Document:

Moody National REIT II, Inc. 8-K

Exhibit 10.3

 

	 	 	 

MOODY NATIONAL REIT II, INC.

AMENDED AND RESTATED

INCENTIVE PLAN

	 	 	 

 

     

     

    

 

MOODY NATIONAL REIT II, INC.

INCENTIVE PLAN 

	 	 	 	 
	ARTICLE
    1 PURPOSE	 	1
	1.1	General	 	1
	ARTICLE
    2 DEFINITIONS	 	1
	2.1	Definitions	 	1
	ARTICLE
    3 EFFECTIVE TERM OF PLAN	 	5
	3.1	Effective Date	 	5
	3.2	Termination of Plan	 	5
	ARTICLE
    4 ADMINISTRATION	 	5
	4.1	Committee	 	5
	4.2	Actions and Interpretations
    by the Committee	 	5
	4.3	Authority of Committee	 	5
	4.4	Delegation of Administrative
    Duties	 	6
	4.5	Indemnification	 	6
	ARTICLE
    5 SHARES SUBJECT TO THE PLAN	 	6
	5.1	Number of Shares	 	6
	5.2	Share Counting	 	6
	5.3	Stock Distributed	 	7
	ARTICLE
    6 ELIGIBILITY	 	7
	6.1	General	 	7
	ARTICLE
    7 STOCK OPTIONS	 	7
	7.1	General	 	7
	7.2	Incentive Stock
    Options	 	8
	ARTICLE
    8 RESTRICTED STOCK AND STOCK UNITS	 	8
	8.1	Grant of Restricted
    Stock and Stock Units	 	8
	8.2	Issuance and Restrictions	 	8
	8.3	Dividends on Restricted
    Stock	 	8
	8.4	Forfeiture	 	8
	8.5	Delivery of Restricted
    Stock	 	8
	ARTICLE
    9 PERFORMANCE AWARDS	 	9
	9.1	Grant of Performance
    Awards	 	9
	9.2	Performance Goals	 	9
	ARTICLE
    10 STOCK OR OTHER STOCK-BASED AWARDS	 	9
	10.1	Grant of Stock or
    Other Stock-Based Awards	 	9
	ARTICLE
    11 PROVISIONS APPLICABLE TO AWARDS	 	9
	11.1	Award Certificates	 	9
	11.2	Form of Payment
    of Awards	 	9
	11.3	Limits on Transfer	 	9
	11.4	Beneficiaries	 	9
	11.5	Stock Trading Restrictions	 	10
	11.6	Acceleration for
    Any Reason	 	10
	11.7	Forfeiture Events	 	10
	11.8	Substitute Awards	 	10
	ARTICLE
    12 CHANGES IN CAPITAL STRUCTURE	 	10
	12.1	Mandatory Adjustments	 	10
	12.2	Discretionary Adjustments	 	10
	12.3	General	 	10
	ARTICLE 13 AMENDMENT, MODIFICATION
    AND TERMINATION	 	11
	13.1	Amendment, Modification and Termination	 	11
	13.2	Awards Previously Granted	 	11
	13.3	Compliance Amendments	 	11

 

     

     

    

 

	ARTICLE 14 GENERAL PROVISIONS	 	11
	14.1	Rights of Participants	 	11
	14.2	Withholding	 	12
	14.3	Special Provisions Related to Section 409A of
    the Code	 	12
	14.4	Unfunded Status of Awards	 	13
	14.5	Relationship to Other Benefits	 	13
	14.6	Expenses	 	13
	14.7	Titles and Headings	 	13
	14.8	Gender and Number	 	13
	14.9	Fractional Shares	 	13
	14.10	Government and Other Regulations	 	13
	14.11	Governing Law	 	14
	14.12	Severability	 	14
	14.13	No Limitations on Rights of Company	 	14

 

     

     

    

 

MOODY NATIONAL REIT II, INC.

AMENDED AND RESTATED

INCENTIVE PLAN

 

ARTICLE 1

PURPOSE

 

1.1.        GENERAL.
The purpose of the Moody National REIT II, Inc. Amended and Restated Incentive Plan (the “Plan”) is to promote the
success, and enhance the value, of Moody National REIT II, Inc. (the “Company”), by linking the personal interests
of employees, officers, directors and consultants of the Company or any Affiliate (as defined below) to those of Company stockholders
and by providing such persons with an incentive for outstanding performance. The Plan is further intended to provide flexibility
to the Company in its ability to motivate, attract and retain the services of employees, officers, directors and consultants upon
whose judgment, interest and special effort the successful conduct of the Company’s operation is largely dependent. Accordingly,
the Plan permits the grant of incentive awards from time to time to selected employees, officers, directors and consultants of
the Company and its Affiliates.

 

ARTICLE 2

DEFINITIONS

 

2.1.        DEFINITIONS.
When a word or phrase appears in this Plan with the initial letter capitalized, and the word or phrase does not commence a sentence,
the word or phrase shall generally be given the meaning ascribed to it in this Section or in Section 1.1 unless a clearly different
meaning is required by the context. The following words and phrases shall have the following meanings:

 

		(a)	“Affiliate” means (i) any Subsidiary or Parent, or (ii) an entity that directly
or through one or more intermediaries controls, is controlled by or is under common control with, the Company, as determined by
the Committee.

 

		(b)	“Award” means an award of Options, Restricted Stock, Restricted Stock Units,
Deferred Stock Units, Performance Awards, Other Stock-Based Awards, or any other right or interest relating to Stock, granted to
a Participant under the Plan.

 

		(c)	“Award Certificate” means a written document, in such form as the Committee
prescribes from time to time, setting forth the terms and conditions of an Award. Award Certificates may be in the form of individual
award agreements or certificates or a program document describing the terms and provisions of an Award or series of Awards under
the Plan. The Committee may provide for the use of electronic, internet or other non-paper Award Certificates, and the use of electronic,
internet or other non-paper means for the acceptance thereof and actions thereunder by a Participant.

 

		(d)	“Beneficial Owner” shall have the meaning given such term in Rule 13d-3 of the
General Rules and Regulations under the 1934 Act.

 

		(e)	“Board” means the Board of Directors of the Company.

 

		(f)	“Cause” as a reason for a Participant’s termination of employment shall
have the meaning assigned such term in the employment, severance or similar agreement, if any, between such Participant and the
Company or an Affiliate, provided, however that if there is no such employment, severance or similar agreement in which such term
is defined, and unless otherwise defined in the applicable Award Certificate, “Cause” shall mean any of the following
acts by the Participant, as determined by the Committee: gross neglect of duty, intentionally engaging in activity that is in conflict
with or adverse to the business or other interests of the Company, prolonged absence from duty without the consent of the Company,
material breach by the Participant of any published Company code of conduct or code of ethics; intentionally engaging in activity
that is in conflict with or adverse to the business or other interests of the Company; or willful misconduct, misfeasance or malfeasance
of duty which is reasonably determined to be detrimental to the Company. The determination of the Committee as to the existence
of “Cause” shall be conclusive on the Participant and the Company.

