Document:

Ex 10.3

xG TECHNOLOGY INC.

 

2013 LONG-TERM STOCK INCENTIVE PLAN

 

1. Purpose

 

The xG Technology,
Inc. 2013 Long-Term Stock Incentive Plan is intended to promote the best interests of xG Technology, Inc. and its stockholders
by (i) assisting the Corporation and its Affiliates in the recruitment and retention of persons with ability and initiative, (ii)
providing an incentive to such persons to contribute to the growth and success of the Corporation’s businesses by affording
such persons equity participation in the Corporation and (iii) associating the interests of such persons with those of the Corporation
and its Affiliates and stockholders.

 

2. Definitions

 

As used in this Plan
the following definitions shall apply:

 

A. “Affiliate”
means (i) any Subsidiary, (ii) any Parent, (iii) any corporation, or trade or business (including, without limitation, a partnership,
limited liability company or other entity) which is directly or indirectly controlled fifty percent (50%) or more (whether by ownership
of stock, assets or an equivalent ownership interest or voting interest) by the Corporation or one of its Affiliates, and (iv)
any other entity in which the Corporation or any of its Affiliates has a material equity interest and which is designated as an
“Affiliate” by resolution of the Committee.

 

B. “Award”
means any Option or Stock Award granted hereunder.

 

C. “Board”
means the Board of Directors of the Corporation.

 

D. “Cause”
means: (i) conduct involving a felony criminal offense under U. S. federal or state law or an equivalent violation of the laws
of any other country; (ii) dishonesty, fraud, self dealing or material violations of civil law in the course of fulfilling the
Participant’s employment or other assigned duties on behalf of the Corporation; (iii) breach of any confidentiality, employment,
or other written agreement with the Corporation; or (iv) willful misconduct injurious to the Corporation or any of its Subsidiaries
or Affiliates as shall be determined by the Committee.

 

E. “Change
of Control” means: (i) any “person” (as such term is used in Sections 13(d) and 14(d) of the Securities
Exchange Act of 1934, as amended (the “Exchange Act”)), other than a trustee or other fiduciary holding
securities of the Company under an employee benefit plan of the Company, becomes the “beneficial owner” (as
defined in Rule 13d-3 promulgated under the Exchange Act), directly or indirectly, of securities of the Company representing
50% or more of (A) the outstanding shares of common stock of the Company or (B) the combined voting power of the
Company’s then-outstanding securities; (ii) the Company is party to a merger or consolidation, or series of related
transactions, which results in the voting securities of the Company outstanding immediately prior thereto failing to continue
to represent (either by remaining outstanding or by being converted into voting securities of the surviving or another
entity) at least fifty (50%) percent of the combined voting power of the voting securities of the Company or such surviving
or other entity outstanding immediately after such merger or consolidation; (iii) the sale or disposition of all or
substantially all of the Company’s assets (or consummation of any transaction, or series of related transactions,
having similar effect); (iv) there occurs a change in the composition of the Board of Directors of the Company within a
two-year period, as a result of which fewer than a majority of the directors are Incumbent Directors; (v) the dissolution or
liquidation of the Company; or (vi) any transaction or series of related transactions that has the substantial effect of
any one or more of the foregoing. For purposes of this paragraph, the Board may exclude any transaction involving MB
Technology Holdings.

 

    	 

    	 

    

 

F. “Code”
means the Internal Revenue Code of 1986, and any amendments thereto.

 

G. “Committee”
means the Board or any Committee of the Board to which the Board has delegated any responsibility for the implementation, interpretation
or administration of this Plan. As of the date of the Plan, the Board has initially delegated responsibility for the administration
of the Plan to the Corporation’s Compensation Committee.

 

H. “Common
Stock” means the common stock, $0.01 par value, of the Corporation.

 

I. “Consultant”
means (i) any person performing consulting or advisory services for the Corporation or any Affiliate, or (ii) a director of an
Affiliate.

 

J. “Corporation”
means xG Technology, Inc., a Delaware corporation.

 

K. “Corporation
Law” means the Delaware General Corporation Law.

 

L. “Deferral
Period” means the period of time during which Deferred Shares are subject to deferral limitations under Section 7.D of
this Plan.

 

M. “Deferred
Shares” means an award pursuant to Section 7.D of this Plan of the right to receive shares of Common Stock at the end
of a specified Deferral Period.

 

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

 

O. “Eligible
Person” means an employee of the Corporation or an Affiliate (including a corporation that becomes an Affiliate after
the adoption of this Plan), a Director or a Consultant to the Corporation or an Affiliate (including a corporation that becomes
an Affiliate after the adoption of this Plan).

 

P. “Exchange
Act” means the Securities Exchange Act of 1934, as amended.

 

Q. “Fair Market
Value” means, on any given date, the current fair market value of the shares of Common Stock as determined as follows:

 

(i) If the
Common Stock is traded on a national securities exchange, the closing price for the day of determination as quoted on such market
or exchange, including the NASDAQ Global Market or NASDAQ Capital Market, or the OTC Bulletin Board, whichever is the primary market
or exchange for trading of the Common Stock or if no trading occurs on such date, the last day on which trading occurred, or such
other appropriate date as determined by the Committee in its discretion, as reported in The Wall Street Journal or such
other source as the Committee deems reliable;

 

(ii) If the
Common Stock is regularly quoted by a recognized securities dealer but selling prices are not reported, its Fair Market Value shall
be the mean between the high and the low asked prices for the Common Stock for the day of determination; or

 

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(iii) In
the absence of an established market for the Common Stock, Fair Market Value shall be determined by the Committee in good faith.

 

R. “Incentive
Stock Option” means an Option (or portion thereof) which meets the criteria of Section 422(b) of the Code.

 

S. “Listing
Date” means the date upon share of Common Stock commence trading on a national securities exchange (exclusive of trading
markets such as the OTC Bulletin Board).

 

T. “Nonqualified
Stock Option” means an Option (or portion thereof) which is not intended or does not for any reason qualify as an Incentive
Stock Option.

 

U. “Option”
means any option to purchase shares of Common Stock granted under this Plan.

 

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

 

W. “Participant”
means an Eligible Person who (i) is selected by the Committee or an authorized officer of the Corporation to receive an Award and
(ii) is party to an agreement setting forth the terms of the Award, as appropriate.

 

X. “Performance
Agreement” means an agreement described in Section 8 of this Plan.

 

Y. “Performance
Objectives” means the performance objectives established pursuant to this Plan for Participants who have received grants
of Performance Shares or, when so determined by the Committee, Stock Awards. Performance Objectives may be described in terms of
Corporation-wide objectives or objectives that are related to the performance of the individual Participant or the Affiliate, subsidiary,
division, department or function within the Corporation or Affiliate in which the Participant is employed or has responsibility.
Any Performance Objectives applicable to Awards to the extent that such an Award is intended to qualify as “performance-based
compensation” under Section 162(m) of the Code shall be limited to specified levels of or increases in the Corporation’s
or a business unit’s return on equity, earnings per share, total earnings, earnings growth, return on capital, return on
assets, economic value added, earnings before interest and taxes, earnings before interest, taxes, depreciation and amortization,
sales growth, gross margin return on investment, increase in the Fair Market Value of the shares, share price (including but not
limited to growth measures and total stockholder return), net operating profit, cash flow (including, but not limited to, operating
cash flow and free cash flow), cash flow return on investments (which equals net cash flow divided by total capital), internal
rate of return, increase in net present value or expense targets. The Awards intended to qualify as “Performance Based Compensation”
under Section 162(m) of the Code shall be pre-established in accordance with applicable regulations under Section 162(m) of the
Code and the determination of attainment of such goals shall be made by the Committee. If the Committee determines that a change
in the business, operations, corporate structure or capital structure of the Corporation (including an event described in Section
9), or the manner in which it conducts is business, or other events or circumstances render the Performance Objectives unsuitable,
the Committee may modify such Performance Objectives or the related minimum acceptable level of achievement, in whole or in part,
as the Committee deems appropriate and equitable; provided, however, that no such modification shall be made to an Award intended
to qualify as performance-based compensation under Section 162(m) of the Code unless the Committee determines that such modification
will not result in loss of such qualification or the Committee determines that loss of such qualification is in the best interests
of the Corporation.

 

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Z. “Performance
Period” means a period of time established under Section 8 of this Plan within which the Performance Objectives relating
to a Performance Share or Stock Award are to be achieved.

 

AA. “Performance
Share” means a bookkeeping entry that records the equivalent of one share of Common Stock awarded pursuant to Section
8 of this Plan.

 

BB. “Plan”
means this xG Technology, Inc. 2013 Long-term Stock Incentive Plan.

 

CC. “Repricing”
means, other than in connection with an event described in Section 9 of this Plan, (i) lowering the exercise price of an Option
or Stock Appreciation Right after it has been granted or (ii) canceling an Option or Stock Appreciation Right at a time when the
exercise price exceeds the then Fair Market Value of the Common Stock in exchange for another Option or Stock Award.

 

DD. “Restricted
Stock Award” means an award of Common Stock under Section 7.B.

 

EE. “Restricted
Stock Units” means a unit similar to restricted
stock, however, the unit represents a promise that
employees will receive stock in the future. The units do not pay dividends until the stock is vested.

 

FF. “Securities
Act” means the Securities Act of 1933, as amended.

 

GG. “Stock
Award” means a Stock Bonus Award, Restricted Stock Award, Stock Appreciation Right, Deferred Shares, or Performance Shares.

 

HH. “Stock
Bonus Award” means an award of Common Stock under Section 7.A.

 

II. “Stock
Appreciation Right” means an award of a right of the Participant under Section 7.C to receive a payment in cash or shares
of Common Stock (or a combination thereof) based on the increase in Fair Market Value of the shares of Common Stock covered by
the award between the date of grant of such award and the Fair Market Value of the Common Stock on the date of exercise of such
Stock Appreciation Right.

 

JJ. “Stock
Award Agreement” means an agreement (written or electronic) between the Corporation and a Participant setting forth the
specific terms and conditions of a Stock Award granted to the Participant under Section 7. Each Stock Award Agreement shall be
subject to the terms and conditions of this Plan and shall include such terms and conditions as the Committee shall authorize.

 

KK. “Stock
Option Agreement” means an agreement (written or electronic) between the Corporation and a Participant setting forth
the specific terms and conditions of an Option granted to the Participant. Each Stock Option Agreement shall be subject to the
terms and conditions of this Plan and shall include such terms and conditions as the Committee shall authorize.

