Document:

Exhibit
10.1

 

SETTLEMENT
AGREEMENT and other covenants

 

The Parties of this Settlement Agreement
are:

 

ELDER MARCOS VIEIRA DA CONCEIÇÃO,
brazilian, entrepreneur, enrolled under the taxpayer registry no 793.295.605-63 (“CPF”), with place of business
at Loteamento Varandas Tropicais, without number, Lotes 10 to 13, Dowtown, Lauro de Freitas, State of Bahia at Rua Passo da Pátria,
1407, tower A2, apartment 34, Alto da Lapa, São Paulo/SP, hereinafter simply referred to as “Marcos” or, jointly
with Márcia Cristina Vieira da Conceição Antunes, “Creditors”;

 

MÁRCIA CRISTINA VIEIRA DA CONCEIÇÃO
ANTUNES, brazilian, entrepreneur, enrolled under the taxpayer registry no 507.932.685-91 (“CPF”), domiciled
at Alameda Praia de Tramandaí, 412, Condomínio Villa Costeira, Casa 31, Stella Mares, Salvador/BA, hereinafter simply
referred to as “Márcia” or, jointly with Elder Marcos Vieira da Conceição, “Creditors”;

 

LAKELAND INDUSTRIES, INC., a company
duly organized under the laws of Delaware, United States of America, with principal place of business at 701 Koehler Avenue, Suite
7, Ronkonkoma, NY 11779, hereinafter simply referred to as “Lakeland Industries” or, jointly with Lakeland Brasil S/A,
“Debtors”;

 

LAKELAND BRASIL S/A, a corporation,
enrolled in the National Registry of Legal Entities of the Ministry of Finance (“CNPJ/MF”) under number 04.011.170/0001-22
(“CNPJ”), with its principal place of business at Rua Luxemburgo, 260, Lotes 82/83, Bloco O, ZIP Code 41230-130, Salvador/BA,
herein represented by its attorneys, hereinafter simply referred to as “Lakeland Brasil” or, jointly with Lakeland
Industries Inc., “Debtors”;

 

Collectively, hereinafter simply referred
to as “Parties”.

 

WHEREAS:

 

(I) On July 13th, 2012 an arbitral
award in the updated amount of R$ 25.148.252,47 (twenty five million, one hundred and forty-eight thousand, two hundred, fifty-two
Brazilian Reais and forty-seven cents) was rendered for the benefit of the CREDITORS. This amount includes the costs, tax, interest
and attorney’s fees;

 

(II) On August 17th, 2012 the
Parties, represented by their respective attorneys, met with the intention to resolve the following issues:

 

		a)	Amend the award rendered in the arbitral proceeding number 35/2010 filed before the Arbitration
and Mediation Center of the Chamber of Commerce Brazil-Canada (“CCBC”), including the expenses and the attorney’s
fees

 

		b)	Resolve any and all relationships and claims between the parties, their affiliates, officers, directors,
representatives and other related parties in connection with, and without limitations, to the May 2008 Share Purchase Agreement,
Management Agreements and Escrow Agreements among the parties, with the resolution of any amount due or which may be due in the
future, related to the activities of Lakeland Brasil S/A, including, but not limited to tax or labor losses/contingencies, which
may arise from the contracts or relationships among the parties and a full settlement of the aforementioned arbitral award is contemplated
herein.

 

(III)        On August 17th, 2012,
the Parties entered into a Memorandum of Understandings, which is a legal, valid and binding agreement, with the intention to resolve
all the issues above mentioned;

 

    	1

    	 

    

 

(IV) The signing of this Settlement Agreement
among the Parties, according to the terms of the Memorandum of Understanding, is subject to approval by Lakeland Industries’
Board of Directors andits Senior Lender, on or before August 31, 2012;

 

(V) On August, 27, 2012 Lakeland Industries’
Board of Directors and its Senior Lender, approved the terms of the Memorandum of Understanding.

 

The parties mutually agree to enter into
this Settlement Agreement with the intention to resolve all the issues related to the arbitral award rendered in the arbitral proceeding
number 35/2010 filed before the Arbitration and Mediation Center of the Chamber of Commerce Brazil-Canada (“CCBC”)
and also all relationships and claims among the parties that were or were not subject to the arbitral proceeding, their affiliates,
officers, directors, representatives and other related parties specially in connection with, and without limitations, to the Share
Purchase Agreement, Management Agreements and Escrow Agreements among the parties.This Settlement Agreement will be governed by
the following clauses and conditions, which the Parties mutually agree to and accept:

 

		I)	THE DEBT

 

Section 1 – The Parties and
their respective attorneys agreed that, according to the aforementioned arbitral award rendered in the arbitral proceeding number
35/2010, the DEBTORS owed to both of the CREDITORS the total nominal and unadjusted amount of R$ 19.237.319,22 (nineteen million,
two hundred and thirty seven thousand, three hundred and nineteen Brazilian Reais and twenty-two cents), which duly updated and
inclusive of taxes, expenses, interest and all the applicable adjustments, updated to the present date amounts to the sum of R$
25.148.252,47 (twenty five million, one hundred and forty-eight thousand, two hundred, fifty-two Brazilian Reais and forty-seven
cents).

 

Section 2 – The CREDITORS
agree to concede a discount of approximately R$ 8.200.000,00 (eight million, two hundred thousand Brazilian Reais) to the DEBTORS
as to the amount mentioned in section 1 of this Settlement Agreement, if the following obligations set below are promptly observed:.

 

Section 2.1 – The DEBTORS
will pay to the CREDITORS the amount of R$ 5,000,000.00 (five million Brazilian Reais) as a “down payment” and the
remaining amount of US$ 6,000,000.00 (six million U.S. Dollars) as follows:

 

Paragraph 1 – The “down
payment” will be paid in Brazilian Reais as follows:

 

		a)	Release of the total amount currently deposited in the escrow accounts with BTG Pactual Bank in
an approximate amount of R$ 2,294,000.00 (two million, two hundred and ninety-four thousand Brazilian Reais). For that purpose,
the DEBTORS, jointly with the CREDITORS, hereby sign a letter to BTG Pactual Bank authorizing the release of said amounts;

 

		b)	In this event, the DEBTORS hereby pay the first installment of the “down payment” in
the amount of R$ 706,000.00 (seven hundred and six thousand Brazilian Reais) to the CREDITORS;

 

		c)	The DEBTORS will pay the last installment of the “down payment” in the amount of R$
2,000,000.00 (two million Brazilian Reais) on or before December 31, 2012.

 

Paragraph 2 – As for the remaining
amount due under this Settlement Agreement, the DEBTORS will pay the following amounts in U.S. Dollars according to the dates and
values identified in the payment table below:

 

    	2

    	 

    

 

	3/31/2013	 	$	250,000	 	In U.S. Dollars
	6/30/2013	 	$	250,000	 	In U.S. Dollars
	9/30/2013	 	$	250,000	 	In U.S. Dollars
	12/31/2013	 	$	250,000	 	In U.S. Dollars
	3/31/2014	 	$	250,000	 	In U.S. Dollars
	6/30/2014	 	$	250,000	 	In U.S. Dollars
	9/30/2014	 	$	250,000	 	In U.S. Dollars
	12/31/2014	 	$	250,000	 	In U.S. Dollars
	3/31/2015	 	$	250,000	 	In U.S. Dollars
	6/30/2015	 	$	250,000	 	In U.S. Dollars
	9/30/2015	 	$	250,000	 	In U.S. Dollars
	12/31/2015	 	$	250,000	 	In U.S. Dollars
	3/31/2016	 	$	250,000	 	In U.S. Dollars
	6/30/2016	 	$	250,000	 	In U.S. Dollars
	9/30/2016	 	$	250,000	 	In U.S. Dollars
	12/31/2016	 	$	250,000	 	In U.S. Dollars
	3/31/2017	 	$	250,000	 	In U.S. Dollars
	6/30/2017	 	$	250,000	 	In U.S. Dollars
	9/30/2017	 	$	250,000	 	In U.S. Dollars
	12/31/2017	 	$	250,000	 	In U.S. Dollars
	3/31/2018	 	$	250,000	 	In U.S. Dollars
	6/30/2018	 	$	250,000	 	In U.S. Dollars
	9/30/2018	 	$	250,000	 	In U.S. Dollars
	12/31/2018	 	$	250,000	 	In U.S. Dollars
	Subtotal	 	$	6,000,000	 	 