 

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		(g)	“Change in Control” means and includes the occurrence of any one of the following
events but shall specifically exclude a Public Offering:

 

(i)         during
any consecutive 12-month period, individuals who, at the beginning of such period, constitute the Board of Directors of the Company
(the “Incumbent Directors”) cease for any reason to constitute at least a majority of such Board, provided that any
person becoming a director after the beginning of such 12-month period and whose election or nomination for election was approved
by a vote of at least a majority of the Incumbent Directors then on the Board shall be an Incumbent Director; provided, however,
that no individual initially elected or nominated as a director of the Company as a result of an actual or threatened election
contest with respect to the election or removal of directors (“Election Contest”) or other actual or threatened solicitation
of proxies or consents by or on behalf of any Person other than the Board (“Proxy Contest”), including by reason of
any agreement intended to avoid or settle any Election Contest or Proxy Contest, shall be deemed an Incumbent Director; or

 

(ii)        any
Person becomes a Beneficial Owner, directly or indirectly, of either (A) 40% or more of the then-outstanding shares of common stock
of the Company (“Company Common Stock”) or (B) securities of the Company representing 40% or more of the combined voting
power of the Company’s then outstanding securities eligible to vote for the election of directors (the “Company Voting
Securities”); provided, however, that for purposes of this subsection (ii), the following acquisitions of Company Common
Stock or Company Voting Securities shall not constitute a Change in Control: (w) an acquisition directly from the Company, (x)
an acquisition by the Company or a Subsidiary, (y) an acquisition by any employee benefit plan (or related trust) sponsored or
maintained by the Company or any Subsidiary, or (z) an acquisition pursuant to a Non-Qualifying Transaction (as defined in subsection
(iii) below); or

 

(iii)       the
consummation of a reorganization, merger, consolidation, statutory share exchange or similar form of corporate transaction involving
the Company or a Subsidiary (a “Reorganization”), or the sale or other disposition of all or substantially all of the
Company’s assets (a “Sale”) or the acquisition of assets or stock of another corporation or other entity (an
“Acquisition”), unless immediately following such Reorganization, Sale or Acquisition: (A) all or substantially all
of the individuals and entities who were the Beneficial Owners, respectively, of the outstanding Company Common Stock and outstanding
Company Voting Securities immediately prior to such Reorganization, Sale or Acquisition beneficially own, directly or indirectly,
more than 40% of, respectively, the then outstanding shares of common stock and the combined voting power of the then outstanding
voting securities entitled to vote generally in the election of directors, as the case may be, of the entity resulting from such
Reorganization, Sale or Acquisition (including, without limitation, an entity which as a result of such transaction owns the Company
or all or substantially all of the Company’s assets or stock either directly or through one or more subsidiaries, the “Surviving
Entity”) in substantially the same proportions as their ownership, immediately prior to such Reorganization, Sale or Acquisition,
of the outstanding Company Common Stock and the outstanding Company Voting Securities, as the case may be, and (B) no Person (other
than (x) the Company or any Subsidiary, (y) the Surviving Entity or its ultimate parent entity, or (z) any employee benefit plan
(or related trust) sponsored or maintained by any of the foregoing) is the Beneficial Owner, directly or indirectly, of 40% or
more of the total common stock or 40% or more of the total voting power of the outstanding voting securities eligible to elect
directors of the Surviving Entity, and (C) at least a majority of the members of the board of directors of the Surviving Entity
were Incumbent Directors at the time of the Board’s approval of the execution of the initial agreement providing for such
Reorganization, Sale or Acquisition (any Reorganization, Sale or Acquisition which satisfies all of the criteria specified in (A),
(B) and (C) above shall be deemed to be a “Non-Qualifying Transaction”).

 

		(h)	“Code” means the Internal Revenue Code of 1986, as amended from time to time.
For purposes of this Plan, references to sections of the Code shall be deemed to include references to any applicable regulations
thereunder and any successor or similar provision.

 

		(i)	“Committee” means the committee of the Board described in Article 4.

 

		(j)	“Company” means Moody National REIT II, Inc., a Maryland corporation, or any
successor corporation.

 

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		(k)	“Continuous Service” means the absence of any interruption or termination of
service as an employee, officer, director or consultant of the Company or any Affiliate, as applicable; provided, however, that
for purposes of an Incentive Stock Option “Continuous Service” means the absence of any interruption or termination
of service as an employee of the Company or any Parent or Subsidiary, as applicable, pursuant to applicable tax regulations. Continuous
Service shall not be considered interrupted in the following cases: (i) a Participant transfers employment between the Company
and an Affiliate or between Affiliates, or (ii) in the discretion of the Committee as specified at or prior to such occurrence,
in the case of a spin-off, sale or disposition of the Participant’s employer from the Company or any Affiliate, (iii) a Participant
transfers from being an employee of the Company or an Affiliate to being a director of the Company or of an Affiliate, or vice
versa, (iv) in the discretion of the Committee as specified at or prior to such occurrence, a Participant transfers from being
an employee of the Company or an Affiliate to being a consultant to the Company or of an Affiliate, or vice versa, or (v) any leave
of absence authorized in writing by the Company prior to its commencement; provided, however, that for purposes of Incentive Stock
Options, no such leave may exceed 90 days, unless reemployment upon expiration of such leave is guaranteed by statute or contract.
If reemployment upon expiration of a leave of absence approved by the Company is not so guaranteed, on the 91st day of such leave
any Incentive Stock Option held by the Participant shall cease to be treated as an Incentive Stock Option and shall be treated
for tax purposes as a Nonstatutory Stock Option. Whether military, government or other service or other leave of absence shall
constitute a termination of Continuous Service shall be determined in each case by the Committee at its discretion, and any determination
by the Committee shall be final and conclusive; provided, however, that for purposes of any Award that is subject to Code Section
409A, the determination of a leave of absence must comply with the requirements of a “bona fide leave of absence” as
provided in Treas. Reg. Section 1.409A-1(h).

 

		(l)	“Deferred Stock Unit” means a right granted to a Participant under Article 8
to receive Shares (or the equivalent value in cash or other property if the Committee so provides) at a future time as determined
by the Committee, or as determined by the Participant within guidelines established by the Committee in the case of voluntary deferral
elections.

 

		(m)	“Disability” of a Participant means that the Participant (i) is unable to engage
in any substantial gainful activity by reason of any medically determinable physical or mental impairment which can be expected
to result in death or can be expected to last for a continuous period of not less than 12 months, or (ii) is, by reason of any
medically determinable physical or mental impairment which can be expected to result in death or can be expected to last for a
continuous period of not less than 12 months, receiving income replacement benefits for a period of not less than three months
under an accident or health plan covering employees of the Participant’s employer. If the determination of Disability relates
to an Incentive Stock Option, Disability means Permanent and Total Disability as defined in Section 22(e)(3) of the Code. In the
event of a dispute, the determination of whether a Participant has incurred a Disability will be made by the Committee and may
be supported by the advice of a physician competent in the area to which such Disability relates.

 

		(n)	“Effective Date” has the meaning assigned such term in Section 3.1.

 

		(o)	“Eligible Participant” means an employee (including a leased employee), officer,
director or consultant of the Company or any Affiliate.

 

		(p)	“Exchange” means any national securities exchange on which the Stock may from
time to time be listed or traded.

 

		(q)	“Fair Market Value,” on any date, means (i) if the Stock is listed on a securities
exchange, the closing sales price on the principal such exchange on such date or, in the absence of reported sales on such date,
the closing sales price on the immediately preceding date on which sales were reported, or (ii) if the Stock is not listed on a
securities exchange, the mean between the bid and offered prices as quoted by the applicable interdealer quotation system for such
date, provided that if the Stock is not quoted on an interdealer quotation system or it is determined that the fair market value
is not properly reflected by such quotations, Fair Market Value will be determined by such other method as the Committee determines
in good faith to be reasonable and in compliance with Code Section 409A.

 

		(r)	“Full-Value Award” means an Award other than in the form of an Option, and which
is settled by the issuance of Stock (or at the discretion of the Committee, settled in cash valued by reference to Stock value).

 

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		(s)	“Good Reason” (or a similar term denoting constructive termination) has the
meaning, if any, assigned such term in the employment, consulting, severance or similar agreement, if any, between a Participant
and the Company or an Affiliate; provided, however, that if there is no such employment, consulting, severance or similar agreement
in which such term is defined, “Good Reason” shall have the meaning, if any, given such term in the applicable Award
Certificate. If not defined in either such document, the term “Good Reason” as used herein shall not apply to a particular
Award.

 

		(t)	“Grant Date” of an Award means the first date on which all necessary corporate
action has been taken to approve the grant of the Award as provided in the Plan, or such later date as is determined and specified
as part of that authorization process. Notice of the grant shall be provided to the grantee within a reasonable time after the
Grant Date.

 

		(u)	“Incentive Stock Option” means an Option that is intended to be an incentive
stock option and meets the requirements of Section 422 of the Code or any successor provision thereto.

 

		(v)	“Independent Director” means a director of the Company who is not a common law
employee of the Company or an Affiliate and who qualifies at any given time as a “non-employee” director under Rule
16b-3 of the 1934 Act.