 

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

 

MM. “Ten Percent
Owner” means any Eligible Person owning at the time an Option is granted more than ten percent (10%) of the total combined
voting power of all classes of stock of the Corporation or of a Parent or Subsidiary. An individual shall, in accordance with Section
424(d) of the Code, be considered to own any voting stock owned (directly or indirectly) by or for such Eligible Person’s
brothers, sisters, spouse, ancestors and lineal descendants and any voting stock owned (directly or indirectly) by or for a corporation,
partnership, estate or trust shall be considered as being owned proportionately by or for its stockholders, partners, or beneficiaries.

 

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NN. “Termination
of Employment” means the end of employment and includes the following:(i) An employee quits, retires, or is dismissed; or
(ii) employment is terminated by an operation of law; or (iii) the board of directors considers a condition of employment to be
substantially altered.

 

3. Administration

 

A. Delegation to
Board Committee. The Board shall be the sole Committee of this Plan unless the Board delegates all or any portion of its authority
to administer this Plan to a Committee. To the extent not prohibited by the charter or bylaws of the Corporation, the Board may
delegate all or a portion of its authority to administer this Plan to a Committee of the Board appointed by the Board and constituted
in compliance with the applicable Corporation Law. The Committee shall consist solely of two (2) or more Directors who are (i)
Non-Employee Directors (within the meaning of Rule 16b-3 under the Exchange Act) for purposes of exercising administrative authority
with respect to Awards granted to Eligible Persons who are subject to Section 16 of the Exchange Act; (ii) to the extent required
by the rules of the market on which the Corporation’s shares are traded or the exchange on which the Corporation’s
shares are listed, “independent” within the meaning of such rules; and (iii) at such times as an Award under this Plan
by the Corporation is subject to Section 162(m) of the Code (to the extent relief from the limitation of Section 162(m) of the
Code is sought with respect to Awards and administration of the Awards by a committee of “outside directors” is required
to receive such relief) “outside directors” within the meaning of Section 162(m) of the Code.

 

B. Delegation to
Officers. The Committee may delegate to one or more officers of the Corporation the authority to grant and administer Awards
to Eligible Persons who are not Directors or executive officers of the Corporation; provided that the Committee shall have fixed
the total number of shares of Common Stock that may be subject to such Awards. No officer holding such a delegation is authorized
to grant Awards to himself or herself. In addition to the Committee, the officer or officers to whom the Committee has delegated
the authority to grant and administer Awards shall have all powers delegated to the Committee with respect to such Awards. Such
delegation shall be subject to the limitations of Section 157(c) (or any successor provision) of the Corporation Law.

 

C. Powers of the
Committee. Subject to the provisions of this Plan, and in the case of a Committee appointed by the Board, the specific duties
delegated to such Committee, the Committee (and the officers to whom the Committee has delegated such authority) shall have the
authority:

 

(i) To construe
and interpret all provisions of this Plan and all Stock Option Agreements, Stock Award Agreements and Performance Agreements under
this Plan.

 

(ii) To determine
the Fair Market Value of Common Stock.

 

(iii) To
select the Eligible Persons to whom Awards are granted from time to time hereunder.

 

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(iv) To determine
the number of shares of Common Stock covered by an Award; to determine whether an Option shall be an Incentive Stock Option or
Nonqualified Stock Option; and to determine such other terms and conditions, not inconsistent with the terms of this Plan, of each
such Award. Such terms and conditions include, but are not limited to, the exercise price of an Option, purchase price of Common
Stock subject to a Stock Award, the time or times when Options or Stock Awards may be exercised or Common Stock issued thereunder,
the right of the Corporation to repurchase Common Stock issued pursuant to the exercise of an Option or a Stock Award and other
restrictions or limitations (in addition to those contained in this Plan) on the forfeitability or transferability of Options,
Stock Awards or Common Stock issued upon exercise of an Option or pursuant to an Award. Such terms may include conditions which
shall be determined by the Committee and need not be uniform with respect to Participants.

 

(v) To accelerate
the time at which any Option or Stock Award may be exercised, or the time at which a Stock Award or Common Stock issued under this
Plan may become transferable or non-forfeitable.

 

(vi) To determine
whether and under what circumstances an Option or RSU may be settled in cash, shares of Common Stock or other property under Section
6.H instead of Common Stock.

 

(vii) To
waive, amend, cancel, extend, renew, accept the surrender of, modify or accelerate the vesting of or lapse of restrictions on all
or any portion of an outstanding Award. Except as otherwise provided by this Plan, the Stock Option Agreement, Stock Award Agreement
or Performance Agreement or as required to comply with applicable law, regulation or rule, no amendment, cancellation or modification
shall, without a Participant’s consent, adversely affect any rights of the Participant; provided, however, that (x) an amendment
or modification that may cause an Incentive Stock Option to become a Nonqualified Stock Option shall not be treated as adversely
affecting the rights of the Participant and (y) any other amendment or modification of any Stock Option Agreement, Stock Award
Agreement or Performance Agreement that does not, in the opinion of the Committee, adversely affect any rights of any Participant,
shall not require such Participant’s consent. Notwithstanding the foregoing, the restrictions on the Repricing of Options
and Stock Appreciation Rights, as set forth in this Plan, may not be waived.

 

(viii) To
prescribe the form of Stock Option Agreements, and Stock Award Agreements and Performance Agreements; to adopt policies and procedures
for the exercise of Options or Stock Awards, including the satisfaction of withholding obligations; to adopt, amend, and rescind
policies and procedures pertaining to the administration of this Plan; and to make all other determinations necessary or advisable
for the administration of this Plan. The Award’s effectiveness will not be dependent on any signature unless specifically
so provided in the Award Agreement. Awards shall generally be subject to a three year vesting period and no more than 60% of Awards
to executives and directors may have a vesting period of less than three years; provided, however, that vesting may accelerate
in the event of change in control and certain other events as set forth in Section 9 herein, and in the events of death, disability
or retirement, as will be specified in the Award Agreement.

 

(ix) To allow
for deferral of shares vesting under the stock awards.

 

The express grant in
this Plan of any specific power to the Committee shall not be construed as limiting any power or authority of the Committee; provided
that the Committee or any committee of the Board may not exercise any right or power reserved to the Board. Any decision made,
or action taken, by the Committee or in connection with the administration of this Plan shall be final, conclusive and binding
on all persons having an interest in this Plan.

 

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4. Eligibility

 

A. Eligibility for
Awards. Awards, other than Incentive Stock Options, may be granted to any Eligible Person selected by the Committee. Incentive
Stock Options may be granted only to employees of the Corporation or a Parent or Subsidiary.

 

B. Eligibility of
Consultants. A Consultant shall be an Eligible Person only if the offer or sale of the Corporation’s securities would
be eligible for registration on Form S-8 Registration Statement because of the identity and nature of the service provided by such
person, unless the Corporation determines that an offer or sale of the Corporation’s securities to such person will satisfy
another exemption from the registration under the Securities Act and complies with the securities laws of all other jurisdictions
applicable to such offer or sale.

 

C. Substitution
Awards. The Committee may make Awards and may grant Options under this Plan by assumption, in substitution or replacement of
performance shares, phantom shares, stock awards, stock options, stock appreciation rights or similar awards granted by another
entity (including an Affiliate) in connection with a merger, consolidation, acquisition of property or stock or similar transaction.
Notwithstanding any provision of this Plan (other than the maximum number of shares of Common Stock that may be issued under this
Plan), the terms of such assumed, substituted, or replaced Awards shall be as the Committee, in its discretion, determines is appropriate.

 

5. Common Stock Subject to Plan

 

A. Share Reserve
and Limitations on Grants. Subject to adjustment as provided in Section 9, the maximum aggregate number of shares of Common
Stock that may be (i) issued under this Plan pursuant to the exercise of Options, (ii) issued pursuant to Stock Awards, (iii) covered
by Stock Appreciation Rights (without regard to whether payment on exercise of the Stock Appreciation Right is made in cash or
shares of Common Stock) and (iv) covered by Performance Shares shall be limited to 15% of the shares of Common Stock outstanding,
which calculation shall be made on the first trading day of a new fiscal year; provided that, in any year no more than 8% of the
Common Stock of the company or derivative securitization with Common Stock underlying 8% of the Common Stock may be issued in any
fiscal year. The number shares of Common Stock subject to the Plan shall be subject to adjustment as provided in Section 9. Subject
to adjustment as provided in Section 9, and notwithstanding any provision hereto to the contrary, shares subject to the Plan shall
include shares forfeited in a prior year as provided herein. For purposes of determining the number of shares of Common Stock available
under this Plan, shares of Common Stock withheld by the Corporation to satisfy applicable tax withholding obligations pursuant
to Section 10 of this Plan shall be deemed issued under this Plan. No single participant may receive more than 25% of the total
shares awarded in any single year.

 

B. Reversion of
Shares. If an Option or Stock Award is terminated, expires or becomes unexercisable, in whole or in part, for any reason, the
unissued or unpurchased shares of Common Stock (or shares subject to an unexercised Stock Appreciation Right) which were subject
thereto shall become available for future grant under this Plan. Shares of Common Stock that have been actually issued under this
Plan shall not be returned to the share reserve for future grants under this Plan; except that shares of Common Stock issued pursuant
to a Stock Award which are forfeited to the Corporation or repurchased by the Corporation at the original purchase price of such
shares, shall be returned to the share reserve for future grant under this Plan.

 

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C. Source of Shares.
Common Stock issued under this Plan may be shares of authorized and unissued Common Stock or shares of previously issued Common
Stock that have been reacquired by the Corporation.

 

6. Options

 

A. Award. In
accordance with the provisions of Section 4, the Committee will designate each Eligible Person to whom an Option is to be granted
and will specify the number of shares of Common Stock covered by such Option. The Stock Option Agreement shall specify whether
the Option is an Incentive Stock Option or Nonqualified Stock Option, the vesting schedule applicable to such Option and any other
terms of such Option. No Option that is intended to be an Incentive Stock Option shall be invalid for failure to qualify as an
Incentive Stock Option.

 

B. Option Price.
The exercise price per share for Common Stock subject to an Option shall be determined by the Committee, but shall comply with
the following:

 

(i) The exercise
price per share for Common Stock subject to an Incentive Stock Option shall not be less than one hundred percent (100%) of the
Fair Market Value on the date of grant .

 

(ii) The
exercise price per share for Common Stock subject to an Incentive Stock Option granted to a Participant who is deemed to be a Ten
Percent Owner on the date such option is granted, shall not be less than one hundred ten percent (110%) of the Fair Market Value
on the date of grant.

 

C. Maximum Option
Period. The maximum period during which an Option may be exercised shall be ten (10) years from the date such Option was granted.
In the case of an Incentive Stock Option that is granted to a Participant who is or is deemed to be a Ten Percent Owner on the
date of grant, such Option shall not be exercisable after the expiration of five (5) years from the date of grant.