 

Section 2.2 – All payments
must be made in the bank accounts identified below in the name of Marcos and Márcia, through transfers or bank deposits
within the above table’s respective maturity terms. The term will be extended to next business day in case there is no business
hours in Brazil’s Bank in the dates of maturity of the payment. Fifty percent (50%) of the amount due will be for the benefit
of Marcos’ account and the other fifty percent (50%) will be for the benefit of Marcia ́s account:

 

Marcos

Banco ItaúAgência n.o
6398

Conta-corrente n.o 01161-8

CPF n.o 793.295.605-63

 

Márcia

Banco Itaú

Agência n.o 6398

Conta-corrente n.o 000050-2

CPF/MF no 507.932.685-91

 

Section 2.3 – To guarantee
the payment of the 8 installments with maturity date on 31.03.2017, 30.06.2017, 30.09.2017, 31.12.2017, 31.03.2018, 30.06.2018,
30.09.2018 e 31.12.2018, and subject to paragraph 2 below, the DEBTORS agree to offer as security, a second mortgage interest in
the real estate and lands where the head office of Lakeland Brasil is established, all of which have the following registrations
of property: 76.982, 780, 75.667 e 781, due to an express request of the CREDITORS. All of the real states and lands are registered
before the 2nd Real State Registry of the city of Salvador/BA and represent the total amount of R$ 4.000.000,00 (four
million reais), The equipment, machinery and other properties located on this real estate are not being offered as collateral.

 

    	3

    	 

    

 

Paragraph 1 – The CREDITORS
hereby declare that the offer of the second mortgage interest as security of the payments set above was a condition for them to
enter into this Settlement Agreement.

 

Paragraph 2 – The CREDITORS
hereby declare that they are completely aware of the fact that the real state and lands in which the mortgage interest was offered,
is already securing the payment of tax debts related to the notices of tax assessment number 108880.0301/09-8, 207140.0010/10-0,
108595.0809/09-2 and 108595.0811/09-7.

 

Paragraph 3 – In the event
that the property as to which the security interest set forth in section 2.3 of this Settlement Agreement is offered is foreclosed
upon due to tax debts, the Parties hereby agree that no other guarantee or security shall be offered by the DEBTORS in respect
of its obligations owing pursuant to this Settlement Agreement nor shall the payment of such obligations be accelerated.

 

Paragraph 4 – In this event,
the Parties hereby sign the Public Deed for the Constitution of the Mortgage Interest in the real estate where the head office
of Lakeland Brasil is established, as set forth in article 108 of the Brazilian Civil Code. This Public Deed is part of this Settlement
Agreement.

 

Paragraph 5 – The DEBTORS
will exclusively pay all expenses related to the drafting of the Public Deed for the Constitution of the Mortgage Interest.

 

Paragraph 6 – The DEBTORS
will have the duty to register the Public Deed for the Constitution of the Mortgage Interest before the competent Real State Registry,
according to article 167, I, “2” of Law Number 6.015/73.

 

Paragraph 7 – The DEBTORS
will exclusively pay all expenses related to the register of the Public Deed for the Constitution of the Mortgage Interest before
the competent Real State Registry, up to a maximum amount of R$ 50,000.00 (fifty thousand Brazilain reais).

 

Paragraph 8 – After the payment
of all amounts mentioned in section 2.1 of this Settlement Agreement, the CREDITORS hereby agree to sign and return the letter
giving forgiveness of all monies due to the CREDITORS within 30 (thirty) days from the deposit of the last amount due for the removal
of the mortgage interest.. The letter shall be delivered at TozziniFreire Advogados head office in São Paulo, to Dr. Plinio
Pistoresi or the attorney in charge of this matter. If the CREDITORS do not comply with this
obligation, they shall incur in a fine of USD $20,000.00 (twenty thousand U. S. dollars)

 

Paragraph 9 – The DEBTORS
will exclusively pay all expenses due to the removal of mortgage before the competent Real State Registry.

 

Section 2.4 – The Parties
hereby agree that the DEBTORS will not incur any interest and/or inflation adjustment in relation to the payment of any amount
described in this Settlement Agreement, subject to section 5 below.

 

		II)	The FORBEARANCE and the early maturity of the amounts
due

 

Section 3 - Any forbearance by either
of the Parties of any inaccuracy or of the untimely compliance with the other Party’s obligations shall only apply to an
isolated event, and shall not be construed as an indulgence and shall not constitute a waiver or novation of any kind.

 

Section 4 – Subject to section
7.1 below, the following causes may lead to the early maturity of the amounts due, which are set forth in chapter 1 of this Settlement
Agreement:

 

    	4

    	 

    

 

		a)	The breach of any obligation established in this Settlement Agreement, mainly the DEBTORS’
payment obligations, after the term of 30 days of the maturity date of the unpaid installment;

 

		b)	The filing of judicial reorganization by any of the DEBTORS;

 

		c)	The adjudication of bankruptcy by any of the DEBTORS;

 

Section 5 –If the early maturity
of the debts occur, the DEBTORS will lose the right to the discount granted by the CREDITORS according to section 2 of this Settlement
Agreement and will have to pay, in the first business day after the early maturity of the debt, the amount of R$ 25.148.252,47
(twenty five million, one hundred forty eight thousand, two hundred fifty two Brazilian reais and forty seven cents), adjusted
according to the inflation since the present date. The index adopted as to the inflation adjustments is “Índice Nacional
de Preços ao Consumidor Amplo – IPCA” or any other index that may replace it in the future. The DEBTORS will
have to pay interest of 1% per month over the adjusted amount and also a fine of 10% of the total amount due from the present date
until the effective payment by the DEBTORS. The amounts that have already been paid will be discounted from the total amount due.

 

		III)	THE BREACH OF CONTRACT

 

Section 6 – If the DEBTORS
fail to make the payment of any of the obligations in section 2.1, paragraph 2 herein, within 5 (five) days after the receipt of
the written notice sent by the CREDITORS (according to section 14), the DEBTORS will incur in a penalty in the amount of 10% of
the unpaid installment, provided that the payment is made within thirty (30) days after the expiration of the deadline of 5 (five)
days above mentioned, in accordance to clause 7.1 below mentioned.

 

Paragraph 1 – The payments
will only be considered, if the whole obligation indicated in this Settlement Agreement is accomplished

 

Section 7 - The Parties acknowledge
that all transactions, statements, acknowledgments and disclaimers contained in this Settlement Agreement were made freely and
without any coercion or any other defect of consent, and that the statements and disclaimers herein shall remain valid, effective
and produce all the effects in or out of Courts

 

Section 7.1 – In the event
that the DEBTORS do pay the amounts due within the maturity date mentioned in this Settlement Agreement, they will have 30 (thirty)
days from the term of 5 (five) days mentioned in the section 6 above, to pay the installment due with the penalty described in
section 6 above, otherwise the early maturity will occur, in accordance to section 4 above mentioned.

 

		IV)	Termination

 

Section 8 – This Settlement
Agreement constitutes a legal, valid and binding agreement among the Parties. This Settlement Agreement has been duly and validly
executed by each party, and constitutes the valid and binding obligation of each party, enforceable pursuant to article
585, II e III, of the Brazilian Procedure Civil Code.

 

Section 9 – This Settlement
Agreement shall only be terminated, at CREDITORS discretion, if the DEBTORS do not comply with their payment obligations within
the period of time described in section 7 above, or if any of the reasons described in section 4 of this Settlement Agreement occur.

 

    	5

    	 

    

 

Paragraph 1 - In the event of termination
of this Settlement Agreement, the DEBTORS recognize the immediate existence, validity and immediate effectiveness of the arbitral
award rendered in the arbitration proceedings n. o 35/2010, before the Chamber of Commerce Brazil-Canada - CCBC, including
costs and attorneys' fees, at the current value of R$ 25,148,252.47 (twenty five million, one hundred and forty-eight thousand,
two hundred fifty-two Brazilian reais and forty-seven cents), which may be enforced in Brazil and / or the United States of America.

