units under this Plan.

 

“Permitted
Transferee” shall mean, with respect to a Participant, any “family member” of the Participant, as defined in
the General Instructions to Form S-8 Registration Statement under the Securities Act (or any successor form thereto), or any other transferee
specifically approved by the Committee after taking into account Applicable Law.

 

“Plan” shall mean the
Morningstar, Inc. 2011 Stock Incentive Plan, as herein amended and restated and as may be further amended from time to time.

 

“Prior Plan” shall mean
the Morningstar, Inc. 2004 Stock Incentive Plan, as amended, or any other plan maintained by the Company under which equity compensation
awards are outstanding as of the Effective Date.

 

“Restricted Stock” shall
mean shares of Common Stock which are subject to a Restriction Period and which may, in addition thereto, be subject to the attainment
of specified Performance Measures within a specified Performance Period.

 

“Restricted Stock Award”
shall mean an award of Restricted Stock under this Plan.

 

“Restricted Stock Unit”
shall mean a right to receive one share of Common Stock or, in lieu thereof, the Fair Market Value of such share of Common Stock in cash,
which shall be contingent upon the expiration of a specified Restriction Period and which may, in addition thereto, be contingent upon
the attainment of specified Performance Measures within a specified Performance Period.

 

“Restricted Stock Unit Award”
shall mean an award of Restricted Stock Units under this Plan.

 

“Restriction Period”
shall mean any period designated by the Committee during which (i) the Common Stock subject to a Restricted Stock Award may not be sold,
transferred, assigned, pledged, hypothecated or otherwise encumbered or disposed of, except as provided in this Plan or the Agreement
relating to such award, or (ii) the conditions to vesting applicable to a Restricted Stock Unit Award shall remain in effect.

 

“SAR” shall mean a stock
appreciation right, which entitles the holder thereof to receive, upon exercise, shares of Common Stock (which may be Restricted Stock)
with an aggregate value equal to the excess of the Fair Market Value of one share of Common Stock on the date of exercise over the base
price of such SAR, multiplied by the number of such SARs that are exercised.

 

“Securities Act” shall
mean the U.S. Securities Act of 1933, as amended.

 

“Stock Award” shall mean
a Restricted Stock Award, a Restricted Stock Unit Award or an Unrestricted Stock Award.

 

    4 

     

    

 

“Subsidiary” shall mean
any present or future corporation, limited liability company, partnership, joint venture or similar entity in which the Company owns,
directly or indirectly, an equity interest possessing more than 50% of the combined voting power of the total outstanding equity interests
of such entity.

 

“Substitute
Awards” means awards granted in assumption of, or in substitution or exchange for, awards previously granted by a company
or other entity acquired by the Company or any of its Subsidiaries or with which the Company or any of its Subsidiaries combines. Substitute
Awards may be granted on such terms as the Committee deems appropriate to conform, in whole or in part, to the provisions of the awards
in substitution for which they are granted, notwithstanding limitations on awards in the Plan.

 

“Tax-Related Items” shall
have the meaning set forth in Section 5.5.

 

“Tax Date” shall have
the meaning set forth in Section 5.5.

 

“Ten Percent Holder”
shall have the meaning set forth in Section 2.1(a).

 

“Unrestricted Stock Award”
shall mean an award of Common Stock that is not subject to any vesting conditions.

 

1.3         
Administration. This Plan shall be administered by the Committee. Subject to any Applicable Law, any authority granted
to the Committee may also be exercised by the Board, in which case, references to the Committee in the Plan and any applicable Agreement
shall be deemed to refer to the Board.

 

(a)              
Grant of Awards under the Plan. Any one or a combination of the following awards may be made under this Plan to eligible
persons: (i) options to purchase shares of Common Stock in the form of Incentive Stock Options or Nonqualified Stock Options (which may
include Performance Options), (ii) SARs, (iii) Stock Awards in the form of Restricted Stock, Restricted Stock Units or Unrestricted Stock
Awards, and (iv) Performance Units.

 

(b)              
Powers of the Administrator. The Committee shall, subject to the terms of this Plan, select eligible persons for participation
in this Plan and determine the form, amount and timing of each award to such persons and, if applicable, the number of shares of Common
Stock, the number of options or SARs, the number of Restricted Stock Units or the number or value of Performance Units subject to such
an award, the purchase price or base price associated with the award, the time and conditions of exercise or settlement of the award
and all other terms and conditions of the award, including, without limitation, the form of the Agreement evidencing the award. The Committee
may, in its sole discretion and for any reason at any time, take action such that (i) any or all outstanding options and SARs shall become
exercisable in part or in full, (ii) all or a portion of the Restriction Period applicable to any outstanding Restricted Stock or Restricted
Stock Units shall lapse, (iii) all or a portion of the Performance Period applicable to any outstanding Restricted Stock, Restricted
Stock Units or Performance Units shall lapse, (iv) the Performance Measures (if any) applicable to any outstanding award shall be deemed
to be satisfied at the target, maximum or any other level or (v) any other terms, conditions or vesting requirements of awards are waived
in whole or in part. Further, the Committee has authority to determine whether, to what extent, and under what circumstances an award
may be settled in, or the purchase price of an award may be paid in, cash, shares of Common Stock, other awards, or other property, or
an award may be canceled, forfeited, or surrendered. The Committee shall, subject to the terms of this Plan, interpret this Plan and
the application thereof, establish rules and regulations it deems necessary or desirable for the administration of this Plan and may
impose, incidental to the grant of an award, conditions with respect to the award, such as limiting competitive employment or other activities.
The Committee shall also make all other decisions and determinations that may be required pursuant to the Plan or as it deems necessary
or advisable to administer the Plan. All such interpretations, rules, regulations and conditions shall be conclusive and binding on all
parties.

 

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(c)              
Delegation. Subject to Applicable Law, the Committee may delegate some or all of its power and authority hereunder to the
Executive Chairman, Chief Executive Officer, or other executive officer of the Company as the Committee deems appropriate, except with
regard to the selection for participation in this Plan of an officer, Director or other person subject to Section 16 of the Exchange Act
or decisions concerning the timing, pricing or amount of an award to such an officer, Director or other person. References to the Committee
in the Plan and any applicable Agreement shall include any such duly appointed delegate of the Committee. No member of the Committee,
and neither the Executive Chairman, Chief Executive Officer, nor any other executive officer to whom the Committee delegates any of its
power and authority hereunder, shall be liable for any act, omission, interpretation, construction or determination made in connection
with this Plan in good faith, and the members of the Committee and the Executive Chairman, Chief Executive Officer or other executive
officer shall be entitled to indemnification and reimbursement by the Company in respect of any claim, loss, damage or expense (including
attorneys’ fees) arising therefrom to the full extent permitted by law (except as otherwise may be provided in the Company’s
Articles of Incorporation and/or By-laws) and under any directors’ and officers’ liability insurance that may be in effect
from time to time.

 

1.4         
Eligibility. Participants in this Plan shall consist of such Employees, Non-Employee Directors, consultants or other
independent contractors, and persons expected to become Employees, Non-Employee Directors, consultants or other independent contractors
of the Company or its Subsidiaries (conditioned upon, and effective not earlier than, such person becoming such a service provider of
the Company or a Subsidiary, as applicable), as the Committee in its sole discretion may select from time to time. The Committee’s
selection of a person to participate in this Plan at any time shall not require the Committee to select such person to participate in
this Plan at any other time. For purposes of this Plan, and except as otherwise provided for in an Agreement, references to employment
shall include service as a Non-Employee Director or independent contractor and periods during which a Participant is on an approved leave
of absence.

 

1.5         
Shares Available and Award Limits.

 

(a)              
Share Reserve. Subject to adjustment as provided in Section 5.7 and to all other limits set forth in this Section 1.5,
the aggregate number of shares of Common Stock which shall be available for all awards under this Plan shall be equal to the sum of (i)
1,050,000 shares of Common Stock, plus (ii) the number of shares of Common Stock which, as of the Effective Date, remain available for
issuance under the Plan, plus (iii) certain shares of Common Stock subject to awards under the Plan or a Prior Plan as of the Effective
Date, as described below in this Section 1.5(a), up to a maximum of 4,126,042, all of which shares may be issued upon the exercise of
Incentive Stock Options. To the extent that shares of Common Stock subject to an outstanding option, SAR or Stock Award granted under
the Plan or granted under or governed by a Prior Plan are not issued or delivered by reason of (A) the expiration, termination,
cancellation or forfeiture of such award, (B) the settlement of such award (or a portion thereof) in cash or (C) the conversion of such
shares of Common Stock to shares of another person in connection with a recapitalization, reorganization, merger, consolidation, split-up, spin-off, combination,
exchange of shares or other similar event, then such shares of Common Stock shall again be available under this Plan.

 

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Notwithstanding anything to the contrary herein,
the following shares of Common Stock shall not be added to the shares authorized for grant under this Section 1.5(a) and shall
not be available for future grants of awards under the Plan: (w) shares tendered by an optionee or withheld by the Company in payment
of the purchase price of an option; (x) shares tendered by the Participant or withheld by the Company to satisfy any tax withholding obligation
with respect to an award; (y) Shares subject to SARs that are not issued in connection with the stock settlement of the SARs on exercise
thereof; and (z) shares purchased on the open market by the Company with the cash proceeds received from the exercise of options. The
payment of dividend equivalents in cash in conjunction with any outstanding awards shall not be counted against the shares of Common Stock
available for issuance under the Plan. Notwithstanding the provisions of this Section 1.5(a), no shares of Common Stock may again
be optioned, granted or awarded if such action would cause an Incentive Stock Option to fail to qualify as an incentive stock option under
Section 422 of the Code.