 

D. Maximum Value
of Options which are Incentive Stock Options. To the extent that the aggregate Fair Market Value of the Common Stock with respect
to which Incentive Stock Options granted to any person are exercisable for the first time during any calendar year (under all stock
option plans of the Corporation or any Parent or Subsidiary) exceeds $100,000 (or such other amount provided in Section 422(d)
of the Code), the Options are not Incentive Stock Options. For purposes of this section, the Fair Market Value of the Common Stock
will be determined as of the time the Incentive Stock Option with respect to the Common Stock is granted. This section will be
applied by taking Incentive Stock Options into account in the order in which they are granted.

 

E. Nontransferability.
Options granted under this Plan which are intended to be Incentive Stock Options shall be nontransferable except by will or by
the laws of descent and distribution and during the lifetime of the Participant shall be exercisable by only the Participant to
whom the Incentive Stock Option is granted. Except to the extent transferability of a Nonqualified Stock Option is provided for
in the Stock Option Agreement or is approved by the Committee, during the lifetime of the Participant to whom the Nonqualified
Stock Option is granted, such Option may be exercised only by the Participant. If the Stock Option Agreement so provides or the
Committee so approves, a Nonqualified Stock Option may be transferred by a Participant through a gift or domestic relations order
to the Participant’s family members to the extent in compliance with applicable securities laws and regulations and provided
that such transfer is not a transfer for value (within the meaning of applicable securities laws and regulations). The holder of
a Nonqualified Stock Option transferred pursuant to this section shall be bound by the same terms and conditions that governed
the Option during the period that it was held by the Participant. No right or interest of a Participant in any Option shall be
liable for, or subject to, any lien, obligation, or liability of such Participant.

 

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F. Vesting.
Options will vest as provided in the Stock Option Agreement.

 

G. Termination.
Options will terminate as provided in the Stock Option Agreement. The Stock Option Agreement shall provide for specific events
of termination. In this regard, if for any reason other than death or permanent and total disability, an Optionee ceases to be
employed by the Corporation or any of its Affiliates (such event being called a “Termination”), Options or Stock Awards
held at the date of Termination (to the extent then exercisable) may be exercised in whole or in part at any time within three
months of the date of such Termination, or such other period of not less than 30 days after the date of such Termination as is
specified in the Option Agreement or Stock Award Agreement or by amendment thereof (but in no event after the Expiration Date);
provided, however, that if such exercise of the Option would result in liability for the Optionee under Section 16(b) of the Exchange
Act, then such three-month period automatically shall be extended until the tenth day following the last date upon which Optionee
has any liability under Section 16(b) (but in no event after the Expiration Date); and further provided that if such Optionee is
a “specified employee” as that term is defined by Section 409A(a)(2)(B)(i) of the Code, no distribution shall occur
until six months after the Optionee’s separation from service. If an Optionee dies or becomes permanently and totally disabled
(within the meaning of Section 22(e)(3) of the Code) while employed by the Company or an Affiliate or within the period that the
Option remains exercisable after Termination, Options then held (to the extent then exercisable) may be exercised, in whole or
in part, by the Optionee, by the Optionee's personal representative or by the person to whom the Option is transferred by devise
or the laws of descent and distribution, at any time within twelve months after the death or twelve months after the permanent
and total disability of the Optionee or any longer period specified in the Option Agreement or Stock Award Agreement or by amendment
thereof (but in no event after the Expiration Date). For purposes of this Section, “employment” includes service as
a Director or as a Consultant. For purposes of this Section, an Optionee's employment shall not be deemed to terminate by reason
of sick leave, military leave or other leave of absence approved by the Administrator, if the period of any such leave does not
exceed 90 days or, if longer, if the Optionee's right to reemployment by the Company or any Affiliate is guaranteed either contractually
or by statute.

 

H. Exercise.
Subject to the provisions of this Plan and the applicable Stock Option Agreement, an Option may be exercised to the extent vested
in whole at any time or in part from time to time at such times and in compliance with such requirements as the Committee shall
determine. A partial exercise of an Option shall not affect the right to exercise the Option from time to time in accordance with
this Plan and the applicable Stock Option Agreement with respect to the remaining shares subject to the Option. An Option may not
be exercised with respect to fractional shares of Common Stock.

 

I. Payment.
Unless otherwise provided by the Stock Option Agreement, payment of the exercise price for an Option shall be made in cash or a
cash equivalent acceptable to the Committee or if the Common Stock is traded on an established securities market, by payment of
the exercise price by a broker-dealer or by the Option holder with cash advanced by the broker-dealer if the exercise notice is
accompanied by the Option holder’s written irrevocable instructions to deliver the Common Stock acquired upon exercise of
the Option to the broker-dealer or by delivery of the Common Stock to the broker-dealer with an irrevocable commitment by the broker-dealer
to forward the exercise price to the Corporation. With the consent of the Committee, payment of all or a part of the exercise price
of an Option may also be made (i) by surrender to the Corporation (or delivery to the Corporation of a properly executed form of
attestation of ownership) of shares of Common Stock that have been held for such period prior to the date of exercise as is necessary
to avoid adverse accounting treatment to the Corporation, or (ii) any other method acceptable to the Committee, including without
limitation, the withholding of shares receivable upon settlement of the option in payment of the exercise price. If Common Stock
is used to pay all or part of the exercise price, the sum of the cash or cash equivalent and the Fair Market Value (determined
as of the date of exercise) of the shares surrendered must not be less than the Option price of the shares for which the Option
is being exercised.

 

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J. Stockholder Rights.
No Participant shall have any rights as a stockholder with respect to shares subject to an Option until the date of exercise of
such Option and the certificate for shares of Common Stock to be received on exercise of such Option has been issued by the Corporation.

 

K. Disposition and
Stock Certificate Legends for Incentive Stock Option Shares. A Participant shall notify the Corporation of any sale or other
disposition of Common Stock acquired pursuant to an Incentive Stock Option if such sale or disposition occurs (i) within two years
of the grant of an Option or (ii) within one year of the issuance of the Common Stock to the Participant. Such notice shall be
in writing and directed to the Chief Financial Officer of the Corporation or is his/her absence, the Chief Executive Officer. The
Corporation may require that certificates evidencing shares of Common Stock purchased upon the exercise of Incentive Stock Option
issued under this Plan be endorsed with a legend in substantially the following form:

 

THE SHARES EVIDENCED BY THIS CERTIFICATE
MAY NOT BE SOLD OR TRANSFERRED PRIOR TO ___, 20___, IN THE ABSENCE OF A WRITTEN STATEMENT FROM THE CORPORATION TO THE EFFECT THAT
THE CORPORATION IS AWARE OF THE FACTS OF SUCH SALE OR TRANSFER.

 

The blank contained
in this legend shall be filled in with the date that is the later of (i) one year and one day after the date of the exercise of
such Incentive Stock Option or (ii) two years and one day after the grant of such Incentive Stock Option.

 

K. No Repricing.
In no event shall the Committee permit a Repricing of any Option without the approval of the stockholders of the Corporation.

 

L. Right of Repurchase.
The Option may, but need not, include a provision whereby the Company may elect, prior to the Listing Date, to repurchase all or
any part of the vested shares exercised pursuant to the Option; provided, however, that (i) such repurchase right shall be exercisable
only within (A) the ninety (90) day period following the termination of employment or the relationship as a Director or Consultant
(or in the case of a post-termination exercise of the Option, the ninety (90) period following such exercise), or (B) such longer
period as may be agreed to by the Company and the Optionee, (ii) such repurchase right shall be exercisable for less than all of
the vested shares only with the Optionee’s consent, and (iii) such right shall be exercisable only for cash or cancellation
of purchase money indebtedness for the shares at a repurchase price equal to the stock’s Fair Market Value at the time of
such termination. Notwithstanding the foregoing, shares received on exercise of an Option by an officer, director or Consultant
may be subject to additional or greater restrictions specified in the Option Agreement.

 

M. Right of First
Refusal. The Option may, but need not, include a provision whereby the Company may elect, prior to the Listing Date, to exercise
a right of first refusal following receipt of notice from the Optionee of the intent to transfer all or any part of the shares
exercised pursuant to the Option. Such right of first refusal shall be exercised by the Company no more than thirty (30) days following
receipt of notice of the Optionee’s intent to transfer shares and must be exercised as to all the shares the Optionee intends
to transfer unless the Optionee consents to exercise for less than all the shares offered. The purchase of the shares following
exercise shall be completed within thirty (30) days of the Company’s receipt of notice of the Optionee’s intent to
transfer shares, or such longer period of time as has been offered by the person to whom the Optionee intends to transfer the shares,
or as may be agreed to by the Company and the Optionee. Except as expressly provided in this Subsection (j), such right of first
refusal shall otherwise comply with the provisions of the Bylaws of the Company.

 

    	-10-

    	 

    

 

7. Stock Awards

 

A. Stock Bonus Awards.
Each Stock Award Agreement for a Stock Bonus Award shall be in such form and shall contain such terms and conditions (including
provisions relating to consideration, vesting, reacquisition of shares following termination, and transferability of shares) as
the Committee shall deem appropriate. The terms and conditions of Stock Award Agreements for Stock Bonus Awards may change from
time to time, and the terms and conditions of separate Stock Bonus Awards need not be identical.

 

B. Restricted Stock
Awards. Each Stock Award Agreement for a Restricted Stock Award shall be in such form and shall contain such terms and conditions
(including provisions relating to purchase price, consideration, vesting, reacquisition of shares following termination, and transferability
of shares) as the Committee shall deem appropriate. The terms and conditions of the Stock Award Agreements for Restricted Stock
Awards may change from time to time, and the terms and conditions of separate Restricted Stock Awards need not be identical. Vesting
of any grant of Restricted Stock Awards may be further conditioned upon the attainment of Performance Objectives established by
the Committee in accordance with the applicable provisions of Section 8 of this Plan regarding Performance Shares.

 

C. Stock Appreciation
Rights. Each Stock Award Agreement for Stock Appreciation Rights shall be in such form and shall contain such terms and conditions
(including provisions relating to vesting, reacquisition of shares following termination, and transferability of shares) as the
Committee shall deem appropriate. The terms and conditions of Stock Appreciation Rights may change from time to time, and the terms
and conditions of separate Stock Appreciation Rights need not be identical. No Stock Appreciation Right shall be exercisable after
the expiration of seven (7) years from the date such Stock Appreciation Right is granted. The base price per share for each share
of Common Stock covered by an Award of Stock Appreciation Rights shall not be less than one hundred percent (100%) of the Fair
Market Value of a share of Common Stock on the date of grant. In no event shall the Committee permit a Repricing of any Stock Appreciation
Right without the approval of the stockholders of the Corporation.