 

Paragraph 2 - Lakeland Industries
states that in the event of termination of this Settlement Agreement, the CREDITORS may seek enforcement of the award in the United
States of America against Lakeland Industries, renouncing Lakeland Industries, herein, to any kind of benefit of order in connection
to the liability against Lakeland Brazil.

 

		V)	Governing law

 

Section 10 - A
Portuguese and an English version of this Settlement Agreement are being signed. In case of conflict between the Portuguese and
English version of this Settlement Agreement, the Portuguese version shall prevail.

 

Section 11
- This Settlement Agreement shall be interpreted according to Brazilian law. The parties hereby recognize that the choice of the
Brazilian law; willnot affect the enforceability of this Settlement Agreement in the United States.

 

		VI)	ConfliCTS and disputes

 

Section 12 - Any
omissions or conflicts arising from the execution of this Settlement Agreement will be resolved by the Parties. However, in the
event that the Parties are unable to resolve any such dispute, an Arbitral Tribunal, constituted by 3 (three) Arbitrators nominated
according to the Procedural Rules of the Arbitration and Mediation Center of the Chamber of Commerce Brazil-Canada (“CCBC”),
shall definitely render a decision about the matter according to this procedural rules.. The language of the arbitration proceeding
shall be Portuguese. The place where the arbitration proceeding shall occur and the award shall be rendered is São Paulo,
Brazil. The conflict and claims shall be resolved through arbitration and according to Brazilian Law. Any dispute arising from
the arbitration clause shall also be resolved according to Brazilian Law. 

 

Paragraph 1 - In spite of this,
the Parties have the right to file lawsuits in the city of São Paulo in order to: (i) apply for injunctions; and (ii) compel
the other Party to take part in the arbitration proceeding.

 

Section 13 - At the CREDITORS’
discretion, the enforcement of this Settlement Agreement may be filed before the Courts of the domicile of Lakeland Brasil and
/ or before the Courts of the domicile of Lakeland Industries, without any kind of preference or distinction as to liability between
the DEBTORS pursuant to Section 9, paragraph 2 above.

 

		VII)	Miscellaneous

 

Section
14 - All notices, demands or any other communications related to this Settlement Agreement shall be given in Portuguese
by first class mail preferably, through confirmation of delivery or shall be delivered by hand, by courier or by facsimile to each
of of the following addresses:

 

    	6

    	 

    

 

CREDITORS:

 

Elder Marcos Vieira da Conceição

Loteamento Varandas Tropicais, S/N,
Lotes 10 a 13,

Centro, Lauro de Freitas/BA, CEP 42700-000

Fax: (71) 3415-3702

E-mail: marcosqualytextil@hotmail.com

 

Márcia Cristina Viera da Conceição
Antunes

Alameda Praia de Tramandaí, 412,
Condomínio Villa Costeira, Casa 31

Stella Mares, Salvador/BA, CEP 41600-480

Fax: (71) 3415-3702

E-mail: marcia.cristina.antunes@hotmail.com

 

Advogado:

Guedes Nunes, Oliveira e Roquim Advogados

Rua Leopoldo Couto de Magalhães Júnior, 146, 11°
andar

04542-000 - São Paulo - SP - Brasil

Fax: 55-11-2856-6222

Email:

raraujo@gnor.com.br (Dr. Rodrigo Souza Mendes de Araujo)

 

DEBTORS:

 

Lakeland Industries Inc.

701 Koehler Avenue, suite 7

Ronkonkoma, NY 117779-7410

Fax: 631-9819751

E-mail:

CJRyan@lakeland.com (Christopher
J. Ryan)

GAPokrassa@lakeland.com (Gary Pokrassa)

 

Lakeland Brasil S/A

Rua Luxemburgo, n.o 260, Lotes 82/83
– Bloco O

Granjas Rurais Presidente Vargas, Salvador/BA
CEP 41230-130

Fax: 55 71 3390-3013

E-mail:

mgbastos@lakeland.com (Miguel Antonio
dos Guimarães Bastos)

rbsampaio@lakeland.com (Raimundo
Sampaio)

 

Advogado:

TozziniFreire Advogados

Rua Borges Lagoa, 1328

São Paulo/SP – CEP 04038-904

Fax: 55 11 5086-5555

E-mail:

ppistoresi@tozzinifreire.com.br
(Dr. Plínio Pistoresi)

 

Section
15 - The Parties expressly waive their right to file any lawsuits to challenge or otherwise enforce the terms of the
Arbitral Award rendered in the arbitral proceeding number 35/2010 filed with the Arbitration and Mediation Center of the Chamber
of Commerce Brazil-Canada, except as the CREDITOR’s rights to enforcement are amended pursuant to section 9.

 

    	7

    	 

    

 

Section
16 - Upon actual receipt of the payments mentioned in section 2.1 of this Settlement Agreement and related obligations,
the Parties shall grant each other and the other Parties’ affiliates, officers, directors, representatives and other related
parties, a complete, general, irreversible and irrevocable release, and may claim nothing more from each other, in any way, judicially
or otherwise, based on any rights and claims, subject-matter or in any way related to this Settlement Agreement.

 

Section
17 - The Parties may agree to negotiate new payment conditions in case the DEBTORS propose an acceleration of the remaining
installments due according to this Settlement Agreement.

 

Section
18 - This Settlement Agreement resolves any disputes that may exist between the Parties, and in no event shall be construed
as an admission or confession by any Party of any liability or obligation, past, present or future, in relation to other party
in any capacity.

 

Section
19 - Each party represents and warrants that they had the opportunity to read and review carefully this Settlement Agreement,
and have been advised by their lawyers and understand its contents, its provisions, aims and purposes, and that each party is signing
this Settlement Agreement freely and willingly.

 

Section
20 - This Settlement Agreement represents the sole, exclusive, full and complete agreement between the Parties with
respect to its subject-matter. In case of omission articles 840 to 850 of the Brazilian Civil Code shall apply.

 

Section
21 - If any provision hereof is declared illegal, invalid or unenforceable, the other provisions shall remain fully
enforceable.

 

Section
22 - No changes to this Settlement Agreement shall be effective unless made in writing and signed by a duly authorized
representative of each Party and 2 (two) witnesses.

 

Section
23 - This Settlement Agreement shall constitute the entire commitment between the Parties and supersedes any previous
agreement or arrangements in relation to its subject-matter. The Parties acknowledge and agree that they have not been induced
by each other to enter into this Settlement Agreement in reliance upon, nor have they been given, any warranty, representation,
statement, assurance, covenant, agreement, undertaking, indemnity or commitment of any nature whatsoever other than as expressly
set out in this Settlement Agreement.

 

Section 24 - The
nullity or invalidity of any provision hereof shall not affect the other provisions, and the Parties hereby commit to bring such
invalid provision to conformance with the terms and limitations set forth by the law, so that the Parties’ intent expressed
herein may prevail to the furthest possible extent. 

 

Section 25 – The parties have
full power and authority or corporate authorization, as applicable, to enter into and enforce the acts described in this Settlement
Agreement.

 

Section 26 - The implementation
of the transactions provided in this Settlement Agreement will not constitute or result in the breach of any term, condition or
provision of, or constitute a default under, or result in the creation of any lien, charge or encumbrance on contract, agreement,
commitment or other instrument of the Parties.

 

    	8

    	 

    

 

In witness hereof, the Parties hereto execute
this instrument in five (5) or more counterparts of equal content and form, in the presence of two (2) undersigned witnesses

 

São Paulo, September 11, 2012.

 

/s/ Elder Marcos Vieira da Conceição

Elder Marcos Vieira da Conceição

 

/s/ Márcia Cristina Vieira
da Conceição Antunes

Márcia Cristina Vieira da Conceição
Antunes

 

/s/ Elder Marcos Vieira da Conceição
- advogado

Elder Marcos Vieira da Conceição
- advogado

 

/s/ Márcia Cristina Vieira
da Conceição Antunes - advogado

Márcia Cristina Vieira da Conceição
Antunes - advogado

 

/s/ Plínio Pistoresi

Lakeland Industries Inc.