 

		(w)	“Non-Employee Director” means a director of the Company who is not a common
law employee of the Company or an Affiliate.

 

		(x)	“Nonstatutory Stock Option” means an Option that is not an Incentive Stock Option.

 

		(y)	“Option” means a right granted to a Participant under Article 7 of the Plan
to purchase Stock at a specified price during specified time periods. An Option may be either an Incentive Stock Option or a Nonstatutory
Stock Option.

 

		(z)	“Other Stock-Based Award” means a right, granted to a Participant under Article
10, that relates to or is valued by reference to Stock or other Awards relating to Stock.

 

		(aa)	“Parent” means a corporation, limited liability company, partnership or other
entity which owns or beneficially owns a majority of the outstanding voting stock or voting power of the Company. Notwithstanding
the above, with respect to an Incentive Stock Option, Parent shall have the meaning set forth in Section 424(e) of the Code.

 

		(bb)	“Participant” means an Eligible Participant who has been granted an Award under
the Plan; provided that in the case of the death of a Participant, the term “Participant” refers to a beneficiary designated
pursuant to Section 11.4 or the legal guardian or other legal representative acting in a fiduciary capacity on behalf of the Participant
under applicable state law and court supervision.

 

		(cc)	“Performance Award” means any award granted under the Plan pursuant to Article
9.

 

		(dd)	“Person” means any individual, entity or group, within the meaning of Section
3(a)(9) of the 1934 Act and as used in Section 13(d)(3) or 14(d)(2) of the 1934 Act.

 

		(ee)	“Plan” means the Moody National REIT II, Inc. 2015 Incentive Plan, as amended
from time to time.

 

		(ff)	“Public Offering”
                                         means a public offering of any class or series of the Company’s equity securities
                                         pursuant to a registration statement filed by the Company under the 1933 Act.

 

		(gg)	“Restricted Stock” means Stock granted to a Participant under Article 8 that
is subject to certain restrictions and to risk of forfeiture.

 

		(hh)	“Restricted Stock Unit” means the right granted to a Participant under Article
8 to receive shares of Stock (or the equivalent value in cash or other property if the Committee so provides) in the future, which
right is subject to certain restrictions and to risk of forfeiture.

 

		(ii)	“Shares” means shares of the Company’s Stock. If there has been an adjustment
or substitution with respect to the Shares (whether or not pursuant to Article 12), the term “Shares” shall also include
any shares of stock or other securities that are substituted for Shares or into which Shares are adjusted.

 

		(jj)	“Stock” means the $0.01 par value Class A common stock of the Company and such
other securities of the Company as may be substituted for Stock pursuant to Article 12.

 

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		(kk)	“Subsidiary” means any corporation, limited liability company, partnership or
other entity, domestic or foreign, of which a majority of the outstanding voting stock or voting power is beneficially owned directly
or indirectly by the Company. Notwithstanding the above, with respect to an Incentive Stock Option, Subsidiary shall have the meaning
set forth in Section 424(f) of the Code.

 

		(ll)	“1933 Act” means the Securities Act of 1933, as amended from time to time.

 

		(mm)	“1934 Act” means the Securities Exchange Act of 1934, as amended from time to
time.

 

ARTICLE 3

EFFECTIVE TERM OF PLAN

 

3.1.        EFFECTIVE
DATE. Subject to the approval of the Plan by the Company’s stockholders within 12 months after the Plan’s adoption
by the Board, the Plan will become effective on the date that it is adopted by the Board (the “Effective Date”).

 

3.2.        TERMINATION
OF PLAN. Unless earlier terminated as provided herein, the Plan shall continue in effect until the tenth anniversary of the
Effective Date or, if the stockholders approve an amendment to the Plan that increases the number of Shares subject to the Plan,
the tenth anniversary of the date of such approval. The termination of the Plan on such date shall not affect the validity of any
Award outstanding on the date of termination, which shall continue to be governed by the applicable terms and conditions of the
Plan. Notwithstanding the foregoing, no Incentive Stock Options may be granted more than ten (10) years after the Effective Date.

 

ARTICLE 4

ADMINISTRATION

 

4.1.        COMMITTEE.
The Plan shall be administered by a Committee appointed by the Board (which Committee shall consist of at least two directors)
or, at the discretion of the Board from time to time, the Plan may be administered by the Board. The members of the Committee shall
be appointed by, and may be changed at any time and from time to time in the discretion of, the Board. It is intended that at least
two of the directors appointed to serve on the Committee shall be Independent Directors and that any such members of the Committee
who do not so qualify shall abstain from participating in any decision to make or administer Awards that are made to Eligible Participants
who at the time of consideration for such Award are persons subject to the short-swing profit rules of Section 16 of the 1934 Act.
However, the mere fact that a Committee member shall fail to qualify under the foregoing requirement or shall fail to abstain from
such action shall not invalidate any Award made by the Committee which Award is otherwise validly made under the Plan. The Board
may reserve to itself any or all of the authority and responsibility of the Committee under the Plan or may act as administrator
of the Plan for any and all purposes. To the extent the Board has reserved any authority and responsibility or during any time
that the Board is acting as administrator of the Plan, it shall have all the powers and protections of the Committee hereunder,
and any reference herein to the Committee (other than in this Section 4.1) shall include the Board. To the extent any action of
the Board under the Plan conflicts with actions taken by the Committee, the actions of the Board shall control.

 

4.2.        ACTION
AND INTERPRETATIONS BY THE COMMITTEE. For purposes of administering the Plan, the Committee may from time to time adopt rules,
regulations, guidelines and procedures for carrying out the provisions and purposes of the Plan and make such other determinations,
not inconsistent with the Plan, as the Committee may deem appropriate. The Committee may correct any defect, supply any omission
or reconcile any inconsistency in the Plan or in any Award in the manner and to the extent it deems necessary to carry out the
intent of the Plan. The Committee’s interpretation of the Plan, any Awards granted under the Plan, any Award Certificate
and all decisions and determinations by the Committee with respect to the Plan are final, binding, and conclusive on all parties.
Each member of the Committee is entitled to, in good faith, rely or act upon any report or other information furnished to that
member by any officer or other employee of the Company or any Affiliate, the Company’s or an Affiliate’s independent
certified public accountants, Company counsel or any executive compensation consultant or other professional retained by the Company
or the Committee to assist in the administration of the Plan. No member of the Committee will be liable for any good faith determination,
act or omission in connection with the Plan or any Award.

 

4.3.        AUTHORITY
OF COMMITTEE. Except as provided in Section 4.1 and 4.5 hereof, the Committee has the exclusive power, authority and discretion
to:

 

		(a)	grant Awards;

 

		(b)	designate Participants;

 

		(c)	determine the type or types of Awards to be granted to each Participant;

 

		(d)	determine the number of Awards to be granted and the number of Shares or dollar amount to which
an Award will relate;

 

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		(e)	determine the terms and conditions of any Award granted under the Plan;

 

		(f)	prescribe the form of each Award Certificate, which need not be identical for each Participant;

 

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

 

		(h)	establish, adopt or revise any rules, regulations, guidelines or procedures as it may deem necessary
or advisable to administer the Plan;

 

		(i)	make all other decisions and determinations that may be required under the Plan or as the Committee
deems necessary or advisable to administer the Plan;

 

		(j)	amend the Plan or any Award Certificate as provided herein; and

 

		(k)	adopt such modifications, procedures, and subplans as may be necessary or desirable to comply with
provisions of the laws of the United States or any non-U.S. jurisdictions in which the Company or any Affiliate may operate, in
order to assure the viability of the benefits of Awards granted to participants located in the United States or such other jurisdictions
and to further the objectives of the Plan.

 

4.4.        DELEGATION
OF ADMINISTRATIVE DUTIES. The Committee may delegate to one or more of its members or to one or more officers of the Company
or an Affiliate or to one or more agents or advisors such administrative duties or powers as it may deem advisable, and the Committee
or any individuals to whom it has delegated duties or powers as aforesaid may employ one or more individuals to render advice with
respect to any responsibility the Committee or such individuals may have under this Plan.