 

D. Deferred Shares.
The Committee may authorize grants of Deferred Shares to Participants upon such terms and conditions as the Committee may determine
in accordance with the following provisions:

 

(i) Each
grant shall constitute the agreement by the Corporation to issue or transfer shares of Common Stock to the Participant in the future
in consideration of the performance of services, subject to the fulfillment during the Deferral Period of such conditions as the
Committee may specify.

 

(ii) Each
grant may be made without additional consideration from the Participant or in consideration of a payment by the Participant that
is less than the Fair Market Value on the date of grant.

 

(iii) Each
grant shall provide that the Deferred Shares covered thereby shall be subject to a Deferral Period, which shall be fixed by the
Committee on the date of grant, and any grant or sale may provide for the earlier termination of such period in the event of a
change in control of the Corporation or other similar transaction or event.

 

(iv) During
the Deferral Period, the Participant shall not have any right to transfer any rights under the subject Award, shall not have any
rights of ownership in the Deferred Shares and shall not have any right to vote such shares, but the Committee may on or after
the date of grant, authorize the payment of dividend or other distribution equivalents on such shares in cash or additional shares
on a current, deferred or contingent basis.

 

    	-11-

    	 

    

 

(v) Any grant
of the vesting thereof may be further conditioned upon the attainment of Performance Objectives established by the Committee in
accordance with the applicable provisions of Section 8 of this Plan regarding Performance Shares.

 

(vi) Each
grant shall be evidenced by an agreement delivered to and accepted by the Participant and containing such terms and provisions
as the Committee may determine consistent with this Plan.

 

8. Performance Shares

 

A. The Committee may
authorize grants of Performance Shares, which shall become payable to the Participant upon the achievement of specified Performance
Objectives, upon such terms and conditions as the Committee may determine in accordance with the following provisions:

 

(i) Each
grant shall specify the number of Performance Shares to which it pertains, which may be subject to adjustment to reflect changes
in compensation or other factors.

 

(ii) The
Performance Period with respect to each Performance Share shall commence on the date established by the Committee and may be subject
to earlier termination in the event of a change in control of the Corporation or similar transaction or event.

 

(iii) Each
grant shall specify the Performance Objectives that are to be achieved by the Participant.

 

(iv) Each
grant may specify in respect of the specified Performance Objectives a minimum acceptable level of achievement below which no payment
will be made and may set forth a formula for determining the amount of any payment to be made if performance is at or above such
minimum acceptable level but falls short of the maximum achievement of the specified Performance Objectives.

 

(v) Each
grant shall specify the time and manner of payment of Performance Shares that shall have been earned, and any grant may specify
that any such amount may be paid by the Corporation in cash, shares of Common Stock or any combination thereof and may either grant
to the Participant or reserve to the Committee the right to elect among those alternatives.

 

(vi) Any
grant of Performance Shares may specify that the amount payable with respect thereto may not exceed a maximum specified by the
Committee on the date of grant.

 

(vii) Any
grant of Performance Shares may provide for the payment to the Participant of dividend or other distribution equivalents thereon
in cash or additional shares of Common Stock on a current, deferred or contingent basis.

 

(viii) If
provided in the terms of the grant and subject to the requirements of Section 162(m) of the Code (in the case of Awards intended
to qualify for exception therefrom), the Committee may adjust Performance Objectives and the related minimum acceptable level of
achievement if, in the sole judgment of the Committee, events or transactions have occurred after the date of grant that are unrelated
to the performance of the Participant and result in distortion of the Performance Objectives or the related minimum acceptable
level of achievement.

 

    	-12-

    	 

    

 

(ix) Each
grant shall be evidenced by an agreement that shall be delivered to and accepted by the Participant, which shall state that the
Performance Shares are subject to all of the terms and conditions of this Plan and such other terms and provisions as the Committee
may determine consistent with this Plan.

 

9. Changes in Capital Structure

 

A. No Limitations
of Rights. The existence of outstanding Awards shall not affect in any way the right or power of the Corporation or its stockholders
to make or authorize any or all adjustments, recapitalizations, reorganizations or other changes in the Corporation’s capital
structure or its business, or any merger or consolidation of the Corporation, or any issuance of bonds, debentures, preferred or
prior preference stock ahead of or affecting the Common Stock or the rights thereof, or the dissolution or liquidation of the Corporation,
or any sale or transfer of all or any part of its assets or business, or any other corporate act or proceeding, whether of a similar
character or otherwise.

 

B. Changes in Capitalization.
If the Corporation shall effect a subdivision or consolidation of shares or other capital readjustment, the payment of a stock
dividend, or other increase or reduction of the number of shares of the Common Stock outstanding, without receiving consideration
therefore in money, services or property, then (i) the number, class, and per share price of shares of Common Stock subject to
outstanding Options and other Awards hereunder and (ii) the number and class of shares then reserved for issuance under this Plan
and the maximum number of shares for which Awards may be granted to a Participant during a specified time period shall be appropriately
and proportionately adjusted. The conversion of convertible securities of the Corporation shall not be treated as effected “without
receiving consideration.” The Committee shall make such adjustments, and its determinations shall be final, binding and conclusive.

 

C. Merger, Consolidation
or Asset Sale. If the Corporation is merged or consolidated with another entity or sells or otherwise disposes of substantially
all of its assets to another company while Options or Stock Awards remain outstanding under this Plan, unless provisions are made
in connection with such transaction for the continuance of this Plan and/or the assumption or substitution of such Options or Stock
Awards with new options or stock awards covering the stock of the successor company, or parent or subsidiary thereof, with appropriate
adjustments as to the number and kind of shares and prices, then all outstanding Options and Stock Awards which have not been continued,
assumed or for which a substituted award has not been granted shall, whether or not vested or then exercisable, unless otherwise
specified in the Stock Option Agreement or Stock Award Agreement, vest immediately pursuant to the provisions of Section 409A of
the Code and the related Treasury Regulations.

 

D. Limitation on
Adjustment. Except as previously expressly provided, neither the issuance by the Corporation of shares of stock of any class,
or securities convertible into shares of stock of any class, for cash or property, or for labor or services either upon direct
sale or upon the exercise of rights or warrants to subscribe therefor, or upon conversion of shares or obligations of the Corporation
convertible into such shares or other securities, nor the increase or decrease of the number of authorized shares of stock, nor
the addition or deletion of classes of stock, shall affect, and no adjustment by reason thereof shall be made with respect to,
the number, class or price of shares of Common Stock then subject to outstanding Options or Stock Awards.

 

    	-13-

    	 

    

 

E. Change of Control.
In connection with any actual or potential Change in Control, the Board will take all such actions hereunder as it may determine
to be necessary or appropriate to treat Participants equitably hereunder, including without limitation the modification or waiver
of applicable Performance Measures, Award Periods or Long-term Incentive Compensation Awards, notwithstanding the terms of any
initial Long-term Incentive Compensation Award, and whether to establish or fund a trust or other arrangement intended to secure
the payment of such Awards.

 

F. Immediate Vesting
of Stock Options upon Change of Control. Notwithstanding anything to the contrary contained in the Long Term Incentive Plan
of xG Technology, Inc., as of the Effective Date, Participants shall be entitled to exercise his/her stock options, upon a change
in control, as follows; any and all unvested Stock Options held by the Participant shall become 100%
vested and exercisable, so long as Participant is i) currently employed at the time of exercise, ii) not employed and termination
of employment did not occur within one year of Change of Control, or, iii) not employed, and Participant was not offered a job
position after Change of Control with responsibilities and duties similar to the job position Participant held prior to Change
of Control.

  

10. Withholding of Taxes

 

The Corporation or
an Affiliate shall have the right, before any certificate for any Common Stock is delivered, to deduct or withhold from any payment
owed to a Participant any amount that is necessary in order to satisfy any withholding requirement that the Corporation or Affiliate
in good faith believes is imposed upon it in connection with U.S. federal, state, or local taxes, including transfer taxes, as
a result of the issuance of, or lapse of restrictions on, such Common Stock, or otherwise require such Participant to make provision
for payment of any such withholding amount. Subject to such conditions as may be established by the Committee, the Committee may
permit a Participant to (i) have Common Stock otherwise issuable under an Option or Stock Award withheld to the extent necessary
to comply with minimum statutory withholding rate requirements, (ii) tender back to the Corporation shares of Common Stock received
pursuant to an Option or Stock Award to the extent necessary to comply with minimum statutory withholding rate requirements for
supplemental income, (iii) deliver to the Corporation previously acquired Common Stock, (iv) have funds withheld from payments
of wages, salary or other cash compensation due the Participant, (v) pay the Corporation or its Affiliate in cash, in order to
satisfy part or all of the obligations for any taxes required to be withheld or otherwise deducted and paid by the Corporation
or its Affiliate with respect to the Option or Stock Award; or (vi) establish a 10b5-1 trading plan for withheld stock designed
to facilitate the sale of stock in connection with the vesting of such shares, the proceeds of which shall be utilized to make
all applicable withholding payments in a manner to be coordinated by the Corporation’s Chief Financial Officer.

 

11. Compliance with Law and Approval
of Regulatory Bodies

 

A. General Requirements.
No Option or Stock Award shall be exercisable, no Common Stock shall be issued, no certificates for shares of Common Stock shall
be delivered, and no payment shall be made under this Plan except in compliance with all applicable federal and state laws and
regulations (including, without limitation, withholding tax requirements), any listing agreement to which the Corporation is a
party, and the rules of all domestic stock exchanges or quotation systems on which the Corporation’s shares may be listed.
The Corporation shall have the right to rely on an opinion of its counsel as to such compliance. Any share certificate issued to
evidence Common Stock when a Stock Award is granted or for which an Option or Stock Award is exercised may bear such legends and
statements as the Committee may deem advisable to assure compliance with federal and state laws and regulations. No Option or Stock
Award shall be exercisable, no Stock Award shall be granted, no Common Stock shall be issued, no certificate for shares shall be
delivered, and no payment shall be made under this Plan until the Corporation has obtained such consent or approval as the Committee
may deem advisable from regulatory bodies having jurisdiction over such matters.

 

    	-14-

    	 

    

 

B. Participant Representations.
The Committee may require that a Participant, as a condition to receipt or exercise of a particular award, execute and deliver
to the Corporation a written statement, in form satisfactory to the Committee, in which the Participant represents and warrants
that the shares are being acquired for such person’s own account, for investment only and not with a view to the resale or
distribution thereof. The Participant shall, at the request of the Committee, be required to represent and warrant in writing that
any subsequent resale or distribution of shares of Common Stock by the Participant shall be made only pursuant to either (i) a
registration statement on an appropriate form under the Securities Act of 1933, which registration statement has become effective
and is current with regard to the shares being sold, or (ii) a specific exemption from the registration requirements of the Securities
Act of 1933, but in claiming such exemption the Participant shall, prior to any offer of sale or sale of such shares, obtain a
prior favorable written opinion of counsel, in form and substance satisfactory to counsel for the Corporation, as to the application
of such exemption thereto.