 

(b)              
Source of Shares. Shares of Common Stock to be delivered under this Plan shall be made available from authorized and unissued
shares of Common Stock, or authorized and issued shares of Common Stock reacquired and held as treasury shares or otherwise or a combination
thereof.

 

(c)              
Award Limits. Subject to adjustment as provided in Section 5.7 and all other limits set forth in this Section 1.5, including
the share limit on all awards available under this Plan, (i) the maximum number of shares of Common Stock that may be issued pursuant
to Unrestricted Stock Awards during any fiscal year of the Company shall be 10,000, (ii) the maximum number of shares of Common Stock
with respect to which options or SARs or a combination thereof may be granted during any fiscal year of the Company to any person shall
be 200,000; (iii) the maximum number of shares of Common Stock with respect to which Stock Awards subject to Performance Measures may
be granted during any fiscal year of the Company to any person shall be 200,000, and (iv) the maximum amount that may be payable with
respect to Performance Units granted during any fiscal year of the Company to any person shall be USD 10,000,000.

 

(d)              
Substitute Awards; Acquired Plans. Substitute Awards shall not reduce the shares
of Common Stock authorized for grant under Section 1.5(a) and shares of Common Stock subject
to such Substitute Awards shall not be added to the shares of Common Stock available for
awards under the Plan as provided above. Additionally, in the event that a company acquired by the Company or any Subsidiary or with
which the Company or any Subsidiary combines, has shares available under a pre-existing plan approved by its shareholders and not adopted
in contemplation of such acquisition or combination, the shares available for grant pursuant to the terms of such pre-existing plan (as
adjusted, to the extent appropriate, using the exchange ratio or other adjustment or valuation ratio or formula used in such acquisition
or combination to determine the consideration payable to the holders of common stock of the entities party to such acquisition or combination)
may be used for awards under the Plan and shall not reduce the shares of Common Stock authorized for grant under the Plan (and shares
of Common Stock subject to such awards shall not be added to the shares of Common Stock available for awards under the Plan as provided
above); provided that awards using such available shares of Common Stock shall not be made after the date awards or grants could have
been made under the terms of the pre-existing plan, absent the acquisition or combination, and shall be made only to individuals who
were not employed by or providing services to the Company or its Subsidiaries immediately prior to such acquisition or combination.

 

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1.6         
Non-Employee Director Limit. Notwithstanding any provision to the contrary in the Plan or in any policy of the Company
regarding compensation payable to a Non-Employee Director, the sum of the grant date fair value (determined in accordance with Financial
Accounting Standards Board Accounting Standards Codification Topic 718, or any successor thereto) of all awards payable in shares of Common
Stock and the maximum cash value of any other award granted under the Plan to an individual as compensation for services as a Non-Employee
Director, together with cash compensation paid to such Director in the form of Board and Committee retainer, meeting or similar fees,
during any calendar year shall not exceed USD 700,000; provided, however, that the foregoing limit shall be increased
by USD 200,000 as the Board may deem necessary to compensate a Non-Employee Director for service on a special purpose committee or for
other special or extraordinary service, as determined in the discretion of the members of the Board excluding any Non-Employee Directors
receiving such additional compensation. For avoidance of doubt, compensation will count towards this limit for the calendar year in which
it was granted or earned, and not later when distributed, in the event it is deferred. The foregoing limit may not be increased without
the approval of the shareholders of the Company.

 

 II. STOCK OPTIONS AND STOCK APPRECIATION RIGHTS

 

2.1         
Stock Options. The Committee may, in its discretion, grant options to purchase shares of Common Stock to such eligible
persons as may be selected by the Committee; provided, however, that the Committee may grant options intended to qualify
as Incentive Stock Options only to Employees of the Company or any of the Company’s present or future “parent corporations”
or “subsidiary corporations” as defined in Sections 424(e) or (f) of the Code, respectively. Each option, or portion thereof,
that is not an Incentive Stock Option, shall be a Nonqualified Stock Option. To the extent that the aggregate Fair Market Value (determined
as of the date of grant) of shares of Common Stock with respect to which options designated as Incentive Stock Options are exercisable
for the first time by an optionee during any calendar year (under this Plan or any other plan of the Company, or any parent or Subsidiary)
exceeds the amount (currently USD 100,000) established by the Code, such options shall constitute Nonqualified Stock Options.

 

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Options may be granted in addition to, or in lieu
of, any other compensation payable to Employees, Directors, and independent contractors, and in all cases shall be subject to the following
terms and conditions and shall contain such additional terms and conditions, not inconsistent with the terms of this Plan, as the Committee
shall deem advisable:

 

(a)              
Number of Shares and Purchase Price. The number of shares of Common Stock subject to an option and the purchase price per
share of Common Stock purchasable upon exercise of the option shall be determined by the Committee; provided, however, that
the purchase price per share of Common Stock purchasable upon exercise of a Nonqualified Stock Option or an Incentive Stock Option shall
not be less than 100% of the Fair Market Value of a share of Common Stock on the date of grant of such option; provided further,
that if an Incentive Stock Option shall be granted to any person who, at the time such option is granted, owns capital stock possessing
more than 10 percent of the total combined voting power of all classes of capital stock of the Company (or of any parent or Subsidiary)
(a “Ten Percent Holder”), the purchase price per share of Common Stock shall not be less than the price (currently
110% of Fair Market Value) required by the Code in order to constitute an Incentive Stock Option. Notwithstanding
the foregoing, in the case of an option that is a Substitute Award, the purchase price per share of the shares of Common Stock subject
to such option may be less than the Fair Market Value per share on the date of grant; provided that the purchase price of any Substitute
Award shall be determined in accordance with the applicable requirements of Section 424 and 409A of the Code. 

 

(b)              
Option Period and Exercisability. The period during which an option may be exercised shall be determined by the Committee;
provided, however, that no Incentive Stock Option shall be exercised later than 10 years after its date of grant; provided
further, that if an Incentive Stock Option shall be granted to a Ten Percent Holder, such option shall not be exercised later than
five years after its date of grant. The Committee may, in its discretion, determine that an option is to be granted as a Performance Option
and may establish an applicable Performance Period and Performance Measures which shall be satisfied or met as a condition to the grant
of such option or to the exercisability of all or a portion of such option. The Committee shall determine whether an option shall become
exercisable in cumulative or non-cumulative installments and in part or in full at any time. An exercisable option, or portion thereof,
may be exercised only with respect to whole shares of Common Stock.

 

(c)              
Method of Exercise. An option may be exercised (i) by giving written notice to the Company specifying the number of whole
shares of Common Stock to be purchased and accompanying such notice with payment therefor in full (or arrangement made for such payment
to the Company’s satisfaction) either (A) in cash, (B) by delivery (either actual delivery or by attestation procedures established
by the Company) of shares of Common Stock having a Fair Market Value, determined as of the date of exercise, equal to the aggregate purchase
price payable by reason of such exercise, (C) authorizing the Company to withhold whole shares of Common Stock which would otherwise
be delivered having an aggregate Fair Market Value, determined as of the date of exercise, equal to the amount necessary to satisfy such
obligation, (D) in cash by a broker-dealer acceptable to the Company to whom the optionee has submitted an irrevocable notice of exercise
or (E) a combination of (A), (B) and (C), in each case to the extent set forth in the Agreement relating to the option, and (ii) by executing
such documents as the Company may reasonably request. Any fraction of a share of Common Stock which would be required to pay such purchase
price shall be disregarded and the remaining amount due shall be paid in cash by the optionee. No shares of Common Stock shall be issued
and no certificate representing Common Stock shall be delivered until the full purchase price therefor and any withholding taxes thereon,
as described in Section 5.5, have been paid (or arrangement made for such payment to the Company’s satisfaction.

 

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(d)              
Automatic Exercise. The Committee may provide in an Agreement or otherwise for the automatic exercise of an option if (i)
on the last day of the term of the option the Fair Market Value of a share of Common Stock exceeds the purchase price of the option, (ii)
the optionee has not exercised the option and (iii) the option has not expired, such that the option shall be deemed to have been exercised
by the optionee on such day, with payment of the purchase price and any applicable withholding taxes made by withholding shares of Common
Stock otherwise issuable in connection with the exercise of the option or by such other payment or withholding method as may be approved
by the Committee.

 

(e)              
Dividend Equivalents. No dividend equivalents shall be payable with respect to options.

 

2.2         
Stock Appreciation Rights. The Committee may, in its discretion, grant SARs to such eligible persons as may be selected
by the Committee.

 

SARs shall be subject to the following terms and
conditions and shall contain such additional terms and conditions, not inconsistent with the terms of this Plan, as the Committee shall
deem advisable:

 

(a)              
Number of SARs and Base Price. The number of SARs subject to an award shall be determined by the Committee. The base price
of a SAR shall be determined by the Committee; provided, however, that such base price shall not be less than 100% of the
Fair Market Value of a share of Common Stock on the date of grant of such SAR. Notwithstanding the
foregoing, in the case of an SAR that is a Substitute Award, the base price per share of the shares of Common Stock subject to such SAR
may be less than the Fair Market Value per share on the date of grant; provided that the base price of any Substitute Award shall be determined
in accordance with the applicable requirements of Sections 424 and 409A of the Code. 

 

(b)              
Exercise Period and Exercisability. The period for the exercise of an SAR shall be determined by the Committee. The Committee
may, in its discretion, establish Performance Measures that shall be satisfied or met as a condition to the grant of an SAR or to the
exercisability of all or a portion of an SAR. The Committee shall determine whether an SAR may be exercised in cumulative or non-cumulative
installments and in part or in full at any time. An exercisable SAR, or portion thereof, may be exercised only with respect to a whole
number of SARs. If (subject to compliance with Section 409A of the Code) an SAR is exercised for shares of Restricted Stock, a certificate
or certificates representing such Restricted Stock shall be issued in accordance with Section 3.2(c), or such shares shall be transferred
to the holder in book entry form with restrictions on the shares duly noted, and the holder of such Restricted Stock shall have such
rights of a shareholder of the Company as determined pursuant to Section 3.2(d). Prior to the exercise of an SAR, the holder of such
SAR shall have no rights as a shareholder of the Company with respect to the shares of Common Stock subject to such SAR.