 

4.5.        INDEMNIFICATION.
Each person who is or shall have been a member of the Committee, or of the Board, or an officer of the Company to whom authority
was delegated in accordance with this Article 4 shall be indemnified and held harmless by the Company against and from any loss,
cost, liability, or expense that may be imposed upon or reasonably incurred by him or her in connection with or resulting from
any claim, action, suit, or proceeding to which he or she may be a party or in which he or she may be involved by reason of any
action taken or failure to act under the Plan and against and from any and all amounts paid by him or her in settlement thereof,
with the Company’s approval, or paid by him or her in satisfaction of any judgment in any such action, suit, or proceeding
against him or her, provided he or she shall give the Company an opportunity, at its own expense, to handle and defend the same
before he or she undertakes to handle and defend it on his or her own behalf, unless such loss, cost, liability, or expense is
a result of his or her own willful misconduct or except as expressly provided by statute. The foregoing right of indemnification
shall not be exclusive of any other rights of indemnification to which such persons may be entitled under the Company’s charter
or bylaws, as a matter of law, or otherwise, or any power that the Company may have to indemnify them or hold them harmless.

 

ARTICLE 5

SHARES SUBJECT TO THE PLAN

 

5.1.        NUMBER
OF SHARES. Subject to adjustment as provided in Sections 5.2 and Section 12.1, the aggregate number of Shares reserved and
available for issuance pursuant to Awards granted under the Plan shall be 2,000,000. The maximum number of Shares that may be issued
upon exercise of Incentive Stock Options granted under the Plan shall be 2,000,000. The maximum aggregate number of Shares associated
with any Award granted under the Plan in any 12-month period to any one Non-Employee Director shall be 2,000,000 Shares. The maximum
number of Shares that may be issued upon the exercise or grant of an Award granted under the Plan shall not exceed, in the aggregate,
an amount equal to five percent (5%) of the outstanding Shares on the Grant Date.

 

5.2.        SHARE
COUNTING. Shares covered by an Award shall be subtracted from the Plan share reserve as of the Grant Date as provided in subsection
(a) below, but shall be added back to the Plan share reserve or otherwise treated in accordance with subsections (b) through (i)
of this Section 5.2.

 

		(a)	To the extent that an Award is canceled, terminates, expires, is forfeited or lapses for any reason,
any unissued or forfeited Shares subject to the Award will be added back to the Plan share reserve and again be available for issuance
pursuant to Awards granted under the Plan.

 

		(b)	Shares subject to Awards settled in cash will be added back to the Plan share reserve and again
be available for issuance pursuant to Awards granted under the Plan.

 

		(c)	Shares withheld or repurchased from an Award or delivered by a Participant to satisfy minimum tax
withholding requirements will be added back to the Plan share reserve and again be available for issuance pursuant to Awards granted
under the Plan.

 

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		(d)	If the exercise price of an Option is satisfied in whole or in part by delivering Shares to the
Company (by either actual delivery or attestation), the number of Shares so tendered (by delivery or attestation) shall be added
to the Plan share reserve and will be available for issuance pursuant to Awards granted under the Plan.

 

		(e)	To the extent that the full number of Shares subject to an Option is not issued upon exercise of
the Option for any reason, including by reason of net-settlement of the Award, the unissued Shares originally subject to the Award
will be added back to the Plan share reserve and again be available for issuance pursuant to other Awards granted under the Plan.

 

		(f)	To the extent that the full number of Shares subject to a Full-Value Award is not issued for any
reason, including by reason of failure to achieve maximum performance goals, the unissued Shares originally subject to the Award
will be added back to the Plan share reserve and again be available for issuance pursuant to Awards granted under the Plan.

 

		(g)	Substitute Awards granted pursuant to Section 11.8 of the Plan shall not count against the Shares
otherwise available for issuance under the Plan under Section 5.1.

 

		(h)	Subject to applicable Exchange requirements, shares available under a stockholder-approved plan
of a company acquired by the Company (as appropriately adjusted to Shares to reflect the transaction) may be issued under the Plan
pursuant to Awards granted to individuals who were not employees of the Company or its Affiliates immediately before such transaction
and will not count against the maximum share limitation specified in Section 5.1.

 

5.3.        STOCK
DISTRIBUTED. Any Stock distributed pursuant to an Award may consist, in whole or in part, of authorized and unissued Stock,
treasury Stock or Stock purchased on the open market.

 

ARTICLE 6

ELIGIBILITY

 

6.1.        GENERAL.
Awards may be granted only to Eligible Participants. Incentive Stock Options may be granted only to Eligible Participants who are
employees of the Company or a Parent or Subsidiary as defined in Section 424(e) and (f) of the Code. Eligible Participants who
are service providers to an Affiliate may be granted Options under this Plan only if the Affiliate qualifies as an “eligible
issuer of service recipient stock” within the meaning of Treas. Reg. Section 1.409A-1(b)(5)(iii)(E).

 

ARTICLE 7

STOCK OPTIONS

 

7.1.        GENERAL.
The Committee is authorized to grant Options to Participants on the following terms and conditions:

 

		(a)	Exercise Price. The exercise price per Share under an Option shall be determined by the
Committee, provided that the exercise price for any Option (other than an Option issued as a substitute Award pursuant to Section
11.8) shall not be less than the Fair Market Value as of the Grant Date.

 

		(b)	Prohibition on Repricing. Except as otherwise provided in Article 12, without the prior
approval of stockholders of the Company: (i) the exercise price of an Option may not be reduced, directly or indirectly, (ii) an
Option may not be cancelled in exchange for cash, other Awards, or Options with an exercise price that is less than the exercise
price of the original Option, or otherwise and (iii) the Company may not repurchase an Option for value (in cash or otherwise)
from a Participant if the current Fair Market Value of the Shares underlying the Option is lower than the exercise price per share
of the Option.

 

		(c)	Time and Conditions of Exercise. The Committee shall determine the time or times at which
an Option may be exercised in whole or in part, subject to Section 7.1(e), and may include in the Award Certificate a provision
that an Option that is otherwise exercisable and has an exercise price that is less than the Fair Market Value of the Stock on
the last day of its term will be automatically exercised on such final date of the term by means of a “net exercise,”
thus entitling the optionee to Shares equal to the intrinsic value of the Option on such exercise date, less the number of Shares
required for tax withholding. The Committee shall also determine the performance or other conditions, if any, that must be satisfied
before all or part of an Option may be exercised or vested.

 

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		(d)	Payment. The Committee shall determine the methods by which the exercise price of an Option
may be paid, the form of payment, and the methods by which Shares shall be delivered or deemed to be delivered to Participants.
As determined by the Committee at or after the Grant Date, payment of the exercise price of an Option may be made, in whole or
in part, in the form of (i) cash or cash equivalents, (ii) delivery (by either actual delivery or attestation) of previously-acquired
Shares based on the Fair Market Value of the Shares on the date the Option is exercised, (iii) withholding of Shares from the Option
based on the Fair Market Value of the Shares on the date the Option is exercised, (iv) broker-assisted market sales, or (iv) any
other “cashless exercise” arrangement.

 

		(e)	Exercise Term. Except for Nonstatutory Options granted to Participants outside the United
States, no Option granted under the Plan shall be exercisable for more than ten years from the Grant Date.

 

		(f)	No Deferral Feature. No Option shall provide for any feature for the deferral of compensation
other than the deferral of recognition of income until the exercise or disposition of the Option.

 

7.2.        INCENTIVE
STOCK OPTIONS. The terms of any Incentive Stock Options granted under the Plan must comply with the requirements of Section
422 of the Code. Without limiting the foregoing, any Incentive Stock Option granted to a Participant who at the Grant Date owns
more than 10% of the voting power of all classes of shares of the Company must have an exercise price per Share of not less than
110% of the Fair Market Value per Share on the Grant Date and an Option term of not more than five years. If all of the requirements
of Section 422 of the Code (including the above) are not met, the Option shall automatically become a Nonstatutory Stock Option.