 

12. General Provisions

 

A. Effect on Employment
and Service. Neither the adoption of this Plan, its operation, nor any documents describing or referring to this Plan (or any
part thereof) shall (i) confer upon any individual any right to continue in the employ or service of the Corporation or an Affiliate,
(ii) in any way affect any right and power of the Corporation or an Affiliate to change an individual’s duties or terminate
the employment or service of any individual at any time with or without assigning a reason therefor or (iii) except to the extent
the Committee grants an Option or Stock Award to such individual, confer on any individual the right to participate in the benefits
of this Plan.

 

B. Use of Proceeds.
The proceeds received by the Corporation from the sale of Common Stock pursuant to this Plan shall be used for general corporate
purposes.

 

C. Unfunded Plan.
This Plan, insofar as it provides for grants, shall be unfunded, and the Corporation shall not be required to segregate any assets
that may at any time be represented by grants under this Plan. Any liability of the Corporation to any person with respect to any
grant under this Plan shall be based solely upon any contractual obligations that may be created pursuant to this Plan. No such
obligation of the Corporation shall be deemed to be secured by any pledge of, or other encumbrance on, any property of the Corporation.

 

D. Rules of Construction.
Headings are given to the Sections of this Plan solely as a convenience to facilitate reference. The reference to any statute,
regulation, or other provision of law shall be construed to refer to any amendment to or successor of such provision of law.

 

E. Choice of Law.
This Plan and all Stock Option Agreements and Stock Award Agreements entered into under this Plan shall be interpreted under the
Corporation Law excluding (to the greatest extent permissible by law) any rule of law that would cause the application of the laws
of any jurisdiction other than the Corporation Law.

 

F. Fractional Shares.
The Corporation shall not be required to issue fractional shares pursuant to this Plan. The Committee may provide for elimination
of fractional shares or the settlement of such fraction shares in cash.

 

G. Foreign Employees.
In order to facilitate the making of any grant or combination of grants under this Plan, the Committee may provide for such special
terms for Awards to Participants who are foreign nationals, or who are employed by the Corporation or any Affiliate outside of
the United States, as the Committee may consider necessary or appropriate to accommodate differences in local law, tax policy or
custom. Moreover, the Committee may approve such supplements to, or amendments, restatements or alternative versions of, this Plan
as it may consider necessary or appropriate for such purposes without thereby affecting the terms of this Plan, as then in effect,
unless this Plan could have been amended to eliminate such inconsistency without further approval by the stockholders of the Corporation.

 

    	-15-

    	 

    

 

13. Amendment and Termination

 

The Board may amend
or terminate this Plan from time to time; provided, however, stockholder approval shall be required for any amendment that (i)
increases the aggregate number of shares of Common Stock that may be issued under this Plan, except as contemplated by Section
5.A or Section 9.B; (ii) changes the class of employees eligible to receive Incentive Stock Options; (iii) modifies the restrictions
on Repricings set forth in this Plan; or (iv) is required by the terms of any applicable law, regulation or rule, including the
rules of any market on which the Corporation shares are traded or exchange on which the Corporation shares are listed. Except as
specifically permitted by this Plan, Stock Option Agreement or Stock Award Agreement or as required to comply with applicable law,
regulation or rule, no amendment shall, without a Participant’s consent, adversely affect any rights of such Participant
under any Option or Stock Award outstanding at the time such amendment is made; provided, however, that an amendment that may cause
an Incentive Stock Option to become a Nonqualified Stock Option shall not be treated as adversely affecting the rights of the Participant.
Any amendment requiring stockholder approval shall be approved by the stockholders of the Corporation within twelve (12) months
of the date such amendment is adopted by the Board.

 

14. Effective Date of Plan; Duration
of Plan

 

A. This Plan shall
be effective upon adoption by the Board, subject to approval within twelve (12) months by the stockholders of the Corporation.
In the event that the stockholders of the Corporation shall not approve this Plan within such twelve (12) month period, this Plan
shall terminate. Unless and until the Plan has been approved by the stockholders of the Corporation, no Option or Stock Award may
be exercised, and no shares of Common Stock may be issued under the Plan. In the event that the stockholders of the Corporation
shall not approve the Plan within such twelve (12) month period, the Plan and any previously granted Options or Stock Awards shall
terminate.

 

B. Unless previously
terminated, this Plan will terminate ten (10) years after the earlier of (i) the date this Plan is adopted by the Board, or (ii)
the date this Plan is approved by the stockholders, except that Awards that are granted under this Plan prior to its termination
will continue to be administered under the terms of this Plan until the Awards terminate or are exercised.

 

IN WITNESS WHEREOF,
the Corporation has caused this Plan to be executed by a duly authorized officer as of the date of adoption of this Plan by the
Board of Directors.

 

xG TECHNOLOGY, INC.

 

	By:	 	 

 

    	-16-Ex
10.4

xG
TECHNOLOGY, INC.

 

STOCK
OPTION AGREEMENT

 

Unless the context
clearly indicates otherwise, capitalized terms used in this Agreement shall have the meanings assigned to such terms in the Company’s
Long-term Incentive Plan of 2013.

 

Whereas,
the Board of Directors of the Company has adopted the Plan for the purpose of attracting and retaining the services of selected
key employees (including officers and directors), non-employee members of the Board and consultants and other independent contractors
who contribute to the financial success of the Company; and

 

Whereas,
Participant is an individual who is to render valuable services to the Company, and this Agreement is executed pursuant to, and
is intended to carry out the purposes of, the Plan in connection with the Company’s grant of a stock option to Participant;

 

Now,
Therefore, it is agreed as follows:

 

1.          Provisions
of Plan Binding. This Agreement and the option evidenced hereby are made and granted pursuant to the Plan and are in all respects
limited by and subject to the express terms and provisions of the Plan, which are incorporated herein by reference.

 

2.          Grant
of Option. Subject to and upon the terms and conditions set forth in this Agreement and the Plan, the Company hereby grants
to Participant, as of the Grant Date, a stock option to purchase up to that number of Option Shares specified in the Grant Notice.
The Option Shares shall be purchasable from time to time during the option term and at the Option Price per share specified in
the Grant Notice.

 

3.          Option
Term. This Option shall expire at the close of business on the Expiration Date specified in the Grant Notice, unless sooner
terminated in accordance with Section 6 or 18 hereof or any applicable provision of the Plan; provided, in no event shall
this option have a maximum term in excess of ten (10) years measured from the Grant Date.

 

4.          Nontransferability.
This Option shall be neither transferable nor assignable by Participant other than by will or by the laws of descent and distribution
following the Participant’s death and may be exercised, during Participant’s lifetime, only by Participant.

 

5.          Dates
of Exercise. This Option may not be exercised in whole or in part at any time prior to the time the Plan or any increases in
shares reserved under the Plan is approved by the Company’s shareholders. Provided such shareholder approval is obtained,
this Option shall thereupon become exercisable for the Option Shares as specified in the Grant Notice. If the Option becomes exercisable
in installments, such installments shall accumulate and the Option shall remain exercisable for such installments until the Expiration
Date or the sooner termination of the Option term under Section 6 of this Agreement or any applicable provision of the Plan.

 

    	1

    	 

    

 

6.            Accelerated
Termination of Option Term. The Option term specified in Section 3 above shall terminate (and this Option shall cease to be
exercisable) prior to the Expiration Date should any of the following provisions become applicable:

 

(a)          Except
as otherwise provided in subsection (b) or (c) below, should Participant cease to remain in Service while this Option is outstanding,
then the period for exercising this Option shall be reduced to a [three (3)-month] period commencing with the date of such cessation
of Service, but in no event shall this Option be exercisable at any time after the Expiration Date. Upon the expiration of such
[three (3)-month] period or (if earlier) upon the Expiration Date, this Option shall terminate and cease to be outstanding.

 

(b)          Should
Participant die while this Option is outstanding, then the personal representative of the Participant’s estate or the person
or persons to whom the option is transferred pursuant to the Participant’s will or in accordance with the law of descent
and distribution shall have the right to exercise this Option. Such right shall lapse, and this Option shall cease to be exercisable,
upon the earlier of (i) the expiration of the twelve (12) month period measured from the date of Participant’s death or (ii)
the Expiration Date. Upon the expiration of such twelve (12) month period or (if earlier) upon the Expiration Date, this Option
shall terminate and cease to be outstanding.

 

(c)          Should
Participant become Permanently Disabled and cease by reason thereof to remain in Service while this Option is outstanding, then
the Participant shall have a period of twelve (12) months (commencing with the date of such cessation of Service) during which
to exercise this Option, but in no event shall this Option be exercisable at any time after the Expiration Date. Upon the expiration
of such limited period of exercisability or (if earlier) upon the Expiration Date, this Option shall terminate and cease to be
outstanding.

 

(d)          During
the limited period of exercisability applicable under subsections (a), (b) or (c) above, this option may be exercised for any or
all of the Option Shares in which the Participant, at the time of cessation of Service, is vested in accordance with the exercise/vesting
provisions specified in the Grant Notice or the special acceleration provisions of the Plan.

 

(e)          Notwithstanding
any provision of this Section 6 or any other provision of this Agreement or the Plan to the contrary, any Options granted under
the Plan shall terminate as of the date Participant ceases to be in the Service of the Company if Participant was terminated for
“cause” or could have been terminated for “cause.” If Participant has an employment or consulting agreement
with the Company, the term “cause” shall have the meaning given that term in the employment or consulting agreement.
If Participant does not have such an agreement with the Company, or if such agreement does not define the term “cause,”
the term “cause” shall have the meaning set forth in Section 6(a) of the Plan.

 

7.            Adjustment
in Option Shares.

 

(a)          In
the event any change is made to the Company’s outstanding Common Stock by reason of any stock split, stock dividend, combination
of shares, exchange of shares, or other change affecting the outstanding Common Stock as a class without receipt of consideration,
then appropriate adjustments shall be made to the total number of Option Shares subject to this option and the Option Price payable
per share in order to reflect such change and thereby preclude a dilution or enlargement of benefits hereunder.

 

    	2

    	 

    

 

(b)          If
pursuant to the terms of the Plan, this option is to be assumed or is otherwise to remain outstanding after a Corporate Transaction,
then this option shall be appropriately adjusted to apply and pertain to the number and class of securities that would have been
issuable to the Participant in the consummation of such Corporate Transaction had the option been exercised immediately prior to
such Corporate Transaction, and appropriate adjustments shall also be made to the Option Price payable per share, provided
the aggregate Option Price payable hereunder shall remain the same.

 

8.            Privilege
of Stock Ownership. The holder of this option shall not have any of the rights of a shareholder with respect to the Option
Shares until such individual shall have exercised the option and paid the Option Price.