 

/s/ Plínio Pistoresi

Lakeland Industries Inc. – advogado

 

/s/ Plínio Pistoresi

Lakeland Brasil S/A

 

/s/ Plínio Pistoresi

Lakeland Brasil S/A – advogado

 

	Witnesses:
	 
	 
	Name:
	ID:
	 
	 
	Name:
	ID:

 

    	9EXHIBIT
4.1

 

LAKELAND
INDUSTRIES, INC.

 

2012
STOCK INCENTIVE PLAN

 

Section
1.            Purpose of the Plan. The purpose of the Lakeland Industries,
Inc. 2012 Stock Incentive Plan (the “Plan”) is to assist the Company and its Subsidiaries in attracting and retaining
valued Employees and Non-Employee Directors by offering them a greater stake in the Company’s success and a closer identity
with it, and to encourage ownership of the Company’s stock by such Employees and Non-Employee Directors.

 

Section
2.            Definitions. As used herein, the following definitions
shall apply:

 

2.1.          “Affiliate”
means, with respect to any Person, any other Person that, directly or indirectly, is in control of, is controlled by, or is under
common control with, such Person. For purposes of this definition, “control” of a Person means the power, directly
or indirectly, to direct or cause the direction of the management and policies of such Person, whether by contract or otherwise.

 

2.2.          “Award”
means the grant of Restricted Stock, Restricted Stock Units, Performance Shares, Performance Units or other stock-based awards
under the Plan.

 

2.3.          “Award
Agreement” means the written agreement, instrument or document evidencing an Award.

 

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

 

2.5.          “Cause”
means,

 

(a)          if
the applicable Participant is party to an effective employment, severance or similar agreement with the Company or a Subsidiary,
and such term is defined therein, “Cause” shall have the meaning provided in such agreement;

 

(b)          if
the applicable Participant is not a party to an effective employment, severance or similar agreement or if no definition of “Cause”
is set forth in the applicable employment, severance or similar agreement, “Cause” shall have the meaning provided
in the applicable Award Agreement; or

 

(c)          if
neither (a) nor (b) applies, then “Cause” shall mean, as determined by the Committee in its sole discretion, (i) the
Participant’s willful misconduct or negligence in connection with the performance of the Participant’s duties for
the Company or its Subsidiaries; (ii) the Participant’s conviction of, or a plea of guilty or nolo contendere to,
a felony or a crime; (iii) the Participant’s engaging in any business that directly or indirectly competes with the Company
or its Subsidiaries; or (iv) disclosure of trade secrets, customer lists or confidential information of the Company or its Subsidiaries
to a competitor or an unauthorized Person.

 

    	 

    	 

    

 

2.6.          “Change
in Control” means, unless otherwise provided in an Award Agreement:

 

(a)          the
acquisition in one or more transactions by any “person” (as such term is used for purposes of Section 13(d) or Section
14(d) of the Exchange Act) but excluding, for this purpose, (i) the Company or its Subsidiaries, and (ii) any employee benefit
plan of the Company or its Subsidiaries, of “beneficial ownership” (within the meaning of Rule 13d-3 under the Exchange
Act) of more than fifty percent (50%) of the combined voting power of the Company’s then outstanding voting securities (the
“Voting Securities”);

 

(b)          the
consummation of a merger or consolidation involving the Company if the shareholders of the Company, immediately before such merger
or consolidation, do not own, directly or indirectly, immediately following such merger or consolidation, at least fifty percent
(50%) of the combined voting power of the outstanding voting securities of the corporation resulting from such merger or
consolidation in the same proportions as owed immediately prior to the merger or consolidation;

 

(c)          individuals
who, as of the Effective Date, constitute the Board (the “Incumbent Board”) cease for any reason to constitute
at least a majority of the Board; provided, however, that any individual becoming a director subsequent to the Effective Date
whose election, or nomination for election by the Company’s stockholders, was approved by a vote of at least a majority
of the directors then comprising the Incumbent Board shall be considered as though such individual were a member of the Incumbent
Board, but excluding, as a member of the Incumbent Board, any such individual whose initial assumption of office occurs as a result
of either an actual or threatened election contest (as such terms are used in Rule 14a-11 of Regulation 14A promulgated under
the Exchange Act) or other actual or threatened solicitation of proxies or consents by or on behalf of any “person”
(as such term is used for purposes of Section 13(d) or Section 14(d) of the Exchange Act) other than the Board; or

 

(d)          the
acquisition by any “person” (as such term is used for purposes of Section 13(d) or Section 14(d) of the Exchange Act)
in a single transaction or in a series of related transactions occurring during any period of 12 consecutive months, of assets
from the Company that have a total gross fair market value equal to or more than 51% of the total gross fair market value of all
of the assets of the Company immediately prior to such acquisition or acquisitions.

 

2.7.          
“Code” means the Internal Revenue Code of 1986, as amended.

 

2.8.          “Common
Stock” means the common stock of the Company, par value $0.01 per share.

 

2.9.          “Company”
means Lakeland Industries, Inc., a Delaware corporation, or any successor corporation.

 

2.10.         “Committee”
means the Compensation Committee of the Board, provided that the Committee shall at all times have at least two members, each
of whom shall (i) be a “non-employee director” as defined in Rule 16b-3 under the Exchange Act, (ii) be an “outside
director” as defined in Section 162(m) of the Code and the regulations issued thereunder and (iii) satisfy such other independence
requirements for members of a compensation committee as may be applicable under the rules of the securities exchange or association
on which the Common Stock is then traded or listed.

 

    	2

    	 

    

 

2.11.         “Disability”
means, unless otherwise provided in an Award Agreement, that the Participant 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 which has lasted
or can be expected to last for a continuous period of not less than 12 months.

 

2.12.         “Effective
Date” means June 20, 2012, the date that the Plan was approved by the shareholders of the Company.

 

2.13.         “Employee”
means an individual who is an officer or employee of the Company or a Subsidiary, including a director who is such an employee
and whose earnings are reported on a Form W-2.

 

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

 

2.15.         “Fair
Market Value” means, on any given date (i) if the shares of Common Stock are then listed on a national securities exchange,
including the Nasdaq Global Market (“NASDAQ”), the closing sales price per share of Common Stock on the exchange for
such date, or if no sale was made on such date on the exchange, on the last preceding day on which a sale occurred; (ii) if shares
of Common Stock are not then listed on a national securities exchange but are then quoted on another stock quotation system, the
closing price for the shares of Common Stock as quoted on such quotation system on such date, or if no sale was made on such date
on such quotation system, on the last preceding day on which a sale was made; or (iii) if (i) and (ii) do not apply, such value
as the Committee in its discretion may in good faith determine in accordance with Section 409A of the Code and the regulations
thereunder.

 

2.16.         “Non-Employee
Director” means a member of the Board who is not an Employee.

 

2.17.         
“Participant” means any Employee or Non-Employee Director who receives an Award.

 

2.18.         “Performance
Cycle” means the period of time of not fewer than two years or more than five years as specified by the Committee over
which Performance Shares or Performance Units are to be earned.

 

    	3

    	 

    

 

2.19.         
“Performance Goals” means any goals established by the Committee in its sole discretion, the attainment of
which is substantially uncertain at the time such goals are established. Performance Goals may be described in terms of Company-wide
objectives or objectives that are related to the performance of the individual Participant or a Subsidiary, division, department
or function within the Company or Subsidiary in which the Participant is employed. Performance Goals may be measured on an absolute
or relative basis. Relative performance may be measured by a group of peer companies or by a financial market index. Performance
Goals may be based upon: specified levels of or increases in the Company’s, a division’s or a Subsidiary’s return
on capital, equity or assets; earnings measures/ratios (on a gross, net, pre-tax or post-tax basis), including diluted earnings
per share, total earnings, operating earnings, earnings growth, earnings before interest and taxes (EBIT) and earnings before
interest, taxes, depreciation and amortization (EBITDA); net economic profit (which is operating earnings minus a charge to capital);
net income; operating income; sales; sales growth; gross margin; direct margin; operating profit; per period or cumulative cash
flow (including but not limited to operating cash flow and free cash flow) or cash flow return on investment (which equals net
cash flow divided by total capital); inventory turns; financial return ratios; market share; balance sheet measurements such as
receivable turnover; improvement in or attainment of expense levels; improvement in or attainment of working capital levels; debt
reduction; strategic innovation, including but not limited to entering into, substantially completing, or receiving payments under,
relating to, or deriving from a joint development agreement, licensing agreement, or similar agreement; customer or employee satisfaction;
individual objectives; any financial or other measurement deemed appropriate by the Committee as it relates to the results of
operations or other measurable progress of the Company and its Subsidiaries (or any business unit of the Company or any of its
Subsidiaries); and any combination of any of the foregoing criteria. If the Committee determines that a change in the business,
operations, corporate structure or capital structure of the Company, or the manner in which it conducts its business, or other
events or circumstances render the Performance Goals unsuitable, the Committee may modify such Performance Goals or the related
minimum acceptable level of achievement, in whole or in part, as the Committee deems appropriate and equitable.