 

ARTICLE 8

RESTRICTED STOCK AND STOCK UNITS

 

8.1.        GRANT
OF RESTRICTED STOCK AND STOCK UNITS. The Committee is authorized to make Awards of Restricted Stock, Restricted Stock Units
or Deferred Stock Units to Participants in such amounts and subject to such terms and conditions as may be selected by the Committee.
An Award of Restricted Stock, Restricted Stock Units or Deferred Stock Units shall be evidenced by an Award Certificate setting
forth the terms, conditions and restrictions applicable to the Award.

 

8.2.        ISSUANCE
AND RESTRICTIONS. Restricted Stock, Restricted Stock Units or Deferred Stock Units shall be subject to such restrictions on
transferability and other restrictions as the Committee may impose (including, for example, limitations on the right to vote Restricted
Stock or the right to receive dividends on the Restricted Stock). These restrictions may lapse separately or in combination at
such times, under such circumstances, in such installments, upon the satisfaction of performance goals or otherwise, as the Committee
determines at the time of the grant of the Award or thereafter. Except as otherwise provided in an Award Certificate or any special
Plan document governing an Award, a Participant shall have none of the rights of a stockholder with respect to Restricted Stock
Units or Deferred Stock Units until such time as Shares of Stock are paid in settlement of such Awards.

 

8.3         DIVIDENDS
ON RESTRICTED STOCK. In the case of Restricted Stock, the Committee may provide that ordinary cash dividends declared on the
Shares before they are vested will be (i) forfeited, (ii) deemed to have been reinvested in additional Shares or otherwise reinvested
(subject to Share availability under Section 5.1 hereof), (iii) credited by the Company to an account for the Participant and accumulated
without interest until the date upon which the host Award becomes vested, and any dividends accrued with respect to forfeited Restricted
Stock will be reconveyed to the Company without further consideration or any act or action by the Participant, or (iv) paid or
distributed to the Participant as accrued (in which case, such dividends must be paid or distributed no later than the 15th day
of the 3rd month following the later of (A) the calendar year in which the corresponding dividends were paid to stockholders, or
(B) the first calendar year in which the Participant’s right to such dividends is no longer subject to a substantial risk
of forfeiture).

 

8.4.        FORFEITURE.
Subject to the terms of the Award Certificate and except as otherwise determined by the Committee at the time of the grant of the
Award or thereafter, upon termination of Continuous Service during the applicable restriction period or upon failure to satisfy
a performance goal during the applicable restriction period, Restricted Stock or Restricted Stock Units that are at that time subject
to restrictions shall be forfeited.

 

8.5.        DELIVERY
OF RESTRICTED STOCK. Shares of Restricted Stock shall be delivered to the Participant at the Grant Date either by book-entry
registration or by delivering to the Participant, or a custodian or escrow agent (including, without limitation, the Company or
one or more of its employees) designated by the Committee, a stock certificate or certificates registered in the name of the Participant.
If physical certificates representing shares of Restricted Stock are registered in the name of the Participant, such certificates
must bear an appropriate legend referring to the terms, conditions and restrictions applicable to such Restricted Stock.

 

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ARTICLE 9

PERFORMANCE AWARDS

 

9.1.         GRANT
OF PERFORMANCE AWARDS. The Committee is authorized to grant any Award under this Plan with performance-based vesting criteria,
on such terms and conditions as may be selected by the Committee. Any such Awards with performance-based vesting criteria are referred
to herein as Performance Awards. The Committee shall have the complete discretion to determine the number of Performance Awards
granted to each Participant, and to designate the provisions of such Performance Awards as provided in Section 4.3. All Performance
Awards shall be evidenced by an Award Certificate or a written program established by the Committee, pursuant to which Performance
Awards are awarded under the Plan under uniform terms, conditions and restrictions set forth in such written program.

 

9.2.         PERFORMANCE
GOALS. The Committee may establish performance goals for Performance Awards which may be based on any criteria selected by
the Committee. Such performance goals may be described in terms of Company-wide objectives or in terms of objectives that relate
to the performance of the Participant, an Affiliate or a division, region, department or function within the Company or an Affiliate.
If the Committee determines that a change in the business, operations, corporate structure or capital structure of the Company
or the manner in which the Company or an Affiliate conducts its business, or other events or circumstances render performance goals
to be unsuitable, the Committee may modify such performance goals in whole or in part, as the Committee deems appropriate. If a
Participant is promoted, demoted or transferred to a different business unit or function during a performance period, the Committee
may determine that the performance goals or performance period are no longer appropriate and may (i) adjust, change or eliminate
the performance goals or the applicable performance period as it deems appropriate to make such goals and period comparable to
the initial goals and period, or (ii) make a cash payment to the participant in an amount determined by the Committee.

 

ARTICLE 10

STOCK OR OTHER STOCK-BASED AWARDS

 

10.1.       GRANT
OF STOCK OR OTHER STOCK-BASED AWARDS. The Committee is authorized, subject to limitations under applicable law, to grant to
Participants such other Awards that are payable in, valued in whole or in part by reference to, or otherwise based on or related
to Shares, as deemed by the Committee to be consistent with the purposes of the Plan, including without limitation Shares awarded
purely as a “bonus” and not subject to any restrictions or conditions, convertible or exchangeable debt securities,
other rights convertible or exchangeable into Shares, and Awards valued by reference to book value of Shares or the value of securities
of or the performance of specified Parents or Subsidiaries. The Committee shall determine the terms and conditions of such Awards.

 

ARTICLE 11

PROVISIONS APPLICABLE TO AWARDS

 

11.1.       AWARD
CERTIFICATES. Each Award shall be evidenced by an Award Certificate. Each Award Certificate shall include such provisions,
not inconsistent with the Plan, as may be specified by the Committee.

 

11.2.       FORM
OF PAYMENT FOR AWARDS. At the discretion of the Committee, payment of Awards may be made in cash, Stock, a combination of cash
and Stock, or any other form of property as the Committee shall determine. In addition, payment of Awards may include such terms,
conditions, restrictions and/or limitations, if any, as the Committee deems appropriate, including, in the case of Awards paid
in the form of Stock, restrictions on transfer and forfeiture provisions. Further, payment of Awards may be made in the form of
a lump sum, or in installments, as determined by the Committee.

 

11.3.       LIMITS
ON TRANSFER. No right or interest of a Participant in any unexercised or restricted Award may be pledged, encumbered, or hypothecated
to or in favor of any party other than the Company or an Affiliate, or shall be subject to any lien, obligation, or liability of
such Participant to any other party other than the Company or an Affiliate. No unexercised or restricted Award shall be assignable
or transferable by a Participant other than by will or the laws of descent and distribution; provided, however, that the Committee
may (but need not) permit other transfers (other than transfers for value) where the Committee concludes that such transferability
(i) does not result in accelerated taxation, (ii) does not cause any Option intended to be an Incentive Stock Option to fail to
be described in Code Section 422(b) and (iii) is otherwise appropriate and desirable, taking into account any factors deemed relevant,
including without limitation, state or federal tax or securities laws applicable to transferable Awards.

 

11.4.       BENEFICIARIES.
Notwithstanding Section 11.3, a Participant may, in the manner determined by the Committee, designate a beneficiary to exercise
the rights of the Participant and to receive any distribution with respect to any Award upon the Participant’s death. A beneficiary,
legal guardian, legal representative, or other person claiming any rights under the Plan is subject to all terms and conditions
of the Plan and any Award Certificate applicable to the Participant, except to the extent the Plan and Award Certificate otherwise
provide, and to any additional restrictions deemed necessary or appropriate by the Committee. If no beneficiary has been designated
or survives the Participant, any payment due to the Participant shall be made to the Participant’s estate. Subject to the
foregoing, a beneficiary designation may be changed or revoked by a Participant, in the manner provided by the Company, at any
time provided the change or revocation is filed with the Company.

 

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11.5.       STOCK
TRADING RESTRICTIONS. All Stock issuable under the Plan is subject to any stop-transfer orders and other restrictions as the
Committee deems necessary or advisable to comply with federal or state securities laws, rules and regulations and the rules of
any national securities exchange or automated quotation system on which the Stock is listed, quoted, or traded. The Committee may
place legends on any Stock certificate or issue instructions to the transfer agent to reference restrictions applicable to the
Stock.