 

9.            Manner
of Exercising Option.

 

(a)          The
Options will be exercisable by notice (an “Exercise Notice”) and payment to the Company in accordance with the procedure
prescribed herein; provided, that the aggregate Exercise Price with respect to any one such exercise will not be less than $[5,000],
unless the exercise represents an exercise of all Options that are vested and exercisable as of the date of the exercise. If the
Employee fails to accept delivery of and pay for all or any part of the number of shares specified in the Exercise Notice upon
tender or delivery thereof, the Employee’s right to exercise the Options with respect to the undelivered shares may be terminated
in the sole discretion of the Company’s Compensation Committee.

 

(b) Each Exercise
Notice will (1) state the number of shares in respect of which Options are being exercised, (2) be accompanied by payment as provided
in paragraph (c) below and (3) be signed by the person or persons entitled to exercise the Options. If Options are being exercised
by any person or persons other than the Employee, the Exercise Notice will be accompanied by proof, satisfactory to the Company
and its counsel, of the right of the person or persons to exercise the Options.

 

(c) Payment of the
Exercise Price will be made by delivering to the Company any one or a combination of (1) a certified or bank cashier’s check
payable to the Company or its order or a wire transfer directly to an account specified by the Company, (2) one or more certificates
evidencing shares of Common Stock owned by the Employee immediately prior to the exercise, together with a duly executed stock
power, having an aggregate Fair Market Value (defined below) on the date on which the Exercise Notice is given equal to the aggregate
Exercise Price or (3) a copy of irrevocable instructions to a registered broker/dealer to deliver promptly to the Company an amount
of proceeds from the sale of shares of Common Stock to be issued pursuant to the Options being exercised or of a loan being made
by such broker-dealer with respect to shares of Common Stock to be issued pursuant to the Options being exercised sufficient, in
either case, to pay the Exercise Price.

 

(d) The certificate
or certificates representing shares of Common Stock to be issued upon exercise of the Options will be registered in the name of
the person or persons exercising the Options, or, if the Options are exercised by the Employee and the Employee so requests in
the applicable Exercise Notice, in the name of the Employee and the Employee’s spouse, jointly, with right of survivorship.
The certificate or certificates will be delivered within 10 days after receipt of payment and compliance by the Employee; provided,
that in the case of clause (3) of the first sentence of Section 9(c), the Company will not make delivery of the certificate or
certificates until payment is actually received from the broker/dealer.

 

    	3

    	 

    

 

(e)          The
Company will have no obligation to issue or deliver fractional shares of Common Stock upon exercise of the Options but may, in
its sole discretion, elect to do so. In lieu of issuing any fractional share, the Company will pay to the person exercising the
Options, promptly following exercise, an amount in cash equal to the Fair Market Value of the fraction of a share as of the date
of exercise. “Fair Market Value” as of any date means (1) the closing sales price per share of Common Stock on the
national securities exchange on which the stock is principally traded, on the next preceding date on which there was a sale of
the stock on the exchange, (2) if the shares of Common Stock are not listed or admitted to trading on any exchange, the closing
price as reported by the Nasdaq Stock Market for the last preceding date on which there was a sale of the stock on that market,
(3) if the shares of Common Stock are not then listed on a national securities exchange or on the Nasdaq Stock Market, the average
of the highest reported bid and lowest reported asked prices for the shares of Common Stock as reported by the National Association
of Securities Dealers, Inc. Automated Quotations (“NASDAQ”) system for the last preceding date on which the bid and
asked prices were reported or (4) if the shares of Common Stock are not then listed on any securities exchange or prices therefor
are not then quoted in the NASDAQ system, the value determined in good faith by the Company’s Compensation Committee.

 

(f)          Should
the Company’s outstanding common stock be registered under Section 12(g) of the Securities Exchange Act of 1934, as amended
(the “1934 Act”), at the time the option is exercised, then the Option Price may also be paid as specified in Section
9(c)(3) of this Agreement.

 

 

10.          REPURCHASE
RIGHTS. THE GRANT NOTICE MAY GRANT THE COMPANY THE RIGHT TO REPURCHASE ANY SHARES ACQUIRED UNDER THIS OPTION, WHICH RIGHT SHALL
LAPSE OVER TIME BASED UPON THE PARTICIPANT’S LENGTH OF SERVICE TO THE COMPANY.

 

11.          Compliance
with Laws and Regulations.

 

(a)          The
exercise of this option and the issuance of Option Shares upon such exercise shall be subject to compliance by the Company and
the Participant with all applicable requirements of federal and state law relating thereto (and with all applicable regulations
of any stock exchange or market on which shares of the Company’s Common Stock may be listed at the time of such exercise
and issuance).

 

(b)          In
connection with the exercise of this option, Participant shall execute and deliver to the Company such representations in writing
as may be requested by the Company in order for it to comply with the applicable requirements of federal and state securities laws.

 

12.          Successors
and Assigns. Except to the extent otherwise provided in Section 4 above, the provisions of this Agreement shall inure to the
benefit of, and be binding upon, the successors, administrators, heirs, legal representatives and assigns of Participant and the
successors and assigns of the Company.

 

13.          Liability
of Company.

 

(a)          If
the Option Shares covered by this Agreement exceed, as of the Grant Date, the number of shares of Common Stock that may be issued
under the Plan without shareholder approval, then this option shall be void with respect to such excess shares, unless shareholder
approval of an amendment sufficiently increasing the number of shares of Common Stock issuable under the Plan is obtained in accordance
with the applicable provisions of the Plan.

 

    	4

    	 

    

 

(b)          The
inability of the Company to obtain approval from any regulatory body having authority the Company deems necessary to the lawful
issuance and sale of any Common Stock pursuant to this option shall relieve the Company of any liability with respect to the nonissuance
or sale of the Common Stock as to which such approval shall not have been obtained. The Company shall use its best efforts to obtain
all such approvals.

 

14.          Notices.
Any notice required to be given or delivered to the Company under the terms of this Agreement shall be in writing and addressed
to the Company in care of the corporate secretary at its principal corporate offices. Any notice required to be given or delivered
to Participant shall be in writing and addressed to Participant at the address indicated below Participant’s signature line
on the Grant Notice, or at such other address as the Participant shall have furnished the Company in writing at least ten (10)
days in advance of its effective date. All notices shall be deemed to have been given or delivered upon personal delivery or forty-eight
hours after deposit in the U.S. mail, postage prepaid and properly addressed to the party to be notified.

 

15.          Reserved.

 

16.          Authority
of Plan Administrator. All decisions of the Plan Administrator with respect to any question or issue arising under the Plan
or this Agreement shall be conclusive and binding on all persons having an interest in this option.

 

17.          Governing
Law. The interpretation, performance and enforcement of this Agreement shall be governed by the laws of the State of Delaware
without resort to its choice of law rules.

 

18.          Additional
Terms Applicable to an Incentive Stock Option. In the event this option is designated an incentive stock option in the Grant
Notice, the following terms and conditions shall also apply to the grant:

 

(a)          This
option shall cease to qualify for favorable tax treatment as an incentive stock option under the federal tax laws if (and to the
extent) this option is exercised for one or more Option Shares: (i) more than three (3) months after the date the Participant ceases
to be an Employee for any reason other than death or Permanent Disability or (ii) more than one (1) year after the date the Participant
ceases to be an Employee by reason of Permanent Disability.

 

(b)          In
the event this option is designated as immediately exercisable in the Grant Notice, then except in the event of a Corporate Transaction,
this option shall not become exercisable in the calendar year in which granted if (and to the extent) the aggregate Fair Market
Value (determined at the Grant Date) of the Common Stock for which this option would otherwise first become exercisable in such
calendar year, when added to the aggregate Fair Market Value (determined as of the respective date or dates of grant) of the Common
Stock for which one or more other post-1986 incentive stock options granted to the Participant prior to the Grant Date (whether
under the Plan or any other option plan of the Company or any Parent or Subsidiary corporations) first become exercisable during
the same calendar year, would exceed one hundred thousand dollars ($100,000). To the extent the exercisability of this option is
deferred by reason of the foregoing limitation, the deferred portion first will become exercisable in the first calendar year or
years thereafter in which the one hundred thousand dollar ($100,000) limitation of this Section 18(b) would not be contravened.

 

    	5

    	 

    

 

(c)          In
the event this option is designated as an installment option in the Grant Notice, no installment under this option shall qualify
for favorable tax treatment as an incentive stock option under the federal tax laws if (and to the extent) the aggregate Fair Market
Value (determined at the Grant Date) of the Common Stock for which such installment first becomes exercisable hereunder, when added
to the aggregate Fair Market Value (determined as of the respective date or dates of grant) of the Common Stock for which this
option or one or more other post-1986 incentive stock options granted to the Participant prior to the Grant Date (whether under
the Plan or any other option plan of the Company or any Parent or Subsidiary corporations) first become exercisable during the
same calendar year, would exceed one hundred thousand dollars ($100,000).

 

(d)          Should
the exercisability of this option be accelerated upon a Corporate Transaction, then this option shall qualify for favorable tax
treatment as an incentive stock option under the federal tax laws only to the extent the aggregate Fair Market Value (determined
at the Grant Date) of the Common Stock for which this option first becomes exercisable in the calendar year in which the Corporate
Transaction occurs does not, when added to the aggregate Fair Market Value (determined as of the respective date or dates of grant)
of the Common Stock for which this option or one or more other post-1986 incentive stock options granted to the Participant prior
to the Grant Date (whether under the Plan or any other option plan of the Company or any Parent or Subsidiary corporations) first
become exercisable during the same calendar year, exceed one hundred thousand dollars ($100,000).

 

(e)          To
the extent this option should fail to qualify as an incentive stock option under the federal tax laws, the Participant will recognize
compensation income in connection with the acquisition of one or more Option Shares hereunder, and the Participant must make appropriate
arrangements for the satisfaction of all federal, state or local income tax withholding requirements and federal Social Security
employee tax requirements applicable to such compensation income.

 

19.          Additional
Terms Applicable to a Non-Statutory Stock Option. In the event this option is designated a non-statutory stock option in the
Grant Notice, and whether or not the Participant exercises the option through the Company, Participant hereby agrees to make appropriate
arrangements with the Company for the satisfaction of all federal, state or local income tax withholding requirements and federal
Social Security employee tax requirements applicable to the exercise of this option.

 

20.          Definitions.
The following definitions shall apply to the respective capitalized terms used herein:

 

Board means
the Board of Directors of xG Technology, Inc.

 

Code means the
Internal Revenue Code of 1986, as amended.

 

Common Stock
means the Common Stock of xG Technology, Inc.

 

Company means
xG Technology, Inc., a Delaware corporation.