 

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(c)              
Method of Exercise. An SAR may be exercised (A) by giving written notice to the Company specifying the whole number of SARs
that are being exercised and (B) by executing such documents as the Company may reasonably request.

 

(d)              
Dividend Equivalents. No dividend equivalents shall be payable with respect to SARs.

 

2.3         
Termination of Employment or Service. All of the terms relating to the exercise, cancellation or other disposition of
an option or SAR upon a termination of employment or service with the Company or a Subsidiary of the holder of such option or SAR, as
the case may be, whether by reason of disability, retirement, death or any other reason, shall be determined by the Committee and set
forth in the applicable award Agreement, subject to Section 1.3(b).

 

2.4         
No Repricing. Notwithstanding anything in this Plan to the contrary and subject to Section 5.7, the
terms of outstanding options or SARs may not be amended, and action may not otherwise be taken without shareholder approval, to: (a) reduce
the purchase price or base price of outstanding options or SARs, (b) cancel outstanding options or SARs in exchange for options or
SARs with a purchase price or base price that is less than the purchase price or base price of the original options or SARs, or (c) replace
outstanding options or SARs with other awards or cash at a time when the purchase price or base price of such options or SARs is higher
than the Fair Market Value of a share of Common Stock.

 

 III. STOCK AWARDS

 

3.1         
Stock Awards. The Committee may, in its discretion, grant Stock Awards to such eligible persons as may be selected by
the Committee. The Agreement relating to a Stock Award shall specify whether the Stock Award is a Restricted Stock Award, a Restricted
Stock Unit Award or an Unrestricted Stock Award.

 

3.2         
Terms of Restricted Stock Awards. Restricted Stock Awards shall be subject to the following terms and conditions and
shall contain such additional terms and conditions, not inconsistent with the terms of this Plan, as the Committee shall deem advisable.

 

(a)              
Number of Shares and Other Terms. The number of shares of Common Stock subject to a Restricted Stock Award and the Restriction
Period, Performance Period (if any) and Performance Measures (if any) applicable to a Restricted Stock Award shall be determined by the
Committee.

 

(b)              
Vesting and Forfeiture. The Agreement relating to a Restricted Stock Award shall provide, in the manner determined by the
Committee, in its discretion, and subject to the provisions of this Plan, for the vesting of the shares of Common Stock subject to such
award (i) if the holder of such award remains continuously in the employment of the Company or a Subsidiary during the specified
Restriction Period and (ii) if specified Performance Measures (if any) are satisfied or met during a specified Performance Period, and
for the forfeiture of the shares of Common Stock subject to such award (A) if the holder of such award does not remain continuously in
the employment of the Company or a Subsidiary during the specified Restriction Period or (B) if specified Performance Measures (if any)
are not satisfied or met during a specified Performance Period.

 

    11 

     

    

 

(c)              
Stock Issuance. During the Restriction Period, the shares of Restricted Stock shall be held by a custodian in book entry
form with restrictions on such shares duly noted or, alternatively, a certificate or certificates representing a Restricted Stock Award
shall be registered in the holder’s name and may bear a legend, in addition to any legend that may be required pursuant to Section
5.6, indicating that the ownership of the shares of Common Stock represented by such certificate is subject to the restrictions, terms
and conditions of this Plan and the Agreement relating to the Restricted Stock Award. All such certificates shall be deposited with the
Company, together with stock powers or other instruments of assignment (including a power of attorney), each endorsed in blank with a
guarantee of signature if deemed necessary or appropriate, which would permit transfer to the Company of all or a portion of the shares
of Common Stock subject to the Restricted Stock Award in the event such award is forfeited in whole or in part. Upon termination of any
applicable Restriction Period (and the satisfaction or attainment of applicable Performance Measures), subject to the Company’s
right to require payment of any taxes in accordance with Section 5.5, the restrictions shall be removed from the requisite number of any
shares of Common Stock that are held in book entry form, and all certificates evidencing ownership of the requisite number of shares of
Common Stock shall be delivered to the holder of such award.

 

(d)              
Rights with Respect to Restricted Stock Awards. Unless otherwise set forth in the Agreement relating to a Restricted Stock
Award, and subject to the terms and conditions of a Restricted Stock Award, the holder of such award shall have all rights as a shareholder
of the Company, including, but not limited to, voting rights, the right to receive dividends and the right to participate in any capital
adjustment applicable to all holders of Common Stock. Notwithstanding the foregoing, (i) a distribution with respect to shares of Common
Stock, other than a regular cash dividend, and (ii) a regular cash dividend with respect to shares of Common Stock that are subject to
vesting conditions, in each case, shall be deposited with the Company and shall be subject to the same restrictions as the shares of Common
Stock with respect to which such distribution was made, such that in no event shall a holder of a Restricted Stock Award receive payment
of dividends, dividend equivalents or other distributions in any form prior to the vesting of such Restricted Stock Award (or applicable
portion thereof). The value of dividends, dividend equivalents and other distributions payable with respect to Restricted Stock Awards
that do not vest shall be forfeited.

 

    12 

     

    

 

3.3         
Terms of Restricted Stock Unit Awards. Restricted Stock Unit Awards shall be subject to the following terms and conditions
and shall contain such additional terms and conditions, not inconsistent with the terms of this Plan, as the Committee shall deem advisable.

 

(a)              
 Number of Shares and Other Terms. The number of shares of Common Stock subject to a Restricted Stock Unit Award and the
Restriction Period, Performance Period (if any) and Performance Measures (if any) applicable to a Restricted Stock Unit Award shall be
determined by the Committee.

 

(b)              
Vesting and Forfeiture. The Agreement relating to a Restricted Stock Unit Award shall provide, in the manner determined
by the Committee, in its discretion, and subject to the provisions of this Plan, for the vesting of such Restricted Stock Unit Award (i)
if the holder of such award remains continuously in the employment of the Company or a Subsidiary during the specified Restriction Period
and (ii) if specified Performance Measures (if any) are satisfied or met during a specified Performance Period, and for the forfeiture
of the shares of Common Stock subject to such award (A) if the holder of such award does not remain continuously in the employment of
the Company or a Subsidiary during the specified Restriction Period or (B) if specified Performance Measures (if any) are not satisfied
or met during a specified Performance Period.

 

(c)              
Settlement of Vested Restricted Stock Unit Awards. The Agreement relating to a Restricted Stock Unit Award shall specify
(i) whether such award may be settled in shares of Common Stock or cash or a combination thereof and (ii) whether the holder thereof shall
be entitled to receive dividend equivalents or the deemed reinvestment of any such dividend equivalents, with respect to the number of
shares of Common Stock subject to such award; provided, however, that in no event shall a Restricted Stock Unit Award provide
for the Participant’s receipt of payment of dividends or dividend equivalents in any form prior to the vesting of such Restricted
Stock Unit (or applicable portion thereof) and any such dividend equivalents with respect to Restricted Stock Units shall therefore be
subject to the same restrictions as such Restricted Stock Units. The value of dividends, dividend equivalents and other distributions
payable with respect to Restricted Stock Units that do not vest shall be forfeited. Prior to the settlement of a Restricted Stock Unit
Award, the holder of such award shall have no rights as a shareholder of the Company with respect to the shares of Common Stock subject
to such award.

 

3.4         
Termination of Employment or Service. All of the terms relating to the satisfaction of Performance Measures and the
termination of the Restriction Period or Performance Period relating to a Stock Award, or any forfeiture and cancellation of such award
upon a termination of employment or service with the Company or Subsidiary of the holder of such award, whether by reason of disability,
retirement, death or any other reason, shall be determined by the Committee and set forth in the applicable award Agreement, subject to
Section 1.3.

 

 IV. PERFORMANCE UNIT AWARDS

 

4.1         
Performance Unit Awards. The Committee may, in its discretion, grant Performance Unit Awards to such eligible persons
as may be selected by the Committee.

 

    13 

     

    

 

4.2         
Terms of Performance Unit Awards. Performance Unit Awards shall be subject to the following terms and conditions and
shall contain such additional terms and conditions, not inconsistent with the terms of this Plan, as the Committee shall deem advisable.

 

(a)              
 Number of Performance Units and Performance Measures. The number of Performance Units subject to a Performance Unit Award,
the method of determining the value of each Performance Unit and the Performance Measures and Performance Period applicable to a Performance
Unit Award shall be determined by the Committee.

 

(b)              
Vesting and Forfeiture. The Agreement relating to a Performance Unit Award shall provide, in the manner determined by the
Committee, in its discretion, and subject to the provisions of this Plan, for the vesting of such Performance Unit Award if the specified
Performance Measures are satisfied or met during the specified Performance Period and for the forfeiture of such award if the specified
Performance Measures are not satisfied or met during the specified Performance Period.

 

(c)              
Settlement of Vested Performance Unit Awards. The Agreement relating to a Performance Unit Award shall specify whether such
award may be settled in shares of Common Stock (including shares of Restricted Stock, subject to compliance with Section 409A of the Code)
or cash or a combination thereof. If a Performance Unit Award is settled in shares of Restricted Stock, such shares of Restricted Stock
shall be issued to the holder in book entry form or a certificate or certificates representing such Restricted Stock shall be issued in
accordance with Section 3.2(c) and the holder of such Restricted Stock shall have such rights as a shareholder of the Company as determined
pursuant to Section 3.2(d). Prior to the settlement of a Performance Unit Award in shares of Common Stock, including Restricted Stock,
the holder of such award shall have no rights as a shareholder of the Company. No dividend equivalents shall be payable with respect to
Performance Unit Awards.