 

2.20.         “Performance
Shares” or “Performance Units” means an Award made pursuant to Section 6.3 of the Plan.

 

2.21.         “Person”
means an individual, corporation, partnership, association, limited liability company, estate or other entity.

 

2.22.         “Restricted
Stock” means Common Stock awarded by the Committee under Section 6.1 of the Plan.

 

2.23.         “Restricted
Stock Unit” means the right granted under Section 6.2 of the Plan to receive, on the date of settlement, an amount equal
to the Fair Market Value of one share of Common Stock. Restricted Stock Units may be settled in cash, shares of Common Stock or
any combination of cash and shares of Common Stock; provided, however, that unless otherwise provided in an Award Agreement, Restricted
Stock Units shall be settled in shares of Common Stock.

 

2.24.         “Restriction
Period” means the period during which Restricted Stock and Restricted Stock Units are subject to forfeiture.

 

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

 

2.26.         “Subsidiary”
means any corporation, partnership, joint venture or other business entity of which 50% or more of the outstanding voting power
is beneficially owned, directly or indirectly, by the Company.

 

Section
3.            Eligibility. Any Employee or Non-Employee Director who
is selected by the Committee shall be eligible to receive an Award under the Plan.

 

    	4

    	 

    

 

Section
4.            Administration and Implementation of the Plan.

 

4.1.          The
Plan shall be administered by the Committee; provided, however, that with respect to Non-Employee Directors (i) the Plan shall
be administered by the full Board and (ii) all references in the Plan to the Committee shall be deemed to refer to the Board.
Any action of the Committee in administering the Plan shall be final, conclusive and binding on all Persons, including the Company,
its Subsidiaries, Participants, Persons claiming rights from or through Participants and shareholders of the Company.

 

4.2.          Notwithstanding
Section 4.1, the Committee may delegate to one or more officers or Board members the authority to grant Awards to eligible individuals
who are not subject to the requirements of Rule 16b-3 of the Exchange Act or “covered employees” within the meaning
of Section 162(m) of the Code and the regulations thereunder.

 

4.3.          Subject
to the provisions of the Plan, the Committee shall have full and final authority in its discretion to (i) select the Employees
and Non-Employee Directors who will receive Awards pursuant to the Plan; (ii) determine the type or types of Awards to be granted
to each Participant; (iii) determine the number of shares of Common Stock to which an Award will relate, the terms and conditions
of any Award granted under the Plan (including, but not limited to, restrictions as to vesting, transferability or forfeiture,
exercisability or settlement of an Award and waivers or accelerations thereof, and waivers of or modifications to Performance
Goals relating to an Award, based in each case on such considerations as the Committee shall determine) and all other matters
to be determined in connection with an Award; (iv) determine the exercise price, base price or purchase price (if any) of an Award;
(v) determine whether, to what extent, and under what circumstances an Award may be cancelled, forfeited, or surrendered; (vi)
determine whether, and to certify that, Performance Goals to which an Award is subject are satisfied; (vii) correct any defect
or supply any omission or reconcile any inconsistency in the Plan, and adopt, amend and rescind such rules, regulations, guidelines,
forms of agreements and instruments relating to the Plan as it may deem necessary or advisable; (viii) construe and interpret
the Plan; and (ix) make all other determinations as it may deem necessary or advisable for the administration of the Plan; provided,
however, that the Committee shall be prohibited from effecting a repricing of any outstanding Award without shareholder approval.

 

Section
5.            Shares of Common Stock Subject to the Plan.

 

5.1.          Subject
to adjustment as provided in Section 9 hereof, the total number of shares of Common Stock available for Awards under the Plan
shall be 310,000. Notwithstanding the foregoing, Awards covering no more than 60,000 shares of Common Stock may be awarded to
any Participant in any one calendar year. Common Stock awarded under the Plan may be reserved or made available from the Company’s
authorized and unissued Common Stock or from Common Stock reacquired (through open market transactions or otherwise) and held
in the Company’s treasury. Any shares of Common Stock issued by the Company through the assumption or substitution of outstanding
grants from an acquired company shall not reduce the shares of Common Stock available for Awards under the Plan.

 

    	5

    	 

    

 

5.2.          If
any shares subject to an Award under the Plan are forfeited or such Award otherwise terminates or is settled for any reason whatsoever
without an actual distribution of shares to the Participant, any shares counted against the number of shares available for issuance
pursuant to the Plan with respect to such Award shall, to the extent of any such forfeiture, settlement, or termination, again
be available for Awards under the Plan; provided, however, that the Committee may adopt procedures for the counting of shares
relating to any Award to ensure appropriate counting, avoid double counting, provide for adjustments in any case in which the
number of shares actually distributed differs from the number of shares previously counted in connection with such Award, and
if necessary, to comply with applicable law or regulations.

 

Section
6.            Awards. Awards may be granted on the terms and conditions
set forth in this Section 6. In addition, the Committee may impose on any Award or the settlement or exercise thereof, at the
date of grant or thereafter, such additional terms and conditions, not inconsistent with the provisions of the Plan, as the Committee
shall determine, including without limitation terms requiring forfeiture of Awards in the event of the termination of a Participant’s
employment or other relationship with the Company or any Subsidiary; provided, however, that the Committee shall retain full power
to accelerate or waive any such additional term or condition as it may have previously imposed (provided that, in any case, any
such action is permitted under Code Section 409A and, with respect to an Award intended to satisfy the “qualified performance-based
compensation” exception under Code Section 162(m), does not cause such Award to fail to satisfy such exception). The right
of a Participant to exercise or receive a grant or settlement of any Award, and the timing thereof, may be subject to such Performance
Goals as may be determined by the Committee. Each Award, and the terms and conditions applicable thereto, shall be evidenced by
an Award Agreement.

 

6.1.          Restricted
Stock. An Award of Restricted Stock is a grant by the Company of a specified number of shares of Common Stock to the Participant,
which shares are subject to forfeiture upon the happening of specified events during the Restriction Period. An Award of Restricted
Stock shall be subject to the following terms and conditions:

 

(a)          General.
Each Award Agreement with respect to Restricted Stock shall specify the duration of the Restriction Period, if any, and/or each
installment thereof, the conditions under which the Restricted Stock may be forfeited to the Company, and the amount, if any,
the Participant must pay to receive the Restricted Stock. Such restrictions may include a vesting schedule based upon the passage
of time, the attainment of Performance Goals or a combination thereof.

 

(b)          Transferability.
During the Restriction Period, if any, the transferability of Restricted Stock shall be prohibited or restricted in the manner
and to the extent prescribed in the applicable Award Agreement. Such restrictions may include, without limitation, rights of repurchase
or first refusal in the Company or provisions subjecting the Restricted Stock to a continuing substantial risk of forfeiture in
the hands of any transferee.

 

    	6

    	 

    

 

(c)          Shareholder
Rights. Unless otherwise provided in the applicable Award Agreement, during the Restriction Period the Participant shall have
all the rights of a shareholder with respect to Restricted Stock, including, without limitation, the right to receive dividends
thereon (whether in cash or shares of Common Stock) and to vote such shares of Restricted Stock. Dividends shall be subject to
the same restrictions as the underlying Restricted Stock unless otherwise provided by the Committee (and the Committee may, in
its sole discretion, withhold any cash dividends paid on Restricted Stock until the restrictions applicable to such Restricted
Stock have lapsed).