 

    	6

    	 

    

 

Corporate Transaction
means one or more of the following transactions: (i) a merger or consolidation in which the Company is not the surviving
entity, except for a transaction the principal purpose of which is to change the state of the Company’s incorporation, (ii)
the sale, transfer or other disposition of all or substantially all of the assets of the Company, (iii) any reverse merger
in which the Company is the surviving entity but in which fifty percent (50%) or more of the Company’s outstanding voting
stock is transferred to holders different from those who held the stock immediately prior to such merger, or (iv) the acquisition
of fifty percent (50%) or more of the Company’s outstanding voting stock by a person or group of related persons other than
the Company, a person that directly or indirectly controls, is controlled by or is under common control with the Company, or any
existing shareholder of the Company as of the date of the adoption of the Plan by such shareholders.

 

Employee means
an individual who is in the employ of the Company or any Parent or Subsidiary corporation. An Participant shall be considered to
be an Employee for so long as such individual remains in the employ of the Company or any Parent or Subsidiary corporation, subject
to the control and direction of the employer entity as to both the work to be performed and the manner and method of performance
or rendering consulting services.

 

Exercise Date
shall be date on which the executed Purchase Agreement for one or more Option Shares is delivered to the Company in accordance
with Section 9 of this Agreement.

 

Expiration Date
means the date specified in the Grant Notice as the date on which the option shall terminate (unless sooner terminated under the
Plan or pursuant hereto).

 

Fair Market Value
of a share of Common Stock on any relevant date shall be determined in accordance with the following provisions:

 

(a)          If
the Common Stock is at the time neither listed nor admitted to trading on any stock exchange nor traded in the over-the-counter
market, or if the Plan Administrator otherwise determines that the valuation provisions of subsections (b) and (c) below will not
result in a true and accurate valuation of the Common Stock, then the Fair Market Value shall be determined by the Plan Administrator
after taking into account such factors as the Plan Administrator shall deem appropriate under the circumstances.

 

(b)          If
the Common Stock is not at the time listed or admitted to trading on any stock exchange but is traded in the over-the-counter market,
the Fair Market Value shall be the mean between the highest bid and the lowest asked prices (or if such information is available
the closing selling price) per share of Common Stock on the date in question in the over-the-counter market, as such prices are
reported by the National Association of Securities Dealers through its NASDAQ National Market System or any successor system. If
there are no reported bid and asked prices (or closing selling price) for the Common Stock on the date in question, then the mean
between the highest bid and lowest asked prices (or closing selling price) on the last preceding date for which such quotations
exist shall be determinative of Fair Market Value.

 

(c)          
If the Common Stock is at the time listed or admitted to trading on any stock exchange, then the Fair Market Value shall be the
closing selling price per share of Common Stock on the date in question on the stock exchange determined by the Plan Administrator
to be the primary market for the Common Stock. If there is no reported sale of Common Stock on such exchange on the date in question,
then the Fair Market Value shall be the closing selling price on the exchange on the last preceding date for which such quotation
exists.

 

Grant Date means
the date specified in the Grant Notice as the date on which the option was granted to the Participant under the Plan.

 

    	7

    	 

    

 

Grant Notice
means the Notice of Grant of Stock Option which accompanies this Agreement.

 

Incentive Stock
Option means an incentive stock option which satisfies the requirements of Section 422 of the Code.

 

Non-Statutory Stock
Option means an option not intended to meet the statutory requirements prescribed for an Incentive Stock Option.

 

Option Shares
means the total number of shares of Common Stock indicated in the Grant Notice as purchasable under this option.

 

Participant
means the individual identified in the Grant Notice as the person to whom this option has been granted under the Plan.

 

Option Price
means the price indicated in the Grant Notice as the exercise price per share to be paid by the Participant for the exercise of
this option.

 

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

 

Permanently Disabled
or Permanent Disability means the inability of an individual to engage in any substantial gainful activity by reason of any medically-determinable
physical or mental impairment that can be expected to result in death or that has lasted or can be expected to last for a continuous
period of not less than 12 months.

 

Plan means the
2013 Long-term Incentive Plan.

 

Plan Administrator
means either the Board or a committee of one or more Board members, to the extent such committee may at the time be responsible
for plan administration.

 

Purchase Agreement
means the stock purchase agreement, in substantially the form of the exhibit to the Grant Notice, which is to be executed in connection
with the exercise of this option for one or more Option Shares.

 

Service means
the performance of services for the Company or any Parent or Subsidiary corporation by an individual in the capacity of an Employee,
a non-employee member of the board of directors or an independent consultant or advisor. Accordingly, the Participant shall be
deemed to remain in Service for so long as such individual renders services to the Company or any Parent or Subsidiary corporation
on a periodic basis in the capacity of an Employee, a non-employee member of the board of directors or an independent consultant
or advisor.

 

Subsidiary corporation
means each corporation (other than the Company) in an unbroken chain of corporations beginning with the Company, provided each
such corporation (other than the last corporation) in the unbroken chain owns, at the time of the determination, stock possessing
more than fifty percent (50%) of the total combined voting power of all classes of stock in one of the other corporations in such
chain.

 

    	8

    	 

    

 

	Date 	 	 	 
	 	 	 	 
	 	 	 	xG Technology, Inc.
	 	 	 	 
	 	 	 	By:	 
	 	 	 	Its:	 
	 	 	 	 
	 	 	 	 
	 	 	 	Participant
	 	 	 	 
	 		Address:	 
	 	 	 	 
	 	 	 	 
	 	 	 	 
	 	 	 	Participant’s Spouse
	 	 	 	 
	 		Address: 	 
	 	 	 	 

 

 

    	9

    	 

    

 

xG Technology, Inc.

 

2013 Long Term Incentive Plan

 

RESTRICTED STOCK AWARD AGREEMENT

 

THIS AGREEMENT is made as of this __ day of
______, by and between xG Technology, Inc., a Delaware corporation (the “Company”), and [______________] (“Participant”).

 

The Company, pursuant
to its 2013 Long Term Incentive Plan (the “Plan”), hereby grants the following stock
award to Participant, which award shall have the terms and conditions set forth in this Agreement:

 

1.     Award

 

The Company, effective as of the
date of this Agreement, hereby grants to Participant a restricted stock award of [_____] shares (the “Shares”) of common
stock, par value $0.01 per share, of the Company (the “Common Stock”), subject to the terms and conditions set forth
herein.

 

2.     Vesting

 

Subject to the terms and conditions
of this Agreement, the Shares shall vest in Participant as follows: the Shares shall vest ratably over a three-year period,
with one-third of the Shares (------) vesting on December 31, 200X; one-third of the Shares (-----) vesting on December 31, 200Y,
and the balance or (-----) of the Shares vesting on December 31, 200Z, if, and only if, Participant remains continuously employed
by the Company from the date hereof until each respective vesting date, and subject to the forfeiture provisions below.  Vesting
of the Shares shall be accelerated to an earlier date only under the following conditions:

 

		(a)	in the event of a Change in Control of Company (as defined
in the attached Exhibit A), and provided that Participant remains continuously in the service of or employed the Company until
the effective date of such Change in Control, all unvested Shares granted under this Agreement shall become immediately vested
on the effective date of the Change in Control;

 

		(b)	in the event that Participant’s employment by or
service provision for the Company is terminated because Participant becomes in the service of a new owner of any business of the
Company pursuant to a Change in Control event, and provided that Participant remains continuously employed by or in the service
of the Company until the date of closing of the Change in Control event, all unvested Shares granted under this Agreement shall
become immediately vested as of the last date of Participant’s service to or employment by the Company; or

 

		(c)	in the event that Participant’s service to the
Company is involuntarily terminated by the Company without cause within one year following a Change in Control Event, and provided
that Participant remains continuously in the service of the Company until the date of such involuntary termination, all unvested
Shares granted under this Agreement shall become immediately vested as of the last date of Participant’s employment with
or service for the Company.

 

    	10

    	 

    

 

		(d)	in the event that the Participant’s
employment with or service to the Company terminates because of death or Disability or at the request of the Chief Executive Officer
of the Company (other than for Cause) or of a U.S. government agency, all the Shares issuable under this award will vest on such
termination. Except to the extent provided in the preceding sentence or unless specifically provided in this Agreement or in a
side letter thereto, this award will not vest upon the Participant’s retirement. On the Vesting Date (or promptly thereafter),
the Company will deliver to the Participant a certificate representing the Shares which have vested on such date. For purposes
of this Agreement, the term “Disability” shall be defined as any condition which shall render the Participant
incapable of fulfilling his or her obligations hereunder because of injury or physical or mental illness, and such incapacity
shall exist or reasonably may be expected, upon the competent medical opinion of a doctor chosen by the Company, for a period
exceeding 60 consecutive days or 120 nonconsecutive days within a six-month period.

 

3.     Restriction
on Transfer

 

Until the Shares vest pursuant to
Section 2 hereof, none of the Shares may be sold, assigned, transferred, pledged, hypothecated or otherwise disposed of or encumbered,
and no attempt to transfer the Shares, whether voluntary or involuntary, by operation of law or otherwise, shall vest the transferee
with any interest or right in or with respect to the Shares.

 

4.     Forfeiture

 

If Participant ceases to be an employee
of or otherwise providing services to the Company or any majority-owned affiliate of the Company for any reason prior to the vesting
of the Shares pursuant to Section 2 hereof, Participant’s rights to the unvested portion of the Shares shall be immediately
and irrevocably forfeited.

 

5.     Issuance
and Custody of Certificate

 

		(a)	The Company shall cause to be issued one or more stock
certificates, registered in the name of Participant, evidencing the Shares.  Each such certificate (except for certificates
in respect of shares to be sold for taxes) shall bear the following legend:

 

“The
shares of common stock represented by this certificate are subject to forfeiture, and the transferability of this certificate and
the shares of stock represented hereby are subject to the restrictions, terms and conditions (including restrictions against transfer)
contained in the 2013 Long Term Incentive Plan (the “Plan”) and a Restricted Stock
Award Agreement (the “Agreement”) entered into between xG Technology, Inc. and the registered owner of such shares. 
Copies of the Plan and the Agreement are on file in the office of the Secretary of xG Technology, Inc., [_______________].”

 

		(b)	Participant shall execute stock powers relating to the
Shares and deliver the same to the Company.  Company shall use such stock powers only for the purpose of canceling any unvested
Shares that are forfeited.

 

		(c)	Each certificate issued pursuant to Section 5(a) hereof,
together with the stock powers relating to the Shares, shall be deposited by the Company with the Secretary of the Company or
a custodian designated by the Secretary.  The Secretary or such custodian shall issue a receipt to Participant evidencing
the certificate or certificates held which are registered in the name of Participant.