 

4.3         
Termination of Employment or Service. All of the terms relating to the satisfaction of Performance Measures and the
termination of the Performance Period relating to a Performance Unit Award, or any forfeiture and cancellation of such award upon a termination
of employment or service with the Company or a Subsidiary of the holder of such award, whether by reason of disability, retirement, death
or any other reason, shall be determined by the Committee and set forth in the applicable award Agreement.

 

V. GENERAL

 

5.1         
Effective Date and Term of Plan. The Plan, as in effect prior to the Effective Date, was originally approved by the
shareholders of the Company at the Company’s 2011 annual meeting of shareholders. This Plan, as amended and restated by the Board
on February 23, 2021, shall be submitted to the shareholders of the Company for approval at the Company’s 2021 annual meeting of
shareholders and, if approved by the affirmative vote of a majority of the shares of Common Stock present in person or represented by
proxy at such annual meeting of shareholders, shall become effective as of such shareholder approval date (the “Effective Date”).
This Plan shall terminate as of the first annual meeting of the Company’s shareholders to occur on or after the tenth anniversary
of its Effective Date, unless terminated earlier by the Board. Termination of this Plan shall not affect the terms or conditions of any
award granted prior to termination. Awards hereunder may be made at any time prior to the termination of this Plan, provided that no Incentive
Stock Option may be granted later than 10 years after February 23, 2021.

 

    14 

     

    

 

5.2         
 Amendments. The Board may amend, suspend, or discontinue this Plan as it shall deem advisable, subject to any requirement
of shareholder approval required by Applicable Law, any rule of the Nasdaq Stock Market, or any other stock exchange on which shares of
Common Stock are traded; provided, however, that no amendment, suspension or discontinuation may materially impair the rights
of a holder of an outstanding award without the consent of such holder unless required or appropriate to comply with Applicable Law.

 

5.3         
Agreement. Each award under this Plan shall be evidenced by an Agreement setting forth the terms and conditions applicable
to such award.

 

5.4         
Non-Transferability. No award shall be transferable other than by will, the laws of descent and distribution. Notwithstanding
the foregoing, to the extent expressly permitted in the Agreement relating to such award or otherwise approved by the Committee, a Participant
residing in the U.S. may be able to transfer an award other than an Incentive Stock Option (unless such Incentive Stock Option is intended
to become a Nonqualified Stock Option) to any one or more Permitted Transferees of such Participant and, if valid under Applicable Law,
a Participant residing in the U.S. may, in the sole discretion and manner determined by the Committee, designate a beneficiary to exercise
the rights of the Participant and to receive any distribution with respect to any award upon the Participant’s death. For the avoidance
of doubt, awards granted to Participants residing outside the U.S. are not transferable to Permitted Transferees and a Participant residing
outside the U.S. may not designate beneficiaries with respect to awards granted to the Participant under the Plan. Except to the extent
permitted by the foregoing sentence or the Agreement relating to an award, each award may be exercised or settled during the holder’s
lifetime only by the holder or the holder’s legal representative or similar person. Except as permitted by the second preceding
sentence, no award may be sold, transferred, assigned, pledged, hypothecated, encumbered or otherwise disposed of (whether by operation
of law or otherwise) or be subject to execution, attachment or similar process. Upon any attempt to so sell, transfer, assign, pledge,
hypothecate, encumber or otherwise dispose of any award, such award and all rights thereunder shall immediately become null and void.

 

5.5         
Tax Withholding. The Company shall have the right to require, prior to the issuance or delivery of any shares of Common
Stock or the payment of any cash pursuant to an award made hereunder, payment by the Participant of any applicable U.S. federal, state,
local and non-U.S. taxes, as well as any social insurance or social security contributions and any other applicable taxes or charges
which may be required to be withheld or paid in connection with such award (collectively, “Tax-Related Items”). An
Agreement may provide that (a) the Company shall withhold whole shares of Common Stock which would otherwise be delivered to a Participant,
having an aggregate Fair Market Value as of the date the tax withholding liability is determined (the “Tax Date”),
or withhold an amount of cash which would otherwise be payable to a Participant, in the amount necessary to satisfy any such Tax-Related
Items obligation or (b) the Participant may satisfy any such obligation by any of the following means: (i) a cash payment to the Company,
(ii) delivery (either actual delivery or by attestation procedures established by the Company) to the Company of previously owned whole
shares of Common Stock having an aggregate Fair Market Value, determined as of the Tax Date, equal to the amount necessary to satisfy
any such obligation, (iii) authorizing the Company to withhold whole shares of Common Stock which would otherwise be delivered having
an aggregate Fair Market Value, as of the Tax Date, or withhold an amount of cash which would otherwise be payable to a Participant,
in either case equal to the amount necessary to satisfy any such obligation, (iv) in the case of the exercise of an option, a cash payment
by a broker-dealer acceptable to the Company to whom the optionee has submitted an irrevocable notice of exercise or (v) any combination
of (i), (ii) and (iii), in each case to the extent set forth in the Agreement relating to the award. Unless otherwise determined by the
Committee, shares of Common Stock to be delivered or withheld shall be limited to the number of whole shares of Common Stock that have
a Fair Market Value on the Tax Date sufficient to cover the aggregate amount of such Tax-Related Items, determined based on the maximum
statutory withholding rates in the Participant’s applicable jurisdictions for U.S. federal, state, local and non-U.S. income tax
and payroll tax purposes (or such other rate as may be required to avoid adverse accounting consequences). Any fraction of a share of
Common Stock which would be required to satisfy such an obligation shall be disregarded and the remaining amount due shall be paid in
cash by the Participant.

 

    15 

     

    

 

5.6         
Restrictions on Shares. Each award made hereunder shall be subject to the requirement that if at any time the Company
determines that the listing, registration or qualification of the shares of Common Stock subject to such award upon any securities exchange
or under any law, or the consent or approval of any governmental body, or the taking of any other action is necessary or desirable as
a condition of, or in connection with, the delivery of shares thereunder, such shares shall not be delivered unless such listing, registration,
qualification, consent, approval or other action shall have been effected or obtained, free of any conditions not acceptable to the Company.
The Company may require that certificates evidencing shares of Common Stock delivered pursuant to any award made hereunder bear a legend
indicating that the sale, transfer or other disposition thereof by the holder is prohibited except in compliance with the Securities Act,
and the rules and regulations thereunder.

 

5.7         
Adjustment. In the event of any stock split, stock dividend, recapitalization, reorganization, merger, consolidation,
combination, exchange of shares, liquidation, spin-off or other similar change in capitalization or event, or any distribution to
holders of Common Stock other than a regular cash dividend, the shares and awards available under this Plan as set forth under Section
1.5 (including, without limitation, the aggregate number and class of securities available under this Plan, the number and class of securities
available for grants of Unrestricted Stock Awards, the number and class of securities subject to each outstanding option or SAR and the
purchase price or base price per share, the terms of each outstanding Restricted Stock Award and Restricted Stock Unit Award, including
the number and class of securities subject thereto, the terms of each outstanding Performance Unit, the maximum number of securities
with respect to which options or SARs may be granted during any fiscal year of the Company to any one grantee, and the maximum number
of shares of Common Stock that may be awarded during any fiscal year of the Company to any one grantee pursuant to a Stock Award that
is subject to Performance Measures) shall be appropriately adjusted by the Committee, such adjustments to be made in the case of outstanding
options and SARs in accordance with Section 409A of the Code. The decision of the Committee regarding any such adjustment shall be final,
binding and conclusive. If any such adjustment would result in a fractional security being (a) available under this Plan, such fractional
security shall be disregarded, or (b) subject to an award under this Plan, the Company shall pay the holder of such award, in connection
with the first vesting, exercise or settlement of such award, in whole or in part, occurring after such adjustment, an amount in cash
determined by multiplying (i) the fraction of such security (rounded to the nearest hundredth) by (ii) the excess, if any, of (A) the
Fair Market Value on the vesting, exercise or settlement date over (B) the exercise or base price, if any, of such award.

 

    16 

     

    

 

5.8         
Change in Control. (a) Notwithstanding any provision in this Plan or any Agreement, in the event of a Change in Control,
the Board (as constituted prior to such Change in Control) may, in its discretion:

 

(i)       require
that (A) some or all outstanding options and SARs shall immediately become exercisable in full or in part, (B) the Restriction Period
applicable to some or all outstanding Restricted Stock Awards and Restricted Stock Unit Awards shall lapse in full or in part, (C) the
Performance Period applicable to some or all outstanding awards shall lapse in full or in part, and (D) the Performance Measures applicable
to some or all outstanding awards shall be deemed to be satisfied at the target, maximum or any other level;

 

(ii)       require
that shares of capital stock of the corporation resulting from or succeeding to the business of the Company pursuant to such Change in
Control, or a parent corporation thereof, be substituted for some or all of the shares of Common Stock subject to an outstanding award,
with an appropriate and equitable adjustment to such award as determined by the Board in accordance with Section 5.7;

 

(iii)       require
outstanding awards, in whole or in part, to be surrendered to the Company by the holder, and to be immediately cancelled by the Company,
and to provide for the holder to receive (A) a cash payment in an amount equal to (x) in the case of an option or an SAR, the number of
shares of Common Stock then subject to the portion of such option or SAR surrendered, to the extent such option or SAR is then exercisable
or becomes exercisable pursuant to Section 5.8(a)(i), multiplied by the excess, if any, of the Fair Market Value of a share of Common
Stock as of the date of the Change in Control, over the purchase price or base price per share of Common Stock subject to such option
or SAR, (y) in the case of a Stock Award, the number of shares of Common Stock then subject to the portion of such award surrendered,
to the extent the Restriction Period and Performance Period, if any, on such Stock Award have lapsed or will lapse pursuant to Section
5.8(a)(i) and to the extent that the Performance Measures, if any, have been satisfied or are deemed satisfied pursuant to Section 5.8(a)(i),
multiplied by the Fair Market Value of a share of Common Stock as of the date of the Change in Control, and (z) in the case of a Performance
Unit Award, the value of the Performance Units then subject to the portion of such award surrendered, to the extent the Performance Period
applicable so such award has lapsed or will lapse pursuant to Section 5.8(a)(i) and to the extent the Performance Measures applicable
to such award have been satisfied or are deemed satisfied pursuant to Section 5.8(a)(i); (B) shares of capital stock of the corporation
resulting from or succeeding to the business of the Company pursuant to such Change in Control, or a parent corporation thereof, having
a fair market value not less than the amount determined under clause (A) above; or (C) a combination of the payment of cash pursuant to
clause (A) above and the issuance of shares pursuant to clause (B) above; and/or

 

(iv)       take
such other action as the Board deems appropriate, in its sole discretion.