 

(d)          Termination
of Employment. Unless otherwise provided in an Award Agreement or as may be determined by the Committee:

 

(i)          Due
to Death or Disability. Upon a Participant’s termination of employment with the Company and its Subsidiaries before the
end of a Restriction Period by reason of his or her death or permanent Disability, the Restriction Period for such Participant
for the purpose of determining the amount of the Award payable, if any, shall end at the end of the calendar quarter immediately
preceding the date of which said Participant ceased to be employed by the Company or its Subsidiaries. The amount of an Award
payable to a Participant (or the beneficiary of a deceased Participant) to whom the preceding sentence is applicable shall be
paid at the end of the Restriction Period, provided all other restrictions on the Restricted Stock have been satisfied, and shall
be that fraction of the Award computed pursuant to the preceding sentence the numerator of which is the number of full calendar
quarters during the Restriction Period during all of which said Participant was an employee of the Company or its Subsidiaries
and the denominator of which is the number of full calendar quarters in the Restriction Period.

 

(ii)         Due
to Reasons Other Than Death or Disability. Upon any other termination of employment of a Participant with the Company and its
Subsidiaries for any reason, the unvested portion of each Award of Restricted Stock held by such Participant shall be forfeited
with no further compensation due the Participant.

 

6.2.          Restricted
Stock Units. Restricted Stock Units are solely a device for the measurement and determination of the amounts to be paid to
a Participant under the Plan. Restricted Stock Units do not constitute Common Stock and shall not be treated as (or as giving
rise to) property or as a trust fund of any kind. The right of any Participant in respect of an Award of Restricted Stock Units
shall be no greater than the right of any unsecured general creditor of the Company. The grant of Restricted Stock Units shall
be subject to the following terms and conditions:

 

(a)          Restriction
Period. Each Award Agreement with respect to Restricted Stock Units shall specify the duration of the Restriction Period,
if any, and/or each installment thereof and the conditions under which such Award may be forfeited to the Company. Such restrictions
may include a vesting schedule based upon the passage of time, the attainment of Performance Goals or a combination thereof.

 

(b)          Termination
of Employment. Unless otherwise provided in an Award Agreement or as may be determined by the Committee:

 

    	7

    	 

    

 

(i)          Due
to Death or Disability. Upon a Participant’s termination of employment with the Company and its Subsidiaries before the
end of a Restriction Period by reason of his or her death or permanent Disability, the Restriction Period for such Participant
for the purpose of determining the amount of the Award payable, if any, shall end at the end of the calendar quarter immediately
preceding the date of which said Participant ceased to be employed by the Company or its Subsidiaries. The amount of an Award
payable to a Participant (or the beneficiary of a deceased Participant) to whom the preceding sentence is applicable shall be
paid at the end of the Restriction Period, provided all other restrictions on the Restricted Stock Units have been satisfied,
and shall be that fraction of the Award computed pursuant to the preceding sentence the numerator of which is the number of full
calendar quarters during the Restriction Period during all of which said Participant was an employee of the Company or its Subsidiaries
and the denominator of which is the number of full calendar quarters in the Restriction Period.

 

(ii)          Due
to Reasons Other Than Death or Disability. Upon any other termination of employment of a Participant prior to the lapse of restrictions,
participation in the Plan shall cease and the unvested portion of any outstanding Awards of Restricted Stock Units to such Participant
shall be forfeited with no compensation due the Participant.

 

(c)          Settlement.
Unless otherwise provided in an Award Agreement, subject to the Participant’s continued employment with the Company or a
Subsidiary from the date of grant through the expiration of the Restriction Period (or applicable portion thereof), the vested
portion of an Award of Restricted Stock Units shall be settled within 30 days after the expiration of the Restriction Period (or
applicable portion thereof).

 

(d)          Shareholder
Rights. Nothing contained in the Plan shall be construed to give any Participant rights as a shareholder with respect to an
Award of Restricted Stock Units (including, without limitation, any voting, dividend or derivative or other similar rights). Notwithstanding
the foregoing, the Committee may provide in an Award Agreement that amounts equal to any dividends declared during the Restriction
Period on the shares of Common Stock represented by an Award of Restricted Stock Units will be credited to the Participant’s
account and deemed to be reinvested in additional Restricted Stock Units, such additional Restricted Stock Units to be subject
to the same forfeiture restrictions as the Restricted Stock Units to which they relate.

 

6.3.          Performance
Shares and Performance Units. An Award of Performance Shares or Performance Units under the Plan shall entitle the Participant
to future cash payments or shares of Common Stock or a combination thereof based upon the level of achievement of pre-established
Performance Goals during a Performance Cycle.

 

(a)          Amount
of Award. The Committee shall establish a baseline and maximum amount of a Participant’s Award, which amount shall be
denominated in shares of Common Stock.

 

(b)          Communication
of Award. Each Award Agreement evidencing an Award of Performance Shares or Performance Units shall contain provisions regarding
(i) the target and maximum amount payable to the Participant pursuant to the Award, (ii) the Performance Goals and level of achievement
versus these goals that shall determine the amount of such payment, (iii) the Performance Cycle as to which performance shall
be measured for determining the amount of any payment, (iv) the timing of any payment earned by virtue of performance, (v) restrictions
on the alienation or transfer of the Award prior to actual payment, (vi) forfeiture provisions, and (vii) such further terms and
conditions in each case not inconsistent with the Plan, as may be determined from time to time by the Committee.

 

    	8

    	 

    

 

(c)          Performance
Criteria. The Performance Goals established by the Committee for any portion of an Award of Performance Shares or Performance
Units that are intended by the Committee to satisfy the requirements for “performance-based compensation” under Section
162(m) of the Code shall be selected by the Committee and specified at the time the Award is granted. Multiple Performance Goals
may be used and the components of multiple Performance Goals may be given the same or different weighting in determining the amount
of an Award earned, and may relate to absolute performance or relative performance measured against other groups, units, individuals
or entities.

 

(d)
          Discretionary Adjustments. Notwithstanding satisfaction of
any Performance Goals, the amount paid under an Award of Performance Shares or Performance Units on account of either financial
performance or personal performance evaluations may be reduced by the Committee on the basis of further considerations as the
Committee shall determine.

 

(e)
          Payment of Awards. Following the conclusion of each Performance
Cycle, the Committee shall determine the extent to which Performance Goals have been attained, and the satisfaction of any other
terms and conditions with respect to an Award relating to such Performance Cycle. The Committee shall determine what, if any,
payment is due with respect to any Award and whether such payment shall be made in cash, Common Stock or a combination therof.
Payment shall be made in a lump sum or installments, as determined by the Committee at the time the Award is granted, commencing
as promptly as practicable following the end of the applicable Performance Cycle, subject to such terms and conditions and in
such form as may be prescribed by the Committee. Payment in Common Stock may be in Restricted Stock at the discretion of the Committee
at the time the Award is granted.

 

(f)
          Termination of Employment. Unless otherwise provided in an
Award Agreement or as may be determined by the Committee:

 

(i)
          Due to Death or Disability. Upon a Participant’s termination
of employment with the Company and its Subsidiaries before the end of a Performance Cycle by reason of his or her death or permanent
Disability, the Performance Cycle for such Participant for the purpose of determining the amount of the Award payable, if any,
shall end at the end of the calendar quarter immediately preceding the date of which said Participant ceased to be employed by
the Company or its Subsidiaries. The amount of an Award payable to a Participant (or the beneficiary of a deceased Participant)
to whom the preceding sentence is applicable shall be paid at the end of the Performance Cycle, provided the related Performance
Goals have been satisfied, and shall be that fraction of the Award computed pursuant to the preceding sentence the numerator of
which is the number of full calendar quarters during the Performance Cycle during all of which said Participant was an employee
of the Company or its Subsidiaries and the denominator of which is the number of full calendar quarters in the Performance Cycle.

 

    	9

    	 

    

 

(ii)
          Due to Reasons Other Than Death or Disability. Upon any other termination
of employment of a Participant during a Performance Cycle, participation in the Plan shall cease and the unvested portion of any
outstanding Awards of Performance Shares or Performance Units to such Participant shall be forfeited with no compensation due
the Participant.