 

		(d)	After any Shares vest pursuant to Section 2 hereof, the
Company shall promptly cause to be issued a certificate or certificates evidencing such vested Shares, free of the legend provided
in section 5(a) hereof, and shall cause such certificate or certificates to be delivered to Participant or Participant’s
legal representatives, beneficiaries or heirs.

 

    	11

    	 

    

 

6.     Distributions
and Adjustments

 

		(a)	If all or any portion of the Shares vest in Participant
subsequent to any change in the number or character of Shares of Common Stock (through stock dividend, recapitalization, stock
split, reverse stock split, reorganization, merger, consolidation, split-up, spin-off, combination, repurchase or exchange of
Shares of Common Stock or other securities of the Company, issuance of warrants or other rights to purchase Shares of Common Stock
or other securities of the Company or other similar corporate transaction or event affecting the Shares such that an adjustment
is determined by the Compensation Committee of the Board of Directors (the “Committee”) to be appropriate in order
to prevent dilution or enlargement of the interest represented by the Shares), Participant shall then receive upon such vesting
the number and type of securities or other consideration which he would have received if the Shares had vested prior to the event
changing the number or character of outstanding Shares of Common Stock.

 

		(b)	Any additional Shares of Common Stock, any other securities
of the Company and any other property (except for cash dividends) distributed with respect to the Shares prior to the date the
Shares vest shall be subject to the same restrictions, terms and conditions as the Shares.  Any cash dividends payable with
respect to the Shares shall be distributed to Participant at the same time cash dividends are distributed to shareholders of the
Company generally.

 

		(c)	Any additional Shares of Common Stock, any securities
and any other property (except for cash dividends) distributed with respect to the Shares prior to the date such Shares vest shall
be promptly deposited with the Secretary or the custodian designated by the Secretary to be held in custody in accordance with
Section 5(c) hereof.

 

7.     Taxes

 

		(a)	In order to provide the Company with the opportunity
to claim the benefit of any income tax deduction which may be available to it in connection with this restricted stock award,
and in order to comply with all applicable federal or state tax laws or regulations, the Company may take such action as it deems
appropriate to assure that, if necessary, all applicable federal or state income and social security taxes are withheld or collected
from Participant, including through means of grossing up the grant to so provide for the collection of such taxes.

 

		(b)	Participant may elect to satisfy his federal and state
income tax withholding obligations in connection with this restricted stock award by (i) having the Company withhold a portion
of the shares of Common Stock otherwise to be delivered upon vesting of this restricted stock award having a fair market value
equal to the amount of federal and state income taxes required to be withheld in connection with this restricted stock award,
in accordance with the rules of the Committee, or (ii) delivering to the Company shares of Common Stock other than the shares
to be delivered upon vesting of this restricted stock award having a fair market value equal to such taxes, in accordance with
the rules of the Committee.

 

		(c)	Notwithstanding clause 7(b) above, if Participant
elects, in accordance with Section 83(b) of the Internal Revenue Code of 1986, as amended, to recognize ordinary income in
the year of acquisition of the Shares, the Company may require at the time of such election an additional payment for withholding
tax purposes based on the fair market value of such Shares as of the date of the acquisition of such Shares by Participant.

 

    	12

    	 

    

 

8.     Confidentiality,
Non-Competition And Non-Solicitation

 

In consideration of Participant’s
receipt of this award, Participant agrees as follows:

 

		(a)	Participant will hold in a fiduciary capacity for the
benefit of the Company all information, knowledge or data relating to the Company or any Subsidiaries and their respective businesses
which the Company or any Subsidiaries consider to be proprietary, trade secret or confidential that Participant obtains or have
previously obtained during its service and that is not public knowledge (other than as a result of Participant’s violation
of this provision) (“Confidential Information”). Participant will not directly or indirectly use any Confidential
Information for any purpose not associated with the activities of the Company or any Subsidiaries, or communicate, divulge or
disseminate Confidential Information to any person or entity not authorized by the Company or any Subsidiaries to receive it at
any time during or after Participant’s service, except with the prior written consent of the Company or as otherwise required
by law or legal process.

 

		(b)	For a period of two years after the termination of Participant’s
service, for any reason, voluntary or involuntary, Participant will not, without the written consent of the Company, directly
or indirectly, engage or hold an interest in any company listed in Exhibit B, or any subsidiary or affiliate of such company (the
“Competing Businesses”), or directly or indirectly have any interest in, own, manage, operate, control, be connected
with as a stockholder (other than as a holder of less than five percent (5%) of any class of publicly traded securities of any
such Competing Business).

 

		(c)	For a period of one year after the termination of Participant’s
service, for any reason, Participant will not, without the written consent of the Company, directly or indirectly solicit, entice,
persuade or induce any person to leave the employment of the Company or any Subsidiaries (other than persons employed in a clerical,
non-professional or non-management position).

 

		(d)	Participant understands and agrees that the restrictions
set forth above, including, without limitation, the duration, and the business scope of such restrictions, are reasonable and
necessary to protect the legal interests of the Company. Participant further agrees that the Company will be entitled to seek
injunctive relief in the event of any actual or threatened breach of such restrictions. In addition, Participant also agrees that
in the event it is found by a court of law to have violated the confidentiality provisions of this Agreement, that an adequate
remedy will including, among other things, the immediate forfeit of all shares (whether or not vested) and disgorgement of any
profit associated with this grant. If any provision of this Agreement is determined to be unenforceable by any court, then such
provision will be modified or omitted only to the extent necessary to make the remaining provisions of this Agreement enforceable.

 

9.     Miscellaneous

 

		(a)	This Agreement is issued pursuant to the Plan and is
subject to its terms.  Participant hereby acknowledges receipt of a copy of the Plan.  The Plan is also available for
inspection during business hours at the principal office of the Company.

 

    	13

    	 

    

 

		(b)	This Agreement shall not confer on Participant any right
with respect to continuance of service of or employment by the Company or any of its subsidiaries.

 

		(c)	This award is governed by and subject to the terms and
conditions of the Plan, which contain important provisions of this award and form a part of this Agreement. Copies of the Plan
are being provided to or have been provided to Participant, along with a summary of the Plan. If there is any conflict between
any provision of this Agreement and the Plan, this Agreement will control, unless the provision is not permitted by the Plan,
in which case the provision of the Plan will apply. Participant’s rights and obligations under this Agreement are also governed
by and are subject to applicable U.S. laws and foreign laws.

 

		(d)	This Agreement may be executed via facsimile and in counterparts,
each of which shall be considered an original, but all of which together shall constitute one and the same Agreement.

 

		(e)	This Agreement shall be governed by and construed under
the internal laws of the State of Colorado, without regard for conflicts of laws principles thereof.

 

IN WITNESS WHEREOF, the parties hereto have
caused this Agreement to be executed on the day and year first above written.

 

	 	xG Technology, Inc.
	 	 	 
	 	By:	 	 
	 	 	 
	 	Its:	Chairman	 
	 	 	 
	 	 	 
	 	PARTICIPANT
	 	 	 
	 	 	 	 

 

	Grantee:	 	No. of Shares:	 	Grant Date:	 	Vesting Date:
	 	 	 	 	 	 	 
	 	 	 	 	 	 	 

 

    	14

    	 

    

 

Exhibit A

 

Change In Control.

 

		(i)	For purposes of this Agreement and this Exhibit A, a
Change in Control” of the Company shall mean:

 

		(a)	a change in control of the Company of a nature that would
be required to be reported in response to Item 6(e) of Schedule 14A of Regulation 14A promulgated under the Securities Exchange
Act of 1934, as amended (the “Exchange Act”), whether or not the Company is then subject to such reporting requirement;

 

		(b)	the public announcement (which, for purposes of this
definition, shall include, without limitation, a report filed pursuant to Section 13(d) of the Exchange Act) by the Company or
any “person” (as such term is used in Sections 13(d) and 14(d) of the Exchange Act) that such person has become the
“beneficial owner” (as defined in Rule 13d-3 promulgated under the Exchange Act), directly or indirectly, of securities
of the Company representing 20% or more of the combined voting power of the Company’s then outstanding securities, determined
in accordance with Rule 13d-3, excluding, however, any securities acquired directly from the Company (other than an acquisition
by virtue of the exercise of a conversion privilege unless the security being so converted was itself acquired directly from the
Company); however, that for purposes of this clause the term “person” shall not include the Company, any subsidiary
of the Company or any employee benefit plan of the Company or of any subsidiary of the Company or any entity holding shares of
Common Stock organized, appointed or established for, or pursuant to the terms of, any such plan;

 

		(c)	the Continuing Directors cease to constitute a majority
of the Company’s Board of Directors;

 

		(d)	consummation of a reorganization, merger or consolidation
of, or a sale or other disposition of all or substantially all of the assets of, the Company (a “Business Combination”),
in each case, unless, following such Business Combination, (A) all or substantially all of the persons who were the beneficial
owners of the Company’s outstanding voting securities immediately prior to such Business Combination beneficially own voting
securities of the corporation resulting from such Business Combination having more than 50% of the combined voting power of the
outstanding voting securities of such resulting Corporation and (B) at least a majority of the members of the Board of Directors
of the corporation resulting from such Business Combination were Continuing Directors at the time of the action of the Board of
Directors of the Company approving such Business Combination;

 

		(e)	approval by the shareholders of the Company of a complete
liquidation or dissolution of the Company; or

 

		(f)	the majority of the Continuing Directors determine in
their sole and absolute discretion that there has been a change in control of the Company.

 

    	15

    	 

    

 

		(ii)	“Continuing Director” shall mean any person
who is a member of the Board of Directors of the Company, while such person is a member of the Board of Directors, who is not
an Acquiring Person (as defined below) or an Affiliate or Associate (as defined below) of an Acquiring Person, or a representative
of an Acquiring Person or of any such Affiliate or Associate, and who (x) was a member of the Board of Directors on the date of
this Agreement as first written above or (y) subsequently becomes a member of the Board of Directors, if such  person’s
initial nomination for election or initial election to the Board of Directors is recommended or approved by a majority of the
Continuing Directors.  For purposes of this subparagraph (ii), “Acquiring Person” shall mean any “person”
(as such term is used in Sections 13(d) and 14(d) of the Exchange Act) who or which, together with all Affiliates and Associates
of such person, is the “beneficial owner” (as defined in Rule 13d-3 promulgated under the Exchange Act), directly
or indirectly, of securities of the Company representing 20% or more of the combined voting power of the Company’s then
outstanding securities, but shall not include the Company, any subsidiary of the Company or any employee benefit plan of the Company
or of any subsidiary of the Company or any entity holding shares of Common Stock organized, appointed or established for, or pursuant
to the terms of, any such plan; and “Affiliate” and “Associate” shall have the respective meanings ascribed
to such terms in Rule 12b-2 promulgated under the Exchange Act.

 

    	16

    	 

    

 

Exhibit B

 

Prohibited Activities

 

    	17

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