 

11.6.       ACCELERATION
FOR ANY REASON. The Committee may in its sole discretion at any time determine that all or a portion of a Participant’s
Options or SARs shall become fully or partially exercisable, that all or a part of the restrictions on all or a portion of a Participant’s
outstanding Awards shall lapse, and/or that any performance-based criteria with respect to any Awards held by a Participant shall
be deemed to be wholly or partially satisfied, in each case, as of such date as the Committee may, in its sole discretion, declare.
The Committee may discriminate among Participants and among Awards granted to a Participant in exercising its discretion pursuant
to this Section 11.6.

 

11.7.       FORFEITURE
EVENTS. Awards under the Plan shall be subject to any compensation recoupment policy that the Company may adopt from time to
time that is applicable by its terms to the Participant. In addition, the Committee may specify in an Award Certificate that the
Participant’s rights, payments and benefits with respect to an Award shall be subject to reduction, cancellation, forfeiture
or recoupment upon the occurrence of certain specified events, in addition to any otherwise applicable vesting or performance conditions
of an Award. Such events may include, but shall not be limited to, (i) termination of employment for cause, (ii) violation of material
Company or Affiliate policies, (iii) breach of noncompetition, confidentiality or other restrictive covenants that may apply to
the Participant, (iv) other conduct by the Participant that is detrimental to the business or reputation of the Company or any
Affiliate, or (v) a later determination that the vesting of, or amount realized from, a Performance Award was based on materially
inaccurate financial statements or any other materially inaccurate performance metric criteria, whether or not the Participant
caused or contributed to such material inaccuracy.

 

11.8.       SUBSTITUTE
AWARDS. The Committee may grant Awards under the Plan in substitution for stock and stock-based awards held by employees of
another entity who become employees of the Company or an Affiliate as a result of a merger or consolidation of the former employing
entity with the Company or an Affiliate or the acquisition by the Company or an Affiliate of property or stock of the former employing
corporation. The Committee may direct that the substitute awards be granted on such terms and conditions as the Committee considers
appropriate in the circumstances.

 

ARTICLE 12

CHANGES IN CAPITAL STRUCTURE

 

12.1.       MANDATORY
ADJUSTMENTS. In the event of a nonreciprocal transaction between the Company and its stockholders that causes the per-share
value of the Stock to change (including, without limitation, any stock dividend, stock split, spin-off, rights offering, or large
nonrecurring cash dividend), the Committee shall make such adjustments to the Plan and Awards as it deems necessary, in its sole
discretion, to prevent dilution or enlargement of rights immediately resulting from such transaction. Action by the Committee may
include: (i) adjustment of the number and kind of shares that may be delivered under the Plan; (ii) adjustment of the number and
kind of shares subject to outstanding Awards; (iii) adjustment of the exercise price of outstanding Awards or the measure to be
used to determine the amount of the benefit payable on an Award; and (iv) any other adjustments that the Committee determines to
be equitable. Notwithstanding the foregoing, the Committee shall not make any adjustments to outstanding Options that would constitute
a modification or substitution of the stock right under Treas. Reg. Section 1.409A-1(b)(5)(v) that would be treated as the grant
of a new stock right or change in the form of payment for purposes of Code Section 409A. Without limiting the foregoing, in the
event of a subdivision of the outstanding Stock (stock-split), a declaration of a dividend payable in Shares, or a combination
or consolidation of the outstanding Stock into a lesser number of Shares, the authorization limits under Section 5.1 shall automatically
be adjusted proportionately, and the Shares then subject to each Award shall automatically, without the necessity for any additional
action by the Committee, be adjusted proportionately without any change in the aggregate purchase price therefor.

 

12.2        DISCRETIONARY
ADJUSTMENTS. Upon the occurrence or in anticipation of any corporate event or transaction involving the Company (including,
without limitation, any merger, reorganization, recapitalization, combination or exchange of shares, or any transaction described
in Section 12.1), the Committee may, in its sole discretion, provide (i) that Awards will be settled in cash rather than Stock,
(ii) that Awards will become immediately vested and non-forfeitable and exercisable (in whole or in part) and will expire after
a designated period of time to the extent not then exercised, (iii) that Awards will be assumed by another party to a transaction
or otherwise be equitably converted or substituted in connection with such transaction, (iv) that outstanding Awards may be settled
by payment in cash or cash equivalents equal to the excess of the Fair Market Value of the underlying Stock, as of a specified
date associated with the transaction, over the exercise price of the Award, (v) that performance targets and performance periods
for Performance Awards will be modified, or (vi) any combination of the foregoing. The Committee’s determination need not
be uniform and may be different for different Participants whether or not such Participants are similarly situated.

 

12.3        GENERAL.
Any discretionary adjustments made pursuant to this Article 12 shall be subject to the provisions of Section 13.2. To the extent
that any adjustments made pursuant to this Article 12 cause Incentive Stock Options to cease to qualify as Incentive Stock Options,
such Options shall be deemed to be Nonstatutory Stock Options.

 

     - 10 -

     

    

 

ARTICLE 13

AMENDMENT, MODIFICATION AND TERMINATION

 

13.1.       AMENDMENT,
MODIFICATION AND TERMINATION. The Board or the Committee may, at any time and from time to time, amend, modify or terminate
the Plan without stockholder approval; provided, however, that if an amendment to the Plan would, in the reasonable opinion of
the Board or the Committee, constitute a material change requiring stockholder approval under applicable laws, policies or regulations
or the applicable listing or other requirements of an Exchange, then such amendment shall be subject to stockholder approval; and
provided, further, that the Board or Committee may condition any other amendment or modification on the approval of stockholders
of the Company for any reason, including by reason of such approval being necessary or deemed advisable (i) to comply with the
listing or other requirements of an Exchange, or (ii) to satisfy any other tax, securities or other applicable laws, policies or
regulations.

 

13.2.       AWARDS
PREVIOUSLY GRANTED. At any time and from time to time, the Committee may amend, modify or terminate any outstanding Award without
approval of the Participant; provided, however:

 

		(a)	Subject to the terms of the applicable Award Certificate, such amendment, modification or termination
shall not, without the Participant’s consent, reduce or diminish the value of such Award determined as if the Award had been
exercised, vested, cashed in or otherwise settled on the date of such amendment or termination (with the per-share value of an
Option for this purpose being calculated as the excess, if any, of the Fair Market Value as of the date of such amendment or termination
over the exercise price of such Award);

 

		(b)	The original term of an Option may not be extended without the prior approval of the stockholders
of the Company;

 

		(c)	Except as otherwise provided in Section 12.1, the exercise price of an Option may not be reduced,
directly or indirectly, without the prior approval of the stockholders of the Company; and

 

		(d)	No termination, amendment, or modification of the Plan shall adversely affect any Award previously
granted under the Plan, without the written consent of the Participant affected thereby. An outstanding Award shall not be deemed
to be “adversely affected” by a Plan amendment if such amendment would not reduce or diminish the value of such Award
determined as if the Award had been exercised, vested, cashed in or otherwise settled on the date of such amendment (with the per-share
value of an Option for this purpose being calculated as the excess, if any, of the Fair Market Value as of the date of such amendment
over the exercise price of such Award).

 

13.3.       COMPLIANCE
AMENDMENTS. Notwithstanding anything in the Plan or in any Award Certificate to the contrary, the Board may amend the Plan
or an Award Certificate, to take effect retroactively or otherwise, as deemed necessary or advisable for the purpose of conforming
the Plan or Award Certificate to any present or future law relating to plans of this or similar nature (including, but not limited
to, Section 409A of the Code), and to the administrative regulations and rulings promulgated thereunder. By accepting an Award
under this Plan, a Participant agrees to any amendment made pursuant to this Section 13.3 to any Award granted under the Plan without
further consideration or action.