 

    17 

     

    

 

(b)               A
 “Change in Control” of the Company means the occurrence of any of the following events:

 

(i)       The
acquisition, other than from the Company, by any individual, entity or group (within the meaning of Section 13(d)(3) or 14(d)(2) of the
Exchange Act) of beneficial ownership (within the meaning of Rule 13d-3 promulgated under the Exchange Act) of 50% or more of either the
then outstanding shares of Common Stock of the Company or the combined voting power of the then outstanding voting securities of the Company
entitled to vote generally in the election of directors, but excluding, for this purpose, any such acquisition by the Company or any of
its Subsidiaries, any Mansueto Holder, any employee benefit plan (or related trust) of the Company or its Subsidiaries, or any corporation
with respect to which, following such acquisition, more than 50% of, respectively, the then outstanding shares of common stock of such
corporation and the combined voting power of the then outstanding voting securities of such corporation entitled to vote generally in
the election of all or substantially all directors is then beneficially owned, directly or indirectly, by the individuals and entities
who were the beneficial owners, respectively, of the Common Stock and voting securities of the Company immediately prior to such acquisition
in substantially the same proportion as their ownership, immediately prior to such acquisition, of the then outstanding shares of Common
Stock of the Company or the combined voting power of the then outstanding voting securities of the Company entitled to vote generally
in the election of directors, as the case may be; or

 

(ii)       The
consummation of a reorganization, merger, consolidation of the Company, statutory share exchange or similar form of corporate transaction
involving the Company, in each case, with respect to which all or substantially all of the individuals and entities who were the respective
beneficial owners of the Common Stock and voting securities of the Company immediately prior to such reorganization, merger or consolidation
do not, following such reorganization, merger, consolidation, statutory share exchange or similar form of corporate transaction, beneficially
own, directly or indirectly, more than 60% of, respectively, the then outstanding shares of Common Stock and the combined voting power
of the then outstanding voting securities entitled to vote generally in the election of directors, as the case may be, of (a) the corporation
resulting from such reorganization, merger, consolidation, statutory share exchange or similar form of corporate transaction, or (b) if
applicable, the ultimate parent company that directly or indirectly has beneficial ownership of 100% of the voting securities eligible
to elect directors of the corporation resulting from such reorganization, merger, consolidation, statutory share exchange or similar form
of corporate transaction; or

 

(iii)        a
complete liquidation or dissolution of the Company or the sale or other disposition of all or substantially all of the assets of the Company.

 

Notwithstanding the foregoing, a transaction shall
not constitute a Change in Control if its sole purpose is to change the jurisdiction of the Company’s incorporation or to create
a holding company that will be owned in substantially the same proportions by the persons who held the Company’s securities immediately
before such transaction.

 

5.9         
Deferrals. The Committee may determine that the delivery of shares of Common Stock or the payment of cash, or a combination
thereof, upon the settlement of all or a portion of any award made hereunder shall be deferred, or the Committee may, in its sole discretion,
approve deferral elections made by holders of awards. Deferrals shall be for such periods and upon such terms as the Committee may determine
in its sole discretion, subject to the requirements of Section 409A of the Code.

 

    18 

     

    

 

5.10       
No Right of Participation, Employment or Service. Unless otherwise set forth in an employment agreement, no person shall
have any right to participate in this Plan. Neither this Plan nor any award made hereunder shall confer upon any person any right to continued
employment by or service with the Company, any Subsidiary or any affiliate of the Company or affect in any manner the right of the Company,
any Subsidiary or any affiliate of the Company to terminate the employment of any person at any time without liability hereunder.

 

5.11       
Rights as Shareholder. No person shall have any right as a shareholder of the Company with respect to any shares of
Common Stock or other equity security of the Company which is subject to an award hereunder unless and until such person becomes a shareholder
of record with respect to such shares of Common Stock or equity security.

 

5.12       
Governing Law. This Plan, each award hereunder and the related Agreement, and all determinations made and actions taken
pursuant thereto, to the extent not otherwise governed by the Code or the laws of the United States, shall be governed by the laws of
the State of Illinois and construed in accordance therewith without giving effect to principles of conflicts of laws.

 

5.13       
Foreign Employees. Without amending this Plan, the Committee may grant awards to eligible persons who are foreign nationals
or employed or providing services outside the United States, or both, on such terms and conditions different from those specified in this
Plan as may, in the judgment of the Committee, be necessary or desirable to foster and promote achievement of the purposes of this Plan,
including, without limitation, for purposes of facilitating compliance with foreign laws and regulations,
easing the administration of the Plan outside the United States and providing tax-favorable treatment of awards granted to eligible Employees
outside the United States; and, in furtherance of such purposes, the Committee may make such modifications, amendments, procedures,
supplements, appendices or subplans as may be necessary or advisable to comply with provisions of laws in other countries or jurisdictions
in which the Company or its Subsidiaries operates or has Employees.

 

5.14       
Clawback. Notwithstanding any other provision of the Plan, all compensation awarded
under the Plan is subject to recovery or other penalties pursuant to (a) any policy, guideline or Board committee charter adopted
by the Company as may be amended from time to time for reasons related to fraud prevention, governance, avoidance of monetary or reputational
damage to the Company and its Subsidiaries or affiliates or similar considerations, whether or not such policy or guideline was in place
at the time of grant of an award (and such requirements shall be deemed incorporated into this Plan without the consent of the Participant),
(b) any clawback provision set forth in an applicable Agreement, and (c) any Applicable Law, including, without limitation, Section 304
of the Sarbanes-Oxley Act of 2002, Section 954 of the Dodd-Frank Wall Street Reform and Consumer Protection Act, Section 10D of the Exchange
Act and any applicable stock exchange listing rule adopted pursuant thereto. By accepting an award under the Plan, the Participant agrees
to such recovery or other penalties.

 

    19 

     

    

 

5.15        Outstanding
Qualified Performance-Based Awards. All provisions of the Plan governing Outstanding
Qualified Performance-Based Awards that were in effect prior to the Effective Date shall continue in effect with respect to Outstanding
Qualified Performance-Based Awards, notwithstanding the elimination of such provisions from the Plan as of the Effective Date. Further,
the amendment or restatement of the Plan as of the Effective Date shall not affect the terms and conditions of any Outstanding Qualified
Performance Based-Award or any other award that the Company intends to qualify for grandfathering under P.L. 115-97, Section 13601(e)(2),
to the extent that it would result in a material modification of such award within the meaning of such Section 13601(e)(2). For purposes
of this Section 5.15, “Outstanding Qualified Performance-Based Award” means any award granted prior to the Effective
Date that is outstanding as of the Effective Date and that is intended to constitute “qualified performance-based compensation”
as described in Section 162(m)(4)(C) of the Code, as in effect prior to its amendment by the Tax Cuts and Jobs Act, P.L. 115-97.

 

5.16        Compliance
with Section 409A of the Code. Except to the extent specifically provided otherwise by the Committee and
notwithstanding any other provision of the Plan, awards under the Plan are intended to satisfy the requirements of, or meet an
exclusion or exemption from, Section 409A of the Code so as to avoid the imposition of any additional taxes or penalties under
Section 409A of the Code. If the Committee determines that an award, payment, distribution, transaction or any other action or
arrangement contemplated by the provisions of the Plan would, if undertaken, cause a Participant to become subject to any additional
taxes or other penalties under Section 409A of the Code, then unless the Committee specifically provides otherwise, such award,
payment, distribution, transaction or other action or arrangement shall not be given effect to the extent it causes such result and
the related provisions of the Plan and/or Agreement will be deemed modified, or, if necessary, suspended in order to comply with the
requirements of Section 409A of the Code to the extent determined appropriate by the Committee, in each case without the
consent of or notice to the Participant. No payment that constitutes deferred compensation under Section 409A of the Code that would
otherwise be made under the Plan or an Agreement upon a Participant’s termination of employment will be made or provided
unless and until such termination is also a “separation from service,” as determined in accordance with Section 409A of
the Code. Notwithstanding the foregoing or anything elsewhere in the Plan or an Agreement to the contrary, if a Participant is a
 “specified employee” within the meaning of Section 409A of the Code at the time of termination of employment with
respect to an award, then solely to the extent necessary to avoid the imposition of any additional tax under Section 409A of the
Code, the commencement of any payments or benefits under the Award shall be made on the earlier to occur of the Participant’s
death or the date that is six months and one day following his or her termination of employment or service or at such other date set
forth in an award Agreement and in compliance with Code Section 409A(a)(2)(B)(i). Further notwithstanding anything to the contrary
in the Plan, to the extent required under Section 409A of the Code in order to make payment of an Award upon a Change in Control,
the applicable transaction or event described in Section 5.8(b) must qualify as a change in the ownership or effective control of
the Company or as a change in the ownership of a substantial portion of the assets of the Company pursuant to Section
409A(a)(2)(A)(v) of the Code, and if it does not, then unless otherwise specified in the applicable Agreement, payment of such award
will be made on the award’s original payment schedule or, if earlier, upon the death of the Participant. Although the Company
may attempt to avoid adverse tax treatment under Section 409A of the Code, the Company makes no representation to that effect
and expressly disavows any covenant to maintain favorable or avoid unfavorable tax treatment. The Company shall be unconstrained in
its corporate activities without regard to the potential negative tax impact on holders of awards under the Plan.