 

6.4.          Other
Stock-Based Awards. The Committee is authorized, subject to limitations under applicable law, to grant to Participants any
type of Award (in addition to those Awards provided in Sections 6.1, 6.2 and 6.3 hereof) that is payable in, or valued in whole
or in part by reference to, shares of Common Stock, and that is deemed by the Committee to be consistent with the purposes of
the Plan.

 

Section
7.            Qualifying Retirement and Disqualifying Activity.

 

7.1.          Qualifying
Retirement. Notwithstanding the provisions of Sections 6.1(d), 6.2(b) and 6.3(f)(ii) hereof, if a Participant’s employment
with the Company or its Subsidiaries terminates for any reason other than death, permanent Disability or the Participant’s
involuntary termination for Cause, and if immediately prior to the date of such termination of employment (i) the Participant
is 55 years of age or older, and (ii) the sum of the Participant’s age and completed years of employment as an Employee
of the Company or its Subsidiaries (disregarding fractions in both cases) totals 70 years or more (a “qualifying retirement”),
the following provisions will apply:

 

(a)          All
shares of Restricted Stock, Restricted Stock Units, Performance Shares or Performance Units awarded to the Participant which have
vested as of the date of the qualifying retirement will be free of restrictions.

 

(b)
          With respect to any time-based Award of Restricted Stock or Restricted
Stock Units which has not vested, effective as of the Participant’s retirement date: (a) the Award will remain in effect
with respect to fifty percent (50%) of the shares or units covered thereby, and such Award will vest on the Participant’s
retirement date and such shares or units will be free of restrictions as of the vesting date; and (b) the Award will be terminated
with respect to the remaining fifty percent (50%) of the shares or units covered thereby.

 

(c)          With
respect to any performance-based Award of Restricted Stock, Restricted Stock Units, Performance Shares or Performance Units which
has not vested, effective as of the Participant’s retirement date: (a) the Award will remain in effect with respect to fifty
percent (50%) of the shares or units covered thereby and will vest upon the achievement of the related Performance Goals (unless
an Award expires according to its terms prior to the satisfaction of the Performance Goals, in which event the Award will terminate
and applicable shares of Restricted Stock, Restricted Stock Units, Performance Shares or Performance Units will be forfeited);
and (b) the Award will terminate as to the remaining fifty percent (50%) of the shares or units covered thereby. However, if the
Participant is the Chief Executive Officer of the Company or a member of his or her direct reporting group, and such person has
given the Company written notice at least one (1) full year prior to his or her qualifying retirement, no unvested performance-based
Award of Restricted Stock, Restricted Stock Units, Performance Shares or Performance Units will terminate upon such retirement,
and one hundred percent (100%) of the shares or units covered by such Award will remain in effect and will vest upon the achievement
of the related Performance Goals (unless an Award expires according to its terms prior to the satisfaction of the Performance
Goals, in which event the Award will terminate and applicable shares of Restricted Stock, Restricted Stock Units, Performance
Shares or Performance Units will be forfeited).

 

    	10

    	 

    

 

7.2.          Disqualifying
Activity. Notwithstanding the provisions of Section 7.1 hereof, if the Committee determines that the Participant is or has
engaged in any disqualifying activity (as defined below), then (1) to the extent that any Award held by such Participant has vested
as of the disqualification date (as defined below), the Participant will have the right to receive all shares or units which are
vested as of such date, and (2) to the extent that any Award held by such Participant has not vested as of the disqualification
date, the Award will terminate, and all related shares or units will be forfeited, as of such date. Any determination by the Committee,
which may act upon the recommendation of the Chief Executive Officer or other senior officer of the Company, that the Participant
is or has engaged in any disqualifying activity, and as to the disqualification date, will be final and conclusive.

 

(a)
          For purposes of this provision, the term “disqualifying activity”
is defined in the Plan to include, among other activities: (i) directly or indirectly being an owner, officer, employee, advisor
or consultant to a company that competes with the Company or its Subsidiaries or Affiliates to an extent deemed material by the
Committee, or (ii) disclosure to third parties or misuse of any confidential information or trade secrets of the Company, its
Subsidiaries or Affiliates, or (iii) any material violation of the Company’s Code of Business Conduct and Ethics or any
other agreement between the Company and the Participant, or (iv) failing in any material respect to perform his or her assigned
responsibilities as an Employee of the Company or its Subsidiaries, as determined by the Committee, in its sole judgment, after
consulting with the Chief Executive Officer of the Company.

 

(b)
          The ownership of less than 2% of the outstanding voting securities
of a publicly traded corporation which competes with the Company or any of its Subsidiaries or Affiliates will not constitute
a disqualifying activity.

 

(c)          The
term “disqualifying date” is defined in the Plan as the earliest date as of which the Participant engaged in any disqualifying
activity, as determined by the Committee.

 

Section
8.            Change in Control. Notwithstanding any provision in the
Plan to the contrary or unless otherwise provided in a Participant’s employment agreement with the Company, upon the occurrence
of a Change in Control, the Board, in its sole discretion, may take one or more of the following actions with respect to any Awards
that are outstanding immediately prior to such Change in Control: (a) accelerate the vesting of all outstanding Awards such that
all outstanding Awards are fully vested (effective immediately prior to such Change in Control); (b) require the successor corporation
(or its parent), following a Change in Control, to assume outstanding Awards and/or to substitute such Awards with awards involving
the common stock of such successor corporation (or its parent) on terms and conditions necessary to preserve the rights of Participants
with respect to such Awards; or (c) take such other actions as the Board deems appropriate to preserve the rights of Participants
with respect to their Awards. The judgment of the Board with respect to any matter referred to in this Section shall be conclusive
and binding upon each Participant without the need for any amendment to the Plan.

 

    	11

    	 

    

 

Section
9.            Adjustments upon Changes in Capitalization.

 

9.1.          In
the event that the Committee shall determine that any stock dividend, recapitalization, forward split or reverse split, reorganization,
merger, consolidation, spin-off, combination, repurchase or share exchange, extraordinary or unusual cash distribution or other
similar corporate transaction or event, affects the Common Stock such that an adjustment is appropriate in order to prevent dilution
or enlargement of the rights of Participants under the Plan, then the Committee shall proportionately and equitably adjust any
or all of (i) the number and kind of shares of Common Stock which may thereafter be issued in connection with Awards, (ii) the
number and kind of shares of Common Stock issuable in respect of outstanding Awards, (iii) the aggregate number and kind of shares
of Common Stock available under the Plan, (iv) the limits described in Section 5 of the Plan and (v) the grant price relating
to any Award or, if deemed appropriate, make provision for a cash payment with respect to any outstanding Award; provided, however,
in each case, that each adjustment shall be made in a manner that does not violate Code Section 409A and the regulations thereunder
to the extent applicable.

 

9.2.          In
addition, the Committee is authorized to make adjustments in the terms and conditions of, and the criteria included in, Awards,
including any Performance Goals, in recognition of unusual or nonrecurring events (including, without limitation, events described
in Section 9.1) affecting the Company or any Subsidiary, or in response to changes in applicable laws, regulations, or accounting
principles. Notwithstanding the foregoing, all adjustments shall be made in a manner that does not violate Code Section 409A and
the regulations thereunder to the extent applicable.

 

Section
10.           Termination and Amendment.

 

10.1.          Changes
to the Plan and Awards. The Board may amend, alter, suspend, discontinue, or terminate the Plan without the consent of the
Company’s shareholders or Participants, except that any such amendment, alteration, suspension, discontinuation, or termination
shall be subject to the approval of the Company’s shareholders if (i) such action would increase the number of shares subject
to the Plan, (ii) such action would decrease the price at which Awards may be granted, or (iii) such shareholder approval is required
by any applicable federal, state or foreign law or regulation or the rules of any stock exchange or automated quotation system
on which the Common Stock may then be listed or quoted, and the Board may otherwise, in its discretion, determine to submit such
other changes to the Plan to the Company’s shareholders for approval; provided, however, that without the consent of an
affected Participant, no amendment, alteration, suspension, discontinuation, or termination of the Plan may materially and adversely
affect the rights of such Participant under any outstanding Award unless such modification is necessary to ensure a deduction
under Section 162(m) of the Code or to avoid the additional tax described in Section 409A of the Code.