 

ARTICLE 14

GENERAL PROVISIONS

 

14.1.       RIGHTS
OF PARTICIPANTS.

 

		(a)	No Participant or any Eligible Participant shall have any claim to be granted any Award under the
Plan. Neither the Company, its Affiliates nor the Committee is obligated to treat Participants or Eligible Participants uniformly,
and determinations made under the Plan may be made by the Committee selectively among Eligible Participants who receive, or are
eligible to receive, Awards (whether or not such Eligible Participants are similarly situated).

 

		(b)	Nothing in the Plan, any Award Certificate or any other document or statement made with respect
to the Plan, shall interfere with or limit in any way the right of the Company or any Affiliate to terminate any Participant’s
employment or status as an officer, or any Participant’s service as a director or consultant, at any time, nor confer upon
any Participant any right to continue as an employee, officer, director or consultant of the Company or any Affiliate, whether
for the duration of a Participant’s Award or otherwise.

 

		(c)	Neither an Award nor any benefits arising under this Plan shall constitute an employment contract
with the Company or any Affiliate and, accordingly, subject to Article 13, this Plan and the benefits hereunder may be terminated
at any time in the sole and exclusive discretion of the Committee without giving rise to any liability on the part of the Company
or an of its Affiliates.

 

     - 11 -

     

    

 

		(d)	No Award gives a Participant any of the rights of a stockholder of the Company unless and until
Shares are in fact issued to such person in connection with such Award.

 

14.2.       WITHHOLDING.
The Company or any Affiliate shall have the authority and the right to deduct or withhold, or require a Participant to remit to
the Company or such Affiliate, an amount sufficient to satisfy federal, state and local taxes (including the Participant’s
FICA obligation) required by law to be withheld with respect to any exercise, lapse of restriction or other taxable event arising
as a result of the Plan. The obligations of the Company under the Plan will be conditioned on such payment or arrangements and
the Company or such Affiliate will, to the extent permitted by law, have the right to deduct any such taxes from any payment of
any kind otherwise due to the Participant. Unless otherwise determined by the Committee at the time the Award is granted or thereafter,
any such withholding requirement may be satisfied, in whole or in part, by withholding from the Award Shares having a Fair Market
Value on the date of withholding equal to the minimum amount (and not any greater amount) required to be withheld for tax purposes,
all in accordance with such procedures as the Committee establishes. All such elections shall be subject to any restrictions or
limitations that the Committee, in its sole discretion, deems appropriate.

 

14.3.       SPECIAL
PROVISIONS RELATED TO SECTION 409A OF THE CODE.

 

		(a)	General. It is intended that the payments and benefits provided under the Plan and any Award
shall either be exempt from the application of, or comply with, the requirements of Section 409A of the Code. The Plan and all
Award Certificates shall be construed in a manner that effects such intent. Nevertheless, the tax treatment of the benefits provided
under the Plan or any Award is not warranted or guaranteed. Neither the Company, its Affiliates nor their respective directors,
officers, employees or advisers (other than in his or her capacity as a Participant) shall be held liable for any taxes, interest,
penalties or other monetary amounts owed by any Participant or other taxpayer as a result of the Plan or any Award.

 

		(b)	Definitional Restrictions. Notwithstanding anything in the Plan or in any Award Certificate
to the contrary, to the extent that any amount or benefit that would constitute non-exempt “deferred compensation”
for purposes of Section 409A of the Code (“Non-Exempt Deferred Compensation”) would otherwise be payable or distributable,
or a different form of payment (e.g., lump sum or installment) of such Non-Exempt Deferred Compensation would be effected, under
the Plan or any Award Certificate by reason of the occurrence of a Change in Control, or the Participant’s Disability or
separation from service, such Non-Exempt Deferred Compensation will not be payable or distributable to the Participant, and/or
such different form of payment will not be effected, by reason of such circumstance unless the circumstances giving rise to such
Change in Control, Disability or separation from service meet any description or definition of “change in control event”,
“disability” or “separation from service”, as the case may be, in Section 409A of the Code and applicable
regulations (without giving effect to any elective provisions that may be available under such definition). This provision does
not affect the dollar amount or prohibit the vesting of any Non-Exempt Deferred Compensation upon a Change in Control, Disability
or termination of employment, however defined. If this provision prevents the payment or distribution of any Non-Exempt Deferred
Compensation, or the application of a different form of payment, such payment or distribution shall be made at the time and in
the form that would have applied absent the non-409A-conforming event.

 

		(c)	Allocation among Possible Exemptions. If any one or more Awards granted under the Plan to
a Participant could qualify for any separation pay exemption described in Treas. Reg. Section 1.409A-1(b)(9), but such Awards in
the aggregate exceed the dollar limit permitted for the separation pay exemptions, the Company shall determine which Awards or
portions thereof will be subject to such exemptions.

 

		(d)	Six-Month Delay in Certain Circumstances. Notwithstanding anything in the Plan or in any
Award Certificate to the contrary, if any amount or benefit that would constitute Non-Exempt Deferred Compensation would otherwise
be payable or distributable under this Plan or any Award Certificate by reason of a Participant’s separation from service
during a period in which the Participant is a Specified Employee (as defined below), then, subject to any permissible acceleration
of payment by the Committee under Treas. Reg. Section 1.409A-3(j)(4)(ii) (domestic relations order), (j)(4)(iii) (conflicts of
interest), or (j)(4)(vi) (payment of employment taxes):

 

		(i)	the amount of such Non-Exempt Deferred Compensation that would otherwise be payable during the
six-month period immediately following the Participant’s separation from service will be accumulated through and paid or
provided on the first day of the seventh month following the Participant’s separation from service (or, if the Participant
dies during such period, within 30 days after the Participant’s death) (in either case, the “Required Delay Period”);
and

 

     - 12 -

     

    

 

		(ii)	the normal payment or distribution schedule for any remaining payments or distributions will resume
at the end of the Required Delay Period.

 

For purposes of this Plan, the
term “Specified Employee” has the meaning given such term in Code Section 409A and the final regulations thereunder.

 

		(e)	Installment Payments. If, pursuant to an Award, a Participant is entitled to a series of
installment payments, such Participant’s right to the series of installment payments shall be treated as a right to a series
of separate payments and not to a single payment. For purposes of the preceding sentence, the term “series of installment
payments” has the meaning provided in Treas. Reg. Section 1.409A-2(b)(2)(iii) (or any successor thereto).

 

		(f)	Timing of Release of Claims. Whenever an Award conditions a payment or benefit on the Participant’s
execution and non-revocation of a release of claims, such release must be executed and all revocation periods shall have expired
within 60 days after the date of termination of the Participant’s employment; failing which such payment or benefit shall
be forfeited. If such payment or benefit is exempt from Section 409A of the Code, the Company may elect to make or commence payment
at any time during such 60-day period. If such payment or benefit constitutes Non-Exempt Deferred Compensation, then, subject to
subsection (c) above, (i) if such 60-day period begins and ends in a single calendar year, the Company may make or commence payment
at any time during such period at its discretion, and (ii) if such 60-day period begins in one calendar year and ends in the next
calendar year, the payment shall be made or commence during the second such calendar year (or any later date specified for such
payment under the applicable Award), even if such signing and non-revocation of the release occur during the first such calendar
year included within such 60-day period. In other words, a Participant is not permitted to influence the calendar year of payment
based on the timing of signing the release.

 

		(g)	Permitted Acceleration. The Company shall have the sole authority to make any accelerated
distribution permissible under Treas. Reg. section 1.409A-3(j)(4) to Participants of deferred amounts, provided that such distribution(s)
meets the requirements of Treas. Reg. section 1.409A-3(j)(4).

 

14.4.       UNFUNDED
STATUS OF AWARDS. The Plan is intended to be an “unfunded” plan for incentive and deferred compensation. With respect
to any payments not yet made to a Participant pursuant to an Award, nothing contained in the Plan or any Award Certificate shall
give the Participant any rights that are greater than those of a general creditor of the Company or any Affiliate. In its sole
discretion, the Committee may authorize the creation of grantor trusts or other arrangements to meet the obligations created under
the Plan to deliver Shares or payments in lieu of Shares or with respect to Awards. This Plan is not intended to be subject to
ERISA.