 

    20EXHIBIT
4.1

 

NEITHER
THESE SECURITIES NOR THE SECURITIES ISSUABLE UPON CONVERSION OF THESE SECURITIES HAVE BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE
COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933,
AS AMENDED (THE “SECURITIES ACT”), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION
STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS
OF THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS AS EVIDENCED BY A LEGAL OPINION OF COUNSEL TO THE TRANSFEROR
TO SUCH EFFECT, THE SUBSTANCE OF WHICH SHALL BE REASONABLY ACCEPTABLE TO THE COMPANY. THESE SECURITIES AND THE SECURITIES ISSUABLE UPON
CONVERSION OF THESE SECURITIES MAY BE PLEDGED IN A MANNER CONSISTENT WITH THE SECURITIES ACT IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT
SECURED BY SUCH SECURITIES.

	$16,250,000	 	Original Issue
  Date: May 14, 2021

 

 

EMPIRE
NEW MEXICO LLC

SENIOR SECURED CONVERTIBLE NOTE DUE December 31, 2021

THIS
NOTE of Empire New Mexico LLC, a Delaware limited liability company (the “Company”), is designated as Senior Secured
Convertible Note due December 31, 2021, in the original aggregate principal amount of Sixteen Million Two Hundred Fifty Thousand Dollars
($16,250,000) (the “Note”).

FOR
VALUE RECEIVED, the Company promises to pay to the order of Energy Evolution Master Fund, Ltd., a Cayman Islands exempted company, or
its registered assigns (the “Investor”), the principal sum of Sixteen Million Two Hundred Fifty Thousand Dollars ($16,250,000),
plus any and all interest accrued thereon, on December 31, 2021 (the “Maturity Date”). This Note is subject to the
following additional provisions:

1.              
Definitions.In addition to the terms defined
elsewhere in this Note, the following terms have the meanings indicated below:

“Change
of Control” shall mean (a) any sale or disposition of all or substantially all of the assets of the Parent or the Company to
a third party in one or a number of related transactions, (b) any merger of the Parent or the Company with or into another corporation
in which the holders of the Parent’s Common Stock or the Company’s ownership interest immediately prior to the consummation
of the merger do not control 50% of the surviving entity, or (c) the acquisition in one or a number of related transactions by any Person
or “group” of persons (as such term is defined in Section 13(d) and 14(d) of the Exchange Act, and the related regulations)
who have expressed intent to control the affairs of the Parent or the Company of more than 50% of the total voting power of outstanding
voting securities of the Parent or the Company.

 

 

     

     

    

 

“Common
Stock” means the common stock of the Parent, $0.001 par value per share, and any securities into which such common stock may
hereafter be reclassified.

“Conversion
Date” means the date a Conversion Notice together with the Conversion Schedule is delivered to the Company in accordance with
Section 5(a).

“Conversion
Notice” means a written notice in the form attached hereto as Exhibit A.

“Conversion
Price” means the lesser of (a) $1.25 and (b) the price per share of Common Stock offered by the Parent in any capital raise
after the Original Issue Date, subject to adjustment from time to time in accordance with Section 10, Section 12, and Section 13.

“Debt”
of any Person shall mean, without duplication, (a) all obligations of such Person for borrowed money or with respect to deposits or advances
of any kind, (b) all obligations of such Person evidenced by bonds, debentures, notes or similar instruments, (c) all obligations
of such Person upon which interest charges are customarily paid, (d) all obligations of such Person under conditional sale or other title
retention agreements relating to property or assets purchased by such Person, and (e) all obligations of such Person issued or assumed
as the deferred purchase price of property or services (other than unsecured accounts payable incurred in the ordinary course of business
and no more than ninety (90) days past the date of the invoice therefor).

“Maximum
Convertible Amount” means as of the date of determination, 40% of the principal amount of this Note then outstanding ($6,500,000
if no prepayments) (or, if less, the entire outstanding principal amount of the Note on the date of conversion) together with any accrued
hereunder at such time, subject to adjustment from time to time in accordance with Section 13.

“Original
Issue Date” has the meaning set forth on the face of this Note.

“Parent”
means Empire Petroleum Corporation, a Delaware corporation and the parent of the Company.

“Person”
means an individual, a corporation, a partnership, a limited liability company, an association, a trust or any other entity or organization,
including a government or political subdivision or an agency or instrumentality thereof.

“Proceeding”
means an action, claim, suit, investigation or proceeding (including, without limitation, an investigation or partial proceeding, such
as a deposition), whether commenced or threatened.

“Trading
Day” means (i) a day on which the Common Stock is traded on a Trading Market, or (ii) if the Common Stock is not quoted on
a Trading Market, a day on which the Common Stock is quoted in the over-the-counter market as reported by OTCQB (or any similar organization
or agency succeeding to its functions of reporting prices); provided, that in the event that the Common Stock is not listed or
quoted as set forth in (i) and (ii) hereof, then Trading Day shall mean a Business Day.

 

    2 

     

    

 

“Trading
Market” means whichever of the OTCQB, the New York Stock Exchange, the American Stock Exchange, the NASDAQ National Market
or the NASDAQ SmallCap Market on which the Common Stock is listed or quoted for trading on the date in question.

“Underlying
Shares” means the shares of Common Stock issuable upon conversion of the Note and payment of interest thereunder.

2.              
Interest. The aggregate unconverted and outstanding
principal amount of this Note shall accrue interest at the rate of 3.8% per annum, until the Maturity Date. After the Maturity Date,
the Note shall bear interest at the rate of 6.8% per annum. Interest shall be paid in a lump sum on the Maturity Date and calculated
on the basis of a 360-day year for the actual number of days elapsed and shall accrue daily commencing on the Original Issue Date and
be compounded monthly on the first day of each calendar month.

3.              
Registration of the Note. The Company shall register
the Note upon records maintained by the Company for that purpose (the “Note Register”) in the name of each record
Investor thereof from time to time. The Company may deem and treat the registered Investor of this Note as the absolute owner hereof
for the purpose of any conversion hereof or any payment of interest hereon, and for all other purposes, absent actual notice to the contrary
from such record Investor.

4.              
Registration of Transfers and Exchanges. The
Company shall register the transfer of any portion of this Note in the Note Register upon surrender of this Note to the Company at its
address for notice set forth herein. Upon any such registration or transfer, a new Note, in substantially the form of this Note (any
such new debenture, a “New Note”), evidencing the portion of this Note so transferred shall be issued to the transferee
and a New Note evidencing the remaining portion of this Note not so transferred, if any, shall be issued to the transferring Investor.
The acceptance of the New Note by the transferee thereof shall be deemed the acceptance by such transferee of all of the rights and obligations
of a holder of a Note. This Note is exchangeable for an equal aggregate principal amount of Notes of different authorized denominations,
as requested by the Investor surrendering the same. No service charge or other fee will be imposed in connection with any such registration
of transfer or exchange. The Company agrees that its prior consent is not required for the transfer of any portion of this Note.

5.              
Conversion. All or any portion of up to the Maximum
Convertible Amount shall be convertible into shares of Common Stock at the Conversion Price, at the option of the Investor, at any time
and from time to time from and after the Original Issue Date. For the avoidance of doubt, the remaining unconverted principal amount
(at least $9,750,000 if no prepayments) remains payable in cash. The Investor may effect conversions under this Section 5, by delivering
to the Company a Conversion Notice together with a schedule in the form of Schedule 1 attached hereto (the “Conversion
Schedule”). If the Investor is converting less than all of the Maximum Convertible Amount, the Company shall honor such conversion
to the extent permissible hereunder and shall promptly deliver to the Investor a Conversion Schedule indicating the Maximum Convertible
Amount which has not been converted.

 

    3 

     

    

 

6.              
Mechanics of Conversion.

(a)           
The number of Underlying Shares issuable upon any conversion hereunder shall equal the outstanding principal amount of this Note to be
converted, divided by the Conversion Price on the Conversion Date, plus the amount of any accrued but unpaid interest on this Note through
the Conversion Date, divided by the Conversion Price on the Conversion Date.

(b)           
The Parent shall, by the third Trading Day following each Conversion Date (and on the Company Conversion Date), issue or cause to be
issued and cause to be delivered to or upon the written order of the Investor and in such name or names as the Investor may designate
a certificate for the Underlying Shares issuable upon such conversion. Such certificate shall be issued with a restrictive legend if
applicable. The Investor, or any Person so designated by the Investor to receive Underlying Shares, shall be deemed to have become holder
of record of such Underlying Shares as of such Conversion Date.

(c)           
The Investor shall not be required to deliver the original Note in order to effect a conversion hereunder. Execution and delivery of
the Conversion Notice shall have the same effect as cancellation of the Note and issuance of a New Note representing the remaining outstanding
principal amount.

7.              
Ranking; Security; Other Rights.

(a)           
This Note ranks senior in all respects to all existing and hereafter created unsecured Debt of the Company.