 

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10.2.          The
Committee may waive any conditions or rights under, or amend, alter, suspend, discontinue, or terminate, any Award theretofore
granted and any Award Agreement relating thereto; provided, however, that without the consent of an affected Participant, no such
amendment, alteration, suspension, discontinuation, or termination of any Award may materially and adversely affect the rights
of such Participant under such Award.

 

10.3.          Notwithstanding
anything in this Section to the contrary, any Performance Goal applicable to an Award shall not be deemed a fixed contractual
term, but shall remain subject to adjustment by the Committee, in its discretion at any time in view of the Committee’s
assessment of the Company’s strategy, performance of comparable companies, and other circumstances, except to the extent
that any such adjustment to a performance condition would adversely affect the status of an Award intended to satisfy the “qualified
performance-based compensation” exception under Section 162(m) of the Code and the regulations thereunder.

 

10.4.          Notwithstanding
anything in the Plan or an Award Agreement to the contrary, no Award may be repriced, replaced or regranted through cancellation
without the approval of the shareholders of the Company, provided that nothing herein shall prevent the Committee from taking
any action provided for in Section 9.

 

Section
11.           No Right to Award or Employment. No Employee or Non-Employee
Director shall have any claim to be granted any Award under the Plan, and there is no obligation that the terms of Awards be uniform
or consistent among Participants. Neither the Plan nor any action taken hereunder shall be construed as giving any Participant
any right to be retained in the employ of the Company or any Subsidiary. For purposes of this Plan, a transfer of employment between
the Company and its Subsidiaries shall not be deemed a termination of employment; provided, however, that individuals employed
by an entity that ceases to be a Subsidiary shall be deemed to have incurred a termination of employment as of the date such entity
ceases to be a Subsidiary unless such individual becomes an employee of the Company or another Subsidiary as of the date of such
cessation.

 

Section
12.           Taxes. Each Participant must make appropriate arrangement for
the payment of any taxes relating to an Award granted hereunder. The Company or any Subsidiary is authorized to withhold from
any payment relating to an Award under the Plan, including from a distribution of Common Stock or any payroll or other payment
to a Participant, amounts of withholding and other taxes due in connection with any transaction involving an Award, and to take
such other action as the Committee may deem advisable to enable the Company and Participants to satisfy obligations for the payment
of withholding taxes and other tax obligations relating to any Award. This authority shall include the ability to withhold or
receive Common Stock or other property and to make cash payments in respect thereof in satisfaction of a Participant’s tax
obligations. Participants who are subject to the reporting requirements of Section 16 of the Exchange Act may elect to direct
the Company to withhold shares of Common Stock that would otherwise be received upon the vesting, settlement or exercise of an
Award to satisfy the withholding taxes applicable to such Award. Withholding of taxes in the form of shares of Common Stock with
respect to an Award shall not occur at a rate that exceeds the minimum required statutory federal and state withholding rates.

 

    	13

    	 

    

 

Section
13.           Limits on Transferability; Beneficiaries. No Award or other
right or interest of a Participant under the Plan shall be pledged, encumbered, or hypothecated to, or in favor of, or subject
to any lien, obligation, or liability of such Participant to, any party, other than the Company or any Subsidiary, or assigned
or transferred by such Participant otherwise than by will or the laws of descent and distribution, and such Awards and rights
shall be exercisable during the lifetime of the Participant only by the Participant or his or her guardian or legal representative.
Notwithstanding the foregoing, the Committee may, in its discretion, provide that Awards or other rights or interests of a Participant
granted pursuant to the Plan be transferable, without consideration, to immediate family members (i.e., children, grandchildren
or spouse), to trusts for the benefit of such immediate family members and to partnerships in which such family members are the
only partners. The Committee may attach to such transferability feature such terms and conditions as it deems advisable. In addition,
a Participant may, in the manner established by the Committee, designate a beneficiary (which may be a natural person or a trust)
to exercise the rights of the Participant, and to receive any distribution, with respect to any Award upon the death of the Participant.
A beneficiary, guardian, legal representative or other Person claiming any rights under the Plan from or through any Participant
shall be subject to all terms and conditions of the Plan and any Award Agreement applicable to such Participant, except as otherwise
determined by the Committee, and to any additional restrictions deemed necessary or appropriate by the Committee.

 

Section
14.           Securities Law Requirements.

 

14.1.          No
shares of Common Stock may be issued hereunder if the Company shall at any time determine that to do so would (i) violate the
listing requirements of an applicable securities exchange, or adversely affect the registration or qualification of the Company’s
Common Stock under any state or federal law, or (ii) require the consent or approval of any regulatory body or the satisfaction
of withholding tax or other withholding liabilities. In any of the events referred to in clause (i) or clause (ii) above, the
issuance of such shares shall be suspended and shall not be effective unless and until such withholding, listing, registration,
qualifications or approval shall have been effected or obtained free of any conditions not acceptable to the Company in its sole
discretion, notwithstanding any termination of any Award or any portion of any Award during the period when issuance has been
suspended.

 

14.2.          The
Committee may require, as a condition to the issuance of shares hereunder, representations, warranties and agreements to the effect
that such shares are being purchased or acquired by the Participant for investment only and without any present intention to sell
or otherwise distribute such shares and that the Participant will not dispose of such shares in transactions which, in the opinion
of counsel to the Company, would violate the registration provisions of the Securities Act, and the rules and regulations thereunder.

 

    	14

    	 

    

 

Section
15.           Code Section 409A. The Plan and all Awards are intended to comply
with, or be exempt from, Code Section 409A and all regulations, guidance, compliance programs and other interpretative authority
thereunder, and shall be interpreted in a manner consistent therewith. Notwithstanding anything contained herein to the contrary,
in the event any Award is subject to Code Section 409A, the Committee may, in its sole discretion and without a Participant’s
prior consent, amend the Plan and/or Awards, adopt policies and procedures, or take any other actions as deemed appropriate by
the Committee to (i) exempt the Plan and/or any Award from the application of Code Section 409A, (ii) preserve
the intended tax treatment of any such Award or (iii) comply with the requirements of Code Section 409A. In the event
that a Participant is a “specified employee” within the meaning of Code Section 409A, and a payment or benefit provided
for under the Plan would be subject to additional tax under Code Section 409A if such payment or benefit is paid within six (6)
months after such Participant’s separation from service (within the meaning of Code Section 409A), then such payment or
benefit shall not be paid (or commence) during the six (6) month period immediately following such Participant’s separation
from service except as provided in the immediately following sentence. In such an event, any payments or benefits that would otherwise
have been made or provided during such six (6) month period and which would have incurred such additional tax under Code Section
409A shall instead be paid to the Participant in a lump-sum cash payment, without interest, on the earlier of (i) the first business
day of the seventh month following such Participant’s separation from service or (ii) the tenth business day following such
Participant’s death.

 

Section
16.           Termination. Unless earlier terminated, the Plan shall terminate
on the third anniversary of its approval by the Board, and no Awards under the Plan shall thereafter be granted.

 

Section
17.           Fractional Shares. The Company will not be required to issue
any fractional shares of Common Stock pursuant to the Plan. The Committee may provide for the elimination of fractions and settlement
of such fractional shares of Common Stock in cash.

 

Section
18.           Discretion. In exercising, or declining to exercise, any grant
of authority or discretion hereunder, the Committee may consider or ignore such factors or circumstances and may accord such weight
to such factors and circumstances as the Committee alone and in its sole judgment deems appropriate and without regard to the
effect such exercise, or declining to exercise such grant of authority or discretion, would have upon the affected Participant,
any other Participant, any Employee or Non-Employee Director, the Company, any Subsidiary, any Affiliate of the Company, any shareholder
or any other Person.

 

Section
19.           Governing Law. The validity and construction of the Plan and
any Award Agreements entered into thereunder shall be construed and enforced in accordance with the laws of the State of Delaware,
but without giving effect to the conflict of laws principles thereof.

 

Section
20.           Effective Date. The Plan shall become effective upon the Effective
Date, and no Award shall become exercisable, realizable or vested prior to the Effective Date.

 

*     *     *     *     *

 

    	15

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