 

14.5.       RELATIONSHIP
TO OTHER BENEFITS. No payment under the Plan shall be taken into account in determining any benefits under any pension, retirement,
savings, profit sharing, group insurance, welfare or benefit plan of the Company or any Affiliate unless provided otherwise in
such other plan. Nothing contained in the Plan will prevent the Company from adopting other or additional compensation arrangements,
subject to stockholder approval if such approval is required; and such arrangements may be either generally applicable or applicable
only in specific cases.

 

14.6.       EXPENSES.
The expenses of administering the Plan shall be borne by the Company and its Affiliates.

 

14.7.       TITLES
AND HEADINGS. The titles and headings of the Sections in the Plan are for convenience of reference only, and in the event of
any conflict, the text of the Plan, rather than such titles or headings, shall control.

 

14.8.       GENDER
AND NUMBER. Except where otherwise indicated by the context, any masculine term used herein also shall include the feminine;
the plural shall include the singular and the singular shall include the plural.

 

14.9.       FRACTIONAL
SHARES. No fractional Shares shall be issued and the Committee shall determine, in its discretion, whether cash shall be given
in lieu of fractional Shares or whether such fractional Shares shall be eliminated by rounding up or down.

 

14.10.     GOVERNMENT
AND OTHER REGULATIONS.

 

		(a)	Notwithstanding any other provision of the Plan, no Participant who acquires Shares pursuant to
the Plan may, during any period of time that such Participant is an affiliate of the Company (within the meaning of the rules and
regulations of the Securities and Exchange Commission under the 1933 Act), sell such Shares, unless such offer and sale is made
(i) pursuant to an effective registration statement under the 1933 Act, which is current and includes the Shares to be sold, or
(ii) pursuant to an appropriate exemption from the registration requirement of the 1933 Act, such as that set forth in Rule 144
promulgated under the 1933 Act.

 

     - 13 -

     

    

 

		(b)	Notwithstanding any other provision of the Plan, if at any time the Committee shall determine that
the registration, listing or qualification of the Shares covered by an Award upon any Exchange or under any foreign, federal, state
or local law or practice, or the consent or approval of any governmental regulatory body, is necessary or desirable as a condition
of, or in connection with, the granting of such Award or the purchase or receipt of Shares thereunder, no Shares may be purchased,
delivered or received pursuant to such Award unless and until such registration, listing, qualification, consent or approval shall
have been effected or obtained free of any condition not acceptable to the Committee. Any Participant receiving or purchasing Shares
pursuant to an Award shall make such representations and agreements and furnish such information as the Committee may request to
assure compliance with the foregoing or any other applicable legal requirements. The Company shall not be required to issue or
deliver any certificate or certificates for Shares under the Plan prior to the Committee’s determination that all related
requirements have been fulfilled. The Company shall in no event be obligated to register any securities pursuant to the 1933 Act
or applicable state or foreign law or to take any other action in order to cause the issuance and delivery of such certificates
to comply with any such law, regulation or requirement.

 

14.11.    GOVERNING
LAW. To the extent not governed by federal law, the Plan and all Award Certificates shall be construed in accordance with and
governed by the laws of the State of Maryland.

 

14.12.    SEVERABILITY.
In the event that any provision of this Plan is found to be invalid or otherwise unenforceable under any applicable law, such invalidity
or unenforceability will not be construed as rendering any other provisions contained herein as invalid or unenforceable, and all
such other provisions will be given full force and effect to the same extent as though the invalid or unenforceable provision was
not contained herein.

 

14.13.    NO
LIMITATIONS ON RIGHTS OF COMPANY. The grant of any Award shall not in any way affect the right or power of the Company to make
adjustments, reclassification or changes in its capital or business structure or to merge, consolidate, dissolve, liquidate, sell
or transfer all or any part of its business or assets. The Plan shall not restrict the authority of the Company, for proper corporate
purposes, to draft or assume awards, other than under the Plan, to or with respect to any person. If the Committee so directs,
the Company may issue or transfer Shares to an Affiliate, for such lawful consideration as the Committee may specify, upon the
condition or understanding that the Affiliate will transfer such Shares to a Participant in accordance with the terms of an Award
granted to such Participant and specified by the Committee pursuant to the provisions of the Plan.

 

The foregoing is hereby acknowledged as
being the Moody National REIT II, Inc. Amended and Restated Incentive Plan as adopted by the Board on June 12, 2017.

	 	 	 
	 	MOODY NATIONAL REIT II, INC.
	 	 	 
	 	By:	/s/ Brett C. Moody
	 	Name:	Brett C. Moody
	 	Its:	Chairman of the Board, Chief Executive Officer and President

 

     - 14 -Exhibit

Exhibit 10.14

Orion Energy Systems, Inc.
Non-Employee Director Compensation Plan
Updated and Effective June 6, 2017
	
		
	1.     Annual cash retainer:
	$36,000 (cash or stock) ($9,000 paid quarterly)

	2.    Board meeting fee:
	None

	3.    Committee meeting fee
	None

	4.    Annual restricted stock grant:
	$40,500 grant date fair market value (option to accept tandem restricted stock (60%) and restricted cash (40%))2

	5.    Annual Lead Director retainer:
	$30,000 (cash or stock)1 ($7,500 paid quarterly)

	6.    Annual Ad Hoc Litigation Committee Chair retainer:
	$10,000 (cash or stock)1 ($2,500 paid quarterly)

	7.    Annual Audit Committee Chair retainer:
	$25,000 (cash or stock)1 ($8,333 paid quarterly)

	8.    Annual Compensation Committee Chair retainer:
	$20,000 (cash or stock)1 ($5,000 paid quarterly)

	9.    Annual Nominating and Corporate Governance Committee Chair retainer:
	$20,000 (cash or stock) 1 ($5,000 paid quarterly)

	10.    Reimburse out-of-pocket expenses:
	Yes

	11.    Non-Employee Director Early Retirement Plan
	a.    Upon the recommendation of the Compensation Committee and the approval of the Board of Directors, any non-employee director who voluntarily retires from the Board prior to the end of his or her stated term or who voluntarily decides not to stand for re-election at the end of his or her stated term will be entitled to continued vesting of up to all of his or her then outstanding unvested restricted stock and options on the dates when such vesting would otherwise occur if such director remained on the Board on such dates, subject to such additional terms and conditions, if any, as may be determined necessary or appropriate by the Compensation Committee and the Board of Directors.
b.    Upon the recommendation of the Compensation Committee and approval by the Board of Directors, any non-employee director who voluntarily retires from the Board prior to the end of his or her stated term or who voluntarily decides not to stand for re-election at the end of his or her stated term will be entitled to receive a services fee of $200 per hour for any time spent at the request of the Company on Company-related matters, plus reimbursement for all out-of-pocket expenses, subject to such additional terms and conditions, if any, as may be determined necessary or appropriate by the Compensation Committee and the Board of Directors.
c.    Upon approval of the Compensation Committee, any non-employee director who voluntarily retires from the Board prior to the end of his or her stated term or who voluntarily decides not to stand for re-election at the end of his or her stated term will be entitled to an extension of the terms of all vested stock options until dates determined by the Compensation Committee that shall not exceed the dates on which such term would have otherwise expired if such director remained on the Board on such dates, subject to such additional terms and conditions, if any, as may be determined necessary or appropriate by the Compensation Committee.

_________________________
1 Form of compensation to be chosen by each individual prior to each fiscal year. Number of shares to be issued on third business day after release of annual (or quarterly, in case of quarterly retainer payments) earnings announcement based on closing price on such date.
2 Annual restricted stock grant on third business day after annual earnings announcement with the number of restricted shares equal to dollar amount divided by the closing sale price on such date - vest 1/3 each year on the anniversary of the date of grant.  Each director shall have the option to elect the award 60% in restricted stock and 40% in restricted cash with each vesting 1/3 each year on the anniversary of the date of grant or in all restricted stock on the same vesting schedule.  The election to accept the award in 60% restricted stock and 40% restricted cash must be conveyed to the Company by the director prior to the grant date.

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