(b)           
The Company will not, directly or indirectly, enter into, create, incur, assume, or suffer to exist any unsecured Debt of any kind, on
or with respect to any of its property or assets now owned or hereafter acquired or any interest therein or any income or profits therefrom,
that is senior in any respect to the Company’s obligations under the Note. The repayment of the Note shall be secured by the following
(the items and types of collateral described herein being collectively referred to as the “Collateral”) pursuant to:
(i) a mortgage lien (as applicable) encumbering the Company’s oil, gas and other leasehold and mineral interests situated in the
State of New Mexico on a first priority basis in form and substance reasonably acceptable to the Company and the Investor, and (ii) a
first priority security interest in substantially all of the Company’s personal property related to such mortgaged properties according
a pledge, security agreement and assignment instrument in form and substance reasonably acceptable to the Company and the Investors.
The Company shall execute such financing statements, letters in lieu of production forms, assignments, notices, and other documents and
instruments as shall be necessary or appropriate to perfect the security interests thus created. The Company hereby acknowledges that
all of the Collateral is granted to the Investor as security for the repayment of all Debt under the Note.

(c)           
In the event any proceeds are received by the Company in connection with the sale of or casualty or condemnation proceedings related
to the undivided interest in any of the above described mortgaged properties is sold or the Company receives any debt or equity proceeds,
then, subject to the terms of the Letter Agreement dated as of the Original Issue Date between the Company and the Investor, 100% of
such proceeds shall be applied initially to the outstanding principal balance of the Note, then to accrued interest under the Note, until
the Note and all accrued interest thereon have been paid in full.

 

    4 

     

    

 

(d)           
No later than 30 days after the end of each calendar month, the Company shall provide the Investor reports regarding leases in the same
form as they are received by the operator under each applicable operating agreement applicable to the mortgaged properties.

8.              
Charges, Taxes, and Expenses. Issuance of certificates
for Underlying Shares upon conversion of (or otherwise in respect of) this Note shall be made without charge to the Investor for any
issue or transfer tax, withholding tax, transfer agent fee or other incidental tax or expense in respect of the issuance of such certificate,
all of which taxes and expenses shall be paid by the Company; provided, however, that the Parent or the Company shall not be required
to pay any tax which may be payable in respect of any transfer involved in the registration of any certificates for Underlying Shares
or the Note in a name other than that of the Investor. The Investor shall be responsible for all other tax liability that may arise as
a result of holding or transferring this Note or receiving Underlying Shares in respect hereof.

9.              
Reservation of Underlying Shares. The Parent
covenants that it will at all times reserve and keep available out of the aggregate of its authorized but unissued and otherwise unreserved
Common Stock, solely for the purpose of enabling it to issue Underlying Shares as required hereunder, the number of Underlying Shares
which are then issuable and deliverable upon the conversion of (and otherwise in respect of) this entire Note (taking into account the
adjustments of Section 10). The Parent covenants that all Underlying Shares so issuable and deliverable shall, upon issuance in accordance
with the terms hereof, be duly and validly authorized, issued and fully paid and nonassessable.

10.           
Certain Adjustments. The Conversion Price is
subject to adjustment from time to time as set forth in this Section 10.

(a)           
Stock Dividends and Splits. If the Parent, at any time while this Note is outstanding: (i) pays a stock dividend on its Common
Stock or otherwise makes a distribution on any class of capital stock that is payable in shares of Common Stock, (ii) subdivides outstanding
shares of Common Stock into a larger number of shares, or (iii) combines outstanding shares of Common Stock into a smaller number of
shares, then in each such case the Conversion Price shall be multiplied by a fraction of which the numerator shall be the number of shares
of Common Stock outstanding immediately before such event and of which the denominator shall be the number of shares of Common Stock
outstanding immediately after such event. Any adjustment made pursuant to clause (i) of this paragraph shall become effective immediately
after the record date for the determination of shareholders entitled to receive such dividend or distribution, and any adjustment pursuant
to clause (ii) or (iii) of this paragraph shall become effective immediately after the effective date of such subdivision or combination.

(b)           
Pro Rata Distributions. If the Parent, at any time while this Note is outstanding, distributes to all holders of Common Stock
(i) evidences of its indebtedness, (ii) any security (other than a distribution of Common Stock covered by the preceding paragraph),
(iii) rights or warrants to subscribe for or purchase any security, or (iv) any other asset (in each case,

 

 

    5 

     

    

 

“Distributed Property”),
then, at the request of the Investor delivered before the 90th day after the record date fixed for determination of shareholders entitled
to receive such distribution, the Parent will deliver to the Investor, within five Trading Days after such request (or, if later, on
the effective date of such distribution), the Distributed Property that the Investor would have been entitled to receive in respect of
the Underlying Shares for which this Note could have been converted immediately prior to such record date. If such Distributed Property
is not delivered to the Investor pursuant to the preceding sentence, then upon any conversion of this Note that occurs after such record
date, the Investor shall be entitled to receive, in addition to the Underlying Shares otherwise issuable upon such conversion, the Distributed
Property that the Investor would have been entitled to receive in respect of such number of Underlying Shares had the Investor been the
record holder of such Underlying Shares immediately prior to such record date. Notwithstanding the foregoing, this Section 10(b) shall
not apply to any distribution of rights or securities in respect of adoption by the Parent of a shareholder rights plan, which events
shall be covered by Section 10(a).

(c)           
Fundamental Transactions. If, at any time while this Note is outstanding, (i) the Parent effects any merger or consolidation of
the Parent with or into another Person, (ii) the Parent effects any sale of all or substantially all of its assets in one or a series
of related transactions, (iii) any tender offer or exchange offer (whether by the Parent or another Person) is completed pursuant to
which holders of Common Stock tender or exchange their shares for other securities, cash or property, or (iv) the Parent effects any
reclassification of the Common Stock or any compulsory share exchange pursuant to which the Common Stock is effectively converted into
or exchanged for other securities, cash or property (other than as a result of a subdivision or combination of shares of Common Stock
covered by Section 10(a) above) (in any such case, a “Fundamental Transaction”), then upon any subsequent conversion
of this Note, the Investor shall have the right to receive, for each Underlying Share that would have been issuable upon such conversion
absent such Fundamental Transaction, the same kind and amount of securities, cash or property as it would have been entitled to receive
upon the occurrence of such Fundamental Transaction if it had been, immediately prior to such Fundamental Transaction, the holder of
one share of Common Stock (the “Alternate Consideration”). For purposes of any such conversion, the Parent shall apportion
the Conversion Price among the Alternate Consideration in a reasonable manner reflecting the relative value of any different components
of the Alternate Consideration. If holders of Common Stock are given any choice as to the securities, cash or property to be received
in a Fundamental Transaction, then the Investor shall be given the same choice as to the Alternate Consideration it receives upon any
conversion of this Note following such Fundamental Transaction.

(d)           
Reclassifications; Share Exchanges. In case of any reclassification of the Common Stock, or any compulsory share exchange pursuant
to which the Common Stock is converted into other securities, cash or property (other than compulsory share exchanges which constitute
Change of Control transactions), the Investor shall have the right thereafter to convert such shares only into the shares of stock and
other securities, cash and property receivable upon or deemed to be held by holders of Common Stock following such reclassification or
share exchange, and the Investor shall be entitled upon such event to receive such amount of securities, cash or property as a holder
of the number of shares of Common Stock of the Parent into which such shares of the Note could have been converted immediately prior
to such reclassification or share exchange would have been entitled. This provision shall similarly apply to successive reclassifications
or share exchanges.

 

 

    6 

     

    

 

 

(e)           
Calculations. All calculations under this Section 10 shall be made to the nearest cent or the nearest 1/100th of a share, as applicable.
The number of shares of Common Stock outstanding at any given time shall not include shares owned or held by or for the account of the
Parent, and the disposition of any such shares shall be considered an issue or sale of Common Stock.

(f)            
Notice of Adjustments. Upon the occurrence of each adjustment pursuant to this Section 10, the Parent at its expense will promptly
compute such adjustment in accordance with the terms hereof and prepare a certificate describing in reasonable detail such adjustment
and the transactions giving rise thereto, including all facts upon which such adjustment is based. Upon written request, the Parent will
promptly deliver a copy of each such certificate to the Investor.

(g)           
Notice of Corporate Events. If the Parent (i) declares a dividend or any other distribution of cash, securities or other property
in respect of its Common Stock, including without limitation any granting of rights or warrants to subscribe for or purchase any capital
stock of the Parent or any subsidiary of Parent, (ii) authorizes and publicly approves, or enters into any agreement contemplating or
solicits shareholder approval for any Fundamental Transaction or (iii) publicly authorizes the voluntary dissolution, liquidation or
winding up of the affairs of the Parent, then the Parent shall deliver to the Investor a notice describing the material terms and conditions
of such transaction, at least 20 calendar days prior to the applicable record or effective date on which a Person would need to hold
Common Stock in order to participate in or vote with respect to such transaction, and the Parent will take all steps reasonably necessary
in order to insure that the Investor is given the practical opportunity to convert this Note prior to such time so as to participate
in or vote with respect to such transaction; provided, however, that the failure to deliver such notice or any defect therein
shall not affect the validity of the corporate action required to be described in such notice.

11.           
Fractional Shares. The Parent shall not be required
to issue or cause to be issued fractional Underlying Shares on conversion of this Note. If any fraction of an Underlying Share would,
except for the provisions of this Section, be issuable upon conversion of this Note or payment of interest hereon, the number of Underlying
Shares to be issued will be rounded up to the nearest whole share.

12.           
Prepayment. This Note may be prepaid without
the consent of the Investor without penalty, provided, however, Borrower must provide the Investor at least 30 days’ prior written
notice of any such prepayment so the Investor may exercise its conversion rights hereunder. Borrower shall use commercially reasonable
best efforts to prepay the outstanding principal amount of this Note on or before September 30, 2021.

13.           
Registration Statement. The Parent shall use
commercially reasonable best efforts to cause a registration statement on Form S-3 to be filed with Securities Exchange Commission within
90 days after the Original Issue Date for (a) all Common Stock owned by the Investor and all Common Stock underlying warrants owned by
the Investor and (b) the Common Stock and Common Stock underlying warrants issued by the Parent in its private offering that closed on
or about March 30, 2021 (the “Registration Statement”).

 

    7 

     

    

 

14.           
Conversion Adjustments.

(a)           
If any principal amount of this Note remains outstanding on October 1, 2021, then on such date the otherwise effective Conversion Price
will be automatically reduced by $0.25. In the event any principal amount of this Note remains outstanding on October 1, 2021 and prior
to such time there has been any conversion of this Note pursuant to Section 5, the Parent shall cause such additional Common Stock to
be issued to the Investor so that effective Conversion Price in connection with such prior conversion was $0.25 lower.

(b)           
If the Registration Statement does not become effective within 120 days after the Original Issue Date:

(i)       
the Maximum Convertible Amount shall increase to 50% of the principal amount of this Note then outstanding ($8,125,000 if no prepayments)
(or, if less, the entire outstanding principal amount of the Note on the date of conversion); and

(ii)       
on such date, the otherwise effective Conversion Price will be automatically reduced by $0.25. In the event the Registration Statement
does not become effective within 120 days after the Original Issue Date and prior to such time there has been any conversion of this
Note pursuant to Section 5, the Parent shall cause such additional Common Stock to be issued to the Investor so that effective Conversion
Price in connection with such prior conversion was $0.25 lower.

(c)           
Adjustments to the Conversion Price under Section 14(a) or Section 14(b)(ii) shall be non-cumulative, i.e., if an adjustment has
become effective under either provision no further adjustment shall occur under the other.

(d)           
In the event the Parent conducts any capital raise after the Original Issue Date for less than $1.25 per share of Common Stock and prior
to such time there has been any conversion of this Note pursuant to Section 5, the Parent shall cause such additional Common Stock to
be issued to the Investor so that effective Conversion Price in connection with such prior conversion was the lowest price per share
of Common Stock paid in connection with any such capital raise.

15.           
Board Seats. The Parent acknowledges and agrees
that it has already agreed to take commercially reasonably efforts to cause two designees of an affiliate of the Investor to be appointed
to the Parent’s Board of Directors. The Parent shall take commercially reasonable best efforts to (a) cause the number of members
serving on the Parent’s Board of Directors to be increased to six, (b) cause an additional designee of the Investor or its affiliate
to be appointed to the Parent’s Board of Directors, and (c) cause one of the designated directors of the Investor or its affiliate
to be appointed the Chairman of the Parent’s Board of Directors with the power to cast the deciding vote in case of a deadlocked
board vote. The right granted to the Investor pursuant to this Section 15 will be effective as of the Original Issue Date and continue
even after repayment of this Note.

 

    8 

     

    

  

16.           
Notices. Any and all notices or other communications
or deliveries hereunder (including without limitation any Conversion Notice or the Company Conversion Notice) shall be in writing and
shall be deemed given and effective on the earliest of (i) the date of transmission, if such notice or communication is delivered via
facsimile at the facsimile number specified in this Section prior to 6:30 p.m. (New York City time) on a Trading Day, (ii) the next Trading
Day after the date of transmission, if such notice or communication is delivered via facsimile at the facsimile number specified in this
Section on a day that is not a Trading Day or later than 6:30 p.m. (New York City time) on any Trading Day, (iii) the Trading Day following
the date of mailing, if sent by nationally recognized overnight courier service, or (iv) upon actual receipt by the party to whom such
notice is required to be given. The addresses for such communications shall be: (i) if to the Company, Empire New Mexico LLC, 2200 S.
Utica Place, Suite 150, Tulsa Oklahoma 74114, attention Chief Executive Officer and President, (ii) if to the Investor, to the address
or facsimile number appearing on the Company’s shareholder records or such other address or facsimile number as the Investor may
provide to the Company in accordance with this Section.

17.           
Miscellaneous.

(a)           
This Note shall be binding on and inure to the benefit of the parties hereto and their respective successors and assigns.

(b)           
Subject to Section 17(a) above, nothing in this Note shall be construed to give to any person or corporation other than the Company and
the Investor any legal or equitable right, remedy, or cause under this Note. This Note shall inure to the sole and exclusive benefit
of the Company and the Investor.

(c)           
All questions concerning the construction, validity, enforcement and interpretation of this Note shall be governed by and construed and
enforced in accordance with the laws of the State of Delaware. Each party hereto hereby irrevocably waives, to the fullest extent permitted
by applicable law, any and all right to trial by jury in any legal Proceeding. The prevailing party in a Proceeding shall be reimbursed
by the other party for its reasonable attorneys’ fees and other costs and expenses incurred with the investigation, preparation
and prosecution of such Proceeding.

(d)           
The headings herein are for convenience only, do not constitute a part of this Note and shall not be deemed to limit or affect any of
the provisions hereof.

(e)           
In case any one or more of the provisions of this Note shall be invalid or unenforceable in any respect, the validity and enforceability
of the remaining terms and provisions of this Note shall not in any way be affected or impaired thereby and the parties will attempt
in good faith to agree upon a valid and enforceable provision which shall be a commercially reasonable substitute therefor, and upon
so agreeing, shall incorporate such substitute provision in this Note.

(f)            
No provision of this Note may be waived or amended except (i) in accordance with the requirements set forth in the Purchase Agreement,
and (ii) in a written instrument signed, in the case of an amendment, by the Company and the Investor or, in the case of a waiver, by
the party against whom enforcement of any such waiver is sought. No waiver of any default with respect to any provision, condition or
requirement of this Note shall be deemed to be a continuing waiver in the future or a waiver of any subsequent default or a waiver of
any other provision, condition or requirement hereof, nor shall any delay or omission of either party to exercise any right hereunder
in any manner impair the exercise of any such right.

 

    9 

     

    

 

 

(g)           
To the extent it may lawfully do so, the Company hereby agrees not to insist upon or plead or in any manner whatsoever claim and will
resist any and all efforts to be compelled to take the benefit or advantage of, usury laws wherever enacted, now or at any time hereafter
in force, in connection with any claim, action or Proceeding that may be brought by any Investor in order to enforce any right or remedy
under the Note. Notwithstanding any provision to the contrary contained in the Note, it is expressly agreed and provided that the total
liability of the Company under the Note for payments in the nature of interest shall not exceed the maximum lawful rate authorized under
applicable law (the “Maximum Rate”), and, without limiting the foregoing, in no event shall any rate of interest or
default interest, or both of them, when aggregated with any other sums in the nature of interest that the Company may be obligated to
pay under the Note exceed such Maximum Rate. It is agreed that if the maximum contract rate of interest allowed by law and applicable
to the Note is increased or decreased by statute or any official governmental action subsequent to the date hereof, the new maximum contract
rate of interest allowed by law will be the Maximum Rate of interest applicable to the Note from the effective date forward, unless such
application is precluded by applicable law. If under any circumstances whatsoever, interest in excess of the Maximum Rate is paid by
the Company to any Investor with respect to indebtedness evidenced by the Note, such excess shall be applied by such Investor to the
unpaid principal balance of any such indebtedness or be refunded to the Company, the manner of handling such excess to be at such Investor’s
election.

IN
WITNESS WHEREOF, the Company have caused this Note to be duly executed by a duly authorized officer as of the date first above indicated.

 

	 	EMPIRE NEW MEXICO LLC
	 	 
	 	By: 	/s/ Michael Morrisett
	 	Name:

        Title:
	Michael Morrisett
President

 

 

Acknowledged
and agreed:

 

	 	EMPIRE PETROLEUM CORPORATION
	 	 
	 	By: 	/s/ Thomas Pritchard
	 	Name:

        Title:
	Thomas Pritchard
CEO

 

 

 

 

 

 

 

 

 

 

 

 

    10 

     

    

EXHIBIT
A

CONVERSION
NOTICE

(To
be Executed by the Registered Investor

in order to convert the Note)

The
undersigned hereby elects to convert the principal amount of Note indicated below, into shares of Common Stock of Empire Petroleum Corporation,
as of the date written below. If shares are to be issued in the name of a Person other than undersigned, the undersigned will pay all
transfer taxes payable with respect thereto and is delivering herewith such certificates and opinions as reasonably requested by the
Company in accordance therewith. No fee will be charged to the Investor for any conversion, except for such transfer taxes, if any. All
terms used in this notice shall have the meanings set forth in the Note.

 

	Conversion
calculations:	 	 
	 	 	Date
to Effect Conversion
	 	 	 
	 	 	 
	 	 	Principal
amount of Note owned prior to conversion
	 	 	 
	 	 	 
	 	 	Principal amount of Note to be Converted
	 	 	 
	 	 	 
	 	 	Principal amount of Note remaining after Conversion
	 	 	 
	 	 	 
	 	 	Number of shares of Common Stock to be Issued
	 	 	 
	 	 	 
	 	 	Name of Investor
	 	 	 
	 	 	 	 	 	 	 
	 	 	By:	 
	 	 	 	Name:

Title:
	 	 	 

 

 

 

 

 

    11 

     

    

Schedule
1

Empire
Petroleum Corporation

Senior Secured Convertible Note due December 31, 2021

CONVERSION
SCHEDULE

This
Conversion Schedule reflects conversions made under the Note.

Dated:

 

	Date
    of Conversion	Amount
    of Conversion	Aggregate
    Principal Amount Remaining Subsequent to Conversion
	 	 	 
	 	 	 
	 	 	 
	 	 	 
	 	 	 
	 	 	 
	 	 	 
	 	 	 
	 	 	 
	 	 	 
	 	 	 
	 	 	 
	 	 	 
	 	 	 
	 	 	 

 

 

 

 

 

